The D.C. Insider
Only Silicon Valley could have produced TechNet, an amalgam of fund raising and influence peddling born during the infancy of the dot-com boom.
Founded in mid-1997, TechNet was different from the beginning a reflection of its roots in hyperkinetic-yet-casual Silicon Valley, where flux is revered as a bedrock value. The organization aimed to ingratiate itself to Capitol Hill, but rooted itself in California and never had much of a presence in Washington, D.C. TechNet fought in the ideological trenches on certain issues, but remained aggressively bipartisan. It has had separate Democrat and Republican wings conducting their own fund-raising raids and working to cotton favor with TechNets ostensibly nonpartisan public-policy wing.
TechNets political schizophrenia is best characterized by the lobbying efforts of John Doerr, the storied Kleiner Perkins Caufield & Byers venture capitalist, who perpetually stumped for Democrats, and Jim Barksdale, the former president and chief executive of Netscape Communications, who did equally fervent work for Republicans. Both are high-profile TechNet leaders, and they see the world through different political lenses.
Such divisions havent made for a placid institution behind the scenes, say people who have worked for TechNet or dealt with its envoys.
"It made it oh-so-much-more interesting," says Ellen Stroud, TechNets former director of communications, who now runs her own consulting firm. "To put out a press release that your vice president of Democratic politics, your vice president of Republican politics and your director of public policy all agreed upon it could take weeks."
The roughly 300-member organization, which comprises high-tech CEOs and other industry leaders, has invested much of its time in political fund raising for congressional elections, but it also counts several policy decisions as victories: Congress vote to allow more foreign citizens to work in America, and legislation lim-iting shareholder class-action lawsuits, among others.
However, TechNet has suffered from revolving-door leadership and, like a software product, has undergone a process of constant reinvention.
Welcome to TechNet, version 3.0.
After a lengthy executive search, TechNet earlier this year crowned Rick White, a Republican and former Washington state representative, as its leader. Tech-policy types say the appointment was a signal that the organization is finally taking Washington, D.C., as seriously as it should.
"Over the past few years, TechNet has gotten serious about [Washington, D.C.] at a fund-raising level, but the appointment of White shows they are serious about engaging just as seriously on policy," says Dan Schnur, a prominent Republican political consultant who helped found the organization. "Thats a huge step forward for them."
Originally, Schnur says, TechNet wanted to serve as a bridge between political and technology communities. But for that to work, the organization needed a leader who understands both communities. "After a string of very credible technology executives running the organization, the shift to White puts TechNet in a position where they can finally fill that role," he says.
White, whose Congressional District included Microsofts headquarters, helped found the Congressional Internet Caucus, a 150-member group of Capitol Hill lawmakers interested in nurturing the Web. He is regarded on both sides of the political aisle as pragmatic as opposed to ideological. He is also said to be skilled at building bridges between parties, and versed in the subtleties of high-tech evangelism.
White "will give TechNet even greater credibility," says Jack Krumholtz, Microsofts director of government affairs. "Rick is a perfect fit for TechNet. He sort of brings a mixture of both policy experience and expertise, and an understanding of the industry and technology which, for an organization like TechNet, makes him ideally suited to be at the helm."
The halls of Congress are buzzing with legislative activity that affects the foundering technology sector, including privacy, Internet taxation and export policy. Decisions made during this Congressional session could reverberate through high-tech companies for years. Chief among TechNets policy priorities this year are education reform an issue that speaks to the thirst for skilled technology workers in the U.S. industry self-regulation for online privacy, and extending research and development tax credits for businesses.
If TechNet wants to emerge as a serious player, now is the time to plunge into the Washington, D.C., game with gusto.
White says thats the plan. "Were at a great point right now," says White, who pledged to the TechNet board that he would remain with the organization for at least three years. "They need a little stability and continuity, and Im going to try to provide that."
With the myth of a robust technology sector that fuels an endless horizon of American prosperity being eclipsed by its mirror opposite the myth of a crippled technology sector that drags the country into economic ruin TechNets mission to wield influence is now harder, "but it makes it that much more important," Stroud says. "Members [of Congress] need to know technology is here to stay, and thats why TechNet exists: to educate members who dont think they need to be educated."
