Big Money Cre­ated A New Cap­i­tal City

Wash­ing­ton and Pol­i­tics Trans­formed As Lob­by­ing Boomed

The Washington Post Sunday - - Front Page - By Robert G. Kaiser

Last Novem­ber, Ger­ald S. J. Cas­sidy took a guest duck hunt­ing on Mary­land’s East­ern Shore. The lo­ca­tion was the lob­by­ist’s $8 mil­lion, 165-acre es­tate on the Ch­e­sa­peake Bay. The guest was a for­mer pres­i­dent of the United States, Jimmy Carter.

For Cas­sidy, a shy man, this must have been a high point in a 38-year ca­reer in Wash­ing­ton. It surely demon­strated his sta­tus as a mem­ber of a new Wash­ing­ton aris­toc­racy, whose mem­bers en­joy ac­cess to the pow­er­ful, in­flu­ence on the deal-mak­ing of gov­ern­ment and great per­sonal wealth. Cas­sidy’s for­tune ex­ceeds $125 mil­lion.

The up­ward arc of his ca­reer also de­lin­eates the way money has altered Wash­ing­ton dur­ing the last three decades. Money has trans­formed Amer­i­can pol­i­tics, the ca­reer choices avail­able here and even the land­scape of the na­tion’s cap­i­tal. Rais­ing money has be­come a key to elec­toral suc­cess, while spend­ing tax­pay­ers’ dol­lars has helped in­cum­bents get re­elected.

For the past five weeks, The Wash­ing­ton Post has re­counted Cas­sidy’s jour­ney from an im­pov­er­ished child­hood in Brook­lyn to ser­vice un­der Sen. Ge­orge McGovern on hunger is­sues to his pi­o­neer­ing lob­by­ing ca­reer. This se­ries, which

be­gan in the news­pa­per on March 4, then con­tin­ued in 25 in­stall­ments on wash­ing­ton­post.com, the pa­per’s In­ter­net site, con­cludes with this ar­ti­cle.

Cas­sidy helped change Wash­ing­ton by shap­ing the cul­ture of con­gres­sional ear­marks that be­came so im­por­tant in the last dozen years. Ear­marks di­rectly trans­fer the gov­ern­ment’s money to par­tic­u­lar in­sti­tu­tions and in­ter­ests. He and his orig­i­nal part­ner helped in­vent the idea of lob­by­ing for ear­marked ap­pro­pri­a­tions — an idea that made Cas­sidy rich and fed a sys­tem of in­ter­de­pen­dence be­tween lob­by­ists and Congress that thrives to­day.

Cas­sidy’s suc­cess has been re­mark­able — even his com­peti­tors ac­knowl­edge awe at the size of his for­tune. But this self­in­vented man, though proud of his wealth, is not com­fort­able boast­ing. In in­ter­views for th­ese ar­ti­cles, some of his most poignant re­marks con­cerned his fail­ures and dis­ap­point­ments.

In a blog he launched this year on his com­pany’s Web site, which he used to re­spond to in­stall­ments of this se­ries, Cas­sidy of­fered a warn­ing about the fu­ture of lob­by­ing: “Our pro­fes­sion is at a crit­i­cal point where we can ei­ther em­brace the con­struc­tive changes and re­forms by Congress or we can seek out loop­holes and con­tinue the slip­pery slide into his­tory along side the ranks of snake oil sales­men.”

Mak­ing Mil­lions

The first lob­by­ing firms were es­tab­lished in the mid-’70s, just when Cas­sidy left McGovern’s se­lect com­mit­tee on nu­tri­tion to be­gin his lob­by­ing ca­reer. As the reach of the fed­eral gov­ern­ment ex­tended into more cor­ners of Amer­i­can life, op­por­tu­ni­ties for lob­by­ists pro­lif­er­ated. “The is­sues have mul­ti­plied,” as Cas­sidy put it. Over th­ese three decades the amount of money spent on Wash­ing­ton lob­by­ing in­creased from tens of mil­lions to bil­lions a year. The num­ber of free-lance lob­by­ists of­fer­ing ser­vices to pay­ing clients has grown from scores to thou­sands. Cas­sidy was one of the first to be­come a mil­lion­aire by lob­by­ing; he now has plenty of com­pany.

The term “lob­by­ist” does not do full jus­tice to the com­plex sta­tus of to­day’s most suc­cess­ful prac­ti­tion­ers, who can play the roles of in­flu­ence ped­dlers, cam­paign con­trib­u­tors and fundrais­ers, po­lit­i­cal ad­vis­ers, res­tau­ra­teurs, bene­fac­tors of lo­cal cul­tural and char­i­ta­ble in­sti­tu­tions, coun­try gen­tle­men and more. They have helped make greater Wash­ing­ton one of the wealth­i­est re­gions in Amer­ica.

