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By LUCY MORGAN
Published December 4, 2006
TALLAHASSEE - Florida lobbying powerhouse Southern Strategy Group filed suit recently against its former lobbying partners in Georgia, accusing them of stealing a client list worth $600,000 a year in fees and seeking more than $50-million in damages.
The Florida group, headed by Paul Bradshaw, a confidant of Gov. Jeb Bush, accused its Georgia brothers of fraud and secretly plotting to sell the firm and make off with more than 40 clients.
Filed in Gwinnett County Court on Sept. 1, the lawsuit offered a peek inside the high-stakes world of lobbying - with so much money at stake that even what once were branches of the same firm went at it.
The suit was quietly dropped Oct. 10. All parties signed a confidentiality agreement and refused to discuss details of the decision to drop it.
"They realized everything they claimed was egregious and dropped it," said Chuck McMullen, managing partner of the Georgia office. "I think everyone was upset when we decided to part ways, and once they slept on it, they decided it was better that it go away."
Said Bradshaw: "We settled the case because we made the business judgment that it was in the best interest of the firm to resolve it and move on to more productive endeavors."
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Southern Strategy is one of Florida's most powerful lobbying groups. It was created in 1999, shortly after Bush was elected governor, and manned by lobbyists with close ties to his office.
Bradshaw was the issues coordinator for Bush's 1998 campaign and helped craft the governor's education policies. His wife, Sally, managed both of Bush's campaigns and was his first chief of staff.
Others at the firm include David Rancourt, a former deputy chief of staff to the governor; former House Speaker John Thrasher, a Bush friend and frequent golf partner; Chris Dudley, once a key aide to former Lt. Gov. Frank Brogan; and James T. "Tim" Moore, former head of the Florida Department of Law Enforcement.
With Republican gains in other Southern states, the firm grew dramatically, expanding its operations to create partnerships in the Tampa Bay and Orlando areas and nine states. It has about 250 clients.
Southern Strategy's Florida clients include Blue Cross Blue Shield of Florida, Chevron, Tampa Electric, Walt Disney World, Wachovia Corp., Corrections Corporation of America and dozens of others.
Likewise, the firm's lobbyists in Georgia were politically connected, including former Deputy Insurance Commissioner Allen Hayes; former state Sen. Dan Lee, a Republican who helped Republican Gov. Sonny Perdue with his legislative agenda; and John Clayton, former staff director for Democrats in the Georgia House. They began work for Southern Strategy about three years ago.
The firm's 41 Georgia clients included Anheuser-Busch, Infinity Software, Keefe Commissary and Motorola. Southern Strategy has pulled out of Georgia, and all of its clients are now with Piedmont Public Affairs, a new lobbying firm that the former Georgia partners created.
The lawsuit was filed after the Florida partners discovered that their Georgia partners had been discussing the sale of the Georgia branch to Dutko Worldwide, a Washington, D.C., firm with a presence in many states.
The lawsuit indicated that Bradshaw and others in the Florida office gained access to e-mail exchanges in January through July between McMullen and others involved in the Dutko negotiations.
McMullen said he doesn't know how Bradshaw got the e-mails.
According to the lawsuit, the e-mails feature McMullen bragging about plans to leave Southern Strategy for Dutko and details of a trip that the Georgia partners made to Washington to meet with Dutko officials - paid for with Southern Strategy's American Express card.
The Georgia lobbyists billed the company more than $100,000 in expenses during the first six months of 2006, far more than they reported spending when they filed statements with Georgia ethics officials, the suit alleged.
While the Georgia partners were negotiating with Dutko, they discovered that Bradshaw also was talking to Dutko.
"McMullen was apoplectic at the news," the lawsuit alleged, and quoted from a McMullen e-mail: "What? Paul is meeting with Dutko? When? What is Paul talking to them about? I don't want to get t-boned."
The Florida partners also accused the Georgia team of trying to recruit other Southern Strategy partners from other states. Southern Strategy has offices in Kentucky, Louisiana, Wisconsin, Alabama, Mississippi, South Carolina, Michigan and Arizona.
In addition to diverting about $600,000 a year in lobbying fees, the lawsuit alleged that the Georgia group derailed a plan to expand Southern Strategy's reach into Virginia.
The situation exploded July 27, when McMullen met in Atlanta with Bradshaw and other partners from the Florida office. McMullen told his fellow lobbyists in Georgia that the meeting had been called because they were "not making money fast enough."
At the meeting, McMullen was asked to justify the continued employment of Lee and Clayton.
Instead of firing them, McMullen and the others formed Piedmont Public Affairs on Aug. 2, took the clients and resigned from Southern Strategy the same day.
Times researcher Caryn Baird contributed to this report. Lucy Morgan can be reached at (850) 224-7263 or email@example.com.
[Last modified December 4, 2006, 00:07:22]