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Lobbyists Preparing for Post-Midterm Fallout

With a GOP takeover of one or both chambers of Congress becoming a distinct possibility, K Street is maneuvering to adapt to what may be a dramatically altered political landscape on Capitol Hill next year.

Some firms and associations are shopping for lobbyists with Republican credentials, hoping to nab personnel before their salary demands escalate if the GOP wins big in November.

But others are wary of dumping Democrats because they said much of the action next year will be in the executive branch agencies, which are implementing the new health care and financial regulation laws.

Then there are those downtown who are taking a wait-and-see approach and are not willing to make big personnel investments before they know the outcome of the election.

“People are all over the map,” said Robert Raben, a Democratic lobbyist whose Raben Group represents clients such as gun-control and same-sex rights groups. “It all depends on your risk tolerance as a business owner.”

Raben said he knows that some heavily Democratic firms are already wooing potential Republican hires.

“Check out the RSVP list of who is having lunch with whom, and I think you will see some interesting pairings,” he said.

But Raben also said he did not anticipate that lobbying firms would make wholesale changes in their staffs.

“It is not tectonic,” he said.

Nels Olson, a headhunter at Korn/Ferry International, said he warns clients not to overreact to a single election.

“You don’t make long-term business decisions based on short-term political realities,” he said. “It is important to have a bipartisan team.”

Heeding such advice is Scott Segal, who heads the government relations section at Bracewell & Giuliani, which represents energy companies including utilities and oil and gas firms.

“If you have a reputation for subject-matter expertise and fair dealing, changes in Congressional leadership should not force lobbying shops to lurch back and forth in their hiring patterns,” Segal said.

Many energy companies have been at loggerheads with the Obama administration and the Democratic leadership in Congress over energy and climate change policy, and they will likely welcome a Republican-controlled Congress. And oil companies have historically contributed more to Republicans than Democrats.

But Segal said the differences over energy have a “more regional aspect to it, rather than a necessarily partisan one.”

While some shops have put a stop to new lobbying hires until after the elections, not everyone wants to wait.

Ivan Adler, a headhunter at the McCormick Group, said many K Streeters “are reading the tea leaves” and have determined there will be significant Republican gains and are hiring accordingly.

“I’m not seeing that hiring is being put off,” he said. “It is better than it has been for a really long time for Republicans on K Street.”

The perception that Republicans are on the rebound may be influencing the hiring decisions of some trade groups, such as the American Council of Life Insurers, which recently tapped former Sen. Dirk Kempthorne (R-Idaho) to be its new president. Kempthorne was picked over prominent Democrats said to be under consideration, including former Nebraska Sen. Bob Kerrey.

Not everyone sees a Republican hiring spree in the coming months.

Democratic lobbyist Steve Elmendorf said he doubted anyone would be hiring before the elections, a stretch in which he predicted little would happen on Capitol Hill.

“I don’t think Congress will have much of a substantive legislative agenda between now and November,” he said.

Although his firm, Elmendorf Strategies, is all Democratic, Elmendorf said he does not think his business will suffer if Republicans take control of one or both chambers.

Elmendorf, a former aide to then-Rep. Dick Gephardt (D-Mo.), said that when clients hire him to deal with Democratic lawmakers, they usually tap a Republican counterpart to handle GOP Members.

Elmendorf and other lobbyists said the elections are not likely to change the need by outside interests to lobby lawmakers of both parties, particularly in the Senate, where individual Members wield considerable power. And lobbyists pointed out that Republicans have proved over the past year that even the minority party can be effective.

K Street firms that have specialized in working with House Democrats might be the most vulnerable if Republicans win the House, one GOP consultant said. In the House, the minority party has far less influence than in the Senate.

Rich Gold, a partner at Holland and Knight, said his firm has bulked up on Democrats since 2006 to deal with a flurry of legislative and regulatory activities in areas such as energy policy and health care. The firm’s lobbying staff is about
55 percent Democratic and 45 percent Republican.

The firm is searching for a lobbyist to work with Senate Republicans, although Gold said that was to fill a vacancy, rather than as a response to polls showing a possible GOP takeover.

He added that in the weeks leading up to the election, firms have to make a tough call of whether to hire a Republican lobbyist now or wait and risk paying more as the demand for such staffers rises after the elections.

“The closer you get, it gets a lot more expensive,” he said.

Gold, a Democrat, added that another problem in making hiring decisions is figuring out what legislation Congress will tackle in January.

“It is a very cloudy issue mix for the next Congress,” he said.

Some veteran lobbyists said increasingly complex legislative issues may make partisan affiliation less significant than it has been in the past.

“I don’t think folks will hire anybody just because they have an R next to their name,” said Mark Merritt, president of the Pharmaceutical Care Management Association and former GOP campaign aide.

“The old days are gone when it was just about access. A lot of this stuff is so highly technical. It is more than being a Republican or Democrat.”

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