Exile on K Street
In January the powerful Alexander Strategy Group shut down its public operations faster than merchants peddling pirated DVDs on Canal Street who hear the cops are on the way. The well-connected Republican lobbying firm, founded and run by former senior staffers of embattled ex-House majority leader Tom DeLay, explained that the publicity from the Jack Abramoff mega-scandal had fatally damaged its business. On the surface, it appears to be the fall of a major player in the GOP's K Street Project, which has made lobbying a highly partisan industry. But don't count out ASG: Already, according to the Washington Post, most of its lobbyists are setting up a "successor firm."
While ASG spins its problems as collateral damage from the Abramoff affair, it's hardly the victim of an errant public relations bomb. In fact, the firm was deeply entangled in several of the Washington scandals. Its swift shutdown offers a rare X-ray of the elaborate lobbying shell game that trades access to lucrative government contracts for funds to fill the campaign war chests keeping Republicans in power. Founded by DeLay's former chief of staff, Ed Buckham, ASG was a centerpiece of this game. In a recent report, Public Citizen lays out the rules: "In this partnership, corporations, trade associations and lobbying firms are pressured to hire only Republicans.... Those lobbyists then help the Republican leadership to 'whip on the outside'--to get Republican members of the House to vote for the leadership's legislative agenda. The lobbyists also raise enormous sums of money from their clients to ensure that Republicans remain the majority in Congress. For this fealty, the leadership grants the lobbyists access to the decision-makers and provides legislative favors for their clients." ASG had close ties to Abramoff, shared clients with him and had an overlap with some staff. The firm offered what few lobbying houses could: instant standing with the most powerful Republicans and a shortcut to the most lucrative contracts in Congress.
ASG was organized out of the same Washington townhouse as another DeLay-connected operation, the US Family Network, established in 1996 as a secret mini-war room for attacking Democratic candidates. In 1999 Buckham--then operating on behalf of USFN--funneled some $300,000 in soft-money contributions from the National Republican Congressional Committee (NRCC) through USFN to an organization called Americans for Economic Growth, which in turn used the funds to run attack ads against Democratic candidates. Buckham ran the townhouse operation with longtime DeLay crony Jim Ellis. USFN was established almost entirely with money from Abramoff's clients, according to a report in the Washington Post. Eventually, in 2004, the FEC fined the NRCC in connection with the scandal. The townhouse was also used at various points by DeLay's Americans for a Republican Majority (ARMPAC), headed by Ellis, as well as a PAC run by DeLay's handpicked successor, Roy Blunt of Missouri. As it happens, when Blunt arrived in Washington and needed someone to run his PAC, DeLay sent Ellis. Shortly after Ellis was indicted in Texas in connection with another DeLay PAC, Texans for a Republican Majority, Blunt's PAC increased its payment to Ellis to $4,000 a month, up from $3,000. Among the other tidbits in this incestuous affair: ASG employed Tom DeLay's wife, Christine, for four years.
While Abramoff, DeLay and Randy "Duke" Cunningham dominate the headlines in the current "lobbying scandal" media reports, ASG deserves to be heavily scrutinized for its role in each of those scandals and others not yet on the mainstream radar.
Just a few months ago it would have been difficult to predict ASG's downfall. The firm was enjoying a prosperous 2005, ranked as a top 25 lobbyist by National Journal, with revenues on a serious rise--up 34 percent in one year, to $8 million. In addition to powerhouses like PhRMA, Enron, TimeWarner, Microsoft and Eli Lilly, ASG counted among its clients over the years several evangelical Christian causes and organizations--among them, right-wing media operations like Salem Com munications, the National Religious Broadcasters and Grace News. ASG was also a quiet workhorse in procuring lucrative military contracts for some of its clients. Recently, ASG was on the cutting edge of one of the fastest-growing industries within the military world--private security. With the occupations of Iraq and Afghanistan, mercenaries have found themselves in high demand, scooping up lucrative contracts from the occupation forces, local politicians and foreign corporations. After Blackwater USA had four of its operatives killed in Falluja, in March 2004, it hired ASG to manage its newfound fame. This past September Blackwater forces were among the first to arrive in New Orleans after Hurricane Katrina, snagging profitable federal security contracts. Blackwater's press contact for its New Orleans operations was none other than Anne Duke, one of ASG's fourteen lobbyists. In other news stories it was Paul Behrends, a partner at ASG and a friend of Blackwater found er Erik Prince. Behrends, as it happens, was a longtime national security adviser to Representative Dana Rohrabacher of California, who incidentally has emerged as one of Abramoff's biggest defenders. A few months after hiring ASG in 2004, Black water's Prince and the company's president, Gary Jackson, both longtime GOP donors, made their first-ever contributions to DeLay. They also began contributing to several other ASG-favored lawmakers.
In November a coalition of security firms, Blackwater among them, began a push to recast their mercenary image under the banner of the International Peace Operations Association. And it was ASG they enlisted to help them do it. Among those registered by ASG as lobbyists for IPOA were several former DeLay staffers, including Buckham and Karl Gallant, former head of DeLay's ARMPAC, and Tony Rudy, DeLay's former counsel, who is deeply implicated in the Abramoff investigation. Despite the scandal, the head of IPOA, Doug Brooks, recently told Roll Call that the association with its ASG lobbyist would continue, saying, "We found them helpful in terms of what we were working on."