LOBBYIST FELLED BY RUSSIA INQUIRY FIGHTS BACK
Tony Podesta turned to art dealing after becoming ensnared in the Trump-Russia scandal.
The collapse of Tony Podesta’s US$42-million-a-year (1.3 billion baht) lobbying and public relations firm in 2017 amid a federal investigation shook up his profession and rendered him toxic — a rare Democratic victim of the Trump-era scandals.
But that was only the beginning of his troubles.
Mr Podesta, long an outsized character in the influence industry and Democratic fundraising, turned to his enormous collection of modern art for solace and income. But when the pandemic sent the art market reeling, he sold the penthouse condo in Washington he had been using to show and sell his collection and secured a loan from the government’s Paycheck Protection Programme for struggling small businesses.
Discussions about consulting gigs and a return to a fundraising circuit that had turned its back on him were halted by a combination of his declining income, pandemic restrictions and an infection from knee surgery that left him hooked to an intravenous antibiotic drip for months.
To top it off, he said, his email accounts and website were frozen after Chinese cyber-thieves launched a wide-ranging phishing campaign using one of his domain names.
“It’s not been an easy time,” Mr Podesta said in an interview, recalling a low point when he was being attacked on Twitter by former President Donald Trump, and a television crew was on his block anticipating an indictment.
But the indictment never came. The Justice Department dropped its investigation, Mr Podesta’s health began improving, and pandemic restrictions were lifting. Mr Trump was defeated, and Mr Podesta’s longtime allies took control in Washington.
Now Mr Podesta is exploring a return to a landscape he once dominated.
President Joe Biden, who came to office with decades-long ties to Washington’s Democratic establishment, pledged not to accept campaign money from lobbyists or to allow them to serve in government agencies they had recently lobbied without a waiver. Nevertheless, he has drawn criticism from progressives and independent watchdogs for selecting former corporate lobbyists, consultants, lawyers and officials for a number of top administration posts, while lobbyists and consultants with close ties to his administration have capitalised on increased demand for their services.
Mr Podesta, who has known Mr Biden and some of his closest aides for decades, noted approvingly that the Biden campaign and the Democratic National Committee had accepted a combined $2,750 in donations from him last year, and that he had been welcomed at a virtual fundraiser hosted by the campaign’s chair, Steve Ricchetti, a longtime friend who once sold his lobbying firm to Mr Podesta.
Mr Ricchetti is a counsellor to Mr Biden in the White House, and his brother Jeff Ricchetti, a former employee of Mr Podesta’s lobbying firm, has seen his lobbying income increase significantly. “They hire all these former lobbyists,” Mr Podesta said. “They shouldn’t not take money from another former lobbyist.”
Mr Podesta is not just any former lobbyist. Over the course of three decades, he built one of the highest-grossing firms in Washington, representing companies and interests across industries and ideologies, including military contractors like Lockheed Martin and Boeing, big banks, a tobacco company, pharmaceutical-makers and foreign governments including that of Hosni Mubarak, the authoritarian former Egyptian leader, Myanmar’s military junta and entities connected to the Saudi government.
His firm benefitted from the perception that he had access to Democratic administrations and congressional offices — a perception enhanced by his fundraising and personal connections to top Democrats. In 2016, Mr Podesta donated or raised nearly $900,000 for the Democratic Party and Hillary Clinton.
Her presidential campaign chair was Mr Podesta’s younger brother John, himself a stalwart of Washington’s Democratic establishment. Both Podesta brothers became characters in the Russia investigation that loomed over much of Mr Trump’s presidency. Emails stolen from John Podesta’s personal Gmail account by Russian intelligence revealed embarrassing rifts roiling Clinton’s presidential campaign and Washington’s Democratic establishment.
Over the years, Tony Podesta became known for his flashy Italian suits and loafers and his pricey collections of art and real estate. At various times, he owned a Louise Bourgeois sculpture that was featured on the cover of the catalogue for Sotheby’s prestigious contemporary art evening auction, as well as a three-bedroom condo in Manhattan’s Flatiron district and waterfront homes in Tasmania and Sydney; Venice, Italy, and the northern Virginia suburbs of Washington — each adorned with sometimes provocative art from his collection.
While he sold the lakefront home in northern Virginia in 2007, former neighbours still discuss an installation in his guest bathroom consisting of a closed-circuit video camera installed inside a toilet allowing users to observe their bodily processes from a unique angle.
His primary residence now, a 650 sq m house in Washington’s Kalorama neighbourhood, houses a rotating display of his art, as well a wine cellar with thousands of bottles. The art and the real estate attracted wide attention during Mr Podesta’s headline-grabbing divorce from his second wife, Heather, 26 years his junior, in 2014, which involved teams of lawyers.
His firm’s demise stemmed primarily from its involvement in one strand of the special counsel’s investigation. The firm took on a client with ties to Viktor Yanukovych, who was president of Ukraine, in 2012, but initially failed to register with the Justice Department under foreign lobbying laws and found itself in the midst of a tangled investigation involving Republican lobbyists Paul Manafort and Rick Gates, who had worked for Mr Yanukovych’s political party before joining the Trump campaign and becoming central targets of the investigation by special counsel Robert Mueller.
Mr Manafort and Mr Gates were charged with unregistered foreign lobbying, tax fraud and other crimes in October 2017.
Within a day, the Podesta Group’s bank, citing the special counsel’s investigation and the draining of the firm’s accounts to pay the staff’s legal fees, cancelled its credit line, rendering the firm illiquid, Mr Podesta said.
Months later, the special counsel referred the investigation of Podesta’s firm to federal prosecutors in Manhattan. They informed Mr Podesta in September 2019 that he would not be charged.
Lately, Mr Podesta has been operating his art dealership out of his Kalorama home, where his neighbours include the Obamas. Looking back at the investigation into his Ukraine lobbying that forced his exit from lobbying, he said, “If I had known what I know now, I never would have taken this client.”
A closed-circuit video camera in the toilet of his guest bathroom allowed users to observe their bodily processes from a unique angle.