News

What Really Happened at Politico

Inside the conflict that broke up a Washington media juggernaut.
Politico Photo-illustration by Miles Donovan. Photographs of VandeHei, Harris, and Allbritton by Matthew Worden; Schwartz, Allen, and Kingsley by Brad Barket/Getty Images.
Photo-illustration by Miles Donovan. Photographs of VandeHei, Harris, and Allbritton by Matthew Worden; Schwartz, Allen, and Kingsley by Brad Barket/Getty Images.

It was early evening in Politico’s newsroom, four days before the Iowa caucuses.

Reporters were working sources and checking TV screens as a presidential debate was about to get under way. But tonight, January 28, Politico’s biggest story was about itself.

Outside news organizations were reporting a massive, unexpected overhaul of the company’s leadership. Now executives were scrambling to respond. In a glass-enclosed office at the far end of the newsroom, CEO Jim VandeHei was hunkered down alongside chief operating officer Kim Kingsley and chief revenue officer Roy Schwartz, hurriedly crafting a statement announcing that they—along with marquee reporter Mike Allen—were leaving the company.

After months of behind-the-scenes drama, Washington’s most successful media partnership in a generation was busting apart. And all the players had to get their stories straight.

Politico published VandeHei’s statement at 7:27 PM. “I caught the entrepreneurial bug a decade ago when we started this place and can’t seem to shake it,” he said. “I plan to start a new venture when I depart.”

One minute later, his boss, Politico owner Robert Allbritton, put out his: “Watching these extraordinary professionals blossom as leaders, stretching their areas of expertise as their responsibilities grew, has been one of my great satisfactions at Politico.”

After nine years running <em>Politico</em> together, founding editors John Harris (left) and Jim VandeHei (right) have split up. Harris remains at <em>Politico</em> while VandeHei looks at future entrepreneurial ventures. Photograph by Daniel Rosenbaum/<em>The New York Times</em>/Redux.
After nine years running Politico together, founding editors John Harris (left) and Jim VandeHei (right) have split up. Harris remains at Politico while VandeHei looks at future entrepreneurial ventures. Photograph by Daniel Rosenbaum/The New York Times/Redux.

It had been nearly ten years since Allbritton and VandeHei founded the news outlet. They were an improbable match—VandeHei a scrapper from Wisconsin, Allbritton an heir to a multibillion-dollar dynasty. But their alliance transformed Washington’s media landscape, reshaping the way news organizations cover politicians, creating a new cast of local celebrities, and, in the process, becoming a digital bible for political insiders.

While their start-up turned into a behemoth, the men became friends. As far as most people knew, they still were. But over the previous year, fault lines had emerged. The sources of tension included all the pitfalls that have driven apart other successful collaborations: power, ambition, ego, glory. But they also included money.

The relationship ultimately deteriorated during a series of events that has not been reported until now. Late last summer, VandeHei began pushing Allbritton to consider selling a chunk of the company. If VandeHei’s vision had been realized, Politico would have joined forces with a European media giant. Such a change could have given global throw-weight to the growing news outlet and could have benefited VandeHei financially. But the owner—who would have had to relinquish full ownership of his juggernaut—refused to pursue it.

In the end, the rift—whether it was over how best to manage growth or how best to compensate the people who had built the company into a behemoth—was too much for the partnership to bear.

To understand why—and to understand how the story of Politico’s first decade is in many ways the story of Washington in the digital age—it helps to go back to the beginning.

• • •

In 1993, Jim VandeHei was a college student who needed a summer job.

He wanted to learn journalism and called every newspaper in Wisconsin. Eventually, he reached Zane Zander, who owned a paper in the small town of Brillion. Zander relied on a single editor to run his weekly publication—to write stories, snap photographs, choose headlines. Just before VandeHei called, the incumbent was threatening to quit if he didn’t get the summer off. “He was my savior,” Zander recalls.

VandeHei had never had a full-time job in journalism, and now he’d be running a newspaper. Even better—the position came with a car, a lake cottage, and a fridge that Zander promised to stock with beer. “If you’re a 19-year-old kid from Oshkosh,” VandeHei says, “you’re like, ‘Hallelujah!'”

