Big money creates a new capital city. As lobbying booms, Washington and politics are transformed.
By Robert G. Kaiser
Last November, Gerald S. J. Cassidy took a guest duck hunting on Maryland's Eastern Shore. The location was the lobbyist's $8 million, 165-acre estate on the Chesapeake Bay. The guest was a former president of the United States, Jimmy Carter.
For Cassidy, a shy man, this must have been a high point in a 38-year career in Washington. It surely demonstrated his status as a member of a new Washington aristocracy, whose members enjoy access to the powerful, influence on the deal-making of government and great personal wealth. Cassidy's fortune exceeds $125 million.
The upward arc of his career also delineates the way money has altered Washington during the last three decades. Money has transformed American politics, the career choices available here and even the landscape of the nation's capital. Raising money has become a key to electoral success, while spending taxpayers' dollars has helped incumbents get reelected.
For the past five weeks, The Washington Post has recounted Cassidy's journey from an impoverished childhood in Brooklyn to service under Sen. George McGovern on hunger issues to his pioneering lobbying career. This series, which began in the newspaper on March 4, then continued in 25 installments on washingtonpost.com, the paper's Internet site, concludes with this article.
Cassidy helped change Washington by shaping the culture of congressional earmarks that became so important in the last dozen years. Earmarks directly transfer the government's money to particular institutions and interests. He and his original partner helped invent the idea of lobbying for earmarked appropriations -- an idea that made Cassidy rich and fed a system of interdependence between lobbyists and Congress that thrives today.
Cassidy's success has been remarkable -- even his competitors acknowledge awe at the size of his fortune. But this self-invented man, though proud of his wealth, is not comfortable boasting. In interviews for these articles, some of his most poignant remarks concerned his failures and disappointments.
In a blog he launched this year on his company's Web site, which he used to respond to installments of this series, Cassidy offered a warning about the future of lobbying: "Our profession is at a critical point where we can either embrace the constructive changes and reforms by Congress or we can seek out loopholes and continue the slippery slide into history along side the ranks of snake oil salesmen."
The first lobbying firms were established in the mid-'70s, just when Cassidy left McGovern's select committee on nutrition to begin his lobbying career. As the reach of the federal government extended into more corners of American life, opportunities for lobbyists proliferated. "The issues have multiplied," as Cassidy put it. Over these three decades the amount of money spent on Washington lobbying increased from tens of millions to billions a year. The number of free-lance lobbyists offering services to paying clients has grown from scores to thousands. Cassidy was one of the first to become a millionaire by lobbying; he now has plenty of company.
The term "lobbyist" does not do full justice to the complex status of today's most successful practitioners, who can play the roles of influence peddlers, campaign contributors and fundraisers, political advisers, restaurateurs, benefactors of local cultural and charitable institutions, country gentlemen and more. They have helped make greater Washington one of the wealthiest regions in America.
During his time in Washington, Cassidy said in one of many interviews he gave for these articles that the United States has experienced "a huge redistribution of income, and you can't blame just the Republicans, because it has happened through Democratic presidencies, and through Democratic and Republican congresses."
So the rich have gotten richer, the weak weaker? "I refuse to argue the obvious. ... It's just true, largely because they have less representation. You look at the movements out there, there is no anti-hunger movement, there is no committee on the Hill looking into poverty." Representation, of course, is Cassidy's line of work. It is as old as the republic, but only in Cassidy's time has lobbying become the biggest Washington industry.
This happened because lobbying works so well. Cassidy and his original partner, Kenneth Schlossberg, demonstrated its efficacy by devising ways to win earmarked appropriations from Congress for their clients, originally colleges, universities and medical centers. As Cassidy's clients began to win appropriations of $10 million, $15 million, $20 million and more in the 1980s, new lobbying firms emerged to compete with Cassidy. An increasing number of institutions and local governments looked for help to win earmarks of their own. The lobbying boom had begun.
It created a new career option for the men and women who had come to Washington to work in the government and could now cash in on their experience. Until the 1980s, the typical career of an aide on Capitol Hill lasted many years, even decades; today the average is probably a few years. "Going downtown" -- becoming a lobbyist -- has become a ritual, and not just for staff assistants. Numerous members of the House and Senate who retire or lose reelection bids have become lobbyists as well. More than 200 former members of Congress are registered to lobby their former colleagues. This is a new phenomenon in American history.
The young men who left the Hill to work for Cassidy in the 1980s were pioneers in this migration. Members of that group, mostly Democrats, liked representing universities and medical centers. "I always felt I was lobbying on the side of the good guys," said Elliott Fiedler, one of Cassidy's early associates.
From the outset Cassidy was also interested in corporate clients. One of his first was the Ocean Spray cranberry cooperative, for which he organized a political action committee, then supervised the distribution of its contributions to favored members of Congress. At the time that he did this, in the early '80s, a corporate PAC was a relatively new phenomenon; now, they're ubiquitous.
Cassidy likes representing corporate clients on what he calls policy issues. In his view, corporate representation is good business because the issues at play rarely resonate with the public.
"In a lot of areas, the stakes are between big companies, and it's hard to argue that one solution is better than another solution with regard to the consumer's interest," Cassidy said. "The issue," he added, "is whether Company A's solution, or Company B's solution, based on their technology or their footprint, is the right one." Corporations are by far the biggest employers of Washington lobbyists, and in recent years, corporate representation has displaced appropriations business as the biggest category for Cassidy & Associates.
Fundraising Gone Wild
Lobbyists, including Cassidy, have been central figures in the political fundraising that has reconfigured American politics in the last generation. In 1976, the cost of the average winning campaign for the House of Representatives was about $86,000; last year, it was nearly $1.3 million. In the same period, the average cost of winning a Senate seat rose from $609,000 to $8.8 million. Just last week, Democratic and Republican candidates for president reported raising more than $130 million in the first three months of the year prior to the election, numbers without precedent.
