Clash of the Super Lobbyists
Partners Neil Clark and Paul Tipps, once the most powerful and feared political kingmakers on Capitol Square, are locked in a nasty, high-stakes divorce. And their enemies can’t stop smiling.
When the 128th Ohio General Assembly opened earlier this year, the hot topic around the Statehouse wasn't the projected $7.3 billion budget deficit, the new Democratic majority in the Ohio House or any other legislative issue. Instead, something much more trivial, a feud between two lobbyists, riveted the Capitol Square crowd. "Remember in elementary school, when you heard something bad happened to the bully?" says a Statehouse insider. "Whether you had anything to do with that person or not, you wanted to find out how bad it was. That is a lot of what is going on right now."
Neil Clark and Paul Tipps, long the toughest kids on the Ohio political playground, aren't stealing anyone's lunch money these days. A court-appointed receiver controls their renowned government relations firm, State Street Consultants, and, according to Tipps, they defaulted on a loan payment for their office building, which, along with a 46-space adjacent parking lot, is for sale for
$2.45 million. Bloggers and reporters are dissecting their financial troubles and personal lives, and their once unbreakable partnership has shattered in a spectacle of litigation and nasty accusations.
In a lawsuit filed in Franklin County Common Pleas Court, Tipps claims Clark misdirected money from State Street to fund his "extravagant personal lifestyle." Clark, in turn, accuses Tipps of defamation, broken promises and sneaky dealings-in particular, sticking him with burdensome building payments and a costly buyout deal when Tipps retired in January 2006.
During their reign as the kings of the lobbying hill, the pair were hardly benevolent rulers, especially the hard-charging Clark, who famously labeled his critics "wimpy little sissies" during a 2000 interview with the Dispatch. Now, with the State Street empire in shambles-and its once mighty leaders at each other's throats-the pencil-necked peasants are gobbling up every gossipy allegation (marital discord, delinquent taxes, phantom employees) and enjoying the sweet taste of schadenfreude. "There are more people dancing around Capitol Square right now than in Pittsburgh," said a veteran politico shortly after the Steelers' victory in the Super Bowl. Adds another wag: "For a lot of people, this is sort of like watching a duel between Darth Vader and Lex Luthor."
Clark, 55, and Tipps, 72, are contract lobbyists-policy peddlers who represent multiple clients instead of individual companies or trade associations. Though they weren't the first hired guns in Columbus, the pair and their longtime rival, Dennis Wojtanowski, the retired co-founder of the Success Group, took the practice to new heights starting in the 1980s. "We had something that nobody else had: political talent and connections," Clark recalled in a Jan. 7 deposition.
Indeed, they seemed ideally matched. A former chairman of the Ohio Democratic Party, Tipps is a smooth talker and a cool character. He rarely raises his voice, slaps backs with the best of them and had an extremely close relationship with the late Vern Riffe, the state's most powerful lawmaker for nearly two decades; in fact, Tipps was the only nonrelative at Riffe's side when the legislator died from cancer in 1997. Clark, meanwhile, boasts deep ties to Republican politicians from his days as former Senate president Stan Aronoff's budget whiz kid. Clark also brought a take-no-prisoners toughness to the partnership, playing the role of Dirty Harry to Tipps's Barney Miller. "I always got the feeling that they really complemented each other, and that is what made the business work," says political consultant Ian James.
Their operation, believed to be the first formal bipartisan lobbying alliance in Columbus, took off right away. Their timing was perfect: They formed their partnership just as corporations began to spread money all over Columbus as Ronald Reagan's New Federalism shifted power from Washington, D.C., to state capitals. Soon, Tipps and Clark were living large: fancy cars, big houses, vacation homes. When they held court at the swanky Christophers restaurant atop the Riffe Tower, they acted as if they owned the place. And for good reason. In Clark's 1993 divorce, it was revealed that he owned a share of the now-closed political hangout. "Through the '90s, Neil was this mythical figure," says Jeff Jacobson, Clark's friend and a former legislator from the Dayton area.
