Axelrod Cashes In On 'Change'

by Rowan Scarborough (more by this author)

Posted 08/20/2009 ET

Barack Obama's chief White House adviser is collecting millions of dollars from his former public relations firms as they sign lucrative contracts with coalitions recently created to push the president's agenda.

After arriving at the White House as top political guru, David Axelrod filed a required financial disclosure form that shows he will receive $3 million in installments over the next five years in a buyout with AKP&D Message and Media, and Ask Public Strategies.

The bottom line: Axelrod is essentially on his old firms' payrolls as he sits in the Oval Office as the closest confidant to the president. Advocacy groups know that when they are hiring AKP or Ask Public they are helping those companies stay profitable and make good on the $3 million.

AKP, which shares Chicago office space with Ask, is now getting contracts from major groups assembled to push Obama's massive health care agenda. They include Healthy Economy Now and Americans for Stable Quality Care. Their million-dollar media blitz is financed in part my the giant pharmaceutical industry which has a big stake in how the White House -- and Axelrod -- craft a final health care bill.

Press reports say pro-Obama groups will spend $150 million on media ads. AKP's website does not list those groups on its client's list, which includes trial lawyers, the largest single contributor to the Democratic Party.

The White House press office did not respond to several emails from HUMAN EVENTS. The mainstream liberal press generally has ignored the Axelrod buyout.

But Republicans have taken notice. The Republican House Conference, led by Rep. Mike Pence, put out a release headlined, "Big Pharma and David Axelrod: $2 Million of Change You Can Believe In?" The $2 million refers to his buyout deal with AKP, where his son still works.

The release notes that the White House negotiated an agreement with the drug lobby (the Pharmaceutical Research and Manufacturers of America) to get its political support.

"Has David Axelrod recused himself from the [drug lobby deals] or will he work to defend an agreement with an industry that is directly funding his son's work, and indirectly funding his own $2 million severance package?" the statement said.

It added, "As the pharmaceutical industry spends hundreds of millions supporting a government takeover of health care -- one which the drug companies obviously believe will increase their profits, even as it raises Medicare premiums for seniors -- some may wonder whether White House senior advisors earning millions of dollars paid for in part by the pharmaceutical industry represent the kind of change Americans can believe in."

Axelrod founded AKP and turned it into a successful public relations and political management firm for liberal candidates and causes. His Ask Public Strategies became a master at setting up what appeared to be grass-roots pressure groups -- the practice is called "astroturfing" -- to pressure governments or industry to do their bidding.

AKP has helped to keep the Democratic Party machine in power in Chicago by running its campaigns.

Ask's website is bare-bone. It does not list clients, nor its address.

By channeling money to Axelrod's old firms, the pro-Obama groups are helping to insure that he will ultimately received all his buyout money since it virtually guarantees the companies will stay in business without their founder.

Axelrod may have physically left the Chicago-based firms. But his name lives on. His son works at AKP&D as an executive. And the words of the founder are still prominently displayed on its website.

At the top of one page is this: "Change is something you have to fight for. Change is never easy. We are going to have to work for every vote. The change we need is worth the struggle; it's worth the fight. David Axelrod, Founder."

The site also features a picture of Axelrod with Obama and David Plouffe, an AKP adviser who served as the president's 2008 campaign manager. And it profiles Axelrod as the campaign's chief strategist.

Bloomberg news reported that Axelrod still talks to one of his former partners, Larry Grisolano, about AKP's work for another client, the Democratic National Committee.

Axelrod's buy-out deal calls for five annual installments of $200,000 from Ask. AKP will pay installments of $350,000, $650,000, $400,000 and $600,000.

The White House was asked about the buyout at Tuesday's press briefing. Spokesman Robert Gibbs dismissed the issue:

Q: Have you seen this charge from Republicans on the Hill that they're asking is he profiting from a payment he's getting from his firm, his firm involved in the PhRMA advertising deal?

Gibbs: That's ridiculous. David has left his firm to join public service.

Q: They say he's about to get -- million-dollar payout.

Gibbs: An agreement I think that was made because David started and owned the firm. He left the firm and, if I'm not mistaken, is being paid for the fact that he created it and sold it, which I think is somewhat based on the free market.

Regardless, Axelrod is, in essence, on his old firm's payroll for the next five years. As such, he benefits from any business they receive as do other people on the payroll.