Tony Podesta, dubbed a “Washington super lobbyist” by “Bloomberg Businessweek,” has been center stage for many of the most significant policy debates in recent history, ranging across sectors from healthcare to financial services to technology. A leading Democratic strategist, he discusses how he and his group work with in-house and outside counsel to fashion and execute winning strategies in M&A and many other areas. His remarks have been edited for length and style.
MCC: Please tell our readers about your role as a lobbyist and public affairs specialist. How did you get started?
Podesta: In 1987, my brother, John Podesta, and I hung out a shingle from a basement office in a townhouse on Capitol Hill and began calling people we knew to say we were in the business of doing lobbying and public relations for companies, trade associations and other organizations dealing with Washington, which was becoming more and more intrusive for businesses around the country. The regulatory state already had begun, so from that moment forward we’ve helped craft strategies involving legislation before Congress, issues before regulatory agencies and matters discussed in public through public relations campaigns.
MCC: Describe today’s lobbying landscape for our readers, including the key players.
Podesta: There are 8,000 registered lobbyists in Washington. Many of them work for companies’ D.C. offices, but there is also a big consulting business. The Podesta Group, which is bipartisan – half of us are Democrats, half of us are Republicans – is the largest, non-law-firm, independent organization that does this work. Our competitors range from major law firms with big lobbying practices to solo practitioners who work out of their spare rooms. There are no barriers to entry in this field. We started by hanging up a shingle. Today, one would start with a digital sign and a website. We were the first firm in Washington to have a website, so we’ve been early adopters of technology.
MCC: Why do companies and other organizations find themselves in need of a firm such as yours? Do specific sectors require more lobbying help than others?
Podesta: Government relations is not the core competency for most businesses. Some businesses have no Washington office and no ability to mount campaigns geared to Congress and the executive branch. Some companies have very small Washington offices and need, if there’s a big controversy, a much bigger effort. Sometimes companies come to us with problems that are uniquely within fields of expertise that we have.
For example, we do a lot of work on regulatory issues. One of our colleagues is a woman named Sally Katzen, who was the head of one of the most powerful, but least known, organizations in the federal government, the Office of Information and Regulatory Affairs (OIRA), which is a sub-agency of the Office of Management and Budget. Every government regulation must go through that office, and it frequently plays a very active role in shaping regulations that come from government agencies. Even if a company has an office in Washington, they may not have the kind of regulatory expertise that we can bring to bear at places like OIRA. In other cases, they may have a small D.C. office and need a lot of extra help if they find themselves in a big fight.
MCC: What else might raise a sudden need for the expertise of the Podesta Group?
Podesta: When companies do mergers and acquisitions, frequently – indeed, almost always – they will be subject to more than whatever legal review is being conducted by the DOJ or the FTC. These transactions have a way of bubbling up on Capitol Hill as well, and companies in the middle of them come to us and ask, “Can you help us get our transaction approved through the process and build congressional support for it?” Sometimes people who oppose a transaction will come to us and say, “Can you throw some sand in the gears on this one? It would be bad for our company or our industry if our two leading competitors merged and became one mega-competitor.”
Our work comes in all shapes and sizes, and from all directions. We develop a communications component in many cases, but occasionally there’s no communications component and we just work very quietly. But in public controversies in Washington, there’s often advertising inside the Beltway. There are digital campaigns. We do a lot of digital analytics to look at the arguments online. Much of public debate has migrated from what used to be 1,700 newspapers around the country – now it’s probably half that number, and they’re much smaller – to the online space. That’s an important part of our work. We have digital and digital analytics teams working on those issues.
MCC: How do government relations and public affairs specialists collaborate with in-house and/or outside counsel, and what’s the added value you bring?
Podesta: Last week, I was in China working with inside and outside counsel for a Chinese company. Outside counsel was a big international law firm headquartered in the U.S., inside counsel was Chinese, and I’m from Washington. Everybody is fashioning a strategy to have the lawyers deal with the legal issues and for us to deal with the communication issues and a congressional relations strategy. So it’s PR, government relations and legal working closely together. If these things get stove-piped, the chance of the PR people making a mistake that could harm the legal interests is increased. The chance of the PR sounding as if it was written by lawyers is increased. Usually, that’s not the right strategy. It’s very important to bring all the internal stakeholders and external consultants together. I’m a big believer in collaboration and coordination because otherwise you can make mistakes that you don’t even realize are mistakes. Without making too fine a point of it, each of us has our own expertise.
