A small group of billionaire-backed Democrats, part of the so-called Problem Solvers Caucus in Congress, has launched a last-ditch effort that threatens to derail Rep. Nancy Pelosi’s election as House speaker.
They’ve framed their challenge to Pelosi, a California Democrat, in terms of good government and high-minded bipartisanship. Yet the force behind their campaign is one of the most toxic and notorious partisan warriors the Democratic Party has produced in the past three decades: political and corporate consultant Mark Penn.
The Problem Solvers Caucus is made up of 12 Democrats and 12 Republicans; nine of the Democrats have publicly committed to opposing Pelosi on the House floor if she doesn’t meet their demands for House rules changes largely aimed at legislatively empowering Republicans. Combined with the holdouts from the last putsch effort, there would be enough votes to thwart Pelosi.
The Democratic chair of the Problem Solvers Caucus is Rep. Josh Gottheimer of New Jersey, who has been a protege of Penn’s since the 1990s, when he was just out of college. Gottheimer is one of the nine members making demands of Pelosi. She and the caucus will meet Tuesday afternoon to go over the group’s demands.
The caucus was born out of meetings of congresspeople organized by No Labels, which was founded in 2010 as a bipartisan group, backed by wealthy donors, ostensibly dedicated to civility and good government. Nancy Jacobson, Penn’s wife, is the No Labels CEO, and Penn is also closely involved with the group. Gottheimer was elected to Congress in 2016 and co-founded the caucus, with Rep. Tom Reed, R-N.Y., shortly thereafter.
The links between Gottheimer and Penn go back decades. Gottheimer was Penn’s assistant in the Bill Clinton White House in the 1990s. Then in 2006, when Penn was CEO of the consulting firm Burson-Marsteller, he hired Gottheimer as an executive vice president, with Gottheimer reporting directly to him. When Penn became chief strategist of Hillary Clinton’s 2008 campaign, he brought on Gottheimer as an adviser. In 2012, Penn set up shop at Microsoft, where he built a guerrilla PR operation to do battle in Washington with rival Google. There, too, he brought on Gottheimer.
Gottheimer had the full-throated support of both Bill and Hillary Clinton when he ran for Congress in 2016, with Hillary Clinton calling him “something of a family member.”
No Labels launched what it called “The Speaker Project” in this past June, proposing a sweeping set of rules changes that lawmakers should demand before agreeing to elect the next speaker, which by then was presumed to be a Democrat. The next month, the Problem Solvers Caucus embraced the plan. In September, Penn went on Tucker Carlson’s show on Fox News to talk up the project. “There’s a problem-solvers group that is looking to have some influence if the result is close, in terms of changing the rules and naming the speaker,” Penn said.
A lawsuit this summer by former No Labels contractors who alleged that they were bilked by the group claimed that Penn was was “calling the shots” at the organization. Penn, according to the Washington Post, has denied involvement with the operation of No Labels, and the group rejected the assertion that he was in charge. Neither No Labels nor Penn responded to The Intercept’s questions about Penn’s relationship with the group.
But aside from the claims of the contractors, there are also direct links between groups Penn owns and No Labels’s political activity. Penn is a minority owner of the consulting firm Targeted Victory, which the group contracted with for some of its 2018 campaigns. No Labels uses an affiliate, Victory Passport, for its online fundraising. Penn’s firm Harris Interactive does the group’s polling; SKDKnickerbocker, of which Penn is an owner, produces and places the group’s television ads, as it did in its campaign to support the re-election of Rep. Daniel Lipinski in Illinois, according to the lawsuit. Hilary Rosen, an SKDK partner, said that the firm does not produce ads for No Labels.
The New Center, a think tank launched by No Labels to house its 501c3 nonprofit operation, listed Mark Penn as a contact for inquiries about its invitation-only “ideas summit.” Penn is managing partner and president of the Stagwell Group, the holding company that owns SKDKnickerbocker. Penn regularly talks up the great work of No Labels during his appearances on Fox News.