Incumbent members of the House and Senate complain that they have to spend a third or more of their working hours raising money for their next elections. To help with this task, lobbyists have become campaign treasurers and fundraisers for members and have been responsible for scores of millions in political contributions.
Cassidy and his wife, Loretta, have given more than $1 million to politicians since he became a lobbyist. His employees have given at least $5 million, according to Federal Election Commission records. Lobbyists consider this part of their business. For years, Cassidy and his colleagues have organized fundraising events, typically breakfasts, in a board room of their federal-style offices at 700 13th Street NW. The graphics and databases below show political contributions from Gerald and Loretta Cassidy, as well as Cassidy & Associates employees.
Cassidy understands the low regard many Americans have for his profession but thinks it is unfair. "Lobbying is no more perfect than is the practice of law or the practice of medicine," he observed -- implying that it is no worse, either. He prides himself on his firm's "tradition of ethics and integrity," trumpeted on the firm's Web site. Since 1988, Cassidy's lawyers have given his employees annual ethics seminars.
Nevertheless, Cassidy nearly got tainted by the biggest lobbying scandal ever. This was the Abramoff affair, named for Jack Abramoff, a cunning operator who had a brief but amazingly lucrative lobbying career. The Abramoff story featured revelations of bribery and conniving, all lubricated with campaign contributions, that ended some congressional careers. The scandal sent Abramoff to federal prison, and sent the reputation of Washington lobbyists reeling. Congress has adopted several reforms since to try to limit earmarks and identify their sponsors.
The Post introduced the Abramoff affair in February 2004 with a front page story describing how Abramoff and public relations man Michael Scanlon had made $45 million over three years for doing what looked like very little for four Indian tribes. A month later, Cassidy offered Abramoff a job as a consultant to bring new business to the firm. They struck a deal just days after Abramoff's law firm had forced him to resign and issued a statement citing "personal transactions and related conduct which are unacceptable to the firm."
"There was no criminal allegation," Cassidy emphasized when he discussed his decision to hire Abramoff. "There was simply [criticism] that his rates and so forth were offensive." Soon there was also a full-blown investigation by the Senate Indian Affairs Committee.
Cassidy ended his relationship with Abramoff only after Sen. Daniel Inouye (D-Hawaii ), a member of the Indian Affairs Committee, told him bluntly that he had to do so. Cassidy felt close to Inouye and did what he instructed three months after offering Abramoff a job. The timeline below shows key events in the Abramoff investigation and the Abramoff-Cassidy relationship.
In the first entry in his blog on his firm's Web site, Cassidy wrote: "Sure, I've made mistakes along the way, among them was falling for the smoke and mirrors of the man at the center of the worst violation of our profession, of the public's trust and the Constitution."
In hours of conversation, Cassidy repeatedly portrayed himself as a regular guy who came up with a few original ideas and got a lot of good advice. Many of those ideas had little or nothing to do with lobbying. From the beginning, Cassidy has been on alert for new opportunities: "I was looking toward making more money from my investments than I was going to make lobbying," he explained. And he did.
Cassidy's reaction to his own wealth has been complicated. He lives large, riding around town in his chauffeured car, spending thousands on custom-made clothes, investing big money in, for example, the Charlie Palmer Steak restaurant at the foot of Capitol Hill just for the fun of it. He has fashioned a wine cellar of more than 7,000 bottles. He loves to go to England and live like a gentleman of the kind his Irish antecedents would have considered an anathema. Chuck Dolan, a friend and former colleague and also an Irish American, recalled a lunch he and Cassidy once had at the House of Lords in London as the guests of the Earl of Clanwilliam and his son, Lord Guilford. The earl sneaked them onto the floor of Lords. "We said we wished our fathers could see us now!" Dolan recounted.
Cassidy's business successes have obviously meant more to him than any political machinations. He expressed great pride in those successes. But he also confessed to two big disappointments.
The first involved football, which for the adolescent Gerry Cassidy was more than a game. He was a fullback and linebacker. As a senior at Holy Cross High School in Flushing, Queens, he met Alex Bell, Villanova's head coach in an era when the school played big-time football. Bell expressed interest in him, Cassidy recalled. "I thought I understood the coach ... to say that if I showed up I would have a scholarship."
But he had to make the team to get the scholarship. The competition was fierce. "So I didn't get to play," he said. "It was probably the singular disappointment in my life. ... It was the thing I most wanted to do. If you could take everything else I've done in my life and roll it up into a ball, the thing I would have liked to have done was that."
The second disappointment involved his business. It was an event that didn't happen -- the failure in 1998 of his attempt to go public, to sell shares in his lobbying firm on the stock market. This was Cassidy's ultimate dream, the gambit that could have made him a true master of the Washington universe.
Cassidy's plan was to raise $40 million to $60 million in the stock sale so he could buy numerous other companies -- "some of the other premier lobbying operations in town ... a radio station or two, a political publication or two. I thought we could perhaps buy some advertising [agencies], that would be radio and print advertising, all-around companies that had done elections, but require them to do public affairs to complement lobbying ... ."
With an empire like this, Cassidy said, he could have increased revenues from $50 million a year to $250 million.
"I think we could have done some very smart things and made a lot of money. But it didn't happen," he said. He blamed the Asian and Russian economic crises for ruining the market for initial public offerings. Instead, he sold his company to a global public relations and advertising conglomerate. This made him still wealthier, but he no longer owns the firm that bears his name.
Research editor Alice Crites contributed to this report.
Key Related Materials
An overview of Gerald Cassidy's life and career.
A "cast of characters" in the life and career of Gerald Cassidy.
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