By TARINI PARTI and ANNA PALMER,
It has faced an exodus of talent over the past year and lost major client contracts.
A week after the indictment of its most high-profile lobbyist, former House Speaker Dennis Hastert, law firm Dickstein Shapiro has gone underground.
Already struggling to rebound from a huge decline in its K Street lobbying business, the firm isn’t talking to the news media and does not appear to have mounted a behind-the-scenes PR offensive to keep clients from fleeing amid the Hastert scandal.
None of the firm’s clients — including the Republic of Turkey, Secure ID Coalition and Fuels America — would confirm to POLITICO whether they intend to keep Dickstein Shapiro on their consultant rosters. Sources affiliated with some Dickstein Shapiro clients also said they had not heard from the firm since Hastert’s indictment on May 28.
Although Hastert wasn’t considered a top K Street rainmaker, according to industry insiders, the scandal was the last thing the beleaguered lobbying practice needed. The firm has faced an exodus of lobbying talent over the past year and the loss of major client contracts. Dickstein billed just $130,000 on behalf of only eight clients for the first quarter of 2015 — not close to being on track for its overall 2014 billings, when it brought in $3.7 million for the year, according to Senate lobbying disclosures.
Melvin ‘Mel’ Watt, director of the Federal Housing Finance Agency (FHFA), listens during a Financial Stability Oversight Council (FSOC) meeting at the U.S. Treasury in Washington, D.C., U.S., on Wednesday, May 7, 2014. The FSOC today unanimously approved its 2014 annual report, which was developed collaboratively by the members of the Council and their agencies and staffs. Photographer: Andrew Harrer/Bloomberg via Getty Images
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Hastert, who left Congress in 2007 and had prestige as the longest-serving Republican House speaker, was a well-connected former member who could offer his clients better access to lawmakers and a keen understanding of the legislative process. He signed a client – Secure ID Coalition — to work on issues “related to identity policy solutions” just weeks before the indictment came down, based on the disclosures.
Earlier this year, Hastert attracted media attention when he reportedly delivered a personal pitch to senators in the Senate Reception Room on behalf of Fuels America in favor of the renewable fuel standard. Some watchdog groups questioned whether Hastert was violating rules barring former lawmakers-turned-lobbyists from the House and Senate floor, but, according to the reports, Hastert lobbied members in private rooms and used the reception room just to greet members.
Dickstein Shapiro declined to respond to several inquiries for this story.
Instead, a spokesman for the firm again sent its statement from last week: “Dennis Hastert has resigned from the firm. Scott Thomas will continue to lead the Public Policy & Political Law Practice.”
Thomas also did not respond to several requests for comment.
Hastert has been in hiding since the indictment was issued. He is set to be arraigned next week on a federal indictment based on allegations that he sought to cover up a deal to pay $3.5 million to an acquaintance over “prior misconduct.” The Illinois Republican had already paid $1.7 million of that amount in small increments from various banks, and reports have said the payments were made as compensation to a former student for prior sexual misconduct.
News reports in recent days have named Barry Levine — a Dickstein partner and former defense lawyer for attempted Reagan assassin John Hinckley — as a defense attorney for the former speaker. However, Levine has yet to enter a formal appearance in the court docket, fueling speculation that the firm might try to step away from Hastert in order to get its name out of the spotlight. Levine didn’t respond to requests for comment.
While the firm’s external communications have all but shut down, Dickstein Shapiro quickly removed the former speaker’s bio from its website last week.
WASHINGTON – NOVEMBER 15: Former Speaker of the House Dennis Hastert (R-IL) speaks with reporters after delivering his farewell address to Congress November 15, 2007 in Washington, DC. He announced his resignation today and said he will leave office before the end of December. Hastert, 65, announced in August he would not seek reelection in 2008. Hastert was the longest-serving Republican speaker in U.S. history, and the first speaker since 1955 to remain in Congress after losing the speakership. (Photo by Chip Somodevilla/Getty Images) *** Local Caption *** Dennis Hastert
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Additionally, the firm appears to have wiped all mention of Hastert from its previous news releases. For example, a recent release announcing the addition of former CIA director and House member Porter Goss previously touted that Goss would be joining Hastert and included a statement from the now-indicted former speaker. The same release now on the firm’s website seems to have been edited to purge all mentions of Hastert — even in a statement from Goss.
