Hastert’s Lobbying Firm Rocked by His Indictment

Posted June 1, 2015 at 4:00am

Ex-Speaker J. Dennis Hastert’s sudden resignation from his K Street firm is the latest and most public setback for Dickstein Shapiro, a shop already scrambling to rebuild amid a client exodus, tumbling lobbying revenue and high-profile employee departures.

The firm is keeping mostly quiet about Hastert, the former Illinois Republican who was indicted Thursday for lying to federal investigators about structured cash withdrawals to an individual “in order to compensate for and conceal his prior misconduct,” said the Department of Justice after a two-year FBI investigation. A Dickstein spokesman confirmed to CQ Roll Call that Hastert had left the firm and that his former co-head Scott Thomas would continue to lead the group. Hastert joined the firm in 2008 and was a co-leader of its public policy and political law practice.

The alleged promise of $3.5 million to “Individual A” — and the payment of about $1.7 million to this person — has focused attention on Hastert’s income as a lobbyist. His annual salary at Dickstein was likely just above $1 million, said K Street head hunter Ivan Adler, adding that such a compensation package is the norm for a former House leader.

Hastert’s publicly disclosed domestic clients paid Dickstein Shapiro $70,000 in the first quarter of the year, according to 2015 Lobbying Disclosure Act reports. That money came mostly from Fuels America, which paid $60,000, to monitor legislation and administrative actions on renewable fuel standards, public documents said.

Pritikin ICR, a medical and rehabilitation center and spa, paid $10,000 to the firm in the first three months of the year to follow legislation related to Medicare coverage for chronic cardiac patients, LDA records show.

Hastert’s foreign government client, Turkey, paid Dickstein $241,000 between August 2014 and December 2014, through the firm of former Rep. Richard A. Gephardt, D-Mo., according to the documents filed with the Justice Department under the Foreign Agents Registration Act (FARA). The Gephardt Group did not return a request seeking comment about whether the firm would hire a new shop to work on the Turkey account.

In its latest filing with DOJ, Dickstein reported that Hastert took three meetings on behalf of the government including with Bill Hughes, policy director to House Majority Whip Steve Scalise, R-La.; Mike Sommers, chief of staff to Speaker John A. Boehner of Ohio; and a Nov. 12, 2014 session with Rep. Charles Boustany Jr., R-La.

“The registrants have continued to provide counsel in connection with strengthening the Turkish-American relationship and educating government officials on issues of importance to Turkey,” the FARA disclosure said. “The registrants also attended and encouraged government officials to attend the December 16, 2014 Jazz Event at the Embassy of Turkey.”

Hastert signed up clients even in recent weeks, bringing on the Secure ID Coalition, which lobbying forms describe as a coalition providing “digital security solutions.” The coalition’s website lists such members as digital security firms Gemalto, Oberthur Technologies and Zebra Technologies. Dickstein reported it was tracking “issues and legislation related to identity policy solutions” for the coalition.

Hastert had also taken on lobbying work for an Illinois real estate company, CenterPoint Properties, to monitor “issues and legislation relevant to commercial development and the transfer of properties,” a recent LDA disclosure said.

Hastert and his former congressional aide, David Thompson, are the only lobbyists listed for the CenterPoint client. A Dickstein spokesman did not return requests for information about whether Thompson was staying at the firm. Thompson’s profile on the Dickstein website remained, while the shop removed Hastert’s shortly after news of the indictment broke.

“Although this is certainly not a hall of fame day for Dickstein, I think it has a negligible effect for the firm in general for the long term,” said Adler of the McCormick Group. “They were in the process of rebuilding their practice anyway after losing a group to another firm. This certainly doesn’t help that effort, but it does give them an opportunity for a new beginning.”

Dickstein lost lobbying star Andrew Zausner and a team to rival outfit Greenberg Traurig last July. Zausner took with him several notable people from Dickstein including former Sen. Tim Hutchinson, R-Ark., and ex-Reps. Pete Hoekstra, R-Mich., and Albert R. Wynn, D-Md.

These departures hit Dickstein’s lobbying revenue hard. In 2014, the shop reported a total of $3.7 million in lobbying fees, down from $7.8 million the year before.

Dickstein’s much reduced lobbying client list — down to about 10 — includes the American Greyhound Track Operators Association and Lerner Enterprises. Last year, Dickstein reported representing more than 40 clients including American College of Rheumatology, Lorillard Tobacco and Peabody Energy. Many of Dickstein’s former clients, including those three, are now registered lobbying clients of Greenberg Traurig.

Neither Zausner nor a spokeswoman for Greenberg Traurig returned phone calls and emails seeking comment about why Zausner and the others left Dickstein, while Hastert remained.  

“The world has changed,” Zausner said in a news release announcing the move back in July 2014. “We were also drawn to the opportunity to build upon the fine platform here at a time when disciplined management, independent thinking and real value are increasingly hard to find.”

Hastert’s business extended beyond Dickstein; He also operated a consultancy known as Hastert & Associates with an Illinois address. It’s unclear what the firm does but it is not registered under the LDA to lobby on behalf of any clients.

Hastert’s K Street work wasn’t his only source of wealth.

He made it into Roll Call’s 50 Richest Members of Congress list in 2007, when his estimated minimum net worth was $3.06 million, obtained mostly through suburban Chicago real estate investments, including one that involved a controversy over an earmark he helped secure while he was in Congress.

High-ranking former members from leadership, such as Hastert, often make millions representing clients behind the scenes, a sort of “unlobbying” that does not require public disclosures and is therefore difficult to monitor.

After his indictment, Hastert also resigned from the board of the Chicago Mercantile Exchange, one of the nation’s largest options and futures exchanges.

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