Dur­ing his time in Wash­ing­ton, Cas­sidy said in one of many in­ter­views he gave for th­ese ar­ti­cles that the United States has ex­pe­ri­enced “a huge re­dis­tri­bu­tion of in­come, and you can’t blame just the Repub­li­cans, be­cause it has hap­pened through Demo­cratic pres­i­den­cies, and through Demo­cratic and Repub­li­can con­gresses.”

So the rich have got­ten richer, the weak weaker? “I refuse to ar­gue the ob­vi­ous. . . . It’s just true, largely be­cause they have less rep­re­sen­ta­tion. You look at the move­ments out there, there is no anti-hunger move­ment, there is no com­mit­tee on the Hill look­ing into poverty.” Rep­re­sen­ta­tion, of course, is Cas­sidy’s line of work. It is as old as the repub­lic, but only in Cas­sidy’s time has lob­by­ing be­come the big­gest Wash­ing­ton in­dus­try.

This hap­pened be­cause lob­by­ing works so well. Cas­sidy and his orig­i­nal part­ner, Ken­neth Schloss­berg, demon­strated its ef­fi­cacy by de­vis­ing ways to win ear­marked ap­pro­pri­a­tions from Congress for their clients, orig­i­nally col­leges, univer­si­ties and med­i­cal cen­ters. As Cas­sidy’s clients be­gan to win ap­pro­pri­a­tions of $10 mil­lion, $15 mil­lion, $20 mil­lion and more in the 1980s, new lob­by­ing firms emerged to com­pete with Cas­sidy. An in­creas­ing num­ber of in­sti­tu­tions and lo­cal gov­ern­ments looked for help to win ear­marks of their own. The lob­by­ing boom had be­gun.

It cre­ated a new ca­reer op­tion for the men and women who had come to Wash­ing­ton to work in the gov­ern­ment and could now cash in on their ex­pe­ri­ence. Un­til the 1980s, the typ­i­cal ca­reer of an aide on Capi­tol Hill lasted many years, even decades; to­day the av­er­age is prob­a­bly a few years. “Go­ing down­town” — be­com­ing a lob­by­ist — has be­come a rit­ual, and not just for staff as­sis­tants. Nu­mer­ous mem­bers of the House and Se­nate who re­tire or lose re­elec­tion bids have be­come lob­by­ists as well. More than 200 for­mer mem­bers of Congress are reg­is­tered to lobby their for­mer col­leagues. This is a new phe­nom­e­non in Amer­i­can his­tory.

The young men who left the Hill to work for Cas­sidy in the 1980s were pi­o­neers in this mi­gra­tion. Mem­bers of that group, mostly Democrats, liked rep­re­sent­ing univer­si­ties and med­i­cal cen­ters. “I al­ways felt I was lob­by­ing on the side of the good guys,” said El­liott Fiedler, one of Cas­sidy’s early as­so­ciates.

From the out­set Cas­sidy was also in­ter­ested in cor­po­rate clients. One of his first was the Ocean Spray cran­berry co­op­er­a­tive, for which he or­ga­nized a po­lit­i­cal ac­tion com­mit­tee, then su­per­vised the dis­tri­bu­tion of its con­tri­bu­tions to fa­vored mem­bers of Congress. At the time that he did this, in the early ’80s, a cor­po­rate PAC was a rel­a­tively new phe­nom­e­non; now, they’re ubiq­ui­tous.

Cas­sidy likes rep­re­sent­ing cor­po­rate clients on what he calls pol­icy is­sues. In his view, cor­po­rate rep­re­sen­ta­tion is good busi­ness be­cause the is­sues at play rarely res­onate with the pub­lic.

“In a lot of ar­eas, the stakes are be­tween big com­pa­nies, and it’s hard to ar­gue that one so­lu­tion is bet­ter than an­other so­lu­tion with re­gard to the con­sumer’s in­ter­est,” Cas­sidy said. “The is­sue,” he added, “is whether Com­pany A’s so­lu­tion, or Com­pany B’s so­lu­tion, based on their tech­nol­ogy or their foot­print, is the right one.” Cor­po­ra­tions are by far the big­gest em­ploy­ers of Wash­ing­ton lob­by­ists, and in re­cent years, cor­po­rate rep­re­sen­ta­tion has dis­placed ap­pro­pri­a­tions busi­ness as the big­gest cat­e­gory for Cas­sidy & As­so­ciates.

