Former Podesta lobbyists reap K Street boom

Former Podesta lobbyists reap K Street boom
© Greg Nash

Two years after the fall of the Podesta Group, lobbyists for the former powerhouse are reaping the K Street boom.

Seven of Washington’s fastest-growing lobby shops were founded by lobbyists from the iconic firm, and together those new firms boast nearly $14 million in revenue for the year.

The Podesta Group’s demise shocked K Street, but two years later the fallout has led to the creation of a number of new players in the influence world while also leaving a complicated legacy for the former firm’s alumni.

“I think we had incredible raw talent and the experiences they had in the firm helped them to grow and make this possible,” Tony Podesta, founder of the Podesta Group, told The Hill about seeing his firm’s principals open their own shops. “I feel like grandpa seeing the grandchildren become successful.”

At its height, his firm brought in nearly $30 million annually from more than 100 clients and employed about 90 people, led by Podesta, one of the most powerful lobbyists in Washington. The firm boasted a number of prominent clients and important connections. Podesta’s own brother, John Podesta, worked for President Clinton and President Obama and was Hillary ClintonHillary Diane Rodham ClintonGiuliani says 'of course' he asked Ukraine to look into Biden seconds after denying it Sanders hits 1 million donors Democrats will not beat Trump without moderate policy ideas MORE’s 2016 presidential campaign chairman.

But the firm suffered a quick fall following former special counsel Robert MuellerRobert (Bob) Swan MuellerLewandowski says Mueller report was 'very clear' in proving 'there was no obstruction,' despite having 'never' read it Fox's Cavuto roasts Trump over criticism of network Mueller report fades from political conversation MORE’s indictment of former Trump campaign manager Paul ManafortPaul John ManafortLewandowski refuses to say whether Trump has offered him a pardon Democrats return to a battered Trump Manafort's legal team argues NY prosecution constitutes double jeopardy MORE, including on charges of illegal foreign lobbying. Podesta Group and another firm, Mercury, had failed to register as foreign lobbyists for work they were hired to do by Manafort for a nonprofit in Ukraine. When Manafort and his business partner were indicted in October 2017, Tony Podesta stepped away from his firm.

While the firms registered as foreign lobbyists retroactively, the reaction was swift, with some clients leaving amid the negative attention. In November 2017, the Podesta Group closed its doors.

For those at the firm, the transition was a challenging time, with those working at its 10th and G Street office at the time worried about their paychecks and health care.

The shake-up forced the firm’s top lobbyists to go out on their own, forming a number of rising K Street players: Ferox, Fulcrum, Klein/Johnson, Federal Street Strategies, Holly Strategies and Lot Sixteen. In most cases, prominent Podesta clients have followed the former firm’s lobbyists.

Podesta Group’s longtime chief executive Kimberley Fritts launched her firm, Cogent Strategies, in November 2017, taking several clients with her.

Cogent now has 29 clients and has made $1.6 million so far in 2019. Fourteen of those clients are former Podesta Group clients, including, Orange County, Fla., and Sotheby’s.

Fritts points to the talent at the Podesta Group to explain why the successor firms are so successful.

“I think we had an amazing team with very distinct and diverse skill sets that were focused on delivering solid results for our clients, so it does not surprise me that clients would want to follow those with whom they had worked alongside successfully,” Fritts said.

Others have found similar success. Josh Lahey, a public relations professional and former Podesta principal, launched Lot Sixteen in November 2017. It has 14 lobbying and public relations clients and has made $740,000 on lobbying in 2019.

“There was exceptional talent at the Podesta Group.  It was like one of those old WWII movies with a cast of characters ... who were each expert at what they did while also operating as part of a bigger team,” Lahey said.

“That’s part of what made it one of the biggest and best firms in town — and part of why so many firms resulted from its demise.”

To those who worked closely with the Podesta Group, it is no surprise that many of its lobbyists have been successful in their own right.

“Our third and fourth lobbyists were stronger than other people’s first and second, and they also were entrepreneurial on behalf of their clients,” Podesta said.

“Because of the firm’s reputation and Fortune 100 clients, Tony was able to recruit and retain some of the best talent in Washington,” said Paul Brathwaite, who launched Federal Street Strategies in December 2017.  His firm has 13 clients and has pulled in $1.05 million this year.

Former principal Josh Holly launched Holly Strategies, a solo shop, in February 2018. Five of his clients are former Podesta Group clients, including BAE Systems, Lockheed Martin, Michelin, the Republic of Iraq and Perceptics.

Holly called his former colleagues “some of the best in their fields.”

“It shouldn’t be a surprise that those same individuals are succeeding — and thriving — nearly two years after the Podesta Group imploded,” he added.

For some, though, the Podesta Group left a complicated legacy. 

Despite the success of Podesta alumni, many on K Street say the influence world should not forget the lessons from the firm’s demise.

“Take FARA [Foreign Agents Registration Act] compliance very seriously,” Sam Geduldig, partner at CGCN Group, said. The disclosures about Podesta Group and Mercury have led to calls for a crackdown on foreign lobbying.

“The Podesta group was as well-connected a lobbying firm as they come, so it is unsurprising that former principals and staff from the firm are able to carry an impressive client list to other lobby shops,” Lisa Gilbert, vice president of legislative affairs at Public Citizen, told The Hill.

“The list of corporate patrons for these firms are huge, and it shows the reality that lobbyists’ deep rolodexes stay relevant for a long time.”

For many Podesta alumni though, there are aspects of the firm’s culture they hope to copy.

“It was an amazing team of some of the very best and brightest here in Washington — all smart and savvy, well-connected and good team players,” said former Podesta principal Cristina Antelo, who launched Ferox in February 2018. Ferox has 18 clients, five of which were former Podesta Group clients like Mylan and Walmart, and it has made $730,000 in 2019.

“I am trying hard to emulate the parts of PG that created such a collegial environment with a team that is hungry and hardworking with a lot of hustle,” she added.

Klein/Johnson was founded by former Podesta principals Matt Johnson and Izzy Klein and has made $1.05 million this year.

“It’s no surprise that the firm’s alumni are having great success. The talent was top-notch,” Johnson told The Hill. Klein/Johnson has 14 clients, including former Podesta Group client Oracle.

Beyond the success of the new firms, others noted that the fallout led to the creation of lobby shops run by minorities and women, which they said was a testament to the diversity at the Podesta Group.

“When I first joined the Podesta Group, I was struck by the amount of young, diverse talent that Tony had hired,” said former principal Oscar Ramirez.

“Tony opened the door for me and so many people who look like me. He exposed us to a world that people in black and brown communities are not usually exposed to.”

Ramirez and Dana Thompson launched Fulcrum, a minority-run firm, in January of this year. It has made $830,000 this year and has 20 clients including Airbnb, Lyft, Google, T-Mobile, Tesla and Mylan, where former Podesta managing partner David Marin now works. 

Two women-run lobby shops have also come out of the Podesta Group: Cogent and Ferox.

“There is something to be said for the fact that of the firms ... two are female-owned — an important addition to the Washington landscape,” Fritts said.

Those connected to Podesta know that his firm will always be the center of talk.

Podesta himself, 75, has left the lobbying world to spend time in Italy and travel. But his name is still in the news, including at the trial of former Obama White House counsel Greg Craig.

Podesta said that he has given advice to some of his former principals about their firms.

But he added, “I don’t think they really need it.”

Updated at 7:54 a.m.