Until then, VandeHei hadn’t shown much ambition. In high school, his guidance counselor was so underwhelmed that he recommended that VandeHei—son of an accountant and a stay-at-home mother—consider trade school or the Army. Instead, he enrolled at community college and eventually got into the University of Wisconsin Oshkosh. While there, he landed a part-time job at the local daily. But it wasn’t until he accepted Zander’s offer that he realized he’d found his calling.

In Brillion, VandeHei covered it all—little-league games, ribbon-cuttings, school-board meetings. While writing about local politicians, he says, he became fascinated with “how people get, use, and abuse power.” By the end of the summer, there was no doubt: Jim VandeHei was going to be a political reporter.

Before Politico, VandeHei says, his only management experience had been “being a night-shift manager at Little Caesar’s in high school.

Less than a year later, VandeHei was working in Washington. Except for family trips to Disney World and Michigan’s Mackinac Island, it was the first time he’d left Wisconsin. Although he lacked the Ivy League pedigree of many of his peers, VandeHei scraped his way up the media food chain—from New Fuels Report to Inside the New Congress to Roll Call. “Every new job or new step I took, I thought, ‘Oh, these people aren’t that much smarter than I am,'” VandeHei says. “And then the next step I’d be like, ‘Oh, these people aren’t much smarter than I am.'”

Meanwhile, the 1994 Republican takeover of Congress presented an opportunity for VandeHei. According to Juliet Eilperin, a Roll Call colleague who now works for the Washington Post, VandeHei spoke openly about his Christian faith and conservative upbringing: “Those were things,” she says, “that kind of allowed him to establish relationships with prominent Republicans and aides that might have been more difficult for one of the more stereotypical Ivy League liberal journalists.”

VandeHei began playing poker with GOP staffers and breaking stories of national consequence: House Republicans were using a secret fund to explore the possible impeachment of President Clinton; Congressman Bob Livingston was ending his campaign for speaker of the House because of an extramarital affair.

These scoops raised VandeHei’s profile. In 2002, the Post snatched him from the Wall Street Journal. Around 2004, he was covering John Kerry’s presidential campaign when Joe Dill, VandeHei’s first editor at the Oshkosh daily, overheard a familiar name on TV, which was tuned to CNN. “And for more on that,” the broadcaster said, “we go to Washington Post political correspondent Jim VandeHei.”

Dill walked over to get a better look at the screen. Sure enough, there he was: The lanky kid who once covered high-school sports for a tiny paper in an anonymous Midwestern city was now the star political reporter at the most glamorous newspaper in America.

• • •

Robert Allbritton didn’t need to climb his way to the top of Washington journalism—he was born there.

His father, Joe, had barreled into town in 1974 when he bought the Washington Star, the city’s afternoon paper. A banker from Houston, Joe proceeded to build an empire that included eight TV stations, most notably Washington’s ABC affiliate, WJLA. In the ’80s, he took control of Riggs Bank, the city’s largest and most historic financial institution.

Joe’s fortune swelled to more than $2 billion, and he and his wife, Barbara, socialized with President Reagan and George H.W. Bush. “He was probably the most powerful businessman in the city,” says Bill Regardie, the former publisher of Regardie’s, Washington’s monthly business magazine at the time.

Robert Allbritton was Joe’s only child. As a boy, he spent afternoons in front of his Atari 800, writing code for knockoff Space Invaders games and tinkering with a so-called bulletin-board system that was a precursor to the internet. “Robert was always better than I was [at programming],” remembers Face the Nation host John Dickerson, Allbritton’s childhood friend.

Father and son were close. Today, Allbritton recalls Joe imparting lessons about business through first-hand experience: “If he had business meetings, he’d say, ‘Oh, come in.'” But when Allbritton took a job at his father’s bank after graduating from Wesleyan University in 1992, he soon quit out of boredom.

When Comcast bought stakes in Vox and BuzzFeed for $1 billion and $1.5 billion, respectively, “Jim thought it would be insane not to take advantage of this moment.

