Will 'Axe' Cut Ties With His 'Secret' Firm?

Barack Obama isn't the only one going to Washington.

So is David Axelrod, architect of the Obama victory. The former Chicago Tribune political reporter was Obama's chief campaign strategist and now will become White House senior adviser. The Trib said in effect Axelrod will be Karl Rove to Obama's W.

The Chicago Tribune revealed Thursday that Axelrod will be selling off his interest in his successful political consultancy, AKP&D Message and Media.

"What Axe understands is that there is a need for authenticity," Peter Giangreco, a Chicago political consultant, told the Tribune. "It wasn't worth winning the day, if it undermined the larger message."

The Tribune continued: "That is why (Axelrod's) friends all expected Axelrod to give up his business if Obama won."

"It would be in keeping with his attitude, which is that you can't do things that are politically expedient if they undermine the larger thing," Giangreco said. "He's going into the White House. He doesn't want to have any outside entanglements."

Outside entanglements?

So "Axe" wanted to devote himself to the candidate? Makes sense.

I wonder if ending outside entanglements is part of the vetting process to prevent conflicts of interest that could bite Obama on the butt.

This could be the mother of all vettings. Even former President Clinton may be reined in to prevent conflicts that would cause problems for a Secretary of State Clinton and President Obama.

So taking the A out of AKP&D will help Axelrod focus on one client and avoid conflicts.

But what about ASK? Never heard of it? ASK Public Strategies is Axelrod's other business, which I covered in an article for BusinessWeek in March.

ASK seems to be wrapped in a cloak of invisibility -- just what its owners and their clients prefer. BusinessWeek's headline described ASK as Axelrod's "secret" business. The Tribune didn't even mention ASK.

Axelrod may have positioned Obama as a man of the people. But ASK, which specializes in "astroturfing," or creating "public interest" groups with artificial grass roots, helps special interests.

When Commonwealth Edison, for example, needed help in selling the public on a rate hike, the utility called on Axe and ASK, which shares a River North office with Axelrod's other firm.

I reported in BusinessWeek:

"One TV commercial, penned by ASK, warned of a ComEd bankruptcy and blackouts without a rate hike: 'A few years ago, California politicians seized control of electric rates. They held rates down, but the true cost of energy kept rising. Soon the electric company went bust; the lights went out. Consumers had to pay for the mess. Now, some people in Illinois are playing the same game.' CORE, which describes itself on its Web site as "a coalition of individuals, businesses and organizations," was identified as the ad's sponsor. After a complaint was filed with state regulators, ComEd acknowledged that it had bankrolled the entire $15 million effort.

"The message seemed effective. Pollster Geoff Garin, president of Peter D. Hart Research Associates in Washington, which has worked with both of Axelrod's businesses, says his research showed that after the advertising campaign, ComEd customers were more supportive of a rate hike than customers served by other electric utilities elsewhere in Illinois."

Newsweek reported in June on how Obama had criticized John McCain for hiring "some of the biggest lobbyists in Washington" to run his campaign; Obama's aides say their candidate, as a foe of "special interests," has refused to take money from lobbyists or employ them. Neither Axelrod nor his partners at ASK ever registered as lobbyists for Commonwealth Edison--and under Illinois' loose disclosure laws, they were not required to. "I've never lobbied anybody in my life," Axelrod tells Newsweek. "I've never talked to any public official on behalf of a corporate client." (He also says "no one ever denied" that Edison was the "principal funder" of his firm's ad campaign.)

Newsweek continued:

Axelrod says there are still huge differences between him and top McCain advisers, including the fact that he doesn't work in D.C. But his corporate clients do have business in the capital. One of them, Exelon, lobbied Obama two years ago on a nuclear bill; the firm's executives and employees have also been a top source of cash for Obama's campaign, contributing $236,211. Axelrod says he's never talked to Obama about Exelon matters. "I'm not going to public officials with bundles of money on behalf of a corporate client," Axelrod says.

I sent an e-mail over to Axelrod to ask whether he was selling his interest in ASK. I haven't heard back. Not surprsing, he has his hands full.

So I asked Eric Sedler--the S in ASK--if Axelrod was selling his interest in the firm. In an e-mail, the publicity-shy Sedler declined comment, saying: "No thanks Howard. I read your previous piece on Huffington. It was total hatchet job."

I suspect that Axe will be sharpening his own hatchet and severing ties with ASK. At least for four years. ASK is just the sort of thing that could give heartburn to an administration that won't want to be associated with astroturfing on behalf of Big Business and special interests.