IT Lobbies Give Vendors Clout in Washington

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."

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