Big Business Finding It Tough to Alter Its Stripes

Posted November 18, 2008 at 6:10pm

It’s been nearly two years since Democrats took control of Congress, but K Street’s corporate offices are still seeing red.

Unlike many lobby shops and law firms that solidified their bipartisanship after the midterm elections and often have Democrats heading their advocacy operations, most Fortune 500 companies hedged their bets, leaving Republicans in top slots while adding Democrats to the lower rungs of their in-house rosters.

And that’s not likely to change.

Democratic lobbyists have culled a list of more than 40 corporations and associations still headed by Republicans as proof of the widespread GOP domination.

That list includes Republicans such as Preston Padden, a bundler for Sen. John McCain (Ariz.) at the Walt Disney Co.; David Rehr, a former aide to Rep. Vin Weber (R-Minn.) who heads the National Association of Broadcasters; the former top White House lobbyist under both Bush administrations, Nick Calio of Citigroup Inc.; and Galen Reser of PepsiCo Inc., who worked for Illinois Republican Sen. Charles Percy.

Edward Hamberger, a former aide to Sen. Hugh Scott (R-Pa.), leads the Association of American Railroads; former Rep. Jim Greenwood (R-Pa.) is head of the Biotechnology Industry Organization; former Rep. Billy Tauzin (R-La.) runs the Pharmaceutical Research and Manufacturers of America; Frank Fahrenkopf, the former chairman of the Republican National Committee, is in charge at the American Gaming Association; former Sen. Chuck Grassley (R-Iowa) aide Stephen Ubl runs AdvaMed; and former Rep. Steve Largent (R-Okla.) heads CTIA.

Since the 2006 Democratic Congressional takeover, few companies have moved to hire an in-house Democrat as the top government relations staffer.

Boeing Co.’s decision to tap Honeywell International senior vice president and Democrat Tim Keating in May to head up its government relations team is the exception, not the rule.

In response to Keating’s departure, Honeywell bumped up Republican Sean O’Hollaren to the senior vice president of global government relations spot.

Honeywell spokesman Rob Ferris defended the company’s move to promote within the ranks.

“Honeywell will continue to maintain a balanced staff of senior Republicans and Democrats in our Washington, DC office,” Ferris wrote in an e-mail. “ We hire the best people — no matter [their] party affiliations — that have the experience and perspective to most effectively support growth for our businesses over the long-term.”

More recently, Comcast Corp. shed Kerry Knott, the former chief of staff to then-House Majority Leader Dick Armey (R-Texas), as its top lobbyist. Melissa Maxfield, a former aide to then-Majority Leader Tom Daschle (D-S.D.), has taken on expanded responsibilities, although the cable company has decided to leave the head-of-the-office slot vacant.

Headhunters say that the overwhelming majority of openings on K Street are for No. 2 spots and below.

“The situation they are in is that government-affairs offices have been Republican-oriented for years and have developed relationships with Republican leaders and they have to switch gears,” said Beth Solomon, a headhunter at CTPartners. “You can’t sort of change everything at once, but I think the reality is they need to speak at the highest levels with Democrats and it certainly helps to have Democrats representing you.”

Citigroup’s decision to promote Democratic lobbyist Jimmy Ryan, a former aide to Senate Majority Leader Harry Reid (Nev.), last month to senior vice president of federal government affairs is one example of bumping Democrats into senior-level positions.

Ryan will head Citigroup’s federal government affairs division along with Republican Heather Wingate, who previously had the title to herself. Both report to Calio, who is executive vice president for global government affairs.

The move to increase the number of senior Democrats isn’t surprising to K Streeters.

“Some of these people are not going to be able to credibly walk into Democratic offices, and that’s why there is such a targeted push to get Democrats in the No. 2 spot,” one in-house Democratic lobbyist said. “They are the ones who will provide the access.”

As part of their efforts, headhunters have reached out to veteran Democratic operatives in the Senate and on K Street to help identify potential candidates. Although there are numerous candidates, one problem Democrats have run into recently is a relative dearth of top staffers who are business-minded.

Although few of the positions coming open are at the very top of the lobbyist food chain, a Democratic aide familiar with the maneuvering said most are vice presidencies or other day-to-day lobbying positions.

One Democrat lamented the fact that “we have too many ‘pures’”— referring to many high-level Senate staffers’ strong environmental or labor ideologies that run counter to the business-oriented nature of K Street.

Also playing a factor in the relatively small number of Democratic candidates is that the new administration is sucking away much of the talent pool, and will likely continue to do so for the next several months.

“There is definitely a supply and demand issue,” Korn/Ferry International headhunter Nels Olson said of the number of Democrats heading for the White House.

Further complicating matters is the number of former aides who have made good on K Street looking to return to the House or Senate for another tour of duty now that the party is firmly in control of Congress and the White House.

With a batch of new Members and expanded staffing opportunities on key committees, jumping back into the Congressional game for a year or two can replenish lobbyists’ contacts and boost their value to clients.

And while several sources said in-house Republicans are nervous that many companies are looking to offload their GOP-heavy in-house ranks, their saving grace could be President-elect Barack Obama, who has signaled that he will bring less partisan rancor inside the Beltway.

As Republicans fight for their jobs, they may benefit from what so far appears to be a lack of Democratic leadership pressure on K Street to promote its own.

While Reid this summer signaled his frustration with GOP lobbyists who chose not to work with the Democratic majority, lobbyists said there isn’t any attempt to block Republicans from lobbying Democratic offices.