Like lege, lobbying world turns right

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New balance of power spurs move toward hires with GOP connections

The end of the Pawlenty administration and the change in political control at the state Legislature are already transforming the lobbying world at the state Capitol.

After a relatively quiet summer with few changes in state agency leadership, high-profile commissioners and other top officials in the governor’s office are heading for the exits. They have moved into the private sector just as the demand for lobbyists with strong GOP ties has begun to spike in the wake of November 2’s results.

“The industry tends to mirror the makeup of the Legislature,” averred long-time lobbyist Todd Hill, a principal at the Cook Hill Girard Associates firm. “Now, with Republicans in control, the industry may lean toward Republicans.”

Many lobbyists have partisan backgrounds. But they usually don’t operate in a partisan manner. Clients tend to value a lobbyist’s partisan background for the contacts it promises rather than as a matter of ideological allegiance. And it’s always in the interest of lobbyists to build relationships on both sides of the partisan divide. As industry veteran John Kaul noted, the party in the minority during one cycle may be in the majority the next time around.

“The thing to avoid for anybody in public office and lobbyists is hubris,” Kaul said. “About the time you think you know what will happen, you get punished by forces you can’t understand.”

The population of lobbyists and lobbying firms has increased in the last decade as the size of the state budget – and the complexity of health care and other policy issues – has grown. In 2006, the Minneapolis law firm Fredrikson & Byron hired state Human Services Commissioner Kevin Goodno to launch a government relations practice. Fredrikson currently employs five lobbyists with backgrounds on both sides of the aisle.

Now, as the Pawlenty administration comes to a close, commissioners and aides are joining or starting lobbying firms. It remains to be seen if there are enough clients to keep the growing number of lobbyists employed. Goodno noted that lobbyists who develop expertise will have futures.

“The market takes care of itself. People who are able to set up a niche – they will likely grow,” Goodno said.

One veteran lobbyist said the local scene is becoming an unbalanced environment in which a bad economy and diminished lobbying budgets are effectively conspiring against the efforts of a growing lobbyist corps.

“It’s a law of supply and demand,” the source said, “and that’s the one law you can’t repeal. Unless there is a brand new burst of business, it will stay very competitive.”

Ted Grindal, the partner in charge of government relations at the Lockridge Grindal Nauen firm, echoed those sentiments about the competitive milieu.

“There already is a lot of competition,” Grindal noted. “In some ways [the influx of lobbyists from the Pawlenty administration] is a new wrinkle.”

The competition among lobbyists has already had a hand in suppressing price increases that lobbyists might otherwise charge for their services, he said.

Three key members of the Pawlenty administration – Tom Hanson, Ward Einess and Dan McElroy – have already announced they are going into lobbying. Aside from their political backgrounds, they have in-depth knowledge of the state budget that will be in demand as state lawmakers contend with an unprecedented $6.2 billion deficit.

Hanson, the Minnesota Management and Budget Department commissioner, left the agency on Wednesday to lobby for the Minneapolis-based law firm of Winthrop & Weinstine. He’s a lawyer who has worked with Pawlenty dating back to the days when Hanson was a partisan House staffer and Pawlenty was a Republican House rep from Eagan.

Hanson joins a lobbying team at Winthrop that is already Republican-heavy. Republican John Knapp leads the firm’s government relations practice, which includes former GOP legislative staffer Christine Zimmer.

Einess, who has been Minnesota’s Revenue Commissioner throughout Pawlenty’s second term, is finishing his last week on the job and will launch his own public affairs shop. He served stints as the commissioner of Employment and Economic Development (DEED) and as a senior policy adviser in Pawlenty’s office. He was also director of fiscal policy at the Minnesota Business Partnership before working in the Pawlenty administration.

McElroy, the current DEED commissioner, will do association work as the executive director of Hospitality Minnesota. Like Hanson and Einess, McElroy has a deep understanding of the intricacies of the state’s general fund from his stints as a Republican House member and as Pawlenty’s chief of staff and Department of Finance commissioner.

They aren’t the only Pawlenty administration veterans who have moved to the lobbying/PR business as the governor’s exit has approached:

• Last summer, former media rep and deputy chief of staff Brian McClung departed to start his own PR shop. McClung also headed MN Forward, the business PAC formed to help elect a Republican governor in 2010.
• In November, director of legislative and cabinet affairs Chris DeLaForest, a former Republican House member from Andover, returned to his lobbying firm, DeLaForest Consulting LLC.
• Brian Steinhoff, a Pawlenty adviser on tax and commerce issues, was recently hired to replace Buzz Anderson as the executive director of the Minnesota Retailers Association.

These former administration officials have long-standing relationships with the new GOP legislative leadership. They also have experience negotiating with DFLers who have controlled the Legislature for the past several years.