06-10-2000

TRANSPORTATION: Producing United's Talent Show

These days, Shelley A. Longmuir is honchoing a band of K Street all-stars
charged with winning the feds' stamp of approval for United Airlines'
$11.6 billion merger with US Airways. It's a role that some industry
experts never thought Longmuir, United's top lobbyist, would get to
play.


After stints during the Bush Administration as a lawyer at both the
Housing and Urban Development and the Transportation departments, Longmuir
joined United's Washington office as senior counsel in March 1993. Nine
months later, however, United's board of directors approved the sale of a
majority stake in the airline to its employees.


Union officials used their new clout to reshape United's management.
"A lot of us were surprised that Shelley was able to survive,"
said an aviation industry lobbyist. "Shelley surprised a lot of
skeptics who thought her Republican background would lead to her immediate
ouster."


Instead of being purged, Longmuir was promoted to vice president for
governmental affairs. In late 1998, Longmuir moved up to senior vice
president for international, regulatory, and governmental affairs, a
position that required her to move to United's headquarters in Chicago. As
head of the airline's government relations office, she travels frequently
to Washington.


Longmuir's knack for winning over potential critics helps explain her
success, say airline insiders. Longmuir, they explain, puts a friendly
face on a carrier that often plays hardball to accomplish its goals in
Washington. "One of the good things about Shelley is that she knows
what she knows, and she knows what she doesn't know," a lobbyist at a
rival airline said. Many top executives at competing carriers "will
try to outfox the opposition themselves," he added. But United's
in-house lobbyists are "the quintessential managers," the
lobbyist said. "They will hire people to outfox you."


Or, bury you, as one aviation lobbyist said of United's tactics.
"What they have-and know that they have-is a massive, well-run
company that can throw off a lot of cash and resources," the lobbyist
said. "They just grind and pound."


The United-US Airways deal is a classic example of that strategy. The two
airlines have hired plenty of big names to help make the case for the
merger among regulators and on Capitol Hill. Superlobbyist Thomas Hale
Boggs Jr. and his sidekick at Patton Boggs, Jonathan R. Yarowsky, should
help with Democrats. Yarowsky was a lawyer in the Clinton White House and
counsel to former House Judiciary Committee Chairman Jack Brooks, D-Texas.
The carriers also retained Harold M. Ickes, a former deputy chief of staff
in the Clinton White House.


United has plenty of Republicans in its lineup, including former Reagan
White House Chief of Staff Kenneth M. Duberstein, and Ann Eppard, a former
chief of staff to House Transportation and Infrastructure Committee
Chairman Bud Shuster, R-Pa.


United rehired Eppard-a controversial but influential lobbyist-even after
she once dumped United in favor of a new client, the Airports Council
International-North America, because of a conflict of interest.


Roughly a dozen aviation policy specialists at top Washington law firms
are also at the beck and call of United and US Airways.


United was foiled in its attempt to land former House Minority Leader
Robert Michel, R-Ill., who is now a lobbyist with the law firm of Hogan
& Hartson. United approached him about joining the team, Michel said,
but he backed out after his partners decided that representing United
would conflict with the firm's representation of the aviation authority
that runs Reagan Washington National and Dulles International
airports.


United has "the right team and the right message," said Mark R.
Anderson, the head of United's Washington office and Longmuir's chief
deputy. "Because of the merger, and because of the questions we
expect, and because of the sheer amount of information [demanded by
regulators], that's why we have added these folks," he said. "We
believe we have a positive story to tell."


Some antitrust experts predict that the blockbuster merger will encounter
plenty of turbulence. Critics maintain that the deal will encourage
additional consolidation in the airline industry and stymie competition.
Kevin Mitchell, the chairman of the Business Travel Coalition, a group of
corporations that lobbies for increased airline competition, said United's
beefed-up lobbying "underscores how deeply, deeply flawed this
transaction is. They are worried. That's why they are bringing in so many
of these people."


Other aviation industry veterans are struck by United's hiring spree.
"They spend a great deal of money and hire people they think are
highly connected politically," said James H. Burnley IV, a former
Transportation Secretary in the Bush Administration who is now a partner
in the Washington office of the Chicago-based law firm of Winston &
Strawn. "They've certainly done that with a vengeance the last few
days. It's fair to say that Shelley's not the least bit hesitant to roll
out the big artillery," added Burnley, who represents American
Airlines.


Longmuir, however, runs United's government affairs effort without much
fanfare. She is rarely quoted in news reports and declined requests from
National Journal for an interview. Lobbyists said that Longmuir is more
than willing to let others take the credit. "She's very secure,"
said a United lobbyist. "I've had other experiences with executives
where it's a badge of weakness to bring in a colleague to speak about
their specialty. But Shelley is willing to bring in the
experts."