Law firm consultants and recruiters said Dickstein Shapiro shouldn’t try to ignore the ongoing scandal because it invites more scrutiny over what the firm knew and how they are handling the aftermath.
“In the short term, things like this are always a major issue, and certainly this is not something that Dickstein needed at this particular moment in the firm’s history,” said Ivan Adler, a veteran legal recruiter at the McCormick Group. Still, Adler said he doesn’t believe this is the “straw that will break the camel’s back” as long as the firm addresses it in a “strategic way both externally and internally.”
Another veteran crisis communications consultant added: “There isn’t much more that Dickstein Shapiro can say at this point beyond the termination of Hastert’s services, or else it becomes more of the story that could hurt its reputation. However, a comment made by the head of the office about how shocked and saddened they are by the situation would go a long way towards keeping their credibility. For legal reasons, the organization may not be able to make statements because of the manner on which Hastert separated from the firm.”
And some expressed doubts about the firm’s ability to right the ship.
“It is going to make clients scratch their heads how does this kind of stuff, particularly at a law firm, go unnoticed and unchecked,” said a managing partner at a Washington law firm. “They’ve already lost a significant number of partners, and now they have a failing management structure allowing allegedly criminal activity under its nose, and they are representing the person perpetrating the crime. … The reason to say nothing is because they have nothing to say.”
Meanwhile, another Dickstein partner — Justin Chiarodo — still represents Hastert in a civil lawsuit alleging he used his official former speaker’s office for private gain. Hastert’s legal team in that case includes his son Ethan, a partner at law firm Mayer Brown. The team continued firing off legal salvos in that case through Wednesday afternoon even as the former speaker remained silent about the criminal charges.
Former House Speaker, Rep. Dennis Hastert, R-Ill., walks through Statuary Hall on Capitol Hill in Washington, Thursday, Nov. 15, 2007, after delivering a speech on the House floor where he announced his plans to leave the House of Representatives by the end of the year. (AP Photos/Susan Walsh)
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Dickstein’s problems began long before news of Hastert’s misconduct surfaced. The firm has been plagued with dozens of departures by lawyers and lobbyists in recent years. In 2013, the entire firm faced a 35 percent drop in profits. And last year its longtime lobbying practice leader, Andrew Zausner, decamped, along with 13 lawyers and lobbyists, including three former members of Congress, to rival law firm Greenberg Traurig.
Following the departures, the firm’s lobbying-client portfolio shrank significantly after it lost more than three dozen clients last year, including its highest-paying clients: tobacco giant Lorillard, Peabody Energy, Bayer Corp. and Covanta Energy Corp.
More recently, the firm lost four partners to Cozen O’ Connor, which launched a new state attorneys general practice.
K Street insiders say the firm placed Hastert as co-leader of its lobbying practice because of his name identification.
Dickstein Shapiro currently lobbies on behalf of the American Greyhound Track Operators Association, Fuels America, Grain Management LLC, Lerner Enterprises, Pritikin ICR LLC and Secure ID Coalition, according to federal lobbying disclosures.
Hastert was on four of those accounts, in addition to working as a subcontractor through Gephardt Government Affairs for the Republic of Turkey, which paid the firm about $240,000 last year. A senior official at Gephardt said the client asked that the firm not talk about the Hastert matter. The Republic of Turkey did not respond to several requests for comment.
Josh Gerstein contributed to this report.
Read more: http://www.politico.com/story/2015/06/dennis-hastert-lobbying-firm-118603.html#ixzz3c7khN6pc