Ken Schlossberg and Gerry Cassidy built one of the most successful lobbying firms in Washington, but their relationship foundered. After they split, one would become rich, the other would disappear.Robert G. Kaiser
By 1984, the prospering lobbying firm of Schlossberg-Cassidy was, like so many bad marriages, doomed to dissolution.
The partnership that created the firm wasn't exactly a marriage, but its two principals behaved uncannily like incompatible spouses. Gerald Cassidy and Kenneth Schlossberg, once intimate friends, were both 35 years old when they started their firm. They related to each other as two ethnic kids from the Northeast, as Schlossberg put it.
But they were dissimilar men. Cassidy had grown up poor in Brooklyn and Queens in a pretty dysfunctional Irish Catholic family, whereas Schlossberg had enjoyed a Jewish version of an Ozzie and Harriet/Brady Bunch upbringing in Brookline, Mass., where his father ran a funeral home. Cassidy was driven to get rich, and to put the deprivations of his childhood far behind him. Schlossberg liked to smell the roses: "I liked the '50s -- mom and pop and the two kids, working five days a week, nine to five, weekends off. It was a very healthy thing." To this day Schlossberg, an avid golfer, abhors workaholics. "People who want to work all the time put normal people at a terrible disadvantage," he says.
In the beginning they built their firm by working well together. Schlossberg's connections got them going. Cassidy's drive and his organizational skills kept them going. Cassidy was shy; Schlossberg was gregarious. Cassidy liked being in business; Schlossberg liked being in the public policy arena. They truly complemented each other.
By 1984, after nearly 10 years together, they were taking in close to $3 million a year in revenue. They could keep most of it for themselves, since overhead was modest and they had only a few colleagues. More important, they had hit on an amazingly lucrative business model. They had a corner on a burgeoning market that no one else had yet discovered: lobbying for earmarked appropriations from Congress for colleges, universities and hospitals. If the earmarks provided millions, they could charge hundreds of thousands. They had not only invented a new game; they wrote the rules and they played it alone, without real competitors.
In March of that year, the Wall Street Journal published a long article about Schlossberg-Cassidy and their accomplishments, detailing how they had won appropriations for Columbia and Catholic University in Washington (view the article [pdf]). Schlossberg, a former reporter who had many contacts in the press, says he "managed" the story. It was a wonderful -- and free -- advertisement for the firm.
Despite their successes, the two partners were growing weary of each other. They got on each other's nerves, quite literally. According to Cassidy, as the business grew Schlossberg withdrew from it. "He became more and more homesick, and I went to his house once to see him about it and told him, we can't go on like this. ..... And he told me he was really going to do better, he committed to the business and so on."
Schlossberg was bothered by Cassidy's explosive temper and by his brusque manner dealing with some people. "I remember one of my initial heart-to-hearts with Gerry, and I told him that I really wasn't happy with the way he was throwing himself around, just his behavior ..... really beating up on little people. He got upset and said 'Hey listen, we got a good thing going here, don't spoil it.'.''
Schlossberg wasn't sure it was such a good thing. He says he feared that he and Cassidy were becoming part of a corrupt new Washington where money trumped all. Political action committees were becoming important sources of political money, and Cassidy eagerly helped clients, beginning with the Ocean Spray cranberry cooperative, create PACs. Schlossberg says he thought it was improper to mix representation of universities with running PACs for corporate clients.
As evidence of his thinking then, Schlossberg cites a May 1986 op-ed article that he wrote for the New York Times. It appeared under the headline "The Greening of Washington":"The truth is that money has replaced brains and hard work as the way for a lobbyist to get something done for his client," he wrote. He predicted that "legal corruption in our legislative and administrative processes will create a disaster."
In 1984 Schlossberg and Cassidy agreed that they should spend some money to create a presence at the Democratic National Convention in San Francisco. They persuaded two clients, Ocean Spray and the Pirelli Co., the Italian maker of cables, tires and other products, to finance "hospitality suites" to entertain delegates and members of Congress. They invited some other clients to come out to San Francisco, hoping to be able to introduce them to important members of the House and Senate.
