MCI Opens Lobbying Office

Despite Ebbers’ Indictment, Telecom Co. Shoots for Comeback

Posted March 5, 2004 at 5:27pm

Two years after filing the largest bankruptcy claim in U.S. history, MCI is returning to Washington.

The embattled telecommunications giant has tapped Republican Frank Cantrel to head its revamped lobbying operation, retained a half-dozen Washington firms and laid plans to triple the number of lobbyists on its payroll.

The move comes just days after federal prosecutors indicted former MCI WorldCom President Bernard Ebbers for lying to investors about the health of the once high-flying long distance phone company.

“We are expanding dramatically internally,” said Tom Hoog, chairman of Hill & Knowlton, who has helped MCI restructure its lobbying operation.

MCI officials said the firm has received permission from its bankruptcy court to make job offers to several lobbyists and firms.

So far, the company has signed deals with its longtime lobbying firm Patton Boggs as well as Ryan, Phillips, Utrecht & MacKinnon; Wexler Walker; and Fierce Isakowitz & Blalock.

MCI’s return to Washington after its two-year battle in bankruptcy court marks what could be a triumphant comeback for a company that once redefined corporate lobbying.

In the 1980s, legendary MCI executive Bill McGowan funded a team of aggressive lobbyists and proved that a savvy, well-heeled Washington operation could help open new markets and boost corporate profits.

“The joke was that MCI used to be a Washington law firm with an antenna,” said Jot Carpenter, a lobbyist with rival AT&T.

MCI’s work at the Federal Communications Commission and on Capitol Hill helped it gain market share on AT&T by shaping favorable rules for the telecommunications marketplace.

The inside-the-Beltway campaign propelled the Washington-based firm to one of the largest U.S. telecommunications companies.

When WorldCom purchased MCI, Ebbers shifted the company’s attention away from Washington even as MCI and AT&T wrestled with the Baby Bell phone companies over the FCC’s implementation of the 1996 Telecommunications Act.

MCI officials say the new hires show that the company is prepared to return to the aggressive style that served it so well before it was snatched up by Ebbers’ WorldCom.

MCI may sign up more firms, but its current roster of outside firms comes with strong ties to both Republicans and Democrats in Congress and the Bush administration.

Jeff MacKinnon is a former top aide to newly appointed Energy and Commerce Chairman Joe Barton (R-Texas).

His partner Tom Ryan was chief aide to Rep. John Dingell (D-Mich.), the ranking member of the Energy and Commerce panel.

Another partner at the firm, Bill Phillips, once was chief of staff to Appropriations Chairman Ted Stevens (R-Alaska).

Wexler Walker’s Jack Howard is the only Washington lobbyist to serve in a leadership role in the House and Senate, as well as in President Bush’s White House.

Fierce Isakowitz & Blalock is an all- Republican team with strong ties to the White House, while Patton Boggs is known for its Democratic ties and success on appropriations projects.

MCI also plans to retain Hoog and Hill & Knowlton as a management consultant as the company continues to expand its Washington presence.

“I’m giving them a hand setting it up,” Hoog said.

After helping guide MCI through its bankruptcy process, Hoog’s first move was to promote Cantrel to head the office.

Cantrel, a Washington native, joined the company in 1988 when it had one of the most aggressive lobbying operations in town.

A former Capitol Hill aide, Cantrel worked for Sen. Bob Packwood (R-Ore.) and the Senate Commerce Committee in the 1980s.

Cantrel replaces Richard Fruchterman, who ran MCI’s Washington office until December.

Donna Sargis will head the company’s regulatory affairs division with primary responsibility over the Federal Communications Commission.

MCI has not yet hired a chief Congressional lobbyist, though the company plans to announce several new hires in the next few weeks.