Politics & Policy

Is Mark Zuckerberg Getting Fleeced by Washington Consultants?


Facebook CEO Mark Zuckerberg speaking at the company's headquarters in Menlo Park, Calif.

Photograph by Josh Edelson/AFP via Getty Images

Facebook CEO Mark Zuckerberg speaking at the company's headquarters in Menlo Park, Calif.

Facebook (FB) founder Mark Zuckerberg made waves in Washington with the rollout last week of FWD.us, a pro-immigration reform advocacy group that includes a bevy of prominent Silicon Valley technology executives: Marissa Mayer of Yahoo! (YHOO); Google’s (GOOG) Eric Schmidt; Elon Musk of Tesla (TSLA); and Reid Hoffman at LinkedIn (LNKD), to name just a few. (But not Bill Gates of Microsoft (MSFT).)

Any time big names make a splash in Washington—especially when those big names have big checkbooks—it sets the political class abuzz. This was certainly true with Zuckerberg’s group. Two details that stood out in the press coverage: the million-dollar ante to join the group and the rumored $50 million it hopes to raise. “There’s vast amounts of money gushing through the political system right now,” says Jim Manley, a former top aide to Senate Majority Leader Harry Reid of Nevada who is now with Quinn Gillespie & Associates. “And the consultant frenzy you see surrounding [the group] is the inevitable result of a heavy influx of money.”

Immigration reform is pretty near the goal line. So it’s not at all clear that the group’s money is necessary for passage. In fact, some veteran lobbyists on the issue whom I spoke with are concerned that high-profile CEOs weighing in with millions of dollars in advertising at the 11th hour will upset the delicate balance that must hold for President Obama to get an immigration reform bill to his desk. (None of these lobbyists would go on the record, however.) And there’s a reason people write books about Washington lobbyists with titles like “Pigs at the Trough.”

So are Zuckerberg and his cronies getting fleeced? Most of the people I spoke with, none of whom have direct financial ties to the group, actually thought no. The reason has less to do with the state of the immigration debate and more to do with the strange way Silicon Valley lobbies Washington. Most big interests—oil companies, pharmaceutical manufacturers, Hollywood studios—have a single, all-powerful trade association to do their bidding. The tech industry does not. Instead, it’s represented by an alphabet soup of different, sometimes overlapping, organizations, which include Compete America, NetCoalition, TechNet, TechAmerica, and many more (maybe they should lobby Congress for some spaces). Politico has published this handy cheat sheet.

The different groups tend to be dominated by different companies. Compete America, for instance, is dominated by Oracle (ORCL), Microsoft, and Intel (INTC). Sometimes big companies go off on their own. Microsoft started its own coalition, inSPIRE STEM USA, to lobby for higher visa fees with the money going for more STEM education. And the tech industry is not homogenous or always in agreement about what it wants from Washington. The SOPA piracy debate was a good example of this—some organizations didn’t participate because they had members on both sides of the issue. And then there’s a generational issue: Older, more established companies, like Oracle and Intel, have more developed lobbying outfits than newer entrants, such as Facebook.

So it makes sense on several levels that Zuckerberg might want his own group with his own people lobbying Washington on the issues that Facebook and companies like it care about—not just immigration, but eventually regulatory issues as well. Even if he makes a lot of political consultants rich in the process.

Green_190
Green is senior national correspondent for Bloomberg Businessweek in Washington. Follow him on Twitter @JoshuaGreen.

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