This article appeared in the Influence, the news source for the lobbying community.

New Lobby Shops: The 2002 Models
By T.R. Goldman
January 08, 2003

There are no window views at Cornerstone Government Affairs. A dozen identical offices face each other along a curved hallway on the seventh floor of the Ronald Reagan Building and International Trade Center, the most visible manifestation of what co-founder Geoffrey Gonella calls his “team approach” to lobbying.

At McBee Strategic Consulting, lobbyists Steve McBee, Judith Zink, and Emelie East take up the entire 12th floor of their narrow 1918 building, which originally housed the Federal Trade Commission. Each has a view, and McBee’s stylish corner office looks out along the heart of K Street.

But both firms have a few things in common. They are among the new shops to have opened their doors in 2002, and they have moved quickly and aggressively to establish themselves as significant players on the Washington lobby scene.

“We do a lot of the traditional blocking and tackling that you do in this business,” says McBee, who was legislative director for then-Rep. and now-Sen. Maria Cantwell (D-Wash.) and who did appropriations work for Rep. Norman Dicks (D-Wash.). “But there are a lot of unrecognized ways to work inside the political process and to add value to your clients. If you’re not a profit center for your clients, or driving revenue, why do they need you?”

McBee, whose client roster includes technology companies RealNetworks, NetCoalition.com, and Click2learn, says selling client services and products to the government is one way to maximize profit.

“I left the Hill at about the time the boom was happening in the [Silicon] Valley,” says McBee. “My friends were telling me, ‘This is like being in Florence during the Renaissance.’ But I realized I could play at a much higher level if I could stay here and bring the Valley to Washington. . . . The U.S. government is one of the very best markets in the world for technology.”

McBee’s shop took in just under $3 million in 2002. He says he’s planning to add three more lobbyists this month, and he predicts that his revenue will grow to at least $4 million, and possibly $5 million, in 2003.

While McBee made some noise when he left Denny Miller McBee last year, Cornerstone started quietly. Gonella and a colleague from Cassidy & Associates, W. Campbell Kaufman IV, opened their two-person shop in April.

Then in August, what was then Gonella & Kaufman suddenly quadrupled in size, pulling in seven lobbyists from the PMA Group, including veteran appropriations staffer Timothy Sanders. Sanders became the lobby shop’s third equity partner.

Cornerstone, which expects to do about $3.5 million in business in 2003, also wants to maintain a diverse list of clients.

“We want to be careful and not do what some shops have done and over-orient toward appropriations,” says Sanders, who adds that the firm is also handling high-tech, telecom, and agricultural policy work.

Regarding the Jan. 1, 2003, name change to Cornerstone, Sanders jokes, “We thought about using everybody’s initials.” But the firm is growing too quickly. Leaving out the principals’ names is also in keeping with the firm’s idea of de-emphasizing its individual lobbyists.

“We all have a common belief about how you build a business,” says Gonella, who was Cassidy’s director of business development and marketing for five years. “When you hire this firm you hire everyone. You don’t get one guy. You get 11.”

Among Cornerstone’s clients are the U.S. Rice Producers, General Atomics, Siemens, and General Mills.

At the beginning of this year, the firm added two more lobbyists, including Steve Crane from Van Scoyoc Associates and Fred Clark, yet another former PMA lobbyist and a longtime counsel to the House Agriculture Committee.

“Fred’s drafted every darn farm bill for the last 20 years or more,” says Sanders.

Another notable loss for Cassidy was James Fabiani, who shocked K Street with his departure after a 20-year run. Fabiani opened Fabiani & Co. and now employs three other lobbyists: Scott Tominovich, Allison Clarke, and Harry Henderson.

Several other prominent lobbyists left their posts last year to start new firms.

Fast Start: From left to right: Geoffrey Gonella, W. Campbell Kaufman IV, and Timothy Sanders of the 2002 startup Cornerstone Government Affairs. (Jay Mallin photo)

Denise Henry, a founding partner of the Legislative Strategies Group, bolted this summer with four colleagues—Carrie Gavora, Sara Franko, Mary Ann Curran, and researcher Michael Hoak—to form Strategic Health Solutions, which will tap into her background in medical matters with several large health-related proposals expected to surface this legislative session.

