Podesta Group CEO Kimberley Fritts has announced that she’s leaving the troubled firm to start her own lobbying shop, according to three Podesta Group staffers who spoke to Politico.
Founder Tony Podesta had named Fritts as his successor when he announced he’d step down as chairman last week, hours after an indictment was unsealed, charging Paul Manafort and his deputy, Rick Gates, with violating foreign lobbying law. The 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, according to the report.
After Podesta took himself out of the business, Fritts was tasked with relaunching the Podesta Group under a new name. However, she apparently changed her mind after more than a week of working to hammer out the details of what the new firm would look like. During a staff meeting on Thursday, Fritts announced her decision to resign and start a new firm.
The future of the “new and improved” Podesta Group and its dozens of employees is now up in the air.
One Podesta Group staffer described Fritts’ decision as the next step in rebuilding the firm without Tony Podesta.
“Tony Podesta’s name had become a scarlet letter,” the unnamed staffer said, predicting, “I expect a lot of the top talent will go with her.”
Neither Tony Podesta nor the Podesta Group has been charged publicly with crimes in the Manafort investigation.
Another Podesta Group staffer said it’s unclear what will happen next. “This is a really painful process, trying to navigate who can go with and who can be let go,” the source told Politico.
“The Podesta Group, one of the top lobbying firms in Washington, had hustled in the wake of Tony Podesta’s departure to hang on to as many clients and staffers as possible. 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,” according to the report.
Fritts’ announcement comes after Paul Brathwaite, a Podesta Group principal, said last week that he was leaving to start his own shop, Federal Street Strategies.
Rival lobbying firms, meanwhile, see this is a prime moment to poach the Podesta Group’s top lobbyists. At least six other firms have reached out to Podesta Group staffers about leaving since Tony Podesta stepped down, Politico reported.