He joined the family media business a couple of months later. “It was clear that he was out trying to prove himself,” says Chuck Conconi, a longtime Washington journalist who hosted a TV show for the company. “He had that look and demeanor and attitude of the son of an extraordinary wealthy and successful father, who was determined that he’s got to find his own way.”

By 1998, Allbritton was chief operating officer of Allbritton Communications. But after his father was diagnosed with cancer in 2000, Allbritton took over at Riggs. The timing was awful: In 2004, federal regulators concluded that Riggs—the bank that had financed the Mexican-American War and the purchase of Alaska—had overlooked suspicious transactions involving government officials of Saudi Arabia and Equatorial Guinea. Senate investigators discovered that Riggs had helped Chilean dictator Augusto Pinochet hide millions of dollars in assets.

The bank—which a federal judge called a “greedy corporate henchman”—pleaded guilty to violating an anti-money-laundering law and paid $41 million in fines. Although prosecutors never indicted either Allbritton, the controversy was front-page news. In 2005, Riggs was sold to PNC Financial Services Group.

Determined to restore prestige to the family name, Allbritton returned to the media company full-time and began thinking about ways to generate new business. He figured a newspaper could create synergies, but antitrust regulations barred the TV station owner from running a general-interest paper. He’d have to target a specialty publication.

Allbritton picked the biggest game in town: politics. After considering buying the Hill, one of the two established political dailies, he decided to start his own. He hired a former Hill editor, brought on 50 employees, and prepared to roll out the new publication: the Capitol Leader.

As the launch date neared, however, Allbritton worried that he didn’t have enough firepower to dislodge its competitors. One night, he woke up with a panicked thought: “I can’t put out a third-place newspaper.”

• • •

As Allbritton fretted about his niche publication, VandeHei was feeling antsy about life in the mainstream media.

In those days, he regularly had lunch with other reporters at a sushi dive near the old Riggs headquarters. Beginning in 2006, the conversations turned to VandeHei’s idea for a new business: creating the New York Yankees of political journalism.

“Imagine if someone put together the six or seven people we know that are really, really good at this, put them in one place, put them on the web, get them on TV,” he remembers thinking. “We could really kick up some dirt quick.”

VandeHei referred to the venture as Project X, according to an early recruit. He even devised an incentive plan to lure established journalists. According to the early recruit, VandeHei said he’d divide the company’s equity among himself, his cofounder, and each reporter and editor they hired.

“And then,” the early recruit recalls VandeHei saying, “we will be so awesome that Google will buy us.”

The more VandeHei thought about the future of media, the more restless he became. Soon he and John Harris, the Post‘s highly regarded political editor, began having what-if conversations about Project X.

“I thought it would be cool,” says Harris. “I found it a little odd that we were living in what I considered an entrepreneurial age and an anti-institutional age, and yet myself and many of my colleagues were living 1950s-style Organization Man careers.”

Around this time, VandeHei got word through media consultant David Bass that Allbritton wanted changes at the Capitol Leader. According to Bass, Allbritton could give VandeHei and Harris the resources to transform it from a second-rate version of the Hill into the news organization of VandeHei’s dreams. The “ESPN of Politics,” as Allbritton Communications’ then-president, Fred Ryan, describes it.

When the deal was signed in November 2006, the only thing missing was the crucial benefit that most start-up leaders enjoy and that VandeHei had envisioned for Project X’s founding members: equity.

Allbritton, who personally bankrolled the new company, retained ownership of 100 percent of its stock. VandeHei and Harris, by contrast, received what are called “phantom shares.” (Mike Allen, Time’s White House reporter who would soon join the venture, had phantom shares as well.) Under this arrangement, Allbritton would pay each of them a low-single-digit percentage of the company’s total value if certain conditions were triggered.

• • •

The men considered dozens of possible names for their start-up before going with Politico, at the suggestion of VandeHei’s wife.

“The [only] other one that was really in the running was Power and Politics,” VandeHei says. “But then we thought people would just make fun of us [by abbreviating the name to] PP.”

