As Sen. Harry Reid faced what some saw as an almost impossible bid for re-election last year, he turned to a trusted Democratic adviser to help guide his campaign: R&R Partners CEO Billy Vassiliadis.
That same election season saw Vassiliadis’ partner at R&R, Pete Ernaut, persuade Brian Sandoval to step down from the federal bench and run for governor. Ernaut, a Republican, led Sandoval’s successful campaign against Gov. Jim Gibbons and then Reid’s son, Rory.
Vassiliadis and Ernaut are among the leading political consultants in their respective parties, occasionally advising opposing candidates. But they have kept political rivalries from becoming a drag on their business relationship as heads of one of the most influential marketing and lobbying firms in the state.
In fact, this arrangement — which some in the political arena see as cynical by its nature — has paved R&R Partners’ ascent to the pinnacle of Nevada’s political hierarchy. By helping powerful politicians, whatever their political party, win office, the firm has the ear of Nevada’s top decision makers. It’s not a bad spot for a business that makes money helping clients lobby for favorable laws and policies from those politicians.
“You get all the horses in the race so you are guaranteed a winner,” one Republican source said. “It’s classic R&R.”
A Democratic critic put it this way: “In Nevada there’s only one political party — R&R.”
In the political messaging industry, firms usually hew to one party. But then, most firms specialize in getting candidates elected, not necessarily getting them elected and then lobbying them on behalf of their business clients. While R&R’s primary business is advertising and marketing — it is, of course, best known for the acclaimed “What happens here, stays here” slogan — the company’s government affairs efforts are boosted significantly by the political connections forged by Vassiliadis and Ernaut.
At the Legislature, the firm represents powerful interests, including NV Energy and the Nevada Resort Association. During the last session, working on behalf of the NRA, they helped persuade the Legislature to pass a bill threatening to end the California-Nevada Lake Tahoe planning agency. The measure was intended to ease restrictions on development near the lake, which is home to several casinos.
In the final hours of the session, they also helped usher through a bill for NV Energy. To the surprise of many, Sandoval vetoed the bill, which would have put ratepayers on the hook for a $1 billion transmission line.
The firm’s connections and business relationships extend beyond the Legislature. R&R has for three decades held the contract to market Las Vegas to the world. The last time it was renewed — in a three-year deal worth more than $90 million — the Las Vegas Convention and Visitors Authority board vote was unanimous. The 2009 agreement included an option for three more years.
Still, the political rivalry isn’t without its compromises and uncomfortable moments.
“We’re obviously a unique agency in having one prominent Democrat and one prominent Republican in the management of the company,” Ernaut said. “The situation never really gets awkward from the standpoint that Billy and I have a very close personal relationship and we talk all these things through.”
Sig Rogich, a founding partner of R&R Partners who sold the firm to Vassiliadis in 1994, said it was difficult to shed the perception that the firm was Republican as he concentrated on his work for the Reagan administration.
“The eventuality is at the end of the day sometimes you’re forced to make tough decisions,” Rogich said of having a Republican and a Democrat leading the firm. “It got pretty difficult for us, the more I got involved on the national level, not to be seen as Republican.”
Some say the more entwined Vassiliadis becomes with the Obama administration, the more difficult it would become not to label R&R Partners a Democratic firm. Vassiliadis, a Chicago transplant, became a friend, early supporter and eventual adviser to Barack Obama during his primary campaign against Hillary Clinton four years ago.
Obama now faces a difficult re-election campaign, and Nevada will be a key battleground. The situation also has the potential to cause strain within R&R because Ernaut also has a presidential contender he hopes to help into office, Texas Gov. Rick Perry.
So will the two continue the same gentleman’s agreement to back opposing candidates? Not when the White House is at stake.
Despite reports to the contrary, Ernaut recently confirmed that he will not sign on to Perry’s campaign in the Republican presidential primary. Ernaut told Politico this month that he and Mike Slanker, another top Sandoval adviser, had committed to steering Perry’s Nevada campaign.
Not so. “I would even say informal adviser is an overstatement,” Ernaut said. “I am a supporter of Rick Perry’s.”
Becoming actively involved in helping Perry defeat Obama would violate another understanding Vassiliadis and Ernaut have. “We’ve always had a rule: Whoever’s guy is in the White House, the other guy has to take a back seat,” Ernaut said.
But Vassiliadis said Ernaut would be free to help Perry if he wanted to. “Pete’s just trying to be respectful to me,” he said. “He knows how much time and heart and effort I’ve invested (in Obama.) He knows I consider the president not just somebody I want to see in the White House, but a friend. It’s something I’m very emotionally wrapped up in.”
While R&R appears to navigate it well, involvement in partisan politics is rife with pitfalls for lobbying firms. Many in Nevada stay out of the campaign world, other than to contribute to candidates and advise clients on whom to to support. That bias usually swings toward incumbents rather than Republicans or Democrats.
“You can’t be completely effective if you’re partisan,” veteran lobbyist Alfredo Alonso said. “You may have some influence with certain people, but you’ll never pass a bill.”
Alonso said Ernaut and Vassiliadis mostly avoid that problem because they complement each other and because their partisanship is not a facade for the benefit of their business plan. “I think what makes them different is that there are others who go out and say, ‘I want to play both sides and that’s my plan,’” Alonso said. “With Pete and Billy, there’s no doubt that what they believe is real. And they are both brutally honest about what they are doing. People respect that.”
Vassiliadis said the firm doesn’t typically take on big campaigns as clients. Harry Reid’s campaign never paid R&R Partners, nor did Sandoval’s.
“That’s our personal time and our personal decision,” Vassiliadis said. “Trust me, nobody makes money on a presidential campaign.”
But the firm does benefit from such associations in greater prestige and access that can help its clients.
Even as Vassiliadis devotes time to the Obama campaign, Ernaut won’t completely extricate himself from presidential politics. Ernaut remains one of Sandoval’s close advisers, and Sandoval surprised many earlier this month when he issued an early endorsement of Perry — a move that was thought to be due to Slanker and Ernaut’s relationship with Perry and their media consultant. Ernaut will likely help steer Sandoval’s involvement in the Perry campaign.
Had Ernaut taken a leading role in Perry’s Nevada campaign, it wouldn’t be the first time he and Vassiliadis have been on opposite sides of the same race. While Ernaut was engineering Sandoval’s victory last year, Vassiliadis acted as an adviser to Rory Reid. Both partners said that race was an anomaly and unlikely to be repeated. The fact the race wasn’t that competitive — Sandoval never appeared in danger of losing — probably diminished any potential for the race to hurt the partners’ relationship.
But with Nevada’s electorate and politicians growing more divided along partisan lines, it’s unlikely R&R Partners will avoid altogether potentially divisive races. For example, would Vassiliadis forgo running a serious Democratic contender against a potentially weakened Sandoval in 2014 out of respect for Ernaut?
When that question was put to him, Vassiliadis’s initial response was silence as he pondered the possibility. “I think I’ll have to revert back to PR 101 training and say I don’t comment on hypotheticals,” he eventually said.