A top Democratic consulting firm, Mack|Crounse Group, split this month after one of the partners used a shell firm to produce mail pieces that attacked candidates backed by the other partner’s banner progressive clients.

The break-up between longtime partners Kevin Mack and Jim Crounse illustrates how the complications of modern politics — outside spending, jungle primaries and interest groups — can put a firm in conflict with itself.

For five cycles, Mack|Crounse Group was a giant among Democratic mail firms, counting top liberal groups, labor unions, elected officials and even President Barack Obama as clients. But all it took to fell the famed partnership were two obscure state California Assembly races last fall.

“Colossal mistakes were made on the other side of a firewall,” Mack said in a phone interview Wednesday. “I was blindsided by this a month or so ago. Those mistakes left me no choice but to split the firm.”

Mack had built up a client listed dominated by progressive groups such as the AFL-CIO, the American Federation of State, County and Municipal Employees, the National Education Association and Planned Parenthood Federation of America. His partner, Crounse, focused on candidate-oriented campaigns, including many in Democratic House leadership and repeat customers who hold competitive seats.

Together, Mack|Crounse employed a staff of 13 people, and competitors estimate that the firm generated tens of millions of dollars in revenue each cycle. It worked for 19 current members of Congress, 12 state parties and nearly every labor, environmental and women’s group in politics.

Sealed With a Conflict

In California, especially in the pricey Los Angeles media market, political war is waged through direct mail. In October, brass-knuckled mail pieces circulated in two Democrat-vs.-Democrat Assembly races: the 10th District in northern California and the 50th District, which covers some of the wealthiest neighborhoods of Los Angeles.

The Democratic incumbents in those two races, Assemblyman Michael Allen and Assemblywoman Betsy Butler, boasted deep support from progressive groups who support abortion rights, labor and environmentalists and top-ranking state Democrats. They both also backed farm workers’ rights legislation and, as a result, soon found themselves on the receiving end of some of the toughest mailers of the cycle.

The hardest-hitting piece accused Butler of helping to “shield” a “former teacher and accused sexual predator” because of her loyalties to “special-interest patrons.” An arm of the Western Growers Association, a trade association that bills itself as representing “family farmers” in the Arizona and California region, sponsored the pieces.

A firm called “Blue Works LLC” produced the mail pieces, according to California election records. The company registered at the Virginia address of two Mack|Crounse Group employees — including Mack. His client roster is filled with groups that backed Allen and Butler.

Both incumbents lost — and Butler by just 1,705 votes. Powerful Democrats were furious.

After the Firewall Crumbled

Several months later, Mack said he received word about the source of the mailers from labor leaders in California and Washington, D.C., during the first week of February. He denied any knowledge of the mailers or participation in their production.

Instead, Mack placed responsibility for the mail pieces solely on his former partner. Crounse concurred with Mack in a statement emailed to CQ Roll Call.

“Kevin Mack was not involved in the work for this client and had no knowledge of the work,” Crounse said.

He added that the company was only directly involved in one side of these races — opponents challenging Butler and Allen — and therefore no conflict of interest existed. He went on to vouch for the liberal credentials of the two Democratic candidates that his mailers supported.

“Both candidates we did mail on behalf of won, both are progressive and both are backed by progressive elements of the Democratic Party,” he added.

Mack said the reason his address came up in public records is because Blue Works was one of several Mack|Crounse shell companies that existed long before 2012 or these California races. But as a result of this incident, Mack decided it was time to end the partnership.

“I am the labor and progressive community’s No. 1 mail consultant,” he said. “And no firm I can be associated with can do this type of work. It crossed a line that I am not willing to cross for anyone.”

The duo , which has been in business together since 2005, notified colleagues of their split in separate emails last week. Mack is forming a new firm, Mack Sumner, with one of the firm’s employees, Dylan Sumner, and eight other staffers from the now-disbanded firm. The two remaining employees will join Crounse.

Back in California, Butler expressed disbelief in a phone interview when she read through the Mack|Crounse client list filled with groups that supported her bid. She questioned how a firm aligned with these groups could work to defeat her.

“Seems like this firm lacks a moral compass,” she said in an email. “Profits over values. Very disappointing.”