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Lobbying World Still Adapting

A lackluster economy, mediocre Capitol Hill recruits and the fast-approaching 2010 midterm elections are spelling an end to the Democratic gold rush on K Street, lobbying sources say.

“The hiring spree of Democrats is over,— one Democratic lobbyist said recently.

Following a Democratic hiring binge that started after the 2006 midterm elections, a prominent downtown headhunter said, staffers and Members from the majority party continue to hold the most in-demand profile with trade associations, corporations and firms. Still, the recruiter said too few Democratic candidates with health care, energy, environmental and taxation experience are stepping forward.

“Everyone would love to have expertise in those areas,— said the headhunter, who would speak about the K Street marketplace only on background. “There are plenty of people qualified to do the job; there aren’t enough people who want to do the job.—

In particular, the recruiter also said corporations increasingly are turning to staffers from moderate Republican offices and ex-GOP Members to fill the gap. Think former Sen. Gordon Smith (R-Ore.), who was tapped to head the National Association of Broadcasters — not someone with a heavily ideological bent such as ex-Sen. Rick Santorum (R-Pa.), the headhunter said.

“On the corporate side, a lot of clients have had a preference for Democrats but will take Republicans who are bipartisan and not nuclear reactive,— the headhunter added. “They’ll only do it if the [Republican] candidates are not radioactive.—

“The demand is pretty strong,— the source added. “It’s just a question of supply — especially those who have experience on the Senate side.—

Smith was defeated last cycle by now-Sen. Jeff Merkley (D-Ore.). The moderate former GOP Member left Covington & Burling last fall for the NAB, where he replaced Republican lobbyist David Rehr as the NAB’s president and CEO.

The hiring slowdown began last year as the economy hit the skids, another Democratic lobbyist said, but has “stabilized— in recent months. The lobbyist also said that although former Members from both parties continue to do well on K Street, out-of-work ex-GOP staffers continue to experience difficultly finding work.

“Republican former Members have been doing just fine, Democratic Members have been doing just fine,— the headhunter said, but added that “the pay isn’t what it was a few years ago.—

While the going rate in years past, was a $1 million compensation package for former Members joining law firms and lobbying shops, K Street sources said, that figure is now virtually nonexistent. Ex-Members heading to firms can expect to field offers from $450,000 to $550,000, said one Democratic lobbyist who is responsible for hiring at his firm. That half-million-dollar figure, this lobbyist added, “is flat to down from a few years ago.—

“For former Members, the market is there, but the pay isn’t what it was a few years ago because of where the market is,— this lobbyist said. “Everything is down.—

Public Affairs Council President Doug Pinkham said “most organizations try to find a balance— in the ideological mix of their lobbying teams. And he added that there has certainly not been a redux of the GOP’s infamous K Street Project under way. That project sought to install loyal GOPers into top-tier lobbying jobs.

“Since the election, a lot of companies and associations have looked at their staffs and realized they didn’t have any Democrats,— Pinkham said. “But it hasn’t been a monumental shift, such that they’re firing members of one party and hiring them from the other. … Honestly, those days are in the past.—

Democratic staffers with ties to powerful moderate Members, such as those in the Blue Dog or New Democrat coalitions, also have seen their stocks rise in recent months. Former Democratic staffers Stacey Alexander, Drew Goesl, Libby Greer, Ryan Guthrie and David Burns all have recently headed downtown.

But despite the surge for moderate Democratic staffers, a Democratic lobbying source said even majority party Members are grumbling privately that too many firms, trade associations and corporations continue to employee Republicans.

“Behind closed doors, many Members cry that there aren’t enough [Democrats] downtown,— this Democratic lobbying source said. “All of the power still resides with Republicans. … It’s a function partially of the economy, but Republicans feel that they’ve weathered the storm.—

In addition to retaining many GOP lobbyists, some firms may soon look to make additional Republican hires. With the minority party expected to pick up House and Senate seats in November, Democratic Members may have even more to cry about.

“In the corner of my eye, I’m looking at bulking up on the Republican side,— a Democratic lobbyist said. “We’re looking at what’s coming in November.—

Republican lobbyist Sam Geduldig agreed, saying that “people are already starting to prepare for that new dynamic.—

“The conventional wisdom is — and all of the pundits agree — that the tide has turned,— he said. “I think people are starting to prepare for a tightened House and Senate dynamic.—

But while GOP pickups are likely, another Democratic lobbyist said history is on the Democrats’ side, speculating that Republican gains will be minimal and firms will continue to prefer Democratic staffers coming off the Hill.

“Republicans downtown think they’re picking up the Senate and the White House [in 2012] and they’re not,— the source said. “If history holds, [Democrats will] pick up seats in 2012, so you’re looking at [six] more years of Democrats in control.—

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