So far, however, the organization has failed to make the Capitol Hill splash that it promised, says Rob Atkinson, director of the Technology and New Economy Project at the Progressive Policy Institute, a centrist Democrat think tank. And the blame, he says, rests squarely with the people running the organization.
"Unfortunately, TechNet ended up becoming more of a dating service, where politicians could meet up with CEOs, get contributions and listen to what industry has to say," Atkinson says. "I dont think that was the most effective role for TechNet."
TechNet, Atkinson says, should have worked to fashion a reputation as Silicon Valleys ambassador to Washington, D.C., one that meets the Hill on the Hills terms, and sells technology as something unique and vastly important to the economic vigor of the country at large. Instead of focusing on discrete suites of pointed issues such as Permanent Normal Trade Relations status for China or year-2000 liability reform, for example the organization should be hitting harder on broader themes, he argues. Atkinson criticizes the organizations pointed decision to remain out of Washington, describing its modus operandi in the past as "a real slash-and-burn mentality."
"It wasnt about building relationships; it was about winning on particular things," Atkinson says. "You can use that sort of hype about Silicon Valley Yeah, its moving fast, its dynamic and thats what politics should be but that is naive and disrespectful and not helpful. . . . Thats not what democracy is all about."
From Valley to Beltway
Now that White is in charge, however, Atkinson says he is hopeful that the organization is now in its Washington, D.C., ascendancy.
White has not yet fully committed to opening a Washington, D.C., office, but he predicts the organization will open a capital office soon.
White says Silicon Valley executives have realized they have to be more involved with government affairs than they used to be. "Its still not quite where other industries are, and it may never be there," he says. "But these guys are just about at the point where they are coming of age. They are understanding they must have an ongoing conversation with the government."
Others who have worked closely with TechNet are quick to dismiss the notion that the organization has been too remote from the capital to be effective.
"There has been too much made of the fact that TechNet has not been active in D.C. in the past," says Mark Gitenstein, an attorney who has worked as TechNets Washington, D.C., consultant on securities litigation reform. "The biggest issue they worked on last year was the Financial Accounting Standards Board, which was done outside of the Hill."
As for the TechNet attitude, Gitenstein says: "I think you could say its always been pretty freewheeling and untraditional. Thats good. I think thats healthy."
Wade Randlett, who along with Schnur helped found the organization, says TechNet must be based in Silicon Valley.
"If you want executives involved, you need to be where they are, and they are in Palo Alto, [Calif.,] not Washington," says Randlett, now a sales executive at Silicon Valley start-up Sigma Storage. "There was a particular role that got filled by TechNet: the role of doing some serious politics in your public policy, as opposed to just taking positions on issues."
By politics, Randlett means fund raising and thats clearly a big part of TechNets mission. During the last election cycle, the organization doled out $137,034 to candidates in federal elections, with 54 percent of the money going to Republican politicians and 46 percent to Democratic candidates. The political action committee (PAC) also forked over $100,024 in soft-money contributions, divided almost evenly between both parties.
TechNet is one of the few organizations with a policy-oriented bent that has waded into politics fund-raising muck. By contrast, the PAC for the Information Technology Association of America, which is one of the leading high-tech trade groups in Washington, D.C., handed out just $6,984 in political contributions during the last election cycle, with 96 percent of that sum ending up in Republican coffers.
Other technology PACs include Microsofts, which delivered $789,499 to candidates 60 percent to Republicans, 40 percent to Democrats and spread another $2,376,926 in soft-money donations 55 percent to Republicans, 44 percent to Democrats. The Intel PAC showered $205,287 on federal candidates, and Amazon.coms PAC put $14,000 in politicians campaign pockets, as well as $1,574 in soft-money contributions to the Natural Law Party of the U.S.
TechNet "took a lot of the pressure off of [trade organizations] because they didnt have PACs," Stroud says. "TechNet had people to raise money. That is something the government relations people at the other associations dont have."
Its part fund raiser, part political campaigner, part policy wonk. Its Silicon Valley, its volatile and its becoming seasoned.
Perhaps, finally, TechNet is burying the khakis and golf shirts in the back of the closet and starting to shop a bit more at Brooks Brothers, Capitol Hills conservative haberdashery.
"TechNets founders wanted Washington to come to Silicon Valley on Silicon Valleys terms," Schnur says, "but they ended up playing the Washington game on Washingtons terms instead."