Like generations of reporters before them, Politico would prioritize scoops above all else. “Game-changers,” says Josephine Hearn, an early hire. But while established news outlets had a self-important tone, Politico reveled in tabloid energy. And unlike its competitors, which were still largely tied to the daily print cycle, it would feed BlackBerry-addicted Beltway insiders in real time, starting with Allen’s early-morning newsletter, Playbook.

Playbook event with Mike Allen and former Treasury Secretary Tim Geithner. Photograph by Mandel Ngan/AFP/Getty Images.
Playbook event with Mike Allen and former Treasury Secretary Tim Geithner. Photograph by Mandel Ngan/AFP/Getty Images.

VandeHei and Harris weeded out legacy Capitol Leader staff and recruited workaholic twentysomethings. To this new staff, they seemed an odd pair. Harris was a cerebral, frumpy-looking editor—”the nutty professor,” says a former colleague—who provided institutional credibility. VandeHei was the competitive spark; he fired off predawn e-mails about story ideas and delivered Churchillian speeches on the perils of complacency. “The Vince Lombardi of the newsroom,” says former Politico reporter Jonathan Allen.

Once the website launched in January 2007, VandeHei spent his days bouncing from one reporter to the next:

“Whaddaya got? Whaddaya got?”

“Who’s breaking news?”

His manic energy turned the team into “a bunch of wolves running after red meat,” says a former reporter. Some couldn’t handle his relentless demands, and staff turnover was high. But VandeHei required as much from himself as he did from his employees. He was often the first to arrive and regularly worked 18-hour days.

Scooping the competition was only half the game. To achieve their second objective—”drive the conversation”—Politico’s founders worked tirelessly to attract attention. Reporters appeared on every TV and radio program imaginable, and spokespeople urged other media outlets to write the name as Politico, per house style, so it would stand out.

Then there was the company’s mastery of the dark arts of internet traffic generation—learned from an unconventional source. According to a former executive, VandeHei and Allen developed a close relationship with Andrew Breitbart, a right-wing provocateur who helped edit the Drudge Report. At one point, VandeHei and Allen traveled to Breitbart’s home in California, where they watched him run the site from his basement. “[Breitbart] was a genius at understanding how to read [a story] and then pull from it what would move the needle on the left and the right,” says the former executive.

Under Breitbart’s tutelage, VandeHei and Allen learned how to extract from an article the “very specific sentences or data points” that could catch fire with either liberal or conservative audiences, and then how to package and feed them to the online communities that would be most receptive. Certain items were perfect for the Huffington Post, others for Drudge.

This friendship served Politico well. Before long, Drudge was featuring so many Politico scoops that liberal conspiracy theorists argued—incorrectly—that VandeHei and Harris pushed a conservative agenda.

Other criticism was more legitimate. As Politico’s reporters scoured the Hill for anything resembling news, congressional press aides gained leverage. They could spoon-feed previously unreported materials to Politico, which—in its dash to be first—would publish these “scoops” with little regard for news value. Just like that, a line of Capitol Hill spin was rebranded as a Politico “EXCLUSIVE” and blasted across the internet.

By 2008, Politico was heralded as an unqualified triumph, as its tabloid-style reporting came to define the presidential campaign. That year, its website averaged 3.1 million unique visitors a month; only 11 US newspapers logged higher traffic. The following year, Vanity Fair named VandeHei, Harris, and Allbritton to its annual New Establishment power ranking. Politico, the magazine’s editors wrote, “may be creating the model for a new-media success story.”

• • •

Unlike his father, Robert Allbritton was a largely anonymous figure in Washington when he launched Politico.

And though he still owned the TV stations his dad had assembled, he took particular pride in his headline-making new-media outlet. “Politico was his baby,” a former Politico executive says. To celebrate the birth of his actual child, Allbritton handed out cigars bearing Politico’s logo, a gift from Fred Ryan.

Colleagues considered Allbritton friendly, if a bit shy. He worked on the 27th floor of the company’s office tower in Rosslyn, a corporate power center so sequestered from the newsrooms that some journalists thought of it as “the Kremlin.” For a time, he displayed model jets on his desk that were similar to the aircraft he owned and sometimes piloted, according to a former Politico executive.

