The departure this week of the American Forest & Paper Association’s chief executive, Juanita Duggan, seemed unexpected and, on the surface, downright surprising. Duggan, a veteran association head, had smoothed tensions on a key policy matter after joining the group, and her energetic style seemed just what the association needed, according to interviews with the group’s members and sources familiar with the trade group.
But under the surface, they say, it was a bad fit from the beginning.
“She tried to do too much change too fast” at an organization that had just been downsized before her arrival, said one official with an AF&PA member company.
But the feeling of dissatisfaction was apparently mutual.
Duggan was surprised by the financial state of the association when she joined it, expecting a bigger budget and an association that would welcome a strong leader.
Craig Wolf, who succeeded Duggan as CEO of the Wine and Spirits Wholesalers of America, and had been the general counsel there under Duggan, said she inherited problems at the AF&PA she had not been expecting. “The association had multiple problems that she did not realize existed in terms of their organizational structure and dues structure … and she was not given enough information about the nature and extent of the problems.”
Al Sample, president of the Pinchot Institute for Conservation, a forest conservation think tank that has worked with the AF&PA in the past, said the paper and forest industry has changed radically in recent years, leaving its trade group with less money in dues.
Huge consolidation in the industry, he said, has led to fewer members. And the biggest members, such as International Paper and Weyerhaeuser, already were paying the maximum in dues. “When they acquired other companies, the dues they paid didn’t increase, and the dues of the companies that were acquired went away,” he explained.
Sample said those factors led to the major downsizing of the association before Duggan joined. The policy rifts among member companies, Sample and other sources said, remain.
Duggan is being replaced, at least temporarily, by the AF&PA’s top lobbyist, Donna Harman. “I hope that Donna Harman is wildly successful and that she has all the support she needs and that she can calm the waters,” Duggan said in a brief telephone interview
As for its finances, the American Forest & Paper Association in its tax filings for 2005, the most recent year available, reported revenue of less than $42 million and expenses that exceeded $44 million. Those expenses included $830,914 for the salary of Duggan’s predecessor, former Rep. Henson Moore (R-La.). He also received $38,894 for benefits and deferred salary.
For the same tax year, the Wine and Spirits Wholesalers of America reported total expenses of $6.6 million and total revenue of more than $7.7 million. Duggan’s salary in 2005 at the wine and spirits group was listed as $501,845 with $26,910 in benefits and deferred compensation.
More than 10 people interviewed for this story stressed that Duggan’s split with the group had nothing to do with partisan politics. Duggan, who is a Republican, retained outside lobbying consultants from the all-GOP firm Fierce, Isakowitz & Blalock and the all-Democratic firm Glover Park Group, among others.
Instead, sources said, it was internal politics that abruptly ended her tenure there.
Several sources, who would speak only about the matter on condition of anonymity, said Duggan had difficulties working with the association’s board members, including Jim Rubright, the current board chairman and president of Rock-Tenn Co. in Norcross, Ga.
Rubright, who according to his Rock-Tenn assistant and an assistant at the AF&PA was at the paper association’s 19th Street Northwest headquarters Tuesday, did not return calls seeking comment. The D.C.-based assistant said Rubright was in “closed-door meetings.”
Several forest and paper industry insiders said the association would be in good hands during the interim leadership of Harman. However, several of them questioned whether the combined group representing forest and paper industries truly could survive. For example, many of the old-line timber companies that used to have holdings in both land and manufacturing have sold off their land holdings to real estate investment trusts and now concentrate on the product end of the business.
The association has 180 members based in offices in Washington, D.C., as well as Leesburg, Va., and Beijing.
It also has been dealing with a major legislative issue, pushing this Congress for the Timber Revitalization and Economic Enhancement Act of 2007, which includes a modernization of the real estate investment trusts rules related to timber land. Sources familiar with the association said the AF&PA’s support was the result of a delicate compromise among industry players, spearheaded by Duggan. When she joined the association it was split over that issue and a timber-tax matter, the sources say.
A spokesman said Duggan’s departure will not disrupt the group’s agenda on Capitol Hill.
“This change in no way impacts the American Forest & Paper Association’s agenda,” said press secretary Charles Lardner. “We will not miss a step and will continue to push forward the interests of our members on Capitol Hill and in state legislatures.”
Eric Vautour, who runs the D.C. office of search firm Russell Reynolds Associates, conducted the AF&PA search, which resulted in Duggan’s move to the association. Search firms often will redo a search if the candidate who is hired leaves too soon. Vautour did not return calls seeking comment, and the AF&PA spokesman said he did not know what, if anything, was planned for another search.
Sources said the search committee had previously narrowed the position down to two finalists: Duggan and former Interior Secretary Gale Norton.
Sources familiar with the organization said that Duggan, a veteran association executive and lobbyist known as both politically savvy and hard-charging, was a poor match for the association, whose previous leader, Moore, cut a more subtle, genteel figure.
Duggan arrived in Washington in 1977 from Mobile, Ala., and earned a degree from the Georgetown University School of Foreign Service. She worked for a one-term Republican Senator from Alabama, Jerry Denton Jr., and then spent three years in the presidential administrations of both Ronald Reagan and George H.W. Bush.
Her first trade association job was at the National Food Processors Association, where as the chief lobbyist she dealt with cancer-causing agents in food. She spent two and a half years at Philip Morris, handling the details of the tobacco settlement.
Then it was nearly a decade at the Wine and Spirits Wholesalers. She specializes, she told the lobby publication Influence in 2001, in “representing products that are difficult to represent.”
The Wine and Spirits Wholesalers were a very different type of trade organization than the AF&PA. There, all of her 200-some member companies were privately held, which meant quicker, more definitive decision making among member CEOs.
More importantly, they all did the same thing: distribute wine and spirits to the nation’s estimated 40,000 retail outlets.
At the AF&PA, the membership is split between two very different groups with different sets of issues: those who grow “fiber,” as industry insiders call wood pulp and those who use fiber for manufacturing.
While it’s a well-known cliche in Washington that associations often have to play internal politics and are often left on the sidelines of big industry fights because of a divided membership, two sources familiar with the group said that the AF&PA’s issues are more extreme than typical association infighting.
Duggan has not indicated what her next move will be, though there already is much speculation about her moving to another trade association or starting her own lobbying venture.
T.R. Goldman contributed to this report.