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It's Revenge Of The Nerds On Capitol Hill


Washington Outlook

IT'S REVENGE OF THE NERDS ON CAPITOL HILL

While most of Corporate America waded through the legislative swamp of the 105th Congress and emerged empty-handed, Silicon Valley staggered under its bundle of victories. In the closing days of the session, tech won more visas for skilled foreign workers, a ban on new Internet taxes, and curbs on the class actions that have been the bane of many startups.

And with the Valley's ability to exert pressure on both sides of the aisle, high-tech initiatives will be on the front burner again next year. One top priority: ending the long stalemate over industry attempts to lift export controls on data-scrambling technology. Computer makers will also push for a relaxation of curbs on overseas sales of supercomputers. California Republican Representatives Christopher Cox and David Dreier want companies that try to solve their Year 2000 problems to be shielded from damage suits if glitches occur. And industry execs may ask Congress to give tax credits to companies that tackle their Y2K troubles.JACKPOT. The tech industry, a relative newcomer to the Washington political game, "exploded onto the scene this year," says analyst Jennifer Shecter at the nonpartisan Center for Responsive Politics (CRP). "It will be a huge player in 2000." No small reason is the fast-building economic clout of the digital world. "Members increasingly recognize the connection between a strong high-tech sector and a strong economy," says Senator Spencer Abraham (R-Mich.), chief sponsor of the bill that raises visas for foreign workers from 65,000 to 115,000 in 1999 and 2000.

But Silicon Valley has other attractions for politicians--such as thousands of millionaires and a sprinkling of billionaires who can shower megabucks in campaign cash. During the 18-month period that ended on June 30, the CRP estimates, the industry ponied up $5 million in donations to candidates and the two parties. That's up from $2.8 million during the same period in 1993-94, the last midterm election season. Split about evenly between Democrats and Republicans, tech's contributions are still small change compared with the dough that the energy and financial-services industries kick in. But tech checks approach the $6 million in political giving forked over by Big Tobacco. And in an industry packed with wealthy businesspeople who have yet to wade into the political waters, the potential for more tech donations is enormous.

Already, tech companies are among the top 50 donors of unrestricted cash to the parties. As of June 30, Microsoft Corp. was No.44 on the GOP's soft-money list, at $264,316. It gave Democrats just $95,000. The Dems have bragging rights to Oracle Corp., their No.25, thanks to donations of $220,463, vs. $20,000 to Republicans.

No lobbying group appears to be exploiting this confluence of interests better than Technology Network, a 15-month-old political action committee formed by such big shots as Cisco Systems CEO John Chambers and Netscape CEO James Barksdale. The typical trade association crafts a broad legislative agenda first, seeks supporters on the Hill, and then rewards them financially. TechNet starts by forging one-on-one ties with influential lawmakers and then asks for help on a limited agenda.

The more than 100 briefings and fund-raisers TechNet has held since its inception, often at the homes and offices of its members, let Democratic and Republican lawmakers mingle with the moguls--and collect checks. Says a top GOP Senate staffer: "Who's going to say, `I don't want to meet with Bill Gates or Andy Grove'?" TechNet President Reed Hastings isn't bragging when he says: "We have a winning hand."

That's because techies play poker with both parties. They appreciate the GOP's mantra of smaller government and lower taxes. But they also like the New Democrat message of fiscal responsibility and federal support for research and education. High tech is "a jump ball," says Republican consultant Ralph Reed. And therein lies its power to influence legislation.

It wasn't so long ago that issues such as Internet taxes, the Year 2000 bug, and encryption were dismissed by lawmakers as nerdtalk. But as Silicon Valley's economic and financial clout expands, it's getting hip to speak geek in Washington.EDITED BY OWEN ULLMANNReturn to top


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