Fundrais­ing Gone Wild

Lob­by­ists, in­clud­ing Cas­sidy, have been cen­tral fig­ures in the po­lit­i­cal fundrais­ing that has re­con­fig­ured Amer­i­can pol­i­tics in the last gen­er­a­tion. In 1976, the cost of the av­er­age win­ning cam­paign for the House of Rep­re­sen­ta­tives was about $86,000; last year, it was nearly $1.3 mil­lion. In the same pe­riod, the av­er­age cost of win­ning a Se­nate seat rose from $609,000 to $8.8 mil­lion. Just last week, Demo­cratic and Repub­li­can can­di­dates for pres­i­dent re­ported rais­ing more than $130 mil­lion in the first three months of the year prior to the elec­tion, num­bers with­out prece­dent.

In­cum­bent mem­bers of the House and Se­nate com­plain that they have to spend a third or more of their work­ing hours rais­ing money for their next elec­tions. To help with this task, lob­by­ists have be­come cam­paign trea­sur­ers and fundrais­ers for mem­bers and have been re­spon­si­ble for scores of mil­lions in po­lit­i­cal con­tri­bu­tions.

Cas­sidy and his wife, Loretta, have given more than $1 mil­lion to politi­cians since he be­came a lob­by­ist. His em­ploy­ees have given at least $5 mil­lion, ac­cord­ing to Fed­eral Elec­tion Com­mis­sion records. Lob­by­ists con­sider this part of their busi­ness. For years, Cas­sidy and his col­leagues have or­ga­nized fundrais­ing events, typ­i­cally break­fasts, in a board room of their fed­eral-style of­fices at 700 13th Street NW.

Cas­sidy un­der­stands the low re­gard many Amer­i­cans have for his pro­fes­sion but thinks it is un­fair. “Lob­by­ing is no more per­fect than is the prac­tice of law or the prac­tice of medicine,” he ob­served — im­ply­ing that it is no worse, ei­ther. He prides him­self on his firm’s “tra­di­tion of ethics and in­tegrity,” trum­peted on the firm’s Web site. Since 1988, Cas­sidy’s lawyers have given his em­ploy­ees an­nual ethics sem­i­nars.

Nev­er­the­less, Cas­sidy nearly got tainted by the big­gest lob­by­ing scan­dal ever. This was the Abramoff af­fair, named for Jack Abramoff, a cun­ning op­er­a­tor who had a brief but amaz­ingly lu­cra­tive lob­by­ing ca­reer. The Abramoff story fea­tured rev­e­la­tions of bribery and con­niv­ing, all lu­bri­cated with cam­paign con­tri­bu­tions, that ended some con­gres­sional ca­reers. The scan­dal sent Abramoff to fed­eral prison, and sent the rep­u­ta­tion of Wash­ing­ton lob­by­ists reel­ing. Congress has adopted sev­eral re­forms since to try to limit ear­marks and iden­tify their spon­sors.

The Post in­tro­duced the Abramoff af­fair in Fe­bru­ary 2004 with a front page story de­scrib­ing how Abramoff and pub­lic re­la­tions man Michael Scan­lon had made $45 mil­lion over three years for do­ing what looked like very lit­tle for four In­dian tribes. A month later, Cas­sidy of­fered Abramoff a job as a con­sul­tant to bring new busi­ness to the firm. They struck a deal just days af­ter Abramoff’s law firm had forced him to re­sign and is­sued a state­ment cit­ing “per­sonal trans­ac­tions and re­lated con­duct which are un­ac­cept­able to the firm.”

“There was no crim­i­nal al­le­ga­tion,” Cas­sidy em­pha­sized when he dis­cussed his de­ci­sion to hire Abramoff. “There was sim­ply [crit­i­cism] that his rates and so forth were of­fen­sive.” Soon there was also a full-blown in­ves­ti­ga­tion by the Se­nate In­dian Af­fairs Com­mit­tee.

Cas­sidy ended his re­la­tion­ship with Abramoff only af­ter Sen. Daniel Inouye (DHawaii ), a mem­ber of the In­dian Af­fairs Com­mit­tee, told him bluntly that he had to do so. Cas­sidy felt close to Inouye and did what he in­structed three months af­ter of­fer­ing Abramoff a job.

In the first en­try in his blog on his firm’s Web site, Cas­sidy wrote: “Sure, I’ve made mis­takes along the way, among them was fall­ing for the smoke and mir­rors of the man at the cen­ter of the worst vi­o­la­tion of our pro­fes­sion, of the pub­lic’s trust and the Con­sti­tu­tion.”

Two Dis­ap­point­ments

In hours of con­ver­sa­tion, Cas­sidy re­peat­edly por­trayed him­self as a reg­u­lar guy who came up with a few orig­i­nal ideas and got a lot of good ad­vice. Many of those ideas had lit­tle or noth­ing to do with lob­by­ing. From the be­gin­ning, Cas­sidy has been on alert for new op­por­tu­ni­ties: “I was look­ing to­ward mak­ing more money from my in­vest­ments than I was go­ing to make lob­by­ing,” he ex­plained. And he did.

