Technology Firms Getting Into the Spirit of (Political) Giving

By Edmund Sanders, Times Staff Writer

This selection was excerpted from
the Los Angeles Times, dated December 23, 2000.

WASHINGTON--Technology companies--once known for their libertarian bent and disinterest in politics--tripled their campaign contributions during the last election cycle, surpassing such deep-pocketed donors as telephone carriers, banks, pharmaceutical makers and oil and gas companies, a research group said Friday.

Computer and Internet firms--led by Microsoft Corp., America Online, Cisco Systems and Dell Computer--gave $31.6 million to the two major presidential candidates, their political parties and various congressional aspirants between January 1999 and December 2000, according to the Center for Responsive Politics, which tracks political campaign contributions.

The technology sector jumped to No. 8 on the list of top industry donors, up from No. 33 just four years ago, when technology companies contributed less than $9 million. The figures confirm what many analysts had suspected: Technology firms have become a powerful force in Washington.

"It's unprecedented to see an industry rise so fast," said Larry Makinson, a senior fellow at the center. Computer and Internet firms now spend nearly as much as the entertainment industry, which contributed $33.2 million during the last two years.

The spending is in keeping with the tech industry's recent strategy of beefing up its presence in Washington. Earlier this year, several dot-coms, such as Amazon.com and Ebay.com, opened lobbying offices in Washington. And Silicon Valley became a frequent campaign stop for presidential candidates Al Gore and George W. Bush.

"The industry is maturing," said Richard Delaney, president of Delaney Policy Group, a technology consultant company in Washington. "Firms are recognizing that they have interests in Washington. That wasn't the case just two years ago."

The government's growing willingness to regulate the tech industry--evident in the Microsoft antitrust trial, the AOL-Time Warner merger review, and proposed legislation to protect online privacy--has spurred tech executives to crack open their checkbooks like never before.

Software giant Microsoft, which is battling government efforts to break it up, gave the most to politicians, contributing $3.9 million over the last two years, 53% of it to Republicans. That's more than the entire tech industry gave just six years ago.

"As Congress pays more attention to high-tech issues, we've increased our activity," said Microsoft spokesman Rick Miller. Top legislative issues for the Seattle-based company included approval of digital signatures on documents, normal trade relations with China and higher quotas on visas for skilled foreign workers, Miller said.

AOL, based in Reston, Va., rocketed to No. 2, with about $1.6 million in contributions, up from just $149,000 two years ago, according to the center. It gave 51% of that to Republicans. The Internet company currently is seeking government approval for its pending merger with Time Warner Inc.

"We've found it's more important for us to get engaged with Congress," said Jill Lesser, vice president of public policy at AOL. "Part of that engagement, for better or worse, is money."

Though the Palm Pilot-wearing Gore may have boasted a better understanding of technology issues, it was opponent Bush who won the battle for the industry's money. Bush raised about $1 million from the computer and Internet industry, compared with Gore's $536,000, the center found. Center officials, however, noted that Bush raised nearly twice as much money as Gore overall, which may account for the difference.

Some tech companies, such as Dell and Oracle Corp., were not shy about showing their Republican bent. Nearly two-thirds of Dell's $775,000 in contributions went to Republicans. Oracle gave 80% of its money to Bush's party.

"The tech industry expects that Bush will be a strong believer in letting the market rule and in removing obstacles," said Chase Untermeyer, a Bush supporter and director of government affairs at Compaq Computer Corp., which also gave most of its $79,000 in contributions to the Republican Party.

But overall, technology companies straddled the political fence, giving about 51% of their money to Democrats and 47% to Republicans, the center found. By contrast, most other top-giving industries tended to throw their support to one party or the other. For example, attorneys favored Democrats, while doctors gave most of their money to Republicans.

The technology industry's bipartisan strategy may pay off in light of the close presidential race and deeply divided Congress. "They should be able to play quite well in the current political environment," the research center's Makinson said.

At the top of the agenda for many technology firms is blocking efforts to impose new regulations on the industry, ranging from restrictions on free trade to limits on the use of personal information collected online.

"Our goal is to keep from being regulated like every other industry," said Jonathan Zuck, president of the Assn. for Competitive Technology, which represents 9,000 technology companies.

Extending the current sales tax moratorium on e-commerce is another priority.

As relative newcomers to the political process, experts said that tech companies will be watching closely over the next two years to see if their contributions pay off.

"The tech industry has its own time frame," Delaney said. "If they don't see results immediately, they might not be as active in the next election."

Falling prices of many tech stocks in recent months also may make companies less generous with their giving in the future.

AOL, for one, probably will not be as active. After closing its merger with Time Warner, the combined company is expected to cease soft-money contributions to political parties, AOL's Lesser said. Time Warner already bans soft-money contributions, intended for such uses as party-building activities and issue ads. Critics say that soft money is susceptible to abuse.

But the center's Makinson predicted that the technology industry will become a permanent fixture in the political game.

"Once you get in the Rolodex [of campaign fund-raisers], they never stop calling," he said.

Tech Industry Contributions

As politicians take a keener interest in their industry, computer and Internet companies are pouring money into presidential and congressional races. The technology industry, which largely ignored Washington, D.C., a decade ago, contributed $31.6 million over the last two years, outspending drug companies and the oil and gas industry. Tech firms now rank No. 8 among top industry givers, up from No. 55 in 1990.