Tech industry getting up to speed on politics

Friday, November 3rd 2000, 12:00 am

By: News On 6

China trade, visas among legislative successes

By Catalina Camia / The Dallas Morning News

WASHINGTON – When it comes to flexing political muscle, the high-tech industry is an infant compared to labor unions, tobacco companies and other business groups that have long had the ear of Congress.

But the new kids are learning fast.

Highlighting their increased influence on Capitol Hill, the barons of the new economy scored a string of legislative victories this year – from normalizing trade with China to securing more visas for skilled foreign workers. No other industry, according to congressional analysts, has done as well this session.

And after years of turning a blind eye to the link between money and politics, high-tech companies and their workers have stepped up their campaign contributions and hedged their bets on the elections by giving almost equally to Republicans and Democrats.

"A lot of the tech community hoped government wouldn't find them, wouldn't tax them and wouldn't regulate them," said Margaret Lauderback, executive director of TechNet Texas, an arm of the bipartisan Technology Network, which builds support for new-economy policies.

"They now realize if they're not part of the process, the process can harm them," she said.

The computer industry and Internet companies have already donated more than $23.9 million to political parties and candidates this year, according to the nonpartisan Center for Responsive Politics, which tracks campaign money.

They have skyrocketed to eighth place among industries making political contributions – from 55th place a decade ago.

And even though Democrats have received 51 percent of the high-tech contributions, the party's choice for president is lagging.

Republican George W. Bush has received nearly $1 million from the computer industry, nearly twice as much as Democrat Al Gore, who has long been viewed as a friend to technology companies.

"By splitting their money almost evenly between Democrats and Republicans, the industry has gotten just about everything it's asked for from Congress," said Larry Makinson, executive director of the Center for Responsive Politics.

"Silicon Valley, and the other valleys and alleys from Seattle to Austin to Boston to right here inside the Beltway, have now come front and center on the political map and will likely grow even more in influence in years to come."

Computer executives and their advisers attribute the high-tech industry's transformation from political neophyte into key player to two factors.

First, there was President Clinton's 1995 veto of a bill that restricted shareholder lawsuits. The industry, which is susceptible to such suits, had to fight hard to get the veto overturned by Congress.

But the second, more dramatic change came in 1998 when the federal government launched its antitrust suit against Microsoft. The company is appealing Judge Thomas Penfield Jackson's order to break up the software giant.

Microsoft, which has been increasing its political donations to parties and candidates at a fast clip, so far has given nearly $3.5 million during 1999-2000 and has significantly boosted its lobbying operations in Washington.

The company Bill Gates built now ranks fourth among companies whose political action committees or employees donate to federal campaigns, according to the Center for Responsive Politics.

"Everyone thought these people [politicians] are from another world. They don't impact us, so why bother," said Gregory Slayton, president and chief executive of ClickAction Inc., an e-mail marketing company. "The Microsoft case woke everybody up to the fact that Washington, obviously, has a real role to play."

While high-profile executives like Michael Dell are generally aligned with one party or the other, party labels have generally meant little in the tech corridors. Mr. Dell, chairman and chief executive of Dell Computer Corp., leads the Bush campaign's high-tech advisory council.

Rep. Tom Davis of Virginia, chairman of the National Republican Congressional Committee, compares new-economy leaders to the disaffected "Reagan Democrats" of the 1980s who eschewed party labels. He notes that the social and cultural issues that attract people to the Republican or Democrat party do not work with tech employees.

Tech executives say the bitter partisanship often displayed on Capitol Hill turns them off and they would rather hear about solutions to policy dilemmas instead of political strategy.

"The high-tech industry is filled with very independent thinkers," said Steve Papermaster, chairman and chief executive of Austin-based Agillion Inc. "They are more likely to look at issues."

In recent years, organizations aimed at educating high-tech executives on policy initiatives and politically oriented groups such as TechNet have flourished. These include the Information Technology Industry Council and TechNet.

ITIC, which represents more than 30 of the top high-tech chief executives, publishes an annual scorecard to illustrate where lawmakers stand on their issues. And like TechNet, which is considered the technology community's political arm, ITIC is strictly bipartisan.

From the industry's point of view, Congress was very friendly this term to the computer industry and Internet companies.

Industry executives consider passage of normalized trade relations with China their biggest achievement, followed closely by more visas for high-tech immigrant workers, a five-year extension of the research and development tax credit and a law allowing for a digital signature on documents sent electronically.

House Majority Leader Dick Armey, R-Flower Mound, recipient of the ITIC's "legislator of the year" award for outlining an "e-contract" of legislative priorities and principles, said Congress cannot ignore the technology industry.

"They are the most sought-after group right now," Mr. Armey said. "They are the main engine propelling the economy."

Learning the game

The tech industry broke into the top 10 in political contributions this year. In 1990, it ranked 55th. Here are this year's contributions by industry, counting contributions of $200 or more, according to FEC data as of Oct. 1.
1. Lawyers/law firms – $73.7 million
2. Retired – $68.8 million
3. Securities/investment – $57.8 million
4. Real estate – $49.9 million
5. Insurance – $30.4 million
6. Health professionals – $28.3 million
7. TV/movies/music – $24.9 million
8. Computers/Internet – $23.9 million
9. Oil/gas – $22.8 million
10. Business services – $20.8 million
SOURCE: Center for Responsive Politics

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