June 8, 2004
Help the Candidate: First the Campaign, Then the Lobbying
By MICHAEL SLACKMAN

When Bear Stearns & Company Inc. sought help to promote its bond sale business, it hired Hank Sheinkopf, a longtime political consultant who had helped elect the official who oversees city bond sales: the city comptroller, William C. Thompson Jr.

When Maureen Connelly was finished working as a political consultant on Michael R. Bloomberg's mayoral campaign, she went back to her firm, which began lobbying the Bloomberg administration on behalf of its business clients.

And Kieran Mahoney, a longtime Republican political consultant and close adviser to Gov. George E. Pataki, handled everything from conducting polls and analyzing their results to directing the governor's media campaigns in the past. Now he personally lobbies Mr. Pataki on behalf of companies like AT&T and the pharmaceutical giant Pfizer, state records show.

Increasingly, political consultants in New York State are taking on dual roles: not only do they help candidates get elected, but afterward they end up lobbying them on behalf of special interests. There has long been a hazy boundary between political consulting and lobbying, but in recent years, the line has been crossed more frequently and more deliberately.

Mr. Sheinkopf, for example, was one of Mr. Thompson's chief campaign consultants. He helped prepare his message and shape his television and radio campaigns. After Mr. Thompson took office, Mr. Sheinkopf obtained a lucrative contract with Bear Stearns that paid him $10,000 a month to identify bond markets nationwide, state records show. The New York bond market is one of the most attractive.

The merging roles of political adviser and lobbyist result from several trends: the rise in power and influence of political consultants, the weakened ability of political parties to provide logistical and strategic support to candidates, and a highly competitive marketplace that for the first time has many longtime political consultants scrambling to grab lobbying business.

While the practice has been common in Washington and has surfaced in the past in New York, consultants have been pushing past the boundaries of what was once considered acceptable.

On the city level, for example, a new breed of lobbyist-consultant, like the Parkside Group, has been very aggressive in collecting political clients it also has lobbied. Parkside helped elect 12 City Council members and has represented more than a dozen clients with business before the city. It has stayed on the political payroll of the Council speaker, Gifford Miller, also helping him find a new chief of staff, even while lobbying him directly and at one point renting space in its office for Mr. Miller's fund-raiser.

One of the firm's partners, Harry Giannoulis, straddles the divide even more, serving as a member of the Taxi and Limousine Commission.

This type of dual practice is not limited to the city. When the state attorney general, Eliot Spitzer, set up his fund-raising unit, called Spitzer 2006, he rented space in the offices of Global Strategy Group, a political consulting and polling firm that had helped him win election and has also lobbied the state.

There is nothing illegal about the arrangements, and elected officials and their consultants say they are able to keep the two worlds separate. Mr. Miller's spokesman, Stephen Sigmund, said, "Speaker Miller makes policy decisions based on what's in the best interests of all New Yorkers, period."

Mr. Thompson's spokesman said that Mr. Sheinkopf had never actually lobbied the office on behalf of Bear Stearns. "Decisions in this office are made on the merits and on the basis of what is in the interest for the City of New York," said Eduardo Castell, deputy comptroller for external relations.

Still, many people inside and outside government express deep reservations about the merging roles. They say that helping elect someone, and then lobbying that official, so clearly presents the appearance of a conflict of interest that it will undermine public confidence in government. There also is concern that political officials are growing too dependent on this new breed of consultant, and more susceptible to their lobbying. Not only do consultants bring business clients to elected officials, they can introduce elected officials to deep-pocketed members of the business community.

"This nexus between the lobbyist, the government official and the corporation is a dangerous one, a kind of iron triangle," said Douglas Muzzio, a professor of public policy at Baruch College. "They are not only influencing policy, which they are supposed to do as lobbyists, they are actually choosing the government officials who will then turn around and act on clients whose interests these people are representing."

One elected state legislator, who spoke on condition of anonymity, complained of not being invited to a business reception in the legislator's own district because the lobbyist representing the business invited his own political clients instead.