While VandeHei and Harris ran the site, Allbritton acted as publisher and handled the business side with Ryan, the CEO. The four met regularly to knock around ideas. “It was a really cool collaboration,” Allbritton says. “Everybody brought something to the table.” Speaking to the press, VandeHei made sure to flatter his benefactor. “Robert has vision, balls, and money,” he told Washingtonian in 2009, “and knows how to use all three.” When rare disagreements occurred, one of the men would send out an e-mail with the subject line “free for a beer?”

Despite their incongruous personalities, VandeHei and Allbritton became friendly. The men and their wives went out to dinner, and the two families vacationed together on Anguilla.

Father and son Joe and Robert Allbritton with their wives, Barbara and Lena. Photograph by Washington Life magazine/Kyle Samperton.
Father and son Joe and Robert Allbritton with their wives, Barbara and Lena. Photograph by Washington Life magazine/Kyle Samperton.

The only dark clouds, in fact, had little to do with Politico itself. In late 2009, Allbritton announced plans to take the lessons he’d learned and create another digital start-up, this one focusing on local news. Again, Allbritton hired a former Postie, Jim Brady, to lead the effort, called TBD.

When the TBD staff arrived in Rosslyn, they were surprised by Allbritton’s role. “He wasn’t the CEO like you think of CEOs,” remembers Brady. “He was the most important at the company, but not a constant presence, so it felt more like a vice chairman at times.”

At the same time, TBD’s leaders became frustrated when Allbritton did insert himself into operations. “He wanted to be involved in most of the decisions,” Brady says. “But that wasn’t always practicable because he wasn’t always in the office on a day-to-day basis.” This muddled TBD’s vision and direction, Brady says: “His decisions sometimes seemed like they came out of nowhere.”

Two years after its launch, Allbritton shuttered TBD. Over at Politico, VandeHei and other executives watched TBD’s implosion with concern. According to a former member of Politico’s leadership, they wondered what might happen if the owner got more involved in the day-to-day journalism at his politics site. Could the same scenario unfold?

• • •

Even as Politico conquered Washington, VandeHei never felt comfortable: “We lived in constant fear that if we don’t keep pushing ourselves to think bigger and to think more creatively, someone is going to come and eat our lunch like we just came and ate others’ lunch.”

Above all, he worried that the company’s dependence on advertising from its print edition wasn’t sustainable. Finding a way to diversify soon became his “obsession.” He began meeting with media titans like Jonathan Klein, then president of CNN, and studying books by management gurus like GE’s former CEO Jack Welch.

Inside Politico, VandeHei and his top lieutenants—Allen, Kim Kingsley, Roy Schwartz—huddled to brainstorm new business lines and became close. The group created a live-events business and, in 2010, launched Politico Pro, which delivered detailed policy coverage on energy, technology, and other sectors. The subscription service, which cost users thousands of dollars a year, revolutionized the company’s balance sheet. Within two years, it brought hundreds of new employees to Rosslyn and accounted for a quarter of Politico’s revenue.

All the while, VandeHei worked to expand his public profile. “He cared so much about being a constant presence on Morning Joe,” says a former Politico staffer. He also hit the speakers circuit, sharing stages with Moneyball author Michael Lewis, former Secretary of State Colin Powell, and AOL founder Steve Case.

“He definitely saw himself as a transformational, transfigurative corporate leader and media baron,” says a former senior Politico reporter. “He wanted to go to give speeches and tell the Politico story.” A former member of Politico’s leadership says VandeHei made public appearances to promote the company—not himself.

VandeHei gradually became so far removed from newsgathering that when he did suggest a story to pursue, senior reporters sometimes ribbed him that he was no longer good enough to get the scoop himself.

“I’m not a reporter anymore,” VandeHei joked back. “I’m a businessman.”