Henry’s departure prompted the demise of Legislative Strategies Group. Co-founder Martin Gold ended up at Covington & Burling; on Jan. 21, he will return to the Hill—where he last worked in 1982—as a senior floor aide to Senate Majority Leader William Frist (R-Tenn.). Co-founder Larry Smith decided to go his own way with LSG colleague Ronna Frieberg in the revamped Legislative Strategies Inc.; and Michael Grisso joined the Capitol Hill Group, itself a 2002 startup formed by former Rep. Bill Brewster (R-Okla.).

Brewster has been lobbying since he left Congress in 1997. His first stop was R. Duffy Wall & Associates. That firm was purchased in 1998 by Fleishman-Hillard, but a “mega-outfit, that’s just not for me,” says Brewster. So last January, soon after his three-year contract with Fleishman expired, Brewster started the Capitol Hill Group, which he owns with David Jory, another R. Duffy Wall exile.

“We’ve had a great year,” he notes. “We’ve added three lobbyists and 10 clients. We obviously want to continue growing, because that’s where you make money.”

The firm continues to represent several clients from the Duffy Wall days, including Verizon, Novartis, and the American Gas Association.

Over at Parry, Romani, DeConcini & Symms, both Thomas Hatch and Jack Martin left the fold to team up with veteran telecom lobbyist Laird Walker to form Martin, Walker & Hatch.

“I had retired from Qwest,” recalls Walker, who had started working for a predecessor to the Denver-based telecom firm Qwest Communications International Inc. in 1967. “But they [Hatch and Martin] thought they were ready to go out on their own, and I was willing to come out of retirement.

“We approached this with blind faith, and now we have 13 clients,” says Walker. The roster includes Coalescent Energy, Ferrero Energy, and the Pharmaceutical Research and Manufacturers of America (PhRMA).

The Hatch in the firm is the son of Sen. Orrin Hatch (R-Utah), but Walker says that “it would be a mistake for anyone to assume that the third name in our partnership is the reason we’re successful. We all have the capacity and the relationships.”

The past year also saw other veteran Hill players form new firms.

Manus Cooney, former Napster Inc. in-house lobbyist and longtime staff director of the Senate Judiciary Committee, reached across the aisle in September and formed Potomac Counsel with Karen Robb, a former Clinton administration lobbyist who also worked for Judiciary Committee member Sen. Joseph Biden (D-Del.) and former Sen. Dennis DeConcini (D-Ariz.).

“Manus and I have worked with each other since 1990,” says Robb. Their clients include the Boys and Girls Clubs of America, the Human Rights Campaign Fund, and Listen.com.

Former Senate Transportation Appropriations staffer Patrick McCann split from his employer of five years, the Wexler & Walker Public Policy Associates, taking his sizable book of business with him, and opened his own solo shop.

James Green, a former acting chief lobbyist at the Federal Communications Commission, severed his formal ties with Tongour Simpson Holsclaw. While he still works in the same building, he is developing a separate client list that concentrates mostly on telecommunications.

“I started on January 1, 2002,” says Green, “and I celebrated my one-year anniversary very quietly. I’m still going strong, and I’m loving it.”

At least two other lobbyists with long tenures at their previous shops left to start something on their own, although, like Green, they maintain close contacts with their former colleagues.

Jeffrey Trammell, who had spent 12 years at Hill & Knowlton, left and formed a new shop, Trammell & Co., although he says he continues to do a lot of work with his old firm.

After 13 years at Jefferson Government Relations, former firm chairman Randal Schumacher decided he wanted to venture into the arena of international work and business development.

Schumacher is using his new company, Schumacher Partners International, to do a significant amount of work in West Africa, especially in Nigeria.

“I want to do some things on a commercial basis that will have a social benefit,” he says. “Take the flared gas [from Nigerian refineries]. You can turn that into PVC pipe and use that to distribute clean water.”

But, he adds, “I’m still paying the bills based on traditional lobbying business.” He says he plans to hire “additional bodies” later this year.

Lauraine Sullivan left what had been Verner, Liipfert, Bernhard, MacPherson and Hand several months before that storied firm was absorbed by Piper Rudnick, and formed a partnership with the Dewey Square Group’s Nick Baldick.

“It’s both more work and more fun than I anticipated,” says Sullivan of Sullivan & Baldick. “Because you get to be in charge, you’re able to involve yourself with clients in a more in-depth way.

“But it’s a lot of work to start a business. You have to find space, transfer all your contracts, and make sure people understand where to find you—and you have a lot of lunches.”