Cas­sidy’s re­ac­tion to his own wealth has been com­pli­cated. He lives large, rid­ing around town in his chauf­feured car, spend­ing thou­sands on cus­tom-made clothes, in­vest­ing big money in, for ex­am­ple, the Char­lie Palmer Steak restau­rant at the foot of Capi­tol Hill just for the fun of it. He has fash­ioned a wine cel­lar of more than 7,000 bot- tles. He loves to go to Eng­land and live like a gen­tle­man of the kind his Ir­ish an­tecedents would have con­sid­ered an anath­ema. Chuck Dolan, a friend and for­mer col­league and also an Ir­ish Amer­i­can, re­called a lunch he and Cas­sidy once had at the House of Lords in Lon­don as the guests of the Earl of Clan­william and his son, Lord Guil­ford. The earl sneaked them onto the floor of Lords. “We said we wished our fa­thers could see us now!” Dolan re­counted.

Cas­sidy’s busi­ness suc­cesses have ob­vi­ously meant more to him than any po­lit­i­cal machi­na­tions. He ex­pressed great pride in those suc­cesses. But he also con­fessed to two big dis­ap­point­ments.

The first in­volved foot­ball, which for the ado­les­cent Gerry Cas­sidy was more than a game. He was a full­back and line­backer. As a se­nior at Holy Cross High School in Flush­ing, Queens, he met Alex Bell, Vil­lanova’s head coach in an era when the school played big-time foot­ball. Bell ex­pressed in­ter­est in him, Cas­sidy re­called. “I thought I un­der­stood the coach . . . to say that if I showed up I would have a schol­ar­ship.”

But he had to make the team to get the schol­ar­ship. The com­pe­ti­tion was fierce. “So I didn’t get to play,” he said. “It was prob­a­bly the sin­gu­lar dis­ap­point­ment in my life. . . . It was the thing I most wanted to do. If you could take ev­ery­thing else I’ve done in0 my life and roll it up into a ball, the thing I would have liked to have done was that.”

The sec­ond dis­ap­point­ment in­volved his busi­ness. It was an event that didn’t hap­pen — the fail­ure in 1998 of his at­tempt to go pub­lic, to sell shares in his lob­by­ing firm on the stock mar­ket. This was Cas­sidy’s ul­ti­mate dream, the gam­bit that could have made him a true mas­ter of the Wash­ing­ton uni­verse.

Cas­sidy’s plan was to raise $40 mil­lion to $60 mil­lion in the stock sale so he could buy nu­mer­ous other com­pa­nies — “some of the other pre­mier lob­by­ing op­er­a­tions in town . . . a ra­dio sta­tion or two, a po­lit­i­cal pub­li­ca­tion or two. I thought we could per­haps buy some ad­ver­tis­ing [agen­cies], that would be ra­dio and print ad­ver­tis­ing, all-around com­pa­nies that had done elec­tions, but re­quire them to do pub­lic af­fairs to com­ple­ment lob­by­ing . . . .”

With an em­pire like this, Cas­sidy said, he could have in­creased rev­enues from $50 mil­lion a year to $250 mil­lion.

“I think we could have done some very smart things and made a lot of money. But it didn’t hap­pen,” he said. He blamed the Asian and Rus­sian eco­nomic crises for ru­in­ing the mar­ket for ini­tial pub­lic of­fer­ings. In­stead, he sold his com­pany to a global pub­lic re­la­tions and ad­ver­tis­ing con­glom­er­ate. This made him still wealth­ier, but he no longer owns the firm that bears his name. Re­search ed­i­tor Alice Crites con­trib­uted to this re­port.

BY SUSAN BIDDLE — THE WASH­ING­TON POST

From an im­pov­er­ished youth, Ger­ald S.J. Cas­sidy has built a for­tune with his pi­o­neer­ing lob­by­ing firm.

Ger­ald Cas­sidy’s home near Cam­bridge, Md., a copy of a 19th-cen­tury farm­house. Ac­cord­ing to the ar­chi­tect’s Web site, the prop­erty in­cludes a “hunter’s lodge, barn, pool house, care­taker’s cot­tage and dog ken­nel.”

PHO­TOS BY SUSAN BIDDLE — THE WASH­ING­TON POST

Ger­ald Cas­sidy talked with Sen. Joseph R. Bi­den and Marty Russo, right, the CEO of Cas­sidy’s firm, at the an­nual Amer­i­can Ire­land Fund gala din­ner last year.

Long-time Wash­ing­ton in­sider Jody Pow­ell joins his friend Ger­ald Cas­sidy, in the back­ground, to hunt turkey near Cas­sidy’s $8 mil­lion, 165-acre es­tate on Mary­land’s East­ern Shore.

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