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Before establishing a lobbying office in Washington back in the early 1990s, Michael Kempner was consumed with looking at the city in a different way. A New Jersey Democrat and founder of the public affairs firm MWW Group, based in East Rutherford, N.J., Kempner’s goal was to grow the firm beyond the borders of the Garden State. He was primarily interested not only in lobbying government, but in using government as a marketing tool to blend the varied world of grass-roots activism, public relations, and lobbying. “We began to not just lobby Washington but understand how the bully pulpit of Washington worked,” Kempner says. “We were government and political professionals first and became PR people. We were less encumbered by the rules of the game, but our heritage is rooted in the public affairs side of the business.” Thinking differently and being unencumbered by Washington’s rules of the road appeared, early on, to serve Kempner well. In 2003, at the height of MWW’s success at recruiting top talent, the firm reported $3.2 million for its lobbying efforts for the year, according to disclosure reports filed with the secretary of the U.S. Senate. But that was four years ago. Today’s story is different. After 14 years with MWW, its senior vice president, Jonathan Slade, bolted the firm in 2005. MWW veterans Tracy Becker and Christine Pellerin soon followed. Clients such as Bacardi USA Inc. left, and other employees headed for the exit. In the first half of 2004, the firm’s lobby revenue was $1.9 million; in the first half of 2005 the revenue declined to $1.4 million, and in the first half of 2006, lobby revenues had dropped to $1 million, according to Senate disclosure records. (Year-end totals for 2006 are not yet available.) Last year the firm also lost as clients FMC Corp., the Directors Guild of America, Pacific Pulmonary Services, and Prudential. MWW Group’s journey from the land of good and plenty to a company in the midst of major transition speaks to the difficulty public-relations firms have had in running lobby shops. It may speak even louder to the importance of work style and environment in a city where lobby shops are a dime a dozen. ENTER MORLEY After a yearlong search, William Morley, the former vice president of congressional affairs at the U.S. Chamber of Commerce and general counsel to Republican Sen. Arlen Specter of Pennsylvania, stepped in to replace the veteran Slade. Morley, a tried-and-true Republican, was brought in at the height of Republican power in Washington to rope in significant business and to continue growing the firm. Yet Morley’s lobbying style and internal-management skills have been described as abrasive and bullish. In fact, since Morley has been at the helm, no lobbyist from the original team has remained. Morley says he lobbies the Hill with a passion inspired by his time growing up in a Latino household. “I’m a father with four girls, and I lobby every day to get to use the bathroom,” he says. “Everyone has their own style.” More than 12 people, including Slade, have left the D.C. office since Morley landed the top job. Kempner says this was not cause and effect. Rather, the firm “made a conscious decision to change the way the office had been operating,” though he declined to discuss why that was the case. As far as the firm’s decreasing revenue, Kempner insists that the firm is on solid ground and is going like gangbusters. He expects revenue to be steady this year. Additionally, the D.C. office has moved from 1747 Pennsylvania Ave. N.W. to the same building and floor as Cassidy & Associates, nearly doubling its space, says Kempner. MWW has hired Timothy Yehl, the current chief of staff to Sen. Frank Lautenberg (D-N.J.), to co-manage the D.C. office. Kempner is intent on proclaiming a new day at MWW. “Don’t think of it as Bill’s team; it’s now Bill and Tim’s team,” he says. In addition to Yehl, the firm has hired Leslie Schweitzer as a senior trade adviser. She, too, hails from the U.S. Chamber of Commerce. Ryan Pennington, manager of legislative programs for Premera Blue Cross, has been hired as director of public affairs. And current clients have positive reviews of MWW, including Jos� Orive, executive director of the Sugar Growers Association of the Central American Isthmus. Orive, based in Guatemala, calls Morley “one of the most effective people in D.C.” Morley says the loss of clients such as Bacardi and Hoffmann-La Roche Inc. is nothing to worry about. In the case of Bacardi, which had been with the firm since 1998, Morley says MWW was effective in getting agreements from the U.S. Patent and Trademark Office for them. “Mission accomplished,” says Morley. “Some clients graduate. That happens in business all the time.” As far as the loss of in-house talent goes, Morley chocks it up to Washington being a transient town. “We are not the U.S. Postal Service,” he says. “We’re not going to keep guys for 30 years.” For Kempner, employee retention is a concern, though he insists it has nothing to do with Morley and everything to do with the competitive D.C. market. But part of the problem may be the noncompete agreement or “restrictive covenant” MWW employees must sign. The covenant bans former employees from soliciting business from clients of MWW for two years, even if that employee brought in those clients during his tenure with the firm. “You can’t take clients,” Kempner says. “If we are paying your salary to secure clients and we paid you to go get that client . . . look, you didn’t walk in the door with that client.” But when lobbyists go, clients tend to follow. The D.C.