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Partisan Edge Is Elusive in Silicon Valley
By Dan Balz
Washington Post Staff Writer
Monday , June 19, 2000 ; A01
PALO ALTO, Calif. -- For the past year, Floyd Kvamme, a Silicon Valley
venture capitalist, has devoted his spare time to George W. Bush's
presidential campaign. He helped organize Bush's support here, has shuttled
to Austin for strategy sessions and hopes to break a record tonight by
helping to stage the biggest political fundraising event in the region's
history.
But ask Kvamme, an unflinching Republican, where partisan politics fits into
the scheme of things here and he offers a different view. "The valley just
isn't into partisanship very much," he said. "My new expression is that the
valley is pretty ambidextrous."
The allure of the new economy--and the money it has created--have touched
off an intense battle between Republicans and Democrats for the allegiance
of Silicon Valley's entrepreneurs. But Silicon Valley continues to resist
efforts to make it into just another political constituency like organized
labor or religious conservatives.
Four years after the valley's political awakening, the ebb and flow of
issues have left Republicans and Democrats convinced they stand to gain the
upper hand with the technology and dot-com world.
Republicans see themselves as far more sympathetic toward Silicon Valley's
views on issues crucial to new economy companies, from H-1B visas for
foreign workers to Y2K product liability. Democrats believe that the
valley's paramount interest in education, as well as its progressive posture
on social issues, gives them a natural advantage.
But the capitals of the old politics and the new economy operate in
different worlds and by different rules. As much as politicians in
Washington would like the valley to conform to the partisan conventions that
define business in the nation's capital, those in Silicon Valley envision a
world in which parties matter less and politics hews close to the center.
Kim Polese, chief executive of Marimba Inc., and a supporter of Vice
President Gore, offered this warning: "It's not a Republican valley or a
Democratic valley. A politician can't take anything for granted here."
Still, no place in America holds such fascination to politicians these days
as Silicon Valley.
"Silicon Valley stands for that which is new and creative in American
society today," said Mark Baldassare, polling director for the Public Policy
Institute of California. "It is very important for candidates to be seen
reaching out to Silicon Valley as a way of demonstrating that they're in
touch with what's going on in the leading edge of our economy and society."
Long before the Justice Department sought to break up Microsoft Corp., the
technology entrepreneurs here (many of whom applauded the government's
action against Microsoft) realized they could no longer deal with Washington
with occasional visits. On issues from encryption software to privacy to
Internet taxation, government's involvement in the business of technology is
growing rapidly.
That realization spurred what has become an increasingly sophisticated--and
expensive--courtship of political leaders. Sean Garrett, director of
corporate communications at Listen.com, likened the valley's growing
political savvy to a variation of Moore's law of computing power: something
that doubles every 18 months.
About the same time that Silicon Valley executives were waking up to how
Washington could affect their businesses, politicians awoke to the new
economy. Since then they have been flocking here to learn more about the
people and companies rethinking everything from banking to book-buying. They
also noticed there was a lot of new money.
A few Silicon Valley executives still express libertarian disdain for
anything related to government, but they have become a minority. Over the
past few years, different generations of computer and Internet executives
have become active participants in the game of politics. "It's not odd, it's
normal now," Reed Hastings, chief executive of Netflix.com, said of the
rising political activity in the valley. "It's not a curiosity, it's typical
and expected."
Bush's fundraising event tonight underscores the intensifying political
competition here. After the Democratic National Committee raised about $2.6
million in mid-April (two weeks after a $1.4 million event for the
Democratic Congressional Campaign Committee), Republicans vowed to do
better.
Bush supporters recruited Cisco Systems chief executive John T. Chambers,
one of the valley's most prominent and politically active GOP executives, to
host a fundraiser at his home in Los Altos Hills, and they have been working
hard to make it a grand success.
Chambers cast his lot with Bush early in the race and has dramatically
stepped up his contributions to GOP candidates and party committees. But
like many valley executives, Chambers does not confine his support to one
party. Some time ago, he hosted a fundraiser for California Gov. Gray Davis
(D) and early this year endorsed California Sen. Dianne Feinstein (D) in her
reelection campaign against her GOP opponent, Silicon Valley Rep. Tom
Campbell.