Their success bred jealousy, of course. Eyes popped all over Capitol Square when Clark's $1.1 million annual salary became public as part of that 1993 divorce. Then there was the roster of blue-chip clients-the Limited (now Limited Brands), Banc One (now JPMorgan Chase), Cardinal Health, to name a few-that seemed to get bigger every time the pair filled out their latest public disclosure forms. "They built up a huge number of enemies who looked at those lists and thought, 'Why are they representing all these premier companies?' " says longtime Democratic political consultant Greg Haas.
But envy doesn't explain all the hatred. In the 1990s, Clark and Tipps played a central role in one of the biggest scandals of the era. They provided lawmakers with stacks of $500 checks for speaking engagements, one for each client they represented. Because state law required the public disclosure of individual donations greater than $500, most lawmakers kept the money secret. The practice (called "pancaking") caused an uproar. Several lawmakers, including Riffe and Aronoff, were convicted of misdemeanor ethics violations, and the scandal prompted widespread reforms. Tipps and Clark reported all their donations, as required by state law, and faced no charges as a result, but some accused them of pushing the ethical envelope.
Bob Hagan, the longtime Democratic legislator from Youngstown, says he experienced "the good and bad" of both men. Despite his gentlemanly exterior, Tipps can play hardball with the best of them. After all, he learned politics from two of the shrewdest operators in recent Ohio legislative history-Riffe and C.J. McLinn, once the most powerful black politician in the state and Tipps's first mentor.
Hagan saw that side of Tipps just before the pancaking scandal broke. Wanting to be transparent, Hagan reported all his $500 donations even though state law didn't require it. That decision offended Riffe, who preferred to keep the money secret. In response, Hagan says, the speaker and his good friend Tipps funneled on the down-low about $40,000 to a primary opponent in a failed attempt to boot Hagan from the Ohio House in 1992. When he found out about the ploy, Hagan, a train engineer before he went into politics, screamed "a few choice, Youngstown railroad words" at Tipps during a confrontation in Columbus. "We didn't talk for a couple of years after that," says Hagan, who eventually forgave Tipps and sought his advice later when the legislator ran for the mayor of Youngstown and contemplated making a bid for Congress.
In 1997, Hagan was appointed to the Ohio Senate, Clark's turf. Jokingly called the "34th senator," Clark has played a key role in the Republicans' domination of the institution since 1984-first as a staffer and then as a political consultant-and never has been afraid to remind people of that. His friends call him confident, but others use harsher terms: "rude," "arrogant," "classic bully." Once, Clark approached Hagan while he was eating dinner with two fellow Democratic senators at Tony's Italian Ristorante in the Brewery District. "He stood over us and said, 'I'm going to beat you, I'm going to beat you,' " recalls Hagan. "Then he got to me and said, 'We can't beat you, but we don't care about you. You don't mean anything.' "
Clark is one of the most polarizing people in Ohio politics. He can be warm, charitable and charming in private, but hides that side from almost everyone. Growing up poor in Cleveland, he always had to be the toughest kid on the block. "I have never in my life been one of those individuals that has been readily gracious to others," he told Columbus Monthly in 2004. "I'm not looking for public approval or individual approval."
During his 16 years in both the House and the Senate, Jacobson came to appreciate Clark's approach. Few people in politics speak as frankly as Clark, a trait that endeared him to reporters, but not always to colleagues and legislators. "There is no one who will give you better advice if you are willing to take it," Jacobson says. "A lot of people are afraid to ask Neil Clark for advice. They don't really want to know what he's going to tell them." He says Clark lives by a "code of honor" and demands others follow suit. "When people violate the rules, there are appropriate punishments," Jacobson says.
