Lobbyist Jack Abramoff sparks a scandal at a time when the tech lobby is one of the biggest spenders and causes the IT industry to re-examine its practices.
The scandal now swirling around lobbyist Jack Abramoff, a former favorite of the tech industry, could hamper the efforts of IT heavyweights to advance their agendas in the coming year.
The amount the industry pays to influence government decisions now rivals that of veteran lobby operations such as the oil and gas business and telephone companies. Between 1998 and 2004, IT companies reported spending approximately $346 million on lobbying. In contrast, telephone companies reported spending approximately $366 million, according to documents filed with the U.S. Senate Office of Public Records. The strategy: spread dollars far and wide, covering both political parties and all decision makers. The industrys lobby grew from almost nothing 12 years ago to one of the 10 biggest spenders today, with Microsoft Corp. at the forefront of the spending.
But that influential machine may be in danger of breaking down as high-tech companies take a closer look at the lobbyists they employ and the image that those lobbyists are portraying in Washington.
The amount the industry pays to influence government decisions now rivals that of veteran lobby operations such as the oil and gas business and telephone companies. Between 1998 and 2004, IT companies reported spending approximately $346 million on lobbying, while telephone companies reported spending approximately $366 million, according to Senate documents.
The lobbying scandal precipitated by Abramoffs guilty plea this month to three felonies, including conspiracy involving corruption of public officials, has prompted lawmakers to publicly distance themselves from the system. Members of Congress are racing to introduce measures tightening lobbying disclosure laws, and hearings are slated to begin within weeks.
Abramoff has become notorious primarily for his work with Native American clients, but he lobbied on behalf of a wide variety of businesses, from the Hazardous Waste Action Coalition to the General Council for Islamic Banks and Financial Institutions. Among Abramoffs prominent IT industry customers were Unisys Corp., Microsoft and the Business Software Alliance.
Unisys hired Abramoff in 2003 to advance its causes in Congress and the White House while he was with Greenberg Traurig LLP, according to Senate documents. The Blue Bell, Pa., company paid Abramoffs company a combined $640,000 in 2003 and 2004.
Records reveal that working alongside Abramoff on the Unisys lobbying campaign was a former chief of staff to Rep. Bob Ney, R-Ohio. Ney was identified in the Abramoff case as receiving gifts from the lobbyist, and he has denied any wrongdoing.
Unisys spokesperson Guy Esnouf declined to comment for this article.
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The records pertaining to Unisys and Abramoff illustrate one of the main loopholes in the current lobbying rulesthe ability to sidestep the spirit of the law and provide less-than-full disclosure. When asked for the specific issues that Abramoff lobbied for Unisys, the response merely stated his efforts went to "promote the interests of Unisys in the Congress and Executive Branch."
Microsoft made use of Abramoffs services in 1998, when the company sought to influence legislation covering encryption, online commerce and network security, according to Senate records. At the time, Abramoff was with Preston Gates & Ellis LLP, to which the Redmond, Wash., software company paid $600,000 in lobbying fees.
Microsoft, through a public relations representative at Glover Park Group in Washington, declined to comment for this article, citing a longtime policy of not discussing lobbying strategies.
No evidence of high-tech corruption.