Schlossberg remembers this as quite a fruitful week of making contacts. He recalls a lunch where he sat at the same table as Tip O'Neill, Pamela Harriman and Walter Shorenstein, a big Democratic contributor from San Francisco. But Cassidy remembers Schlossberg taking it easy. Jimmy Collins, a Tip O'Neill protégé and former Massachusetts state representative who was then helping Schlossberg-Cassidy at the convention, thought "Sophia [Schlossberg] and Ken were out there for a good time."
Collins recalled that he and his wife, Mary, accompanied by Cassidy's wife, Loretta, had taken one of two limos the firm had hired for the convention week on a drive up the Pacific coast one afternoon. This, said Collins, was a welcome respite from days of intense work. But the drive took longer than planned, and when they arrived back at their hotel they found the Schlossbergs were waiting impatiently for them, because they had wanted to use the limo. "Sophia gave a ration of crap to my wife, who was appalled by her behavior," Collins said.
The Schlossbergs were trying to get to Marin County, across the Bay, to buy a Brittany spaniel. Schlossberg and Cassidy both remember that at some point that afternoon, Sophia blew up at Cassidy on the telephone. Schlossberg says this happened when they were waiting for the limo in the lobby of the Fairmont Hotel, and they learned that Loretta Cassidy was using the car. "I called Gerry and asked what had happened," Schlossberg said. Then "Sophie got on the phone and read him the riot act. ..... Sophie doesn't take crap from anybody."
Cassidy remembers this too: "Sophia took the phone away from him and was ..... yelling at me."
Cassidy "got really ripped about this," recalled William Cloherty, one of their earliest associates. "There had been other blowups of various types like this. So I took Gerry aside at the Fairmont Hotel and said do you really want to bring this thing to a conclusion? Think about it. I said, take a hard minute here and think about it. Do you really want to end this thing? 'God. Bill, I do, I do,' he replied. And I said then if you really want to end it, I'll get you a lawyer. That's where you put your money on the table, Gerry, you hire a lawyer whose job it is to separate this operation. There's really no going back on that once you really are launched. ..... 'Do it; do it today,' he said."
Cloherty did act quickly. He called a lawyer friend in New York who referred him to Lester "Ruff" Fant in the Washington office of Sidley & Austin, the huge Chicago firm. In future years Fant would provide financial and legal advice to Cassidy that would stimulate his appetite for wealth and help make him a rich man. They met in Washington soon after that Democratic convention ended to discuss how to break up the lobbying firm.
The same idea had occurred to Schlossberg. "I'd had it. ..... I went to our company attorney ..... and told him I wanted him to inform Gerry that I wanted to split the business. I had in mind that I would keep most of the university business and Gerry could have the corporations and the PACs. Gerry immediately countered that he wouldn't split it and he wanted to buy me out."
Cassidy quickly convened a meeting of the two "associates" then in the firm, James Fabiani and Frank Godfrey, at Godfrey's townhouse in Arlington. Fabiani recalled: "Gerry explained the situation and said, 'I want to get Ken out before Ken succeeds in getting me out, and I want you guys on my team.' It actually got to a discussion of barring Ken from the firm's offices." Fabiani and Godfrey readily agreed to join Cassidy.
Like wronged spouses, Cassidy and Schlossberg found a painful, drawn-out and expensive way to end their union. After much intrigue and maneuvering, and on the eve of a trial to which Schlossberg -- the plaintiff -- was determined to attract the maximum possible attention from his friends in the news media, they reached a settlement. Cassidy would buy Schlossberg out (eventually he paid $812,600 -- nearly $2 million in today's dollars), provided all the clients then with the firm remained and paid their bills. Schlossberg understood that if he took any of those clients away, his payout could be reduced.
Cassidy recalled that the firm had 27 clients when they split, including two pro bono clients . All but three (two of them the non-paying clients) chose to go with Cassidy. "It was really stunning to [Schlossberg] that none of them went with him," Cassidy recalled. "But it was because he had withdrawn from the business so much."