The judgments are swift and lasting-and no one gets a free pass. A best friend? Gone if Clark suspects you spread dirt about him. That's what happened to Curt Steiner. Didn't matter that Clark and his fellow GOP powerbroker cut their teeth together as Senate staffers. Or served as groomsmen in each other's weddings. Or that Steiner, now a senior vice president at Ohio State, denied leaking the embarrassing divorce papers to the media in 1993. "I've always lived by the philosophy that it's not your enemies that will hurt you," Clark told this magazine five years ago. "The people who will hurt you the most will be your friends."
Or family. Five years ago, Clark also told Columbus Monthly the story of the last time he saw his father, a shady character who bounced in and out of jail. The two met for dinner at a restaurant in Cleveland in 1976 and hugged after they finished their meal. Later, Clark realized his own dad had picked his pocket.
That memory continues to haunt Clark. In his recent deposition, he brought it up as he explained his breakup with Tipps. "I adored him," Clark said. "He was like a father figure to me. And I believe that what he has done is absolutely disgusting and similar to what my own father did in betraying me." Clark never spoke to his dad again and the same fate appears to await Tipps. "What would be the best way to say this so I'm crystal clear?" Clark said in the deposition. "There is no need for us to ever speak to each other again. There is no need for us to ever be friends again. . . .We had some great memories, but it's over."
Tipps looks dapper in a tie, jacket and gold cufflinks, and his pale blue eyes light up as he looks back at his more than four decades in politics. He talks about how he and his mentor, McLinn, engineered a coup of the Montgomery County Democratic Party in 1970. He reminisces about the Galleria, Riffe's favorite bar, where people would line up to see the speaker every night, including on at least one occasion then Gov. Dick Celeste. "That's the beauty of being around as long as I've been-these great stories that all these guys have done, and I was actually there when they did it," Tipps says.
He even talks fondly of Clark. They succeeded, Tipps says, because of smarts, hard work and complementary skills and personalities. Clark understands state government through his mastery of the budget, the intellectual key to the Statehouse. Tipps, meanwhile, knows local government and political strategy thanks to his experience as a county and state party chief. He also understands Clark's quirks. He'd clean up after Clark if he offended someone-a common occurrence-and refused to let Clark disappear completely into his own world. "Neil's attitude was he wouldn't tell me anything," Tipps says. "He just didn't do it. It just was his nature. But if I asked him, he'd tell me everything. But I had to ask. I knew that."
On this afternoon in February, Tipps sits in a conference room in the State Street Consultants building. Clark moved out of the imposing structure about a month earlier for less grand digs a few blocks away, but Tipps has yet to exorcise his ghost from the place. The firm was a two-headed monster, and the walls of this conference room highlight that fact. A Neil Armstrong photograph, dedicated to Clark, is next to a John Glenn picture, dedicated to Tipps. Also on the wall are two framed collections of campaign buttons. Tipps assembled both sets-one for him, one for Clark. "For 18 years, we never had a single argument," Tipps says. He pauses to contemplate the current state of their relationship. "All this stuff happened when I retired," he says. "Until then, we never had a single one of these problems." Clark, who declined to be interviewed for this story, said in a letter to Columbus Monthly that he was "saddened" by the breakup with Tipps.
Tipps announced his retirement in the summer of 2005. He, Clark and their lawyers then spent the next few months discussing a buyout deal and sorting through their partnership's tangled corporate structure. In January 2006, an accord was reached, and Tipps retired from active involvement in State Street.
Clark got off to a rough start. In January, he broke his neck, coming "within an eighth of an inch from being totally paralyzed," Clark recalled in his deposition. Doctors put 10 screws and three rods in his neck, and he couldn't return to his office full time until May. He did, however, continue to work at home and even in the hospital. "I was actually doing a poll in my bed two hours before my operation and communicating the poll results to nine track owners," he said in his deposition, referring to the failed gambling campaign he led in 2006. "Not a single track owner even knew that I was in the hospital."
