ComputerWorld

IT Lobbies Give Vendors Clout in Washington
Industry receives tax breaks and more
By PATRICK THIBODEAU
(August 28, 2000) High-tech firms have been pouring people and money
into Washington, and they have been getting results: tax breaks and
relatively little regulation of their activities.

In one year, from 1998 to 1999, lobbying expenditures for the computer
industry jumped from $39 million to about $61 million - an increase of
roughly 56%, according to Richard Delaney, president of The Delaney
Policy Group in Washington.

What did information technology vendors get for the money? Software
and hardware makers, facing the threat of out-of-control Y2k-related
litigation, successfully lobbied Congress to approve year 2000
liability-limiting legislation. Congress also approved a moratorium on
new Internet taxes.

In terms of spending, high-tech industry lobbies now rival
long-established lobbies like those of the insurance, tobacco and
pharmaceutical industries, according to figures compiled by the Center
for Responsive Politics, a nonprofit watchdog group in Washington.
High-tech campaign spending this year is expected to exceed 1998
levels, which reached $9.4 million.

Microsoft has been the leader in high-tech campaign contributions,
with more than $2.2 million coming from the company and its employees
in this election season.

But in terms of campaign spending, the high-tech industry is still
behind older industries. In 1998, the last election cycle, insurance
companies contributed $31 million, oil and gas companies $22 million
and telephone companies $14.8 million to political campaigns,
according to Center for Responsive Politics figures. But not all firms
approach such spending the same way.

Computer maker Gateway Inc. in San Diego, for instance, is taking a
high-profile route in Washington. So far, Gateway is credited with
contributing about $242,000 in political action committee and soft
money donations to candidates and party organizations in this election
cycle. The firm opened an office in Washington three years ago.

The company has a range of concerns, from taxation to the digital
divide between those who have access to the Internet and those who
don't, said John Spelich, a Gateway spokesman. "It would be foolish to
just sit back and permit Washington to set policy on these issues
without our voice being heard," he said.

In contrast, PeopleSoft Inc. in Pleasanton, Calif., doesn't have a
political action committee, nor is it giving soft money. Instead, like
many high-tech companies, PeopleSoft lobbies through trade groups like
the Information Technology Association of America for industry
representation, said company spokesman Steve Swasey.

But Delaney and other analysts said more companies are listening to
people like Mountain View, Calif.-based Marimba Inc. co-founder and
chief strategy officer Kim Polese, who said: "We have to be engaged in
the process. We can't have our heads in the sand as we used to in the
industry."