The network of Super PACs linked to No Labels — which go by a variety of names, according to a Sun-Times investigation, including United for Progress, Citizens for a Strong America, United Together, and Govern or Go Home — spent millions in the 2018 midterms, mostly to help elect members of the Problem Solvers Caucus. Its most high-profile intervention came in defense of Lipinski, a conservative Democrat who faced a well-organized primary challenge from progressive Marie Newman, winning by just 2,000 votes. Pelosi backed Lipinski in the primary, and now he is part of the effort to block her speakership. The Daily Beast reported Monday that Jacobson considered Pelosi’s support of Lipinski insufficient, and the group considered making her a “bogeyman.” They ultimately settled on attacking Sen. Bernie Sanders instead.
No Labels’s Super PACs also spent heavily to beat incoming Rep. Deb Haaland, who nonetheless prevailed in New Mexico and will soon be one of the first two Native American members of Congress.
Pelosi will meet Tuesday afternoon with members of the Problem Solvers Caucus to hear out their demands. One of the initial planks of the Speaker Project was that the House speaker should be a bipartisan position, with the speaker needing five more votes than the number of their majority party. That demand has been dialed back, but the rules changes being called for are in a similar vein, with the purpose of stripping power from the majority party and requiring Republican support for legislation.
Penn is notorious in Washington as the metaphorical devil on the shoulder, whispering toxic advice into the ears of Democratic candidates. Penn and Jacobson were both early players in the Democratic Leadership Council, a faction that emerged within the party in the 1980s to push it to align with corporate money and to move in a more conservative direction. He’s perhaps most well known for urging his client, Hillary Clinton, to attack Barack Obama as un-American during the 2008 presidential primary.
In a now-famous 2007 memo to Clinton, Penn noted that there had been much coverage in the media of Obama’s “boyhood in Indonesia and his life in Hawaii … geared towards showing his background is diverse, multicultural and putting that in a new light. Save it for 2050.”
In other words, Penn argued, an appeal to diversity wouldn’t work politically for another half-century. “I cannot imagine America electing a president during a time of war who is not at his center fundamentally American in his thinking and in his values,” he wrote.
How Penn planned to isolate Obama’s alleged otherness is a window into how he views the kind of glossy, good government rhetoric now deployed by No Labels — its meaning is found less in what it says than in what it doesn’t. He advised Clinton that “we give some life to this contrast without turning negative” by elevating the values she grew up with as uniquely American. “Every speech should contain the line you were born in the middle of America to the middle class in the middle of the last century.”
That, Penn argued, would make an implicit contrast with Obama, who allegedly lacked those values — “fairness, compassion, responsibility, giving back” — due to his lack of American roots. “Let’s explicitly own ‘American’ in our programs, the speeches and the values. He doesn’t. Make this the new American Century, the American Strategic Energy fund. Let’s use our logo to make some flags we can give out. Let’s add flag symbols to the backgrounds,” he advised. “We are never going to say anything about his background — we have to show the value of ours when it comes to making decisions, understanding the needs of most Americans — the invisible Americans.”
Clinton, clumsy in her rhetoric, would occasionally make the subtext into text. In a 2008 speech in West Virginia after she beat Obama in Indiana, she said, “Senator Obama’s support among working — hard-working Americans, white Americans, is weakening again.” (Obama went on to win Indiana in the general election.)
A more effective dog-whistler, in the 2016 campaign, would boil the Penn approach down to just four words: “Make America Great Again.” Donald Trump was named by No Labels in 2016 as an official “Problem Solver.”
A Trump surrogate accepted the award, even though two months earlier, Trump had spoken at a No Labels conference and delivered a speech larded with Trumpisms. (Since his 2017 swearing in, Gottheimer, the Problem Solvers Caucus chair, has voted with Trump more than half the time, according to FiveThirtyEight.)
Jon Favreau, a longtime aide to Obama and a co-founder of Crooked Media, said that the No Labels/Problem Solvers Caucus focus on Pelosi makes little sense with Mitch McConnell in the Senate and Trump in the White House, given how little interest those two have shown in civility or bipartisanship. But an incoherent strategy was not terribly surprising coming from Penn. “You mean the guy who Laura Ingraham recently praised for sounding just like her?” Favreau said of Penn. “Sterling track record of success as a consultant. I’d rather light my money on fire than use it to hire him for literally anything.”
Reporting for this story will appear in Ryan Grim’s forthcoming book, We’ve Got People. Sign up here to get an email when it’s published.
Update: November 26, 2018
This story was updated to include comment from SKDK’s Hilary Rosen. It was also corrected to identify Tom Reed as R-N.Y.