Tony Podesta, the firm's founder, tapped Fritts as his successor when he announced he'd step down as chairman last week, hours after an indictment was unsealed, charging Paul Manafort and his deputy, Rick Gates, with violating foreign lobbying law. The indictment accused Manafort of hiring the Podesta Group to lobby for an ostensibly independent nonprofit that "was under the ultimate direction" of the Ukrainian president, his party and the Ukrainian government.
Fritts had been expected to relaunch the Podesta Group under a new name in the days after Podesta stepped down. But after more than a week of working to hammer out the details of what the new firm would look like, Fritts announced at a staff meeting late this afternoon, that she would resign and start a new firm, exacerbating questions about the future of the Podesta Group and its dozens of employees.
One Podesta Group staffer described Fritts' decision as the next step in rebuilding the firm without Tony Podesta.
"Tony Podesta's name had become a scarlet letter," the staffer said, speaking on condition of anonymity. "I expect a lot of the top talent will go with her," the staffer added.
But it's not clear how many staffers - and how many of the firm's clients - will follow Fritts to her new firm.
"I just don't know," said another Podesta Group staffer. "This is a really painful process, trying to navigate who can go with and who can be let go."
Fritts declined to comment. Neither Tony Podesta, nor the Podesta Group has been charged publicly with crimes in the Manafort investigation. A lawyer for Tony Podesta did not immediate respond to a request for comment.
The Podesta Group, one of the top lobbying firms in Washington, had hustled in the wake of Tony Podesta's departure to hang on to as many clients and staffers as possible. Wells Fargo and Oracle, two of the firm's highest-paying clients, cut ties with the firm, although others said last week they would stick with the Podesta Group for now.
Paul Brathwaite, a Podesta Group principal, said last week that he was leaving to start his own shop, Federal Street Strategies.
Rival lobbying firms, meanwhile, see this is a prime moment to poach the Podesta Group's top lobbyists. At least six other firms have reached out to Podesta Group staffers about leaving since Tony Podesta stepped down.
Comment: Breaking: Tony Podesta quits Podesta Group amid Mueller inquiry