Such cross-party support may simply show that Silicon Valley executives have
learned the value of currying favor with those in power. But the executives
say it also reflects their desire to promote centrist politics over partisan
alliances.
"As centrists, we'll take the best and brightest from either party, young or
old," said Peter Harter, an Emusic.com vice president who has contributed to
Bush and offered advice on technology policy to the Texas governor's
campaign but who also maintains a close relationship with the New Democrat
Network.
On almost any given week when Congress is not in session, Silicon Valley
plays host to visiting politicians anxious to see the cubicle culture in
action. But the road toward mutual understanding can be bumpy.
As Roberta Katz, president and CEO of TechNet, a bipartisan lobbying group,
said, "Our members look very closely at candidates, not parties, and at
issues. For 80 percent of them, every race is a jump ball, which is
different from other parts of the country and other businesses."
House Minority Leader Richard A. Gephardt (D-Mo.) caused a ripple this
spring when, after delivering a speech declaring his commitment "to pursue
policies" designed to boost the industry, he announced his opposition to
permanent normal trade relations with China, high-tech's top legislative
priority.
Gephardt has tried to patch up with some of the valley's entrepreneurs, and
after a follow-up visit told his staff he believes Democrats are
well-positioned on issues important to the tech community. But the history
of Silicon Valley's political activity shows why neither Republicans nor
Democrats should feel overconfident.
President Clinton made the first serious overture to Silicon Valley,
beginning with his 1992 campaign, when he recognized the importance of
reaching out to the business community, especially to that part most
associated with the future.
Looking ahead to his own campaign, Gore intensified this courtship of
Silicon Valley beginning in early 1997 by holding monthly meetings with tech
leaders. His most important ally here remains the powerful venture
capitalist John Doerr of Kleiner, Perkins, Caufield and Byers (where Kvamme
is a partner), and the members of his digital cabinet here were dubbed the
"Gore Techs."
But Gore discovered that, in a culture that rewards innovation and constant
reinvention, standing pat risks being left behind. As the presidential
campaign got underway, the man who seemed to have Silicon Valley all locked
up found himself scrambling to keep pace in fundraising here with Bush and
even Democratic rival Bill Bradley. Suddenly Gore began to look like last
year's good idea, or as one young Internet executive put it, "soooooo '97."
Gore suffered too from a feeling that the administration was often slow to
support Silicon Valley's positions, as the White House repeatedly found
itself caught between the tech community on the one side and two powerful
Democratic constituencies, organized labor and trial lawyers, on the other.
"They've been horrible on our issues," one Internet executive complained of
the administration.
Twice last year on the eve of Bush campaign appearances here, the
administration suddenly announced support for the industry's position on
issues long in dispute, first on Y2K liability, later on encryption
software. White House aides called the timing a coincidence.
Republicans were far slower than Clinton and Gore to recognize the political
potential of Silicon Valley. Congressional Republicans have been more
supportive on the industry's bread-and-butter issues, but they were
initially resentful that the area's entrepreneurs appeared committed to
Clinton and Gore.
"Republicans have gotten the message through that they're with Silicon
Valley philosophically," said Lezlee Westine, a Republican who is vice
president of TechNet.
Where the GOP has faltered here it has been over social issues and the power
of religious conservatives within the party. Bush's candidacy has generated
considerable enthusiasm and financial support among executives in Silicon
Valley, who like his education record, his support for technology issues in
Texas and the minimal emphasis he places on issues such as abortion.
Kvamme said the growth in GOP activity in the valley over the past four
years has been exponential. Recalling that he only began to round up
endorsements for Robert J. Dole in August 1996, Kvamme said, the idea of
holding a fundraiser "never even crossed my mind."
Money is at the heart of the two parties' courtship of Silicon Valley, but
the dirty little secret is that the tech industry (Microsoft obviously
excluded) has enjoyed remarkable success in Washington for what has been a
relatively small investment in campaign contributions. "It seems like
anything on the computer industry wish list has been granted or is about to
be," said Holly Bailey of the Center for Responsive Politics (CRP).
