Surging Market For Democrats

Lobbyists Willing to Pay Top Dollar to The Right Prospects on Capitol Hill

Posted December 7, 2007 at 6:13pm

It’s the kind of call most Capitol Hill aides only dream of. A headhunter telephoned the chief of staff to a prominent Democratic Senator recently and, recalls the staffer, said to him: “Look, a downtown firm is looking for a senior Democrat, the package is $600,000, and could be more. Do you want to talk to us?”

“People trying to go out before we took the majority, they weren’t hearing those numbers,” said the staffer, who turned down the offer. “They were looking at $250,000 to $300,000.”

Such is the current marketplace of K Street.

“What most firms are looking at, quite frankly, most obviously, are Democrats,” said Cassidy & Associates’ Gregg Hartley, a former top aide to Minority Whip Roy Blunt (Mo.). “And those people by and large aren’t quite ready to leave the Hill yet. We wish it was a year or two down the road, so they had a little bit more time in the majority and were ready to start talking about leaving.”

He added, “I’m not trying to hire somebody who was around when Tip O’Neill was Speaker. I want somebody from Nancy Pelosi’s office.”

Ivan Adler, a lobbying recruiter for the McCormick Group, said he is seeing a growing demand for Senate Democrats, anyone connected to leadership and the top aides of key business-focused committees like Senate Finance and House Ways and Means.

But unlike past years, lobbyists, recruiters and Congressional aides alike must navigate the revolving door under a brand new ethics regime. The House and Senate both have similar new rules for senior-level staffers negotiating with the private sector. Aides who earn more than 75 percent of a Member’s salary must alert the ethics committee and recuse themselves from working on issues that could impact the prospective employer.

“I’m making a big deal of it in talking to candidates, in making sure they comply with the new ethics rules when talking to them,” Adler said.

While Sen. Trent Lott (R-Miss.) may be the highest-profile example, lobbyists said they expected senior Senate staffers to make a swift exit by the end of this session to avoid new revolving-door strictures.

The chief difference for senior Senate aides is that those who leave after this session is over will be barred from lobbying anyone in the Senate for one year, instead of just their old office, as is currently the case.

Alex Sternhell, a former Democratic aide on the Senate Banking, Housing and Urban Affairs Committee, just joined The Cypress Group, a boutique financial services firm that previously was all-GOP. Getting out just in time, he’ll be covered by the old ban.

“He’s got great expertise at the most senior levels on both the House and Senate side,” said Cypress partner Pat Cave. “Alex is well-liked, and I think that’s a critical intangible, on both sides of the aisle. I’ve always seen him as one of the more constructive Dem staffers to work with Republicans.”

But by and large, lobbyists and other Hill aides say the mass departures of top Senate aides have not measured up to expectations.

“You’re going to see less of an exodus than some have predicted,” said Robert Van Heuvelen, the longtime chief of staff to Sen. Kent Conrad (D-N.D.) who left this summer to launch Van Heuvelen Strategies. “The ethics legislation probably prompted some people to think about leaving, but the circumstances in Congress make a lot of these senior Democratic staffers committed to staying to finish the job.”

Plus, he said, most senior staffers aren’t worried that all their K Street options will dry up by next year.

“There’s a real supply and demand problem downtown,” said Steve Elmendorf, whose business at Elmendorf Strategies has boomed. “There’s a high demand for Democrats and the supply isn’t great because we just got the majority.”

Demand is high for such staffers as top leadership aides to Senate Majority Leader Harry Reid (D-Nev.) and Speaker Nancy Pelosi (D-Calif.); or people like Jeff Miller, chief counsel on the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights; Dennis Fitzgibbons, a former Daimler-Chrysler lobbyist who is now staff director on the House Energy and Commerce Committee; Sheila Murphy, legislative director for Sen. Amy Klobuchar (D-Minn.); and Kyle Simmons, chief of staff in the leadership office of Senate Minority Leader Mitch McConnell (R-Ky.). (See related story on p. 11.)

One downtown Democratic trade association lobbyist said Democrats can command more than in recent memory.

“If you’re a Democratic staffer, now’s the time to leave,” this lobbyist said. “There’s a real lack of talent out there. If you were a chief of staff for leadership or staff director for a committee, you could set your price, and $300,000 is reasonable. Nobody wants to leave for under $250,000.”

Nels Olson, managing director of search firm Korn/Ferry International’s D.C. office, said that’s all part of a “definitive recalibration” that’s going on within lobbying firms and corporate and trade association offices.

“Given the changes in the Congress, for years obviously there was a heavier bent for more to the Republican side, but now the rebalancing is ongoing,” he said. “Given that the Republicans controlled Congress for as long as they did, the bench on the Democratic side wasn’t as deep.”

Now, he said, Democratic staff directors and chiefs of staff, in particular, are in very high demand.

The top tier can command total compensation packages worth $500,000 to $750,000, occasionally even into the rare seven figures, according to headhunters, hiring partners at firms and staffers themselves who have received offers.

A more typical salary for a fresh-off-the-Hill lobbyist can be in the range of $250,000, with some more junior staffers looking at closer to $120,000 to $150,000 to decamp from the Capitol.

The ones with previous corporate experience will command the highest packages.

“People who have been outside government become far more valuable because they understand the way the pieces fit together,” said Dan Tate, a partner with Capitol Solutions.

Although names on the appropriations committees had been highly sought-after in recent years, some lobbyists say the scrutiny placed on the earmarking sector has cooled interest. “I’m nervous about hiring [appropriations] staffers because you can be accused of rewarding this person with a job if they’ve done earmarks for you or done official actions,” said one lobbyist who runs an appropriations firm.

With the new ethics rules and stepped-up scrutiny about spinning through the revolving door, some of the most sought-after Hill aides said they are worried about appearances.

One senior Democratic Senate staffer, who would speak only on background, said he has become skittish about even casual interactions with lobbyists that hint at post-Hill employment.

“They may say to you, ‘If you’re ever leaving, come talk to me,’” said the aide. “If somebody were to say that to me now, given the ethical rules, I would be flattered and smile, and wouldn’t ever let it get beyond that.”

Jack Quinn, a co-founder of Quinn Gillespie & Associates, said the new rules won’t deter him.

“I think you have to be straightforward,” he said. “There is nothing wrong with inquiring with a staff member whether they’re at a point in their life when they want to consider making a move. If I were inclined to pursue someone, I would be straight-up and ask them directly. They would take whatever steps they would have to take to be in compliance with the ethics rules if they wanted to pursue it.”

Tory Newmyer and T.R. Goldman contributed to this story.