I happen to be a lawyer, but I don’t practice law. Some of us in this field are recovering lawyers; some of us are recovering journalists. The person who does our international communications spent 28 years as a reporter at “The Washington Post,” mostly as a foreign correspondent. We’ve been successful by covering all the bases and working in teams. And we have found that it’s best to do so in a way that’s open and transparent so that the client gets the benefit of the wisdom of various disciplines and the benefit, which is substantial, of everybody working toward a common strategy.
MCC: Is there a scenario that you can talk about to illustrate your work?
Podesta: We’ve worked with outside law firms and with general counsel for big international companies, such as Google (now Alphabet) and Reed Elsevier, to build support for big mergers and acquisitions. Sometimes we deal with EU issues. One of our colleagues, who now heads our Brussels office, is both an attorney and a former Italian ambassador to NATO. I remember one project when we got half of the U.S. Senate to complain to the EU about an action that they were about to take against an American company. This was an important statement of political support. We helped publicize that and made it into a big issue. We end up working in ways that promote our clients’ interests across the world, as well as in their home countries. We have corporations and businesses all over the world, from China to Eastern Europe to Silicon Valley. They have complex legal and regulatory issues, sometimes in Washington, sometimes in Brussels, sometimes in other places where it’s important to have a coordinated effort between inside counsel, outside counsel and consultants like us who do both government relations and public relations.
MCC: Can you describe the role of political fundraising and the pros and cons of corporations developing PACs?
Podesta: Most corporations have PACs. A few don’t. Many of our clients have PACs. These are nothing more than a voluntary effort on the part of the employees of a company. Usually it’s individuals who are in management who make a contribution to a political action committee and that political action committee, depending on the company, has a committee that decides who to support. They support members of the House and Senate who have views consistent with their general point of view. We often bring together clients to meet with senators or House members to discuss the congressional agenda and see where they have a chance to support members who are thoughtful and friendly to their point of view.
MCC: Please discuss the role of corporate governance in government relations. How or why should corporate board members get involved in government relations and how is that done most successfully?
Podesta: For the most part, we deal with management rather than with board members. Of course, we deal with board members of trade associations, but board members of companies occasionally pop up and get a glimpse of what’s going on in Washington. For example, we represent a bank in the Midwest that had their first-ever board meeting in Washington down the street from the Federal Reserve and near the office of the Comptroller of the Currency. They had a chance to hear firsthand from senators who are in charge of regulating the banking industry and House members similarly situated, as well as from federal regulators. In that case, Washington was a valuable backdrop for their business meeting.
We often have a chance, as well, to brief board members on legislative matters that the company faces or on the regulatory-legislative atmosphere in Washington. People are interested in this. They know there are major things to be done. We’ve just spent a lot of time in the last couple of months working for SeaWorld, which has been through a major transformation of their corporate strategy. We ended up working with some members of the board who were very actively involved in this big strategic shift and wanted to get firsthand knowledge from us. It’s uncommon, but not unknown, that we would work with board members.
MCC: How can attorneys and others become lobbyists, or otherwise get actively involved in politics?
Podesta: There are no barriers to entry. For people who are interested in becoming political volunteers, there are plenty of opportunities. All you have to do is make it known that you want to be involved. That can be organizational work, or it can be fundraising work. The Clinton campaign has been recruiting people to travel all over the country.
MCC: I understand that you have some close ties there.
Podesta: My brother is the chairman of the Clinton campaign. His home is in Washington, but I have a New York apartment. We’re roommates. We’ve sort of reverted back to the days when we were roommates before we went to school. The Clinton headquarters is in Brooklyn, so he’s there, although he travels a great deal.
MCC: Is there anything else that you’d like to share with our readers?
Podesta: If you think you have nothing at stake in Washington, think again. If you think you can’t have an impact on it, think harder. The government has become so large and intrusive in so many ways. The bottom line is that it’s much easier to try to shape a law or regulation in the process of being written than it is to argue for a change after it’s final or to look for an exception to the final rule. It’s best for any corporate counsel to look thoroughly at what’s going on in the federal government to determine where their interests lie. Very few people find that there are no issues in which they have a stake if they really look at it. We frequently are the canary in the coal mine for companies that don’t have a Washington office. It’s a lot better to catch these things early than it is to say, “I wish I had known about that.”
Published June 1, 2016.