"It makes you wonder whether you need to have a political consultant to get invited to events in your own district," the legislator said.

The firm of Bolton-St. Johns is considered by many people to have pioneered bringing both political consulting and lobbying under one roof. Norman Adler, a partner in the firm, often provides consulting services to Republicans in the State Senate, while his partners lobby the Senate on behalf of clients like KeySpan Energy Corporation and Hereford Insurance Company. Another partner in the firm is a former Assembly speaker, Melvin Miller.

Some political consultants say they do not accept lobbying jobs because they recognize the conflict. Among those who do, some recognize the pitfalls. George D. Arzt, a veteran political consultant, said he found himself slowly moving into lobbying and has tried to avoid taking his business clients to meet his political clients. He has worked on campaigns for the Manhattan district attorney, Robert M. Morgenthau, and members of the City Council.

"I try not to do it," Mr. Arzt said of lobbying people he helped to win office. "I think it is a bad appearance for the candidate. I don't want the candidate who I helped elect to have an issue the next time out, and I don't want to be in a position to jeopardize their election."

Some companies cast a wide net when securing lobbying assistance in City Hall. Van Wagner Communications, a New York firm that places advertisements on pay telephone kiosks, has four lobbyists on retainer. Two of them, Mr. Sheinkopf and Parkside, have worked on the campaigns of council members, and a third is Ms. Connelly, who helped direct Mr. Bloomberg's mayoral campaign.

The issue of outside interests having undue influence over city government was recently highlighted because the mayor has been preparing a proposal to limit campaign contributions by people who do business with the city. The proposal would limit those contributions to $250 and eliminate the government matching funds for those who do business with the city. Although the mayor has promoted the idea as a way to limit influence peddling, his proposal does not touch on the issue of political consultants and lobbyists taking on dual roles.

The system has always been largely self-policed. For example, when Ms. Connelly returned to her lobbying firm, Connelly & McLaughlin, she took along Kathleen Cudahy, a former longtime City Council staff member who had worked with her on the Bloomberg campaign. Among her firm's many clients are taxi fleet owners, and Ms. Connelly said she saw no problem with her partner, Martin McLaughlin, or Ms. Cudahy lobbying the mayor on issues like taxi fares, which were recently raised for the first time in many years.

She said she drew the line at returning to work for Mr. Bloomberg's re-election.

"I don't think it's appropriate to go back on his payroll," Ms. Connelly said.

Edward Skyler, the mayor's press secretary, said, "Maureen and Kathy worked on the campaign, but that relationship ended in 2001."

The interlocking relationships have even entangled Mr. Spitzer, the state attorney general, who used Global Strategy Group to help win election in 1998 and 2002. Global also represented the YES Network in 2003, and when the network was bogged down in negotiations with Cablevision over terms of broadcasting Yankees baseball games and other programs, Global asked Mr. Spitzer to oversee negotiations, according to Mr. Spitzer's office. Initially, Mr. Spitzer declined to get involved, but he stepped in later after negotiations fell apart, the attorney general's office said.

Though both sides say they were happy with Mr. Spitzer's involvement, it is not clear that Mr. Spitzer would have found himself involved if not for his business relationship with Global. According to his office, Mr. Spitzer "was acting as an impartial mediator of the dispute" and did not take sides.

Mr. Spitzer's links to Global go deeper still. He rents office space from Global for his campaign fund-raising operation. Mr. Spitzer said through his aides that he was paying market rates for the use of the space and that Global agreed not to lobby his office.

A partner in Global, Jon Silvan, said, "I would say a small portion of our business is lobbying, and we comply with the letter of the law and are transparent about our business at all times."

Though lobbyists have always tried to find ways to improve their access to officials, helping with fund-raising and providing free political advice, former Mayor Edward I. Koch said merging the two roles under one roof was troublesome. He said, for example, that he "would have been very upset" if his political consultant, David Garth, ever lobbied him.

"I personally think that you let yourself in for a lot of trouble if you use someone who has a separate agenda," Mr. Koch said.


Mike McIntire contributed reporting for this article