MIght t he favors these guys are buying be used to limit regulation and
enforcement of accessibility to information technology?
kelly
Microsoft moves into politics
with campaign contributions
By John R. Wilke
THE WALL STREET JOURNAL
WASHINGTON - Like version 1.0 of most of its software programs,
Microsoft Corp.'s first major foray into politics still has some bugs.
Just three days before last November's elections, for instance, the
software giant gave $25,000 to Dave Stirling's race for California
attorney general. Microsoft bet the Republican candidate would end
California's backing for the federal antitrust suit against the
company.
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MR. STIRLING WAS SOUNDLY DEFEATED by Democrat Bill Lockyer, a
strong backer of the case, and the last-minute gift only succeeded in
irking the new attorney general. "It came out of the blue," an aide to
Mr. Lockyer says. "They've never been involved in California politics
before this lawsuit, and the way they got into it was pretty awkward."
Such Microsoft efforts nevertheless send a powerful message:
After years on the sidelines, the company wants to be a political
player - and it has the cash and commitment to do it.
Microsoft's total contributions last year - including
political-action-committee gifts, "soft money" given directly to the
parties and individual employee giving - more than tripled to nearly
$1 million, 63% of it to Republicans, says Jennifer Shecter, who
studied Microsoft's giving for the Center for Responsive Politics, a
Washington nonprofit group. Lobbying expenditures doubled in the first
six months of 1998 to $1.28 million from the year-earlier period,
records show.
`BUILDING AN ARSENAL'
"They're clearly building an arsenal and preparing for war,"
Ms. Shecter says. Microsoft's PAC, she adds, "is now clearly in the
major leagues" alongside the American Medical Association and other
long-established PAC Internet taxation, encryption, technology trade
and a host of other concerns.
Image: Computing Microsoft Donations
Microsoft's outreach efforts have already paid dividends. It
has become a leading voice in many technology issues in Washington,
for example. But some other moves have had mixed results.
In North Carolina shortly before the election, Microsoft
Chairman Bill Gates made a personal appearance with GOP Sen. Lauch
Faircloth, a critic of the antitrust suit, who was up for re-election;
but Mr. Faircloth lost. Microsoft backed other losers, as well,
including South Carolina's Republican governor, and the company's
local Washington state congressman, Republican Rick White.
A "grass roots" lobbying plan targeting local officials fell
apart last year before it got started. More recently, an effort to
persuade some of the newly elected attorneys general to back away from
supporting the antitrust suit misfired in some states, says Lloyd
Constantine, transition coordinator for New York's new attorney
general, Elliot Spitzer. Mr. Constantine calls Microsoft's effort
"crude, obvious and unsuccessful."
SOUTH CAROLINA EFFORTS
But Microsoft did better in South Carolina, where it gave
$20,000 to the state Republican Party. GOP Attorney General Charlie
Condon recently dropped his support for the antitrust case against
Microsoft. The company says the two events were coincidental and the
gift to the party wasn't used for Mr. Condon's campaign; Mr. Condon
says the federal case is now unnecessary because of new competition
from America Online Inc.
Lobbying expenditures doubled in the first six months of 1998 to $1.28
million from the year-earlier period, records show.
The defection of South Carolina's attorney general was a huge
public-relations boost, even if it will make little difference in the
case itself. So Microsoft hopes to repeat its success in other states.
It is expected to focus on North Carolina, Louisiana, Minnesota and
Ohio, rivals say.
Microsoft, meantime, is opening its considerable wallet to
political interests. Most of its new largesse is directed at
Republicans, including a recent $100,000 gift to the National
Republican Senatorial Committee and $40,000 to a state party
committee. Donations by the PAC fell far short of its income last
year, though, leaving a war chest to win friends on Capitol Hill if
Microsoft's antitrust problems spill into the political arena.
"They raised an enormous amount of money in a very short period
of time, and a PAC doesn't do that just to build reserves; they do it
when they're getting ready for a big push of some kind," says Ms.
Shecter.
FAST RISE TO BIG LEAGUES
Tapping its wealthy employees - Microsoft now has more than
5,000 millionaires in its ranks - contributions to its PAC soared
tenfold last year, to $562,000, vaulting it into the big leagues of
business PACs in a single year. The company also hired top Washington
lobbyists, including Haley Barbour, former Republican national
chairman; Kerry Knott, former chief of staff to House Majority Leader
Dick Armey; former GOP congressman Vin Weber of Clark & Weinstock and,
last week, former Democratic Rep. Vic Fazio.
Part of Microsoft's quick success at fund raising stems from a
technical change last year in the rules of its PAC to allow direct
solicitation of company managers, Mr. Murray says. "We invited
executives to contribute, and there was a strong response both in
terms of the level and number of contributions," he says. Most
Microsoft employees "recognize that technology industries are
increasingly affected by public policy," he adds. While many company
PACs are fueled by small payroll deductions, many Microsoft employees
wrote checks for the legal annual maximum of $5,000; all are eligible
to give again this year.
FIGHTING FIRE WITH FIRE
With all its new efforts, Microsoft says it
is simply fighting fire with fire. “Our competitors have
dramatically increased their lobbying budgets, and Microsoft is no
different,” says Mr. Murray.
Microsoft’s largest rivals, including
Oracle Corp. and Sun Microsystems Inc., have boosted lobbying and
political activity in the past year and banded together to sway policy
makers to take on Microsoft, the company says. Federal election
records show that chief executives Lawrence Ellison of Oracle and
Scott McNealy of Sun are also active contributors, as is John Doerr, a
venture capitalist on the board of several Microsoft competitors, who
gave more than $91,000 in soft money in the latest election cycle.
[LINK]
The most generous contributor among Microsoft's rivals was also
the Justice Department's star witness in the trial, James Barksdale,
Netscape Communications Corp.'s chief executive, who gave $165,000 to
candidates in both parties in the latest period. But he didn't favor
Justice Department antitrust chief Joel Klein's Democratic friends:
Most of his money went to Republicans, including $100,000 to the
Republican National Committee.
Copyright © 1999 Dow Jones & Company, Inc.
All Rights Reserved.
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