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Clinton Woos Silicon Valley Leaders, Says He Opposes Prop. 211

Politics: President takes stand in San Jose campaign swing. Initiative would make it easier for shareholders to sue firms.

August 08, 1996|JOHN M. BRODER | TIMES STAFF WRITER

SAN JOSE — President Clinton, bidding to untangle one of his few political thickets in California, told a group of high-technology executives here Wednesday that he opposes a state ballot initiative that would make it easier for shareholders to file costly lawsuits against struggling companies.

Clinton, on a brief campaign swing before vacationing this weekend in Jackson Hole, Wyo., told the Silicon Valley business people that he is against Proposition 211 because such legal changes should be handled at the federal, not state, level.

The initiative is sponsored by a group of trial lawyers, many of whom reap lucrative profits suing companies--chiefly growing high-technology firms--when their stock prices fall sharply.

Clinton thus sided with high-tech firms, who argue that they should not be subject to costly harassment because of the vagaries of the marketplace. Many growing high-tech concerns also complain that they have been victimized by nuisance suits filed by lawyers specializing in shareholder litigation.

The president "deeply believes that when it comes to securities law, that this ought to be something that the Congress of the United States does on a national basis," said White House Chief of Staff Leon Panetta, a former congressman from Monterey.

"These kinds of [state] initiatives are going to undermine national law and for that reason he does not support the initiative," Panetta said.

The president's relations with Silicon Valley have been strained since he vetoed a congressional bill last year that would have put limits on such lawsuits. Congress overrode that decision, the only time it has reversed a Clinton veto.

Notwithstanding a recent Times poll showing him ahead of Republican Bob Dole by 27 percentage points in California, Clinton devoted Wednesday evening to courting the disaffected high-tech constituency.

After a speech at Muir Middle School in San Jose lauding the role of computer technology in education, Clinton attended a dinner hosted by Steven Jobs, the computer pioneer who now runs Pixar Inc., a digital animation film company.

Both at the dinner--attended by about 60 business people--and at an earlier informal meeting with some of the same executives, Clinton announced his opposition to Proposition 211, White House aides said. Both events were closed to the press.

Clinton, who is scheduled to visit Los Angeles today, vetoed the bill to limit shareholder lawsuits at the behest of plaintiffs' attorneys, one of his most reliable sources of campaign donations. But in opposing Proposition 211, he is parting company on the issue with San Diego attorney William Lerach, a major Clinton contributor and one of the initiative's main backers. Additionally, Lerach's chief political advisor is Bill Carrick, who serves as Clinton's top California strategist.

The proposition also is backed by the California Democratic Party.

Clinton's position was immediately attacked by consumer advocate Ralph Nader, who will appear on California's ballot as the Green Party presidential candidate. Nader, who supports Proposition 211, blasted Clinton for coming out against the initiative "after drinking the milk from the Silicon billionaire's campaign cash cows. . . . "

The president's California trip is his 26th to the state since taking office, and Clinton aides acknowledged that it was timed mainly to draw attention from Dole a few days before the former senator receives his party's presidential nomination in San Diego.

The trip, being paid for by Clinton's reelection committee, is a matter of "touching base" with state voters before the GOP convention, said campaign spokesman Joe Lockhart.

Republicans "are going to tell some tall tales, and we want to get our story out," Lockhart said.

Clinton is to travel to Salinas today to speak on measures his administration is taking to combat juvenile crime. He then is to fly Los Angeles late this afternoon and, at a scheduled appearance at the ports of Long Beach and Los Angeles, is to stress the importance of international trade to the California and American economies.

This evening, he plans to attends a fund-raising dinner for Democratic congressional candidates at the Los Angeles home of cable television executive Marc Nathanson. He is to close the day with an address to young Democratic donors at the Armand Hammer Museum of Art in Westwood.

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