-based Whitman-Walker Clinic, which specializes in HIV/AIDS counseling and related health work, had been working with MWW since 2001. Last year the clinic terminated its contract. Kim Mills, the clinic’s director of communications, says that after Jon Alexander left MWW in January 2006 to form his own firm, Monument Strategies, Whitman-Walker followed. “He had been successful for us on the Hill,” says Mills of the appropriations work Alexander was able to snag with the clinic during his five years at MWW. In addition to Whitman-Walker, Alexander has held on to another MWW client, Coppin State University, according to Senate disclosure records. He declined to discuss the financial arrangement that was made with MWW to retain these clients. THE JURY’S OUT The mixture of public affairs and lobbying has produced mixed results on K Street. Some, like Howard Paster, an executive at WPP Group, which oversees the Hill & Knowlton, Burson-Marsteller, and Ogilvy Public Relations empire, say they are “naturally complementary.” But there is another view. Public-relations guru Gloria Dittus, owner and founder of Dittus Communications, which was bought by Financial Dynamics, a New York- and England-based business and communications consulting firm last year, made a conscious decision almost a decade ago not to create a lobby shop. “We wanted to stick to our knitting and not be all things to all people,” says Dittus. “I have a client now who is looking for lobbyists. I’ve been around town long enough to know who is at the top of their game. If we had our own lobbying shop, I would be compelled to recommend our people. It just limits what you can offer.” The stereotype connected to such an arrangement goes something like this: Public relations doesn’t understand lobbying, and lobbyists don’t understand public relations. Though Kent Jarrell, a senior vice president and director of litigation communication at Apco Worldwide, says it’s possible for both worlds to come together, provided that everyone is communicating. “You want those two functions extremely coordinated, because what sometimes happens is, lobbyists will be saying and doing one thing with regulators and lawmakers while the PR side is saying and doing another thing outside the Beltway, and that can create problems for an institution or client,” says Jarrell. For other public affairs/lobby combinations, such as the Federalist Group, which was acquired by Ogilvy in September 2005, it may be too soon to tell how the pairing will ultimately shake out. Stewart Hall, a lobbyist at the Federalist Group, says the PR giant has given the group a great deal of leeway to run their lobbying shop, adding that they will soon move to Ogilvy’s D.C. space on 19th Street Northwest to integrate the two businesses physically. One of the more recent disasters of merging a public affairs shop with a lobbying operation was the takeover by New York-based Mercury Public Affairs of Fleishman-Hillard Government Relations. The firm lost significant talent last year, including Matthew LaRocco, the general manager; his father, former Rep. Larry LaRocco (D-Idaho); Jerome Hauer, who chaired the firm’s homeland-security practice; and A. Bailey Wood Jr. “Fleishman wanted a lobby shop the way my daughter walks through a store and wants a new pair of $200 jeans. They don’t understand it,” says Rich Gold, a lobbyist at Holland & Knight. But at least one former MWW lobbyist says there was no feeling of interference from the public relations firm. “It was the government relations arm of a public relations firm, but we were a stand-alone shop,” says Matthew Horn, now at the American Jewish Congress. “We certainly didn’t do any PR stuff for them except answer specific congressional questions about how the appropriations process works or what’s a suspension calendar. If you didn’t tell me they were a part of a PR firm, I would not have known.” LIFE. A BOX. CHOCOLATES. Before he entered the lobbying world, Kempner was president of Winters Chocolates, the nation’s first company that made liquor-filled chocolates, which, under his leadership, successfully overturned 30 state laws and a federal law banning the sale and distribution of the tiny booze-filled bottles. Kempner soon grew bored with “running a factory” and turned to public affairs. He soon teamed up with Slade, whom he had known for years dating back to Slade’s days as executive director of College Democrats of America, in which he ran all the national student programs for the Democratic National Committee from 1981 to 1982. When Slade eventually left MWW, Kempner says his old friend was seeking to do something more entrepreneurial, so he gave Slade his own clients for his new lobbying venture, the Cormac Group. Lobbying-disclosure records with the Senate indicate that those were higher-education clients, including Education Investment Co. and Keisler College of Florida. Slade says he had an amiable parting with MWW and a good 14-year run. Regarding the criticisms of Morley and his business approach, Kempner says there are bound to be growing pains when anyone with a leadership role leaves an office after 14 years. As far as Morley’s lobbying style is concerned, Kempner adds, the company does not dictate personalities. “I would encourage everyone to kill people with kindness, but it doesn’t mean it’s not appropriate to push or be aggressive at times,” he says. “What’s important is to understand when to push and when to back off. Bill truly understands the difference.”
Joe Crea can be contacted at [email protected].

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