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The Gold Standard

Covington & Burling Becomes a Lobby Power

Covington & Burling’s big play into the lobbying business in late 2002 seemed like a complete bust within a matter of weeks.

The firm, which previously shied away from a big-league legislative practice, had successfully wooed longtime lobbyist Martin Gold in November of that year. Before Gold could even unpack his boxes at Covington, he promptly got wooed again, this time by incoming Senate Majority Leader Bill Frist (R-Tenn.).

Gold — who got to know the ins and outs of Senate procedure working for another Majority Leader from Tennessee, Sen. Howard Baker — left Covington for Frist with no promise of ever coming back. But after a year as Frist’s floor adviser and counsel, he returned. Gold and an expanding team he has helped to recruit have paid off.

Last year, Covington reported earning close to $9 million in lobbying fees under the Lobbying Disclosure Act. In 2001, Covington’s LDA figures were less than $2 million.

“I thought a lot about different opportunities,” Gold said recently of his decision to rejoin Covington. He spoke in his office, decorated with photographs taken by Baker including a shot of the archeological ruins at Petra, Jordan. On the opposing wall is a picture of Gold meeting with Vice President Cheney on judicial nominations. It reads, “Marty Gold — Thanks for your help! Dick Cheney.”

“The reason I came back here was the opportunity to build this up to the standards of the firm and to mold it,” Gold added.

Despite Covington’s growth in the lobbying area, the firm still cuts a low profile on Capitol Hill, and the office Covington was perhaps best plugged into — Frist’s — shut down when Frist retired from the Senate. Several Democratic leadership staffers, as well as some Republican ones, said they knew little of the firm’s reputation on Capitol Hill and said Covington is still best known for its legal work.

When it comes to giving out campaign cash, Covington isn’t a player: It has no political action committee.

But Congressional aides who work on specific issues such as telecom or taxes say they routinely turn to Covington experts when crafting legislation or making policy. And Covington’s recent client roster plops it into some key fights this Congress including legislation to allow for generic versions of bio-tech drugs for client Genzyme and proposals to change tax policy on private equity firms for client Kohlberg Kravis Roberts.

Covington also has added Democrats, a reflection of the party in power, bringing on former Rep. Mike Barnes (D-Md.), who most recently ran the Brady Center to Prevent Gun Violence, and Holly Fechner, who was policy director for Sen. Edward Kennedy (D-Mass.).

John Lawrence, who is chief of staff to Speaker Nancy Pelosi (D-Calif.), said he doesn’t know much about Covington & Burling’s lobbying operation, but Fechner, he said, was an impressive labor and education staffer. “She is one of the top-rated people on the Hill with respect to credibility and expertise,” he said.

Barnes, who said his Covington job is part time but feels full time, started at the law firm in 1972 as an associate before making his way through the Maryland state government to Congress. He was lured back, in part, by partner Stuart Eizenstat, a Clinton administration official.

When Barnes started out as an associate, one of his then-colleagues was Roderick DeArment, who was lobbying at Covington even before the firm established its government affairs practice, which DeArment now co-leads with Gold. DeArment left for government service in the George H.W. Bush administration and also was chief of staff to former Senate Republican Leader Bob Dole (Kan.).

“I’ve chosen to come to Covington three times, so I obviously think very much of Covington & Burling,” he said.

DeArment started in the tax shop and ended up on the Senate Finance Committee staff and eventually back at Covington to work on tax legislation for clients.

Other longtime Covington lobbyists include partner Gerard Waldron, who a former Covington associate said was one of the first lawyers there to understand the importance of working Capitol Hill.

“Over the years, we’ve built more and more of a team to deal with government affairs and legislative matters, so it isn’t quite so lonesome,” DeArment said. “One of the hallmarks of the way we’ve chosen to go at the government affairs practice is it’s an outgrowth of our substantive expertise. I’m a tax and labor lawyer … with knowledge of how the Hill works.” That puts him in demand with private equity clients such as Kohlberg Kravis Roberts.

DeArment, like Gold, has a law degree. But as the two have built the lobbying practice at Covington, they have recruited Hill vets without J.D.s including former Frist aide Bill Wichterman, who still must keep track of his work time in the standard lawyer six-minute intervals.

“The old Covington,” Gold said, “wouldn’t have hired a nonlawyer.”

Before he joined Covington, Gold was a lobbyist for more than two decades. He left a shop he had co-founded, Legislative Strategies Group, and brought with him a roster of clients including the National Football League, which already retained Covington for legal work.

Joe Browne, an executive vice president for the NFL, said Gold is his main contact at Covington and that the law firm brought Gold in to give its lobbying a boost. “Marty has been very valuable to the league on issues ranging from terrorism insurance, stadium overflight issues to gambling,” Browne said.

Tim Hester, a member of Covington’s management committee, helped recruit Gold and has played a big role in convincing Covington to grow into lobbying.

“We had a legislative group, and Rod DeArment has been with us for a long time and had been building a nice practice, but we thought we needed to take it to a different scale,” Hester said.

Instead of acquiring a smaller firm or an existing group, Covington has added about two or three lobbyists each year over the past several years, Hester said. “It’s roughly at the scale we had in mind years ago,” Hester added. “But I’m sure it will continue to grow from here.”

Covington’s expansion has attracted the attention of K Street observers and competitors.

“They’ve obviously taken a look at what some of their competitors are doing and seeing the money they are making in the government relations area,” said lobbying headhunter Ivan Adler of the McCormick Group.

Rich Gold, who heads the public policy practice at rival Holland & Knight and is not related to Marty Gold, said, “Covington is a quality shop.” But Holland & Knight’s Gold said he doesn’t find himself competing against the firm for clients. “It’s a different model,” he said. “They’re trying to capture captive clients who they’re losing revenue on if they don’t serve.”

But cross-fertilization among the firm’s legal clients isn’t as simple as that, Marty Gold said.

“It always looks easier than it is,” he said. “But it’s fair to say that’s a good source of business and has real potential.”

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