Growing Gephardt Inc.

Former Leader Figures Out K Street

Posted April 24, 2009 at 6:10pm

The old adage “If you want a friend in Washington, get a dog— falls short for Richard Gephardt. For the House Democratic leader-turned-lobbyist, a more fitting adaptation is, “If you want a friend in Washington, work hard and play nice.—

The same values and work ethic that propelled the 14-term

Congressman from St. Louis to the highest ranks of Congress are now serving him well on K Street, where his eponymous lobbying shop has seen triple-digit growth despite the economic downturn.

Gephardt’s firm, Gephardt Group Government Affairs, reported lobbying revenue of $1.2 million in the first quarter of 2009.

That is triple the amount that it received in the same time period last year and already comes close to the $1.8 million in lobbying revenue that it received in all of 2008, according to Senate disclosure records.

“It’s just a natural cycle,— Gephardt said during an interview last week in his firm’s sleek K Street office, a space that reflects his recent success more than his Midwestern roots. “You pick up work, do a good job and bring in good people who do more good work.—

That good work has resulted in a growth of clients from four when the firm was founded in June 2007 to 26 today, including its four original clients and recent additions such as the U.S. Chamber of Commerce, Visa and Delphi Corp., a struggling U.S. auto parts giant.

Much as he did as a leader in Congress, Gephardt has a hand in almost all of the firm’s hottest issues. It was part of the team that helped secure $1 billion in stimulus funding earlier this year to build the FutureGen clean-coal project in Illinois and also represents St. Louis-based Peabody Energy, the world’s largest private-sector coal company, in the climate debate.

In addition to the 19 clients for which firm employees are registered lobbyists, Gephardt’s team also provides separate strategy and communications services to companies such as UnitedHealth Group and FTI Consulting. These services bring the firm’s total revenue to $3.7 million in 2008 and $2.9 million in the first quarter of this year, when combined with the lobbying numbers.

“We don’t want to grow too fast,— Gephardt said of the firm’s future plans. “It’s important that we stay nimble and have people who do good, honest work and treat people well — all the things I care about.—

In a crowded field on K Street, clients and competitors alike say Gephardt’s reputation and hands-on management combined with the smart, devoted staff that he attracts have quickly placed the firm among the top boutique lobbying shops in the city.

“What we have found invaluable is his experience,— said Rick Cotton, general counsel for NBC Universal, a client of the firm. “He brings credibility and highly relevant strategic experience that make him stand out.—

The 68-year-old Gephardt was known for keeping a frenetic pace in Congress, and he hasn’t slowed down much since he retired from his seat in 2004 to pursue a short-lived presidential bid, ending a 28-year political career that included seven years as House Majority Leader, eight years as House Minority Leader and an earlier presidential run in 1988.

Gephardt also serves on five corporate boards — he was appointed to the board of Ford Motor Co. last month — is an adviser at the law firm DLA Piper, consults for Wall Street giant Goldman Sachs, is involved in various nonprofit endeavors and oversees a public service institute named for him at Washington University in St. Louis.

The work that he has undertaken post-Congress shows where his priorities, and real passions, lie. In 2005, he negotiated a deal with the machinists union on behalf of Boeing Co. that allowed the purchase of a Boeing subsidiary by a Canadian firm to move forward and resulted in a big bonus for the workers when the company went public, an instance he points to as one of his proudest accomplishments.

More recently, he has assumed the role of elder statesmen in the debate over health care reform, cautioning not to move too far too fast and risk failure.

Still a man of routine and Congress, Gephardt flies to Washington, D.C., on Monday night and leaves Friday. In between, he is on the road tending to his corporate work and advising companies on labor issues at the Gephardt Group, the Atlanta-based consulting firm that he founded in 2005 with his children, Matthew and Christine.

“He was almost to the point of mechanical in the sense of how hard he worked,— said Moses Mercado, a lobbyist with Ogilvy Government Relations who served as Gephardt’s chief of staff and traveled with the Congressman each weekend as he campaigned for fellow Democrats. “That work ethic translates well to the shoe-leather, retail work of lobbying.—

Clients uniformly paint Gephardt as a hands-on strategist who is willing to work all angles for his clients, from joining meetings and planning sessions to enthusiastically going to the Hill to lobby, a rarity for former Members of Congress on K Street.

Much of the day-to-day management of the lobby shop lands in the lap of Tom O’Donnell, the firm’s co-founder and managing partner and Gephardt’s right-hand man in Congress for almost 10 years. Prior to rejoining Gephardt in 2007, O’Donnell was a partner at a political media consulting firm and also served an earlier stint at the Democratic Congressional Campaign Committee.

That history means the two men either worked with or helped elect most of the Democrats who now make up the majority in Congress.

“Given their background helping Members get elected, there’s a level of trust,— said a former colleague and firm client who now works at a competitor firm. “They can feel they’re never going to bring an issue that’s not in the Member’s best interest.—

Joining Gephardt and O’Donnell at the all-Democratic firm are former Gephardt aides Sharon Daniels, Andie King and Michael Messmer. Catherine Goode, Janice O’Connell and Joel Freedman joined the firm this year as the client base expanded.

Gephardt’s nearly three decades in politics and good-guy reputation also built a vast network of former aides who now operate at Washington’s highest levels, an asset that undoubtedly helps the former Member stand out on K Street.

Former aides say they don’t have a formal alumni network, but Washington is a small town and their paths cross often, including at a gathering held a few years ago to celebrate the boss to whom they owe so much.

For a former politician not known to stray off message or show emotion, the memory was obviously touching.

“It brought a tear to my eye,— Gephardt recounted. “To see everyone gathered and think back to what we had done and where they are now, and the impact they’re having.—