Meanwhile, Clark's second marriage was breaking up. His wife, Kathy, sued for divorce in early 2006 and claimed in an affidavit that her husband had been "dating" Colleen Lora, a State Street employee, since 2003. As he was recovering from his broken neck, Clark settled with his wife-and paid a steep price. She received $12,000 a month in alimony, two cars (a 2000 BMW and a 2002 Cadillac Escalade) and several real estate holdings (a Grandview Heights condo, an Upper Arlington home and timeshares in Park City, Utah, and Maui, Hawaii). The expenses came on top of the $15,000 a month he already was paying his first wife in child support.
Next, Clark took some bold action at his business. He, his accountant and bookkeeper said in recent depositions that a cash crunch forced them to skip some payroll taxes to the IRS in 2006 and 2007-about $333,000, according to a federal tax lien. (Clark also didn't pay about $1.07 million in personal income taxes in 2006 and 2007, according to another federal tax lien.) Then, looking to cut expenses, he adjusted how he reimbursed his employees. Two senior lobbyists-Mike Morrison and Kevin Futryk-didn't like the changes and started their own firm, Government Advantage Group, in January 2007, taking several clients with them.
What motivated those decisions is a source of debate. Clark contends Tipps, the managing partner before he retired, burdened State Street with deals that benefited him personally but hurt the firm. Clark claims that when he examined the books closely in 2006 for the first time, he concluded that Tipps had stuck him with costly building payments-about $20 a square foot more than he should have been paying, says Clark's lawyer, Bob Behal. "Paul had manipulated the situation because Neil was not paying attention to whatever the bills were for the building," Behal says. The discovery shocked and angered Clark. He concluded those payments and Tipps's costly buyout package (50 monthly payments of $45,833) were killing the firm. "He started to say, 'I thought I could trust Paul, but now I see that I couldn't,' " Behal says.
In an interview and in his lawsuit, Tipps offers a much different explanation. He claims his former partner drained the coffers-$1 million in both 2006 and 2007, according to his suit-to support his personal financial obligations and free-spending lifestyle. "It really made him desperate and he did desperate things," Tipps says. In her divorce proceedings, Kathy Clark also suggested that her husband was squandering money-largely to support Lora, the State Street employee. According to the deposition of Clark's accountant, Tom Rankin, Lora now lives with Clark in his 9,200-square-foot New Albany mansion, which he put on the market in 2008 and listed for sale recently for $1.7 million. Kathy Clark alleges Lora, also an interior designer, redecorated the mansion, outfitted it with four new flat-screen TVs and "may be receiving an inappropriate salary based upon her experience and qualifications." (At one time, Lora was listed as a lobbyist on the State Street website.)
To the amusement of some Statehouse insiders, Tipps, one of the central players in the pancaking scandal, briefly reinvented himself as a good government reformer in retirement. But in January 2007, concerned by the departures of Morrison and Futryk, Tipps got involved again in State Street's affairs. He says he tried to ease Clark's financial burden. "I made specific offers to resolve all the problems," Tipps says. "But the resolutions had to be accompanied by changes in lifestyle, and he was unwilling to do that."
At that point, Tipps says Clark stopped talking to him and, in 2008, he prepared to abandon the State Street Consultants building to save money, a move that Tipps feared could damage the firm's image. Then their fight went public last November. "The relationship is over," Clark told the Dispatch in his only interview so far about the feud. Clark predicted he would sue his ex-partner, but Tipps beat him to the punch in late December. A month later, Clark filed a counterclaim, and Franklin County Commons Pleas Judge Julie Lynch appointed a receiver, Columbus lawyer Keith Schneider, to run State Street, which Clark abandoned when he formed his new lobbying firm, Grant Street Consultants.
