The growing influence of Silicon Valley on the US political process has been highlighted by the publication of an independent survey, which shows that the IT industry paid out $7.3 million in campaign contributions to sway decision makers in Washington in 1996.
The current session of Congress is scheduled to consider 13 pieces of proposed legislation that would have a direct impact on the IT industry. These range from the Tax Free Internet Act 1997 - which prohibits the taxation of the Internet or other online services and is likely to be approved - to the Encrypted Communications Privacy Act, which is currently held up at a Judiciary Committee hearings stage.
In the light of the increased level of IT-related legislation heading for the statute books, Silicon Valley companies are becoming correspondingly more active on the political landscape. As well as paying out to support specific campaigns and politicians, they are spending more to hire professional lobbying firms to act on their behalf.
The survey - from the independent Centre for Responsive Politics - divides spending into soft money or individual contributions, and funds channelled through self-styled political action committees (PACs), which an increasing number of firms see as a more up-front, legitimate way of making contributions. The Centre cited Oracle as an example of a firm that set up its own PAC last year and so far in 1997 has donated more money via that than it did in the whole of 1996.
The most significant PAC funder was EDS, which specialises in picking up central government services contracts on both sides of the Atlantic. EDS spent $237,749 in 1996 through its PAC, $127,850 of which went to the Republican party and $109,899 to the Democrats. It was followed by Texas Instruments on $100,500 and Computer Sciences on $71,100.
But PAC funding remains a relatively small component of an overall political contributions total, which has increased by 52 per cent since 1992. Many companies are making individual contributions to fund specific individuals or causes. The Centre cited the example of 14 Microsoft employees who gave $7,600 to a particular Republican representative in 1995 at a crucial point in the progress of a Securities Litigation Reform bill.
Microsoft employees were the third most politically generous, contributing $114,089 worth of donations, while in second place were staff at Sterling Software on $128,067. But well ahead of the rest of the pack was EMC with $206,709, $204,259 of which went to Republicans with the Democrats mopping up a mere $1,450.
Among the US political figures to benefit were Republicans Tom Campbell, Thomas Davis and Rick White, the latter representing Microsoft?s home town of Redmond, as well as household names such as Ted Kennedy, Joe Kennedy and Newt Gingirch, the disgraced Speaker of the House who was slammed for the tawdy nature of his financial dealings, including fund raising.
IBM is strikingly absent from the list of campaign contributors, preferring to make its presence felt in Washington courtesy of specialist political lobbying firms. During 1996, it spent $4.9 million on lobbying using the offices of US firm Podesta Associates. It was followed by Texas Instruments on $3.6 million, EDS on $1.8 million and Microsoft on $1.1 million.
The success of all this spending is a moot point, but the industry can point to some notable victories in recent times, both as a group force and on an individual basis. For example, Silicon Valley companies united last year to defeat Proposition 211, a planned new law that would make it easier for investors to bring lawsuits against IT firms if they failed to perform financially exactly as they predicted.
On an individual basis, Silicon Graphics' Cray Research arm pulled off a coup last week when it succeeded in persuading the US Commerce Department to penalise Japanese supercomputer firms by imposing crippling duty on their products when exported to the US market. The company spent $300,000 on lobbying in Washington last year; keeping Japanese rivals out its domestic market will make that outgoing extremely worthwhile.
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