Tech Wields Its Political Clout

TechNet, a political network of CEOs, has a growing presence in Washington, and its placement of a well-connected administration insider at its helm mirror a larger trend in the industry.

Until this month, Lezlee Westine answered directly to President Bushs top adviser, Karl Rove, but as of next week, she will answer to CEOs Craig Barrett, of Intel Corp.; John Chambers, of Cisco System Inc.; Stratton Sclavo, of VeriSign Inc.; and 14 other IT luminaries.

The newest face of the IT industry here, Westine is leaving her job as director of public liaison and deputy assistant to Bush to become CEO of TechNet, a political network of CEOs. She will open the first Washington office for the association, which, until now, has operated out of its base in Palo Alto, Calif.

TechNets growing presence here and its placement of a well-connected administration insider at its helm mirror a larger trend in the industry. Having once shunned politicking—in keeping with a West Coast, independent, free-spirited image—IT is fast becoming one of the countrys highest-profile groups seeking to influence Capitol Hill, the White House and federal agencies.

"I think it reflects a maturing and an evolving of the industry and a realization that we are now very established," said Westine, who worked at TechNet from 1997 until she joined the White House in 2001. "So much of the decision-making is happening here."

But as its power grows, the IT lobby increasingly looks out for its parochial interests—often at the expense of users, experts say. Policies on issues ranging from spam to security to patent law to stock options are being influenced by companies such as Microsoft Corp., Intel and IBM in ways that protect innovation but often eschew consumer protections, they say.

TechNet is not alone in turning to Bush administration insiders to lead the lobbying charge.

This spring, the Washington-based Information Technology Association of America hired Stephanie Childs, a former Department of Commerce adviser, to lobby on tax policies. The Cyber Security Industry Alliance, in Arlington, Va., joined the crowded field of IT lobbying a year ago with Paul Kurtz, former special assistant to President Bush, at its helm. Ed Ingle, former deputy assistant to the president and deputy Cabinet secretary, joined Microsofts in-house lobbying team in 2003.

Also in 2003, the Washington-based Computer Systems Policy Project, another CEO-level trade group, hired Bruce Mehlman, former assistant secretary for technology policy at the Commerce Department.

With Republicans retaining control of the White House and Congress, Beltway observers say that hiring administration insiders is the most pragmatic way to get things done. The organizations, however, generally insist that the insider is simply the most qualified candidate for the job.

"My policy of hiring is to hire the best person available. It had nothing to do with the fact that she worked for the Bush administration," said ITAA President Harris Miller about hiring Childs. "Ive found that hiring the best person is preferable to hiring the person who is the most connected. Were here for the long term."

For an industry that had no discernible presence here as recently as a decade ago, IT grew with record speed into one of the 10 biggest lobbying spenders in town. The amount of money the industry pays to affect public policy and government decisions now rivals that of the oil and gas business and the telephone companies.

/zimages/2/28571.gifClick here to read about the growing number of cyber-security companies joining the lobbying ranks.

The spending is led by Microsoft, which blazed the trail to Washington when it set up a one-man lobby shop to assist in the battle against the antitrust lawsuit brought by the Clinton administration in the mid-1990s. By last year, the Redmond, Wash., software maker was paying no fewer than 17 outside organizations—mostly Washington law firms—to lobby beside 14 in-house lobbyists on about 60 issues.

In the last five years, Microsoft reported spending approximately $39 million on direct lobbying at the federal level, according to documents filed with the Senate Office of Public Records. The sum does not include money spent routinely to influence lawmakers through media campaigns, advertising in Washington newspapers, grass-roots initiatives, membership in trade associations and other lobbying activities, all of which add up to millions of dollars.

The other major industry players have escalated their spending at a comparable pace. Intels lobbying grew steadily from just over $1 million in 1998 to approximately $6 million last year, counting 14 in-house lobbyists and six outside firms. In the last five years, Intel reported spending approximately $28 million, IBM reported spending $28.4 million and Oracle Corp. reported spending $11.4 million.

It is not unusual for young industries beginning to mature to head for this city once they achieve a size and prevalence that catches the eye of policy-makers, but the pace at which ITs spending here has grown is exceptional. "The high-tech industry in general increased its political involvement faster than any other industry," said Steve Weiss, spokesperson at the Center for Responsive Politics here. "The speed with which they did it—and the pure increase in the amount of money spent—is something we have never seen before."

Next page: IT continues to produce more trade groups.