That soon became official. In late 2012, Joe Allbritton died. Seven months after the funeral, his son emerged from his grief with dramatic plans to transform the company he’d inherited. The TV stations—the centerpiece of his dad’s empire—were sold off for nearly $1 billion. Politico also bought a news website that gave it a beachhead in New York. When Fred Ryan stepped down as CEO (he’s now publisher of the Post), VandeHei got the job.

Before Politico, VandeHei says, his only management experience had been “being a night-shift manager at Little Caesar’s in high school.” But over the previous two years, he’d charted new income streams and driven impressive revenue growth. “He wanted to be seen as the guy in charge,” Allbritton says. “Just out of loyalty, I thought, ‘Let’s give it a shot.’ ”

Together, VandeHei and Allbritton exported Politico’s model to new markets both domestic and international. In 2014, the company partnered with Axel Springer, the German publishing giant, to create Politico Europe.

The following year, Politico had more than 450 employees in Rosslyn, Florida, Massachusetts, New Jersey, California, Illinois, Paris, London, Brussels, and Berlin cranking out roughly 6,000 news items a month. It had confounded its competition in the political-news industry. “Our dream,” VandeHei and Harris wrote in a September 2015 memo, “is a Politico journalistic presence in every capital of every state and country of consequence by 2020.”

• • •

Behind all the bravado, however, Politico’s foundation was wobbling.

With VandeHei in the CEO’s office and Harris often in Europe, the Rosslyn newsroom drifted off course. Rick Berke, who’d been hired away from the New York Times as top editor, abruptly resigned after less than a year. He was replaced by Susan Glasser, a former Foreign Policy editor who’d launched Politico’s new magazine.

The masthead changes precipitated defections. In 2014 alone, roughly a quarter of the newsroom turned over, according to the Post. Politico’s identity as a singular scoop factory faded. When the 2016 election cycle kicked off, it was no longer dictating the terms of the news cycle.

Meanwhile, throughout the summer and fall of 2015, VandeHei and Allbritton’s relationship unraveled.

Although he still considered VandeHei a “visionary CEO and leader,” Allbritton says he concluded that Politico’s executive staff couldn’t manage its explosive growth all by itself. VandeHei’s school-of-hard-knocks approach may have worked during the company’s awkward teenage years, but Politico was now on the precipice of a major global expansion.

“Did the company outgrow him?” Allbritton says. “I don’t know, maybe.”

There were reasons to lose confidence. Senior managers complained to Allbritton that VandeHei, Kingsley, Schwartz, and executive vice president Danielle Jones had isolated themselves from others and were running the company as a clique. Allbritton “felt that Jim became intolerant to any ideas but his own,” says a Politico executive. “And that ran counter to the secrets of Politico’s success, where a lot of good ideas came from batting ideas around.”

Says VandeHei: “This makes no sense. Every company has a small group of deciders, always including the CEO, CRO, and COO.” Politico’s “extended” leadership team comprised 20 people, he adds. “We were in a constant rolling conversation about ideas. We implemented the good ones and killed the dumb ones.”

Allbritton believed that VandeHei’s vision for the domestic expansion was muddled and that, without changes, Politico wouldn’t be open in every state capital by 2020 as VandeHei and Harris predicted. “Robert thought Jim was interested in the shiny new object,” says a Politico executive, “but he wasn’t interested in actually running it.”

It also hurt when VandeHei delivered to Allbritton a budget proposal that contained several errors. Allbritton describes these mistakes as “whoopsies” and says they weren’t “out of the ordinary for a first-year executive.” A former member of Politico’s leadership insists that the mistakes originated from incorrect information provided by Allbritton Communications’ financial managers. Whatever the case, Allbritton made sure VandeHei’s figures were reviewed more carefully after the blunder.

“We built a durable, scalable, super-well-respected media company that produces awesome journalism and double-digit growth,” says VandeHei. “People should be celebrating, not shooting spitballs.”

For his part, VandeHei had grown irritated by what he viewed as Allbritton’s erratic involvement in Politico, according to a former member of the company’s leadership. Allbritton would be late to meetings and, when he attended, would sometimes distract executives by fiddling with his smartphone or giggling, according to this source—the sort of thing that might be no big deal in good times, but not when relationships were already stressed. Afterward, Allbritton occasionally gave instructions to executives and said, “Don’t tell Jim that I told you this.”

