Less than two weeks after John Podesta's brother, Tony, quit as head of the prominent Democratic lobbying group, the Podesta Group just days after it was revealed that Special Prosecutor Robert Mueller was investigating Podesta for potentially violating the Foreign Agents Registration Act for his work involving Ukraine clients, Politico reported overnight that Podesta Group longtime CEO, Kimberley Fritts, is leaving the firm to start her own lobbying shop, according to three Podesta Group staffers.
Tony Podesta tapped Fritts as his successor when he announced he'd step down as chairman last week, hours after an indictment charging Paul Manafort and his deputy, Rick Gates, with violating foreign lobbying law, was unsealed. As a reminder, the widely leaked indictment accused Manafort of hiring the Podesta Group to lobby for an ostensibly independent nonprofit that “was under the ultimate direction” of the Ukrainian president, his party and the Ukrainian government.
And while Fritts had been expected to relaunch the Podesta Group - under a new name of course - in the days after Podesta stepped down, after just a week of trying to hammer out the details of what the new firm would look like, Fritts announced at a staff meeting late on Thursday that she would resign and start a new firm, "exacerbating questions about the future of the Podesta Group and its dozens of employees" as Politico politely puts it. Which, of course, is a less polite way of saying that the Podesta group is almost certain to be formally charged for the same violations that dragged down Manafort.
Fitts' was just the latest exodus from the sinking ship: last week Paul Brathwaite, a Podesta Group principal, said that he was leaving to start his own shop, Federal Street Strategies.
Politico quoted one Podesta Group staffer who described Fritts’ decision as as the next step in rebuilding the firm without Tony Podesta: “Tony Podesta’s name had become a scarlet letter,” the staffer said, speaking on condition of anonymity."
Wells Fargo and Oracle, two of the firm's highest-paying clients, cut ties with the firm, although others said last week they would stick with the Podesta Group for now.
But it's not clear how many staffers — and how many of the firm's clients — will follow Fritts to her new firm.
"I just don't know," said another Podesta Group staffer. "This is a really painful process, trying to navigate who can go with and who can be let go."
Fritts declined to comment.
While neither Tony Podesta, nor the Podesta Group has been charged publicly with crimes in the Manafort investigation, that is likely to change in the coming weeks.
Meanwhile, rival lobbying firms see the implosion of the Podesta Group as a prime moment to poach the Podesta Group’s top lobbyists. At least six other firms have reached out to Podesta