In California, Silicon Valley has become an obligatory stop on the
fundraising circuit. Where once Democrats largely looked to Hollywood and
Republicans plumbed Orange County, members of both parties now see Silicon
Valley as an equally important source of campaign funds.
Overall, the computer industry nationally ranks eighth in the money its
members and individuals give to federal candidates, according to CRP
estimates. Still, the $13 million donated as of April 1 pales in comparison
to the $49.5 million given by lawyers and law firms. But Bailey said the
pace of tech industry giving is accelerating more rapidly than in most other
industries, with computer firms already donating more in this cycle than
they did in all of 1997-98.
Silicon Valley, like Washington, thrives on competition. But even here there
is a clear difference in cultures--one more reason why neither party may
ever become the tech industry's favorite.
"Competition in Silicon Valley is different than political competition,"
said Joel Hyatt, the Democratic National Committee's finance chairman and
managing partner for IdeaLab, an Internet incubator firm in Sunnyvale. "Here
you are competitors one day and partners the next. Competition is healthy
but [in Silicon Valley] it's not personal. Political competition is always
personal."
Silicon Valley's political activity has taken various forms, beginning with
efforts by individual companies to beef up their Washington presence,
establish political action committees and develop personal relationships
with key politicians.
Given the entrepreneurial spirit and impatience with traditional politics,
wealthy executives here also have been drawn to the ballot initiative route
as the way to change California politics. And they have the advantage of
having enough personal wealth to help fund the costly battles.
Ron Unz, who made his money in the software business, has developed a new
career promoting initiatives ranging from ending bilingual education (which
passed) to reforming campaign finance laws (which failed).
Reed Hastings is making a second effort to make it easier for communities to
pass education bond issues and admits his first effort was mediocre. This
time he has added some high-profile help to his cause, including Davis, John
Doerr and John Chambers.
Venture capitalist Tim Draper, who calls himself "a freedom fighter," is
promoting an initiative to provide California families with $4,000 school
vouchers. He has hired Joe Gaylord, long the top strategist to former House
speaker Newt Gingrich, to help manage the campaign, but even many
Republicans say he faces an uphill fight.
Collectively the most ambitious initiative came three years ago when Doerr,
Chambers and James Barksdale, the former chairman of Netscape, looking to
harness the valley's political muscle after repelling a ballot initiative
that threatened the technology industry, created the Technology Network.
TechNet's primary mission is to advance Silicon Valley's interests in
Washington and Sacramento and to act as a fund-raising facilitator for
politicians from both parties. But the founders of TechNet sketched out a
more ambitious--some would say altruistic--role for the organization.
Their goal was to make TechNet more than a high-tech trade association by
focusing on issues of broader importance to the country, mainly education,
and by applying the principles of the new economy--speed, innovation,
decentralization, competition and technology--to public policy. The results
have been mixed, partly because of the political naivete of the industry
leaders, partly because some Washington politicians wanted to see financial
contributions before building genuine relationships.
"There was a hope that this community could be above partisan politics,"
said Dan Schnur, a Republican political strategist who worked for TechNet in
1998. "The natural political gravitational forces wouldn't allow that."
Like most start-up companies, TechNet has gone through leadership changes
and repositioning. A year ago Roberta Katz, former general counsel at
Netscape, was recruited to reorganize and refocus the operation. She has
drawn high marks for her work, which has cooled the partisan tensions within
the organization and identified ways the industry can put its resources
behind promising public policy experiments. But early this month she
announced she was leaving to join a start-up firm.
TechNet's evolution mirrors the valley's involvement in politics: still
trying to find the right niche. Those entrepreneurs who have devoted time
and energy to politics have come away with an appreciation for what it
demands. They have learned to speak the language and begun to master the
dance of Washington. But they remain resistant to Washington's ways and are
still certain that, as with everything else they have begun to examine,
there is a better way to do business.
Staff writer Ben White contributed to this report.
About This Series
This is one in an occasional series of articles that will look at
California, its people and economy, and the key role the state will play in
the 2000 election.
© 2000 The Washington Post Company