Washington's ultimate powerbroker, not!

The sudden fall of Washington's ultimate powerbroker

Tony Podesta personified D.C. influence and wealth for decades. Then along came Robert Mueller.

By ANNA PALMER and THEODORIC MEYER

Tony Podesta has epitomized the height of Washington influence and wealth for two decades.

He has a home in Washington a few doors down from Barack Obama, a villa in Italy, an apartment in New York and a multimillion-dollar art collection. He’s been a K Street rainmaker, holding fundraisers for the Democratic Party’s top elected officials and mingling with the most powerful liberals in the country. Last week, he attended Hillary Clinton’s 70th birthday party.

Some of the world’s largest companies — BAE Systems, Walmart and Lockheed Martin — have paid him piles of cash to represent them in the Capitol. His firm’s receipts reached nearly $30 million in 2010, and his company has swelled to nearly 60 employees.

But now, the 74-year-old D.C. fixture is showing this town that what took decades to build can implode in a day.

“There’s a lot of shock value because of who it is,” said Ivan Adler, a veteran headhunter at The McCormick Group. “His personality is mammoth enough, and it has all kinds of implications — I think it will cause people to really take a look at making sure they cross their t’s and dot their i’s, because you never know what could happen.”

Podesta announced Monday that he would be stepping down from the firm he founded in 1988 with his brother, John Podesta, amid reports that special counsel Robert Mueller could bring criminal charges against him and his firm. Mueller’s team is investigating work that Podesta did on behalf of Paul Manafort for a Ukrainian nonprofit.

Podesta’s move came the same day that former Donald Trump campaign aides Manafort and Rick Gates were indicted on multiple charges, including money laundering and operating as unregistered agents of the government of Ukraine. The Podesta Group was not named directly in the indictment, but it was one of two firms mentioned but not identified by name.

Podesta’s lawyer did not respond to a request for comment.

Trump campaign foreign policy adviser George Papadopoulos pleaded guilty earlier this month to lying to the FBI about his contacts with Russian officials, according to court records.

Sources familiar with the firm said it would rebrand in the next day or so under the leadership of the Podesta Group’s longtime CEO Kimberley Fritts. Discussion of Podesta exiting the firm had been ongoing for several months, they said.

What’s next for Podesta is less clear. He told colleagues Monday that he “doesn’t intend to go quietly, or learn how to play golf.” He said he “needs to fight this as an individual, but doesn’t want the firm to fight it.”

One source who attended the internal meeting said Podesta gave no indication that he would start another firm or join a competitor. “He’s stepping down and sort of retiring from what he’s been doing day-to-day for the last 30-plus years,” the source said.

It’s unclear when, or whether, Podesta will be charged in connection with the Mueller probe. The Justice Department unit dedicated to going after foreign lobbying violations is relatively small, and Democratic and Republican lawmakers have speculated that violations are rampant.

“I fear that [Foreign Agents Registration Act] violations are happening around this town all the time,” Sen. John Cornyn (R-Texas), the No. 2 Republican in the Senate, said at a Senate Judiciary Committee hearing in July.

The Manafort indictment may lead firms to think twice before playing fast and loose with registering.

“I think it’s a wake-up call,” said Tom Spulak, a partner at King & Spalding who advises companies on complying with lobbying rules.

Podesta’s rise to the upper echelon of K Street wasn’t guaranteed. He didn’t have the pedigree or political connections that many downtowners and lawmakers do. Instead, as a college student at MIT, the Chicago native caught the politics bug, leaving school to work on Minnesota Sen. Eugene McCarthy’s failed presidential bid in 1968. It was the start of many Senate and presidential campaigns in the ’70s and ’80s. In 1981, Podesta helped found the liberal group People for the American Way before launching a boutique lobbying firm called Podesta Associates in 1988.

Podesta worked as a rank-and-file line lobbyist alongside his brother John and later with his Republican partner, Dan Mattoon. Over the years, he built a reputation as an aggressive political fixer whose wealth and sway blossomed as he built out a lobbying and public relations firm with a massive international practice representing countries like Egypt, Georgia, Kenya and Albania.

He also has long played the role of an eccentric K Street lobbyist with a penchant for daring ensembles and loafers to match. “He’s one of those guys who’d show up at an event and out of the corner of your eye — here comes Tony,” said veteran Democratic communicator Jim Manley.

Podesta’s influence grew alongside his outsize presence in Democratic fundraising circles. He contributed nearly $1.2 million over the past three decades to Democrats, according to a Politico review of Federal Election Commission disclosures.

But his true influence has been as a bundler and a host of lavish fundraisers at his Kalorama home. Manley, a former top aide to Senate Majority Leader Harry Reid (D-Nev.), who first met Podesta while working for the late Sen. Ted Kennedy (D-Mass.), said he remembers hearing Democratic lawmakers chatting on the Senate floor about the fundraisers they’d attended the night before at Podesta’s house.

“They always made money hand over fist, and they hired many of the best from Capitol Hill and elsewhere to staff the firm,” Manley said.

Podesta also regularly worked the media. At the 2008 Democratic National Convention in Denver, he and his then-wife, Heather Podesta, wore scarlet Ls embroidered on their clothes — a direct knock at Obama’s pledge to crack down on lobbyists.

As it turned out, Obama’s presidency was a boom time for Podesta. His brother served as Obama’s chief of staff and senior adviser. While many K Streeters were looking to cleanse themselves from the lobbyist stain — and perhaps land a job in the administration — by deregistering, Podesta embraced his pedigree. It was during this time that Podesta focused on building out his international book of business: In 2012, Podesta began to work on a PR campaign for a nonprofit called the European Centre for a Modern Ukraine.

Podesta Group filed paperwork with the Justice Department in April stating that it had done work for the European Centre for a Modern Ukraine, which also benefited the same Ukrainian political party that Manafort once advised. Podesta Group said at the time it believed its client to be a European think tank with no links to any political party.

Despite the legal entanglements Podesta now faces, not everyone believes he’s leaving K Street for good.

“I know Tony, and I think Tony’s a person of great integrity,” said Steve Elmendorf, a top Democratic lobbyist. “I’ve got to believe that he didn’t do anything wrong, and he will be back in some fashion.”