When the Democrats Take Back K Street

The reception thrown by Nancy Pelosi at the Capitol a week after the Democrats prevailed in congressional elections was a party some power players had been waiting more than a decade to attend. The fête was for newly elected freshmen lawmakers, but Pelosi's invited guests included big-name Democratic lobbyists like Jack Quinn, Tony Podesta and Steve Elmendorf. Said a partygoer: "I thought to myself, they're all back, all the same old faces. It was just like old times."

For 12 years, Democratic lobbyists lost influence--and money--as Republicans tightened their hold on power. G.O.P. leaders amplified the effect by launching an overt effort to push Democrats out of trade associations and lobbying firms, with the aim of increasing the G.O.P.'s share of campaign contributions from the groups' clients. G.O.P. leaders also punished firms that were too Democrat-friendly by excluding them from meetings on the Hill. The combined effect of power and persuasion added up to a decade of Republican domination in the business of influence peddling.

But the Democrats are making their comeback on K Street, the metonymic home of Washington's $2.36 billion lobbying business. A gold rush is under way for lobbyists who have an in with the winning team. Firms are hiring away key Democratic congressional staff members and bidding up the salaries of Democrats already in the business. And companies that tilt Democratic are signing clients from industries that previously relied on Republican outfits.

There's one hitch. It's not supposed to be like old times. In an election in which exit polls identified corruption as the No. 1 voting issue and Washington's biggest corruption scandal involved lobbying, Democrats won in part by promising to curtail K Street's excesses. Pelosi has said her first act as Speaker of the House in January will be to pass new rules limiting contact between lobbyists and lawmakers. Later in 2007, Pelosi plans to rewrite the laws on pork-barrel spending. She promises that the overall effect of her reforms will be "to break the link between lobbyists and legislation" in Washington.

Who will win the coming battle between reformers and revanchists? The market is betting against reform. Demand for anyone with access to powerful Democrats on the Hill is soaring. Lobbyists who couldn't get a meeting are suddenly a hot commodity. "I've gotten a lot of calls from headhunters in the last two months," says Florence Prioleau, a lobbyist who has maintained close ties with her former boss, New York's Charles Rangel, incoming chairman of the Ways and Means Committee. Pelosi's former chief of staff, George Crawford, has just been hired by Amgen, a biotech company, to represent its interests with the new Congress. Toby Moffett, a former Democratic Congressman from Connecticut now with the Livingston Group, says he recently told a Republican lobbyist desperate to hire Democrats that he had two options: "One is to go after [congressional] staff members who are thinking of leaving, maybe someone with tuitions to pay. The second is to overpay for people who weren't thinking of leaving."