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K Street: Will DeLay Inc. Survive the Indictment?

Carl Thorsen, a former general counsel to then-House Majority Leader Tom DeLay (R-Texas), spent late last week in a lobbying frenzy.

Shuttling from the Justice Department to Capitol Hill on behalf of entertainment-industry clients, he barely had time to process the story exploding all around him.

“It’s been consuming to a certain extent on an emotional level,” said Thorsen, a lobbyist with the American Continental Group since leaving DeLay’s leadership office in January. “But it hasn’t distracted me from my work.”

Rattled but undeterred, members of the sprawling lobbying network the Texas Republican spent years building expressed confidence that Republicans on and off the Hill could weather DeLay’s stunning indictment last week.

Even without DeLay, they said, DeLay Inc. would survive. Less clear, however, is exactly what happens next.

With uncertainty reigning at the top of GOP ranks, Republican lobbyists are struggling to make sense of events last week that sidelined the most powerful advocate for business interests in the House. Even as many predicted DeLay’s victory over his indictment and a swift return to the leadership, many were bracing for what could be a bitter succession battle.

In the meantime, lobbyists were eyeing those close to the ranks of lawmakers suddenly moving up the GOP leadership ladder and making their best guesses about the impact of the shake-up at the top on the legislative agenda for the rest of the year.

Smoothing what could have been a rocky transition, DeLay’s successor, Rep. Roy Blunt (R-Mo.), has spent the past three years taking control of the corporate network DeLay built to help leverage the Republican agenda. That means that top corporate lobbyists are known to Blunt and his staff. And for now, much of DeLay’s leadership staff remains in place.

“The Blunt operation overlays the DeLay operation overlays the Hastert operation,” said Ralph Hellmann, a former aide to Speaker Dennis Hastert (R-Ill.) now lobbying for the tech sector. “It’s all inextricably linked. Being in leadership staff is kind of like being in a fraternity or sorority — it’s a tight knit family and everybody knows everybody.”

Since most lobbying takes place at the staff level, alumni of DeLay’s office can still claim valuable ties to the rest of the GOP apparatus.

But part of those lobbyists’ clout stems from their coziness with the powerful Majority Leader himself — someone who could tip the balance for or against another Member’s committee assignment or other priorities. The lobbyists who previously had Members coming to them to get in DeLay’s good graces will still have their vast network of contacts, but they won’t have the Majority Leader’s ear. That alone will make them a less valuable commodity, other lobbyists said.

And the lobbyists in DeLay’s inner circle might face problems of their own. Some of their names already have come up in news accounts of the federal investigations looking into the business dealings of Jack Abramoff.

Although the Alexander Strategy Group, for example, has signed up at least 14 clients this year alone and reported strong growth, the firm also has filed termination reports for one client, the Korea-United States Exchange Council, which was involved in the controversy over improperly funded travel.

Alexander Strategy’s Terry Haines, a former staff director of the House Financial Services Committee, said his firm’s strength comes from the depth of its partners’ contacts across town. “Our relationships are very broad in the House, very broad in the Senate, and very broad in the administration,” he said. “In order to get something done, you have to be able to work all three.”

For the rest of this year, lobbyists agreed, the House legislative agenda will largely move ahead unaffected. Must-pass measures such as spending bills and reconciliation likely should proceed apace. So will a second energy bill to address sky-high energy prices and a second disaster relief bill to cope with the costs of recent hurricanes.

Gregg Hartley, chief operating officer of Cassidy & Associates and the former chief of staff in Blunt’s whip operation, downplayed any disruption to the pro-business agenda, though Hartley acknowledged that the recent events are wreaking havoc with his own schedule.

“It’s been disruptive to my personal business for the last couple of days, just because when you have a friend who is making a change, you’re called upon to be helpful,” he said.

But by all accounts, DeLay was a headstrong director of GOP policy in the House, and his tumble could sink some of his favored priorities not shared by others in leadership. Most notable among them, perhaps, is immigration reform, a politically touchy issue that DeLay was eager to tackle.

“Blunt’s not a big fan of doing it at all,” said a top GOP lobbyist. This lobbyist noted that Rep. David Dreier (R-Calif.), who will be dividing leadership duties with Blunt, almost lost his previous election over immigration.

Lobbyists added that GOP fundraising efforts stand to suffer. Indeed, the very source of DeLay’s current troubles stem from his aggressive tactics in search of campaign dollars.

DeLay’s efforts cemented the party’s relationship with the city’s corporate offices and netted record sums to help reelect Republican colleagues, but they also earned him ethics slaps when he overreached. Now, with DeLay focusing on his own unsure reelection prospects, some lobbyists fear a fundraising vacuum in the party.

“It certainly sets our fundraising back,” said a former Republican leadership staffer, who added that the new leadership roster should be careful not to repeat DeLay’s missteps. “Some of Blunt’s people can be very aggressive fundraisers, and they’re going to have to watch it.”

To be sure, top GOP lawmakers ascending the ranks to fill DeLay’s absence all have extensive downtown ties.

Blunt’s inner circle includes Hellmann, the top lobbyist for the Information Technology Industry Council; Hartley; Jack Oliver of Bryan Cave Strategies; Kirsten Chadwick of Fierce, Isakowitz & Blalock, who has taken a leading role in whipping tough trade fights such as the Central American Free Trade Agreement; and Blunt’s wife, Abigail, a lobbyist with Altria.

Dreier, who has had a lower profile than Blunt as chairman of the Rules Committee, nevertheless has his own kitchen cabinet. It includes: Ed Kutler, a lobbyist with Clark and Weinstock who manages his PAC; Bill Pitts, a former Rules Committee staff director with Notification Technologies; Lisa Nelson, a top lobbyist with Visa; and Vince Randazzo, a former aide now with Wachovia.