The Man In The Middle Dirk Van Dongen isn't a celebrity, an elected official, or a cable television pundit. So why is this trade group president on the White House's speed dial and one of the most influential men in Washington?
(FORTUNE Small Business) – It's 10 A.M. and Dirk Van Dongen is taking his seat in the West Wing. Around him are a select group of other lobbyists and two of the President's men, political strategist Karl Rove and economic advisor Larry Lindsey. On the table this overcast January morning: pads, pencils, and a discussion of the Administration's plan to jump-start the economy. An hour later Van Dongen is back at his downtown D.C. office dialing for campaign dollars on behalf of the President's younger brother, Florida Governor Jeb Bush. But the bulk of his calls this afternoon Banking on benefits from tax cuts? You may have Van Dongen to thank.
Happen to be for Speaker of the House Dennis Hastert. As it turns out, Dirk Van Dongen is co-sponsoring an upcoming reelection fundraiser for Hastert. Don't feel clueless if you're asking, Dirk Van who? He's not an elected official, not an ersatz expert for an all-news cable network, and not an in-print pundit. He is, in fact, the somewhat paunchy, bespectacled 58-year-old president of a tiny and little-known trade group called the National Association of Wholesaler-Distributors. So why is he at the center of so much Beltway action?
In our nation's capital, clout can sometimes be found in obscure places. Unlike Washington's more notable acronym associations, the National Association of Wholesaler-Distributors, or NAW, doesn't boast the budget of the 34 million-strong AARP or the celebrity--thanks to Charlton Heston--of the NRA. Van Dongen's relatively humble NAW has just 20,000 members, 92% of which are small businesses, such as Ace Mart Restaurant Supply, Rogers Welding Supply, and Farmco Distributing. Wholesaler-distributors may not be hip or sexy, but collectively these small companies are a formidable $3-trillion-a-year industry of middlemen. Van Dongen is their man in Washington, the legislative middleman for America's middlemen who has been cutting deals and exerting influence in congressional hallways for the past two decades.
What he's lacked in fanfare, he's made up for with results. For example, if you're banking on benefits from George W. Bush's $1.3 trillion 2001 tax-cut legislation, you have Van Dongen partly to thank. He was among the first to get a consultation call from the President's staff when the Administration was starting to push the plan. Van Dongen was happy to oblige, just as he did for two other Republican Presidents whenever they called. Over the years he has discreetly prodded Administration after Administration to secure tax cuts for small business owners. He's also parlayed his golden Rolodex of insiders to score legislative victories on everything from tort reform to OSHA deregulation.
Earning a place on the White House's speed dial took a little time. Van Dongen started modestly in 1968 when he moved from AT&T's marketing department to direct the NAW's membership drive via phone solicitations. The strategy may sound simple now, but back then it was a novel idea that paid off for the association and for Van Dongen's career. As he moved up the NAW ranks, he perfected his schmoozing skills, wining and dining Administration officials as well as the new NAW members he helped sign up. Thirty years later Sydney "Tucker" Jones III, president of the Hudson Valley Paper Co., still remembers the impression Van Dongen made on him. A recent death in Jones' family had left him feeling somewhat shy and withdrawn while attending his first NAW meeting. "Dirk seemed to pick up on that," says Jones. "I was on my way back to my room when he grabbed me to go out for drinks. I didn't get back to my room for another three hours. He's an easy, comfortable guy to be with."
While Van Dongen was making an impression on Washington, the NAW had yet to make its mark. When he took over the association in 1980, its views were still pretty parochial and dealt almost exclusively with issues that only wholesalers cared about. But with a recession looming, Van Dongen realized that broader government policies, especially reducing tax rates, mattered to his members as much as or more than Labor Department health and safety regulations. In Washington such insights are only as important as the people you share them with. As luck would have it, one of his contacts was Wayne Valis, then of the American Enterprise Institute, a conservative think tank. The two men met when Van Dongen was arranging for Valis' boss to speak at an NAW meeting and forged their friendship over dinners at Duke Ziebert's. When Valis became President Reagan's go-between with the business community and needed help passing the President's 1981 tax cut, he called his dinner companion. That was Van Dongen's ticket into the White House and D.C.'s inner circle. "We were off to the races," Van Dongen says, "and we never turned back."