Politico’s leaders were grateful to Allbritton for the resources he devoted to the company but were puzzled about why he wouldn’t “embrace the role of owner” and allow the executive staff to run the company, the source says. “Deep down, I think Robert wanted to be the guy with the loyal following and the guy who was getting credit—internally and externally—for our success. And you had this whole leadership team that was inspired and motivated by Jim. And I think that always bothered [Allbritton].”

A final clash—over the future of the company—ruined the relationship for good.

“Deep down, I think Robert wanted to be the guy with the loyal following and the guy who was getting credit—internally and externally—for our success.

For years, investors had approached Allbritton to gauge his interest in selling part or all of Politico. The young owner always said no. Other new-media start-ups, meanwhile, were fetching giant piles of cash. In 2011, for example, AOL bought the Huffington Post for $315 million. According to a person familiar with the situation, these transactions served as reminders to VandeHei and Harris that they didn’t have true equity stakes. Over time, this became a growing source of frustration for both men.

Late last summer, an opportunity arose. Axel Springer, the company’s partner in Europe, was looking to acquire stakes in digital-media companies in the United States. As his relationship with Allbritton frayed, VandeHei had come to admire Axel Springer CEO Mathias Döpfner, who was also a journalist turned businessman. Axel Springer executives had made clear to Harris, VandeHei, and other Politico leaders that the company was interested in expanding their partnership. The firm raised the idea of acquiring a stake in Politico, according to a person familiar with these discussions.

Although Politico never solicited an investment and Axel Springer never made a formal offer, VandeHei became captivated by the idea of a deal—something he believed would help Politico grow beyond its boutique roots. He began urging Allbritton to consider selling a chunk of the company. “Jim was no longer having fun at this job and was regarding Robert as a pain in the ass,” says a person familiar with these discussions. “This was a way out.”

It was certainly a good time to sell a new-media company. When Comcast bought stakes in Vox and BuzzFeed that very summer, it valued them at $1 billion and $1.5 billion, respectively. According to a source familiar with the discussions, VandeHei concluded that a bubble in the industry would inflate Politico’s value, too. “Jim thought it would be insane not to take advantage of this moment,” says a former member of Politico’s leadership.

A high valuation could have made VandeHei’s phantom shares worth more than they already were. According to a source familiar with the discussions, VandeHei believed Axel Springer would pay three times Politico’s assessed value for whatever portion of the company it acquired. “If he was right about that,” says the source, he would have gotten a very handsome financial reward for his work, “and he desperately wanted it.”

A former member of Politico’s leadership says personal financial incentives had nothing to do with VandeHei’s recommendation that Allbritton sell. Instead, this source says VandeHei thought a deal would provide the capital infusion Politico needed to reach its aggressive growth targets. “We can’t run this place as a mom-and-pop shop,” VandeHei told a colleague. “We need to take on a partner to truly grow globally.”

According to a former member of Politico’s leadership, Mike Allen and Schwartz backed VandeHei as he repeatedly tried to persuade Allbritton to explore a sale; Harris initially supported the idea, too. Allbritton made clear he wasn’t interested.

When Axel Springer bought 88 percent of Business Insider for $343 million last September, VandeHei became even more convinced that Politico could get a monster payday. He believed Politico was far more valuable than Business Insider and, according to a person familiar with the discussions, he proceeded to try and “bully” Allbritton into selling. The source says VandeHei disparaged Allbritton’s business acumen and left the boss with the clear impression that if he didn’t sell, VandeHei, Allen, Schwartz, and Kingsley would all quit. “Jim was trying to intimidate Robert,” the source says. “And he was just wrong about that.”

A former member of Politico’s leadership says VandeHei never bullied the owner. Instead, VandeHei argued that Allbritton should capitalize on the opportunity before him. “This was a once-in-a-lifetime chance,” says a former member of Politico’s leadership, “to partner with Axel Springer—or in a dream scenario, with Business Insider, too—to create a real global powerhouse.”

