Tech firms go on a legislative offensive
Published: 28 Mar 2006 16:20 BST
...Washington bureaucrats with the key to our private lives?"
The answer might not be as obvious today.
It's not entirely clear what caused the change in attitude over the last decade. One reason for heightened interest in Washington is, of course, practical: the proliferation of homeland security contracts in the last five years, a lucrative business that the "new" Bill Gates said "we're proud to be involved in" during remarks made on a 2003 visit to the US capital.
Oracle chief executive Larry Ellison, for example, called for a national ID card soon after the Sept. 11, 2001, attacks. In meetings with Senator Dianne Feinstein, a Californian Democrat, Attorney General John Ashcroft and CIA officials, Ellison offered to donate the database (and presumably make money on support).
"I can definitely see how the technology industry is taking part of the slot machine culture of Washington," said Jim Harper, an analyst at the free-market Cato Institute who serves on a Department of Homeland Security advisory panel. "Put a little money in, get a lot of money out."
Another reason for a different perspective on Washington was the Microsoft antitrust trial, which taught companies like Oracle, Sun and Netscape Communications [since purchased by America Online] that they could use lobbyists for offence as well as defence.
The case was inspired and even partially orchestrated by Microsoft's rivals: Testimony from the trial revealed that then-Netscape chief executive Jim Barksdale met with assistant attorney general Joel Klein for breakfast at Barksdale's home, one of about a dozen meetings that the executive had with government attorneys.
Netscape hired Gary Reback, at the time a partner at the storied Silicon Valley law firm Wilson Sonsini Goodrich & Rosati, to drum up support for the antitrust suit inside the Department of Justice. Once the case was under way, Sun and Oracle went so far as to set up a special group, called ProComp, on Washington's lobbyist-laden K Street solely to target Microsoft.
"Most of the high-tech community thought, 'Washington is 3,000 miles away. What do we care?'" said Larry Noble, executive director of the Centre for Responsive Politics, a non-profit group that tracks political spending. "All of the sudden, you see them ramp up their lobbying dramatically — and their contributions to campaigns."
Microsoft would not comment on specifics involving its lobbying practices or expenditures. The company, which has run a Washington office for about a decade said it "is focused on a number of key high-tech issues that can positively impact the industry, US competitiveness and consumers." As examples, the firm cited business immigration issues, telecommunications and patent reform, and data security and privacy.
Yet one favourite Microsoft lobbying firm has been forced to shut its doors because of the scandal involving former House majority leader Tom DeLay. The Alexander Strategy Group, founded by former DeLay aides, including his chief of staff, counted nine lobbyists on Microsoft's payroll as of 2003 and an undisclosed number last year, according to public records. In addition, the group's Tony Rudy, a former DeLay aide listed in public records as a Microsoft lobbyist, has become a focus of the Abramoff investigation.
No one has accused the software company of any improprieties in its relationship with the lobbying firm. But given Washington's penchant for scandals, it is understandable that many have recommended avoiding the federal government altogether.
In 1970, Milton Friedman, the economist and Nobel laureate, wrote an article for The New York Times that called such offensive lobbying a "suicidal impulse" on the part of businesses. In a follow-up article written during the time of the Microsoft antitrust trial, Friedman warned that technology executives "will rue the day when you called in the government". Now, he said, the industry "will experience a continuous increase in government regulation."
CNET News.com's Anne Broache contributed to this report.
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