By the mid-1980s, Van Dongen was working his connections for a variety of small business causes. He formed alliances with key lobbying groups, such as the National Federation of Independent Business. Says Dan Danner, the NFIB's chief lobbyist: "He's one of our closest and most important allies." With other groups on his side, Van Dongen spearheaded the Tax Reform Action Coalition (TRAC), which helped push through the Tax Reform Act of 1986, a top-to-bottom overhaul of the federal income-tax system. TRAC, along with Reagan, was calling for lower corporate tax rates. Who could have a problem with that? As it turns out, plenty of big businesses did. Heavy manufacturers in particular wanted to keep their write-offs, not trade them for lower rates. But small firms like those Van Dongen represents wanted rate drops, since they rarely got to benefit from the old system's plentiful deductions. Two years of intense congressional lobbying later, Van Dongen and his allies won their fight. Working in coalition with many other groups "was fundamental to our success," Van Dongen says.
Not all of Van Dongen's coalitions were winners, especially during the Clinton era. In 1995 he was part of the so-called Thursday Group, which worked with House Republican leaders to pass Newt Gingrich's Contract With America. Van Dongen met every Thursday in Gingrich's offices alongside heavy-hitters like the NFIB, the Chamber of Commerce, and the National Association of Homebuilders. But all this muscle was unable to push much into law. Van Dongen backed but failed to win legislation requiring a balanced budget, a tax reduction on capital gains, and tax incentives for small business.
Sometimes Van Dongen's political pull has been accidental, not by design. When he handpicked a young Nick Calio as NAW's lobbyist in 1984, he couldn't have known Calio would rise to become the chief lobbyist for George Bush I and II. Van Dongen's Calio connection certainly hasn't hurt his relationship with the current Administration. It also came as little surprise last year when Van Dongen was tapped to be the executive secretary (meaning the chief administrative officer) of the Tax Relief Coalition, which is now lobbying to safeguard the Administration's 2001 tax-cut plan. "Dirk is always well positioned in Washington," says Bruce Josten of the Chamber of Commerce. "His political tentacles run deep."
Such depth is partly due to the cash Van Dongen can raise for his pals. To date he's responsible for getting more than $10 million for the Republican Party and its candidates. He raised so much in 1996 that he was given the honor of introducing vice presidential candidate Jack Kemp to a gala at the GOP's convention in San Diego. In 2000 he qualified as a Bush Pioneer, among an elite few who raised $100,000 or more for the President's election. Unlike most other trade associations, which tend not to make endorsements, Van Dongen's NAW has happily backed a Republican in every general election. And the NAW membership, 77% of whom are Republican, seem happy with the arrangement. It also makes good sense these days, with the White House and the House in Republican hands and the Senate just barely Democratic.
ENVY OF OTHERS
Van Dongen's access hasn't gone unnoticed by other trade associations. "There are 1,000 other trade associations the size of Dirk's, but they don't play the same role. He fights outside his weight," says Grover Norquist, a GOP activist and president of Americans for Tax Reform. "NAW doesn't have a very big PAC [political action committee], and it doesn't have a large staff, yet Dirk has been able to keep the NAW up in the same ranks as some of the major associations in town. I'm a bit jealous," says John Motley, top lobbyist of the Food Marketing Institute. Van Dongen's colleagues have another reason to be jealous. Despite the dowdy image of wholesaler-distributors, the NAW's board members meet in pretty glamorous locales: Rome, Venice, London, Barcelona, and Barbados, to name just a few.
When he's not traveling, Van Dongen's home life is pretty charmed. His listed annual income from the NAW is $387,000, plus insurance and deferred compensation. During the week he and his wife, Maryann, live in a tony Washington neighborhood near Embassy Row, and on most weekends they stay at their co-op in Manhattan's Murray Hill section, where they have views of the Empire State and Chrysler buildings.
Van Dongen's high-rise life and fancy friends lend him a mystique that his board and members seem to appreciate. Soon after being inaugurated, President Bush addressed the NAW board at a special White House meeting just for them. Andre Lacy, an NAW member and CEO of LDI in Indianapolis, can still hardly get over the GOP dinner in D.C. he attended (thanks to Van Dongen), at which he met Senators John McCain and Richard Lugar. Says Lacy: "It's a wow every time I come to Washington."
Entertaining isn't all that Van Dongen's good at. These days he's focused on passing legislation to limit product-liability lawsuits, persuading the government to underwrite terrorism insurance coverage, and repealing the inheritance tax. He also remains a White House regular. Plus, President Bush has spoken to the NAW bigwigs again this year--via Webcast in February.
As for any ambitions to take his influence and Rolodex elsewhere? "NAW is a perfect constituency," he says. "I couldn't create a more perfect place to work."
Reporter associate: Melanie Nayer