VandeHei told a colleague that his ideal outcome would be a new standalone company with equity stakes for all employees, just as he’d once imagined for Project X. VandeHei believed nothing incentivized employees like ownership.

But according to the person with knowledge of the discussions, the entire notion of a blockbuster deal was “a fantasy”; Axel Springer never would have paid the lofty prices VandeHei envisioned, this person says, and Allbritton didn’t believe such a scenario was realistic.

“By that time, Robert had lost respect for Jim as a CEO,” says a person familiar with Allbritton’s thinking. “Robert didn’t respect Jim’s standing to make those kinds of judgments.” Besides, after selling the TV stations for nearly $1 billion, Allbritton believed he had more than enough capital to finance Politico’s ambitions.

“I don’t need the money,” he says. “We’re growing like crazy.” (Axel Springer declined to comment.)

The dispute made life in Politico’s executive ranks uncomfortable during December and January. Owner and CEO argued, and VandeHei huddled with his deeply disillusioned allies in closed-door meetings. Harris—who by then had concluded that the drama was a distraction—tried to mediate. But the division between Allbritton and VandeHei was too profound to be resolved over beers, the way the old partners used to do.

• • •

Around 11 AM on January 29, the day after the leadership group announced their departure, Allbritton, VandeHei, and Harris held an all-staff meeting in Rosslyn.

The previous day’s events had rattled Politico’s rank and file. Some staffers were livid at VandeHei and his allies for making their announcement smack in the middle of a presidential election; others were confused about the reasons for the mass departure of much of the company’s leadership.

Most of the newsroom had no idea about the infighting that had transpired over the previous months. They were oblivious to the owner losing confidence in his executives, the leading executives losing faith in the owner, and the protracted dispute over Axel Springer. The story behind this seemingly abrupt exit was a total mystery to one of the most well-wired newsrooms in Washington—and Allbritton and VandeHei did their best to keep it that way.

All the same, employees could feel the tension between the men, even as Allbritton and VandeHei focused on the bright futures before them. VandeHei told his colleagues that he’d always wanted to start a company of his own, and now was the right time to do it.

“The only thing I couldn’t give him was ownership,” Allbritton told the crowd.

According to a former member of Politico’s leadership, the departures were driven by an erosion of faith in Allbritton. “Robert has lost the room,” this source says. Additional executives left Politico around the time of the power struggle.

VandeHei’s original partner wasn’t among those who lost confidence. “What made Politico a special place, and a very successful one, at its founding and in the years since were certain values: teamwork, shared purpose and shared rewards, laughter, love of game,” says Harris. “We never stopped believing these values, but in my view we did stop fully living by them. This was painful from a personal perspective, intolerable from the publication’s perspective. So we are not tolerating it and have moved on.”

About the dispute, VandeHei says: “This isn’t a soap opera. It’s a business—and a very successful one. Who cares about some small-ball disagreements? They happen in every thriving business every day. Look at the big picture: The hundreds of people behind Politico created the most consequential, badass Washington publication of the past few decades. Everyone should be proud of a great run. I sure am.”

He and Schwartz left the company this past spring and have been courting investors on Wall Street and in Silicon Valley for their as yet undefined new venture. Mike Allen plans to join them after the election. VandeHei has told others that all employees of his new company will get stock.

In Rosslyn, Allbritton’s company has been taking steps to put the drama behind it. On July 11, Harris announced that Politico veteran Carrie Budoff Brown will become its new top editor. A trio of reporters—Jake Sherman, Anna Palmer, and Daniel Lippman—recently inherited the Playbook franchise from Allen. And there are still plans to conquer new markets.

Allbritton himself spends much less time in the corporate suite on the 27th floor these days. Instead, he often works alongside top editors and executives, at a desk with a view of Politico’s newsroom.

Luke Mullins will discuss this article on Reddit at 3 PM on Monday, July 18.

This story is from the August issue of Washingtonian, on newsstands July 21.

Senior writer Luke Mullins (@lmullinsdc on Twitter) can be reached at lmullins@washingtonian.com.

More from News