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Silicon Valley's Political Myopia

July 04, 1999|Steve Scott | Steve Scott is political editor for California Journal, a nonpartisan monthly magazine covering politics and government

SACRAMENTO — If there is one thing about which California's politicians are not shy, it is raising money. The state's open-season campaign-finance laws, coupled with the expense of running for office, can turn even the most camera-wary Assembly member or low-profile statewide candidate into a practiced arm-twister. In many cases, the pitches for money are directed at corporate CEOs or their public-affairs officers, since California, unlike many other states, permits direct corporate contributions to political campaigns.

For fund-raising staffs, Silicon Valley should figure to be a version of Oz: a temple of high-tech affluence. It already has become an early port of call for money-seeking presidential hopefuls. Last week, Texas Gov. George W. Bush, the leading contender for the GOP nomination, collected $850,000. If California's high-tech executives are willing to give to these political migrants, they should jump at the chance to "invest" in their home-state pols, the ones who can cut them some tax breaks and ease them through California's regulatory maze.

But it hasn't worked out that way.

The Silicon Valley boom has been a bust for the state's political leadership.

None of the top 10 corporate or PAC donors in last year's elections were from high tech, and of the top 20 individual donors, only two--NetFlix CEO Reed Hastings and venture capitalist John Doerr--boast Silicon Valley pedigrees. Giants such as Sun Microsystems and Yahoo spent zilch on state political campaigns last year. The collective contributions made by three other high-tech companies--Apple, Netscape and Oracle--totaled $23,500, and that included individual contributions made by their CEOs.

Perhaps most telling were the donor lists for the major-party gubernatorial nominees, Democrat Gray Davis and Republican Dan Lungren. Among givers of $10,000 or more during the general-election campaign, only about a dozen or so individuals and companies on each side had Silicon Valley addresses, and some of these were insurance or finance companies. Most of what did go to the top of the ticket went in the "wrong" (i.e. losing) direction. The one high-tech giant that did bet right was Microsoft, which gave $10,000 to Davis, and it's based in Redmond, Wash.

There are exceptions to this trend. Local legislators like San Jose Republican Assemblyman Jim Cunneen and San Mateo Democrat Ted Lempert received contributions from some largely politically indifferent companies. More established companies like Intel, Advanced Micro Devices and Hewlett-Packard are more politically engaged, but their donations pale in comparison to the hundreds of thousands of dollars given to state and local races by the likes of the Irvine Co., Archer Daniels Midland or Chevron.

So where does California's high-tech political money flow?

East to Washington.

Most companies large enough to have public-affairs departments tend not to think of themselves as California companies but rather as global megaliths for which Silicon Valley is merely a street address. The issues that affect their bottom lines involve international trade, intellectual-property rights and federal tax policy.

True, the Legislature and the governor often dabble in these areas. But to an industry that doesn't dump massive quantities of toxics into water or pollute the air, state regulations are mostly viewed as a cost of doing business. TechNet, the high-tech consortium charged with coaxing Silicon Valley CEOs into collective action on public affairs, claims it's concerned with both federal and state issues. A visit to its Web site, however, reveals a lot of talk about Congress and relatively little about Sacramento.

There are issues with which the state is heavily involved, notably civil-liability law and education policy. But in these areas, most Silicon Valley bigwigs have another Sacramento workaround: the ballot initiative. The genesis of TechNet itself was an initiative campaign launched, in 1996, by Intuit co-founder Tom Proulx. Agitated about what he viewed as frivolous lawsuits aimed at high-tech "deep pockets," Proulx coauthored three measures, for the March 1996 primary ballot, aimed at curbing the state's trial bar. All were defeated, but Proulx et al. returned the favor in November by raising more than $40 million to defeat Proposition 211, a pro-lawyer counterinitiative.

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