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Clinton Allies Join Bush Alum To Form New Consulting Group

Sep. 3, 2013 - 03:45AM   |  
By ZACHARY FRYER-BIGGS   |   Comments
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WASHINGTON — Consulting groups are routinely a place where former public servants are put out to pasture, a last stop to conclude careers built on senior government positions. But a group of former senior officials is building a new firm, Beacon Global Strategies, while retaining an additional goal.

They all want to go back into government.

Part of the confidence in future public service may stem from a combination of significant titles and relative youth, paired with the fact that most of the founders of the firm have ties to former Secretary of State Hillary Clinton, who may be a presidential favorite heading into the 2016 election if she decides to run.

Clinton’s longtime spokesman Philippe Reines and one-time national security adviser turned Assistant Secretary of State Andrew Shapiro are teaming with Jeremy Bash and Michael Allen to launch the group. Bash spent years as chief of staff at both the CIA and Pentagon for former Defense Secretary Leon Panetta, a close Clinton ally. Allen, the lone Republican in the group, has a longstanding relationship with Bash. The two worked together in a variety of roles while Allen was a White House staffer for President George W. Bush and as staff director of the House Permanent Select Committee on Intelligence.

“We haven’t started this in a way that a lot of others have, which is that they’ve had their last big job in government and then they want to sail off and do something a little bit easier, a little bit lower key,” Bash said in an interview alongside the other three company directors. “We’re highly motivated and highly energetic in that we’ve all spent the better part of the last decade in government, mostly in the national security arena. In terms of our experience, we take a back seat to nobody.”

Together they have quietly set up a consulting group built on providing advice to companies, primarily defense contractors, focused on international defense business as well as cyber, although their first client was Bash’s former boss, Panetta.

But despite the relative secrecy it has maintained, the group has already outpaced its projected client list, which now surpasses a dozen, and spent part of last week meeting with an architect to go over plans for new office space set to be ready in November. Beacon won’t name the companies on that list because of nondisclosure agreements.

“We’ve talked to folks around town about how to do this, and it’s always get attention, get your website up,” Reines said. “We decided to go a different route. We wanted to walk the walk before we talked the talk.”

The firm started to coalesce in April but didn’t get fully off the ground until Aug. 6, the day after Allen left his job in Congress and officially joined, helped by seed funding from Claude Fontheim of Fontheim International, another consulting firm. The other three departed their administration positions earlier in the year.

Reines acknowledged that having a chance to work more typical hours and to see family was a draw. In their new space, one of the offices is being converted into a room for their combined six kids to play.

Building a firm while that firm’s principals might want to return to government creates its own obstacles, such as the politics of certain clients. The firm’s second hire was a former staffer for Michelle Obama whose primary role is now to vet new business.

Most consulting work these days comes from the largest defense contractors, names that are well-known to all in the national security arena and unlikely to set off alarms in those circles, Richard Aboulafia, of the Teal Group, said.

And there is opportunity, for the right firm.

“It’s crowded, but if you have good people and you have star power, you can make a name for yourself,” Aboulafia said.

Still, if one is concerned about optics, consulting comes with certain inherent problems, he said.

“If you’re going into government and you’re super concerned about conflict, you wouldn’t establish a consultancy,” he said. “And if you’re trying to avoid the bad guys, you have to be ecumenical because that’s a large group.”

Beacon has already turned down clients and won’t work for foreign governments, Reines said, and despite the interest in future government jobs, the principals aren’t simply biding their time for an offer, alluding to the presidential elections for which Clinton may be a candidate in 2016.

“In terms of going back in, I think we all want to, but we also know that life doesn’t necessarily work out so cutely that you have to worry about three years from now,” he said. “It’s not that simple. We’re thinking long term.”

There also is a push to stay in the national security space, while promoting bipartisanship.

“The other important part of this is the bipartisan nature of it. I worked for eight years for President Bush, and the last two years for the Republican Party,” Allen said. “Everybody we’ve talked to has almost a sense of relief on their face. They’re glad that we’ve got both Republicans and Democrats.”

Helping to foster that kind of collaboration is a goal for the new group, Bash said.

“Bipartisanship and national security have long gone hand in hand, but recently that hasn’t always been the case, but we’re trying to re-establish that important tradition of bipartisanship in national security,” he said.

And toward that end, new blood is critical because of the radical shifts in the national security apparatus.

“Since 9/11, no area of government has changed more than the national security arena,” he said. “New agencies, obviously new departments, DNI [director of national intelligence] didn’t exist, DHS [Department of Homeland Security] didn’t exist. Defense and intelligence spending has gone up significantly, and now we’re seeing prioritization of those resources. No one who was in government in the ’80s or even in the 1990s, I don’t think, can fundamentally understand the way the current national security agencies operate.”

The group is being set up to focus on several hot areas in national security: international sales, potential vertical integration in the defense industry, and cyber.

But the firm is clear that it will help only with items that align with US policy.

“We want to be sure that what companies are doing is consistent with US national security policy, to begin with,” Bash said.

And since the group has no plans to do any lobbying, that help will be concentrated in strategic thinking, such as how to handle a complicated weapons sales picture in the Middle East, Shapiro said.

“The political currents are obviously of great concern to a lot of defense companies, but it’s not as if they’re going to turn to us to help change the administration’s mind on a major policy issue,” he said. “What they want to know, is they want to understand what the implications are: What are the potential outcomes? How do we plan our business? How do we measure risk?”

And in cyber, they see a chance to help companies both in terms of understanding the complexities of security and policy, as well as the cyber business.

“We can feel people coming to us grappling with this, trying to understand the implications,” Allen said. “Everyone is obsessed with trying to figure out where the cyber market is heading.”

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