Longmuir has a soft touch, lobbyists said. One United lobbyist recalled
that Longmuir several years ago made a point of having United's
then-Chairman and CEO Gerald Greenwald call a key congressional aide after
a crucial vote on a tax issue. The aide wasn't a supporter of the measure,
the lobbyist added, and United had just lost the vote. "I think that
goes to her fundamental understanding that Washington is about long-term
relationships," the lobbyist said. "We may have lost that vote,
but she realized that there were certainly going to be other tax issues in
the coming years."


Kenneth P. Quinn, a Washington lobbyist with the New York City-based law
firm of Winthrop, Stimson, Putnam & Roberts, and a friend of Longmuir
from their days at the Transportation Department, said that United also
understands the value of compromise. United and American, the two dominant
airlines at Chicago's O'Hare International Airport, fought a long battle
against a Quinn client-the city of Chicago-to limit the number of flights
at the airport. Eventually, both carriers accepted more competition at
O'Hare. "That's typical of the approach United has-fiercely
protective of their competitive interests, but at the same time realistic
and pragmatic," Quinn said. "When they sense that change is
going to come, they embrace it and shape it. Shelley's been a pivotal
force in that."


Longmuir, 44, graduated Phi Beta Kappa from Brown University and then
received a law degree from New York University. After working as a
criminal appellate lawyer at the Justice Department, Longmuir became
deputy general counsel at HUD, then chief of staff on the Presidential
Task Force on Hurricane Andrew Recovery. At Transportation, she was chief
of staff to department Secretary Andrew H. Card.


Fellow lobbyists agree that Longmuir, despite her background, is more a
corporate lawyer than a Beltway schmoozer. Her four-person Washington team
is headed by Anderson, a fellow Bush Administration alum who was an aide
to Sen. Charles G. Grassley, and former Rep. Jim Ross Lightfoot, both Iowa
Republicans.


United's stable of outside lobbyists stays in contact with Longmuir and
her lieutenants through weekly conference calls. The group includes
Eppard, lobbyist Jack Ferguson, and several lobbyists from the Duberstein
Group, including Michael S. Berman, Steven M. Champlin, and Daniel P.
Meyer, a former chief of staff to then-House Speaker Newt Gingrich, R-Ga.
Two veteran aviation hands-former Transportation Department official Pat
Murphy and Michael E. Korens, a former aide on the Senate Commerce,
Science, and Transportation Committee who now lobbies with ex-Sen. Bob
Packwood, R-Ore.-also participate. The proposed merger has sparked a
separate round of conference calls that brings in bigwigs such as Boggs
and Duberstein.


United "has assembled the best and the brightest" to press for
the deal, said Edward P. Faberman, the executive director of the Air
Carrier Association of America, which represents small and new airlines.
"Nevertheless, they have a high hurdle to clear."


Members of Congress could try to shoot down the deal if they are swayed by
complaints that the merger will result in reduced service or higher
airfares. Most important, it is Justice Department trustbusters who will
decide whether the merger flies or not; United's political clout will have
little impact on their ruling. United has won mixed reviews for trying to
resolve potential antitrust complications by selling off US Airways'
routes at Reagan National Airport to a start-up owned by Robert L.
Johnson, the founder of Black Entertainment Television. The transaction
would make Johnson the first African-American to own a U.S. carrier-a
potentially winning consideration for liberal Democrats in Congress. But
the sale to Johnson also strikes some of United's competitors as
"ham-handed," in the words of one competing lobbyist. Justice
would probably prefer that US Airways and United sell the routes to an
established competitor, several antitrust lawyers agreed.


Still, lobbyists predict that Longmuir will have an easier time selling
the deal to a Democratic Administration than would most Republicans.
Longmuir, said lobbyist Quinn, is comfortable working with diverse groups,
thanks in part to her experiences with former HUD Secretary Jack Kemp, a
Republican who often attracted support from traditional Democratic
constituencies. "Shelley has taken a page from Kemp," Quinn
said.


For example, Longmuir has long supported the bipartisan Welfare to Work
Partnership, an effort aimed at persuading the private sector to hire
former welfare recipients. Eli Segal, a former Clinton Administration
official, heads the drive, which President Clinton strongly
endorsed.


United was one of five major corporations that took the lead on the
partnership. Longmuir has spent numerous hours working with partnership
officials since the group's debut in 1997. She brokered changes in
United's employment rules to allow the hiring of more ex-welfare
recipients and also advised partnership officials on management issues.
"It was a passion" for her, said Tiffany Westover, the
partnership's executive vice president.


Longmuir will need all her passion and smarts to pull off United's
mega-deal with US Airways. "It's way too soon to know if she helped
their case or not," said former Transportation Secretary Burnley.
"You only know when it's all done."


Louis Jacobson and Mark Murray

National Journal