Since then, according to legislative inspector general filings available in late February, Clark lost 14 clients. Five-including the Ohio Psychological Association, American Share Insurance and the city of Dayton-went with Penny Tipps, a State Street lobbyist and Paul's daughter who launched earlier this year her own firm, Public Policy Strategies, based in the old State Street Consultants building. Five other Clark clients gave up lobbying completely, while the remaining four-Buckeye Community Health Plan, Community Financial Services, the Humane Society of the United States and ACS State and Local Solutions, a division of the Texas-based technology giant ACS-went with other lobbyists. Still, turnover is common in contract lobbying-especially at the start of a new budget season-and Clark kept blue-chippers such as Apple, Oracle and Greek gambling giant Intralot and gained enough new clients to keep his roster at 43, 11 below what he had in December but still nothing to sneeze at. "Relationships end," Clark said in his letter to Columbus Monthly. "New opportunities develop, and life moves on."
Indeed, Clark isn't going away. Friends call him the ultimate survivor. He overcame poverty and a reading disability to rise to the top of the Ohio political world. Heck, a broken neck couldn't stop him in his tracks, so why should a lawsuit and some embarrassing headlines? "If you are looking at this thing and saying, 'Gosh, he's down and almost out,' I think you are underestimating Neil's tenacity," says James, the political consultant. "Neil is a fighter. He's not going to give up. And for those folks who are trying to go out and take his clients away, there is one guy who keeps a pretty long list and has a long memory, and that guy is one tough son of a bitch."
But could this time be different? Image was a big part of Clark's success-in fact, too much, his critics charge. They say Clark's self promotion disguised a gradual waning of his power after his chief benefactor, Aronoff, left office. In recent years, Clark's customer roster has boasted fewer big names than it once did, and several of Clark's clients-strip clubs, race-track owners and payday lenders-have taken hits in the legislature and at the ballot box. "He got the shit kicked out of him every time, and they still hire him," says John Mahaney, the longtime head of the Ohio Council of Retail Merchants. "Who says he's successful?" Now, with Tipps's lawsuit damaging his reputation, will Clark's brash, tough-guy shtick still work-especially on new legislators who know nothing of his past exploits? Thanks to term limits, the Ohio House welcomed 32 new members this year. "I don't think when Humpty Dumpty is broken, you can put him back together," Mahaney says.
What's more, the lawsuit is only going to get uglier. Tipps is coming after Clark with guns blazing. He's got a team of lawyers working on the case, and he's hired Sandy Theis, the hard-nosed reporter-turned-PR consultant, to spin the media for him. Tipps alleges both Clark's girlfriend Lora and his daughter, Brittany Clark, are "phantom employees." Rankin, Clark's accountant, acknowledged in his deposition that Clark's daughter collected a salary while attending Endicott College in Massachusetts. Rankin also said he expressed concerns to Clark about Lora's salary. "I didn't see her in the office much," Rankin said. (Behal, Clark's attorney, says both Lora, who was deposed in early March, and Brittany Clark worked outside the office on various projects-public relations, event planning, public policy research and website development, among other things.)
Meanwhile, Rankin's wife, Lisa, a former State Street lobbyist and a longtime employee of Clark's, has been dragged through the mud, too. In her deposition, she took the Fifth Amendment when one of Tipps's lawyers asked if she had ever signed any documents using Kathy Clark's name.
Still, Clark isn't pulling back. He was diplomatic in his letter, but took a different approach in an e-mail sent earlier to Columbus Monthly. "Paul's side is distorted and filled with lies," he wrote. He also pointed out that Tipps's former bookkeeper continues to work for him. As a result, "I know more than Paul about dirt," he said.
Tipps is less combative. "I went through being angry with what happened to being deeply disappointed to now I feel sorry for him," says Tipps, who was forced to come out of retirement and join his daughter's new lobbying firm after Clark cut off his buyout payments. But Tipps promises to fight for what he says Clark owes him-nearly $1 million. "The only way it doesn't go to trial is he decides it doesn't go to trial," Tipps says.
This story appeared in the April 2009 issue of Columbus Monthly.