Schlossberg recalled what must have been a painful phone call from John Silber at Boston University. He called to say that Boston would stay with Cassidy. "I said, OK, just please remember all I did for you," Schlossberg recounted. [A previous version of this story mistakenly reported that the phone call was from Jean Mayer of Tufts University.]
Schlossberg kept lobbying on his own for several years, but eventually gave it up.
Early in November 1984, Schlossberg-Cassidy disappeared, to be succeeded by Cassidy & Associates. It would quickly become the biggest lobbying firm in town, measured by revenue. By the late '80s Cassidy was paying himself millions of dollars a year in salary, and he invested much of it in the booming stock market.
The boy from Red Hook, Brooklyn, abandoned by his real father, beaten by his step-father, repeatedly a witness to evictions and repossessions through a harrowing childhood, was becoming a rich man.
Washington Post research editor Alice Crites contributed to this report.
Tomorrow: On his own, Cassidy becomes a juggernaut.
Key Related Materials
An overview of Gerald Cassidy's life and career.
A "cast of characters" in the life and career of Gerald Cassidy.
Please email us to report offensive comments.
Posted by: Poppa Cap | March 12, 2007 09:40 PM
Posted by: Todd | March 12, 2007 10:55 PM
Posted by: Sandy | March 13, 2007 02:22 AM
Posted by: just a thought | March 13, 2007 05:25 AM
Posted by: Todd | March 13, 2007 07:23 AM
Posted by: Todd | March 13, 2007 07:30 AM
Posted by: Wake me when it's over | March 13, 2007 07:40 AM
Posted by: Wake me when it's over | March 13, 2007 07:42 AM
Posted by: Calvin | March 13, 2007 07:45 AM
Posted by: Rachael | March 13, 2007 08:14 AM
Posted by: Rachael | March 13, 2007 08:59 AM
Posted by: sportsfan | March 13, 2007 09:31 AM
Posted by: JT | March 13, 2007 09:38 AM
Posted by: DC Dave | March 13, 2007 09:40 AM
Posted by: Patrick | March 13, 2007 10:17 AM
Posted by: Todd | March 13, 2007 10:51 AM
Posted by: Holden | March 13, 2007 11:21 AM
Posted by: Mary | March 13, 2007 11:59 AM
Posted by: Rachael | March 13, 2007 12:20 PM
Posted by: swtexas | March 13, 2007 12:41 PM
Posted by: swtexas | March 13, 2007 12:42 PM
Posted by: Patrick | March 13, 2007 12:50 PM
Posted by: swtexas | March 13, 2007 12:50 PM
Posted by: swtexas | March 13, 2007 12:57 PM
Posted by: Jeff | March 13, 2007 01:05 PM
Posted by: Dwight | March 13, 2007 01:19 PM
Posted by: Dave | March 13, 2007 01:29 PM
Posted by: VA-mon | March 13, 2007 02:55 PM
Posted by: Todd | March 13, 2007 03:44 PM
Posted by: Todd | March 13, 2007 03:53 PM
Posted by: Get a life | March 13, 2007 04:01 PM
Posted by: Holden | March 13, 2007 04:17 PM
Posted by: Todd | March 13, 2007 04:27 PM
Posted by: Todd | March 13, 2007 04:37 PM
Posted by: Todd | March 13, 2007 04:47 PM
Posted by: Rick | March 13, 2007 04:53 PM
Posted by: Patrick | March 13, 2007 05:06 PM
Posted by: Holden | March 13, 2007 05:16 PM
Posted by: Rachael | March 13, 2007 06:03 PM
Posted by: Todd | March 13, 2007 07:25 PM
Posted by: word count | March 13, 2007 07:28 PM
Posted by: Todd | March 13, 2007 08:00 PM
Posted by: Sportsfan | March 13, 2007 08:39 PM
Posted by: Rachael | March 13, 2007 08:45 PM
Posted by: Todd | March 14, 2007 12:06 AM
Posted by: toddradian | March 18, 2007 07:16 PM
The comments to this entry are closed.