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Will Political Donations Keep Microsoft Intact?
Published on Sunday, July 1, 2001 in the San Francisco Chronicle
Will Political Donations Keep Microsoft Intact?
by John Wildermuth
Microsoft's future could ride on a decision that's likely to have as much to do with politics as with anti-trust law. And with politics comes money.

In recent years, the software giant has showered millions of dollars on politicians of both major parties, lawmakers who now will decide whether to take a stand on one of the nation's biggest anti-trust suits.

Overall, Microsoft and its employees were the country's fifth-largest political donor in the 2000 election -- contributing $4.7 million to politicians and their committees. Republicans received about 53 percent of that money.

For Microsoft, the stakes are huge. The U.S. Court of Appeal's decision Thursday to toss out a lower court's plan to split the high-tech firm into two separate entities was another step in a long legal battle. Now Justice Department attorneys must decide whether to appeal the decision to the Supreme Court, retry the penalty phase in a lower court or settle the case.

The company's wide financial reach makes it easier for politicians to duck and wait for the heat to pass on the issue, even those expected to take a position.

Republican House Speaker Dennis Hastert and his Democratic counterpart, Minority Leader Dick Gephardt, who are not known for agreeing on issues, made similar statements in the wake of Thursday's ruling.

"Let's hope that we can put this lawsuit behind us," Hastert said.

For Gephardt, the ruling hopefully "will cause the parties, and the court, to go back and see if they can come up with an appropriate, sensible agreement. "

Both Hastert and Gephardt list Microsoft as a campaign contributor. According to Federal Election Commission records, Gephardt received $2,500 in 2000 and another $5,000 this year. Hastert received $2,500 last year and an additional $1,000 this year, FEC records show.

And in a joint statement, Sen. Mike DeWine, an Ohio Republican who received $9,000 in campaign contributions from Microsoft last year, and Democratic. Sen.

Herb Kohl of Wisconsin said they "will continue to monitor future developments in the case closely, but feel strongly that the case must remain above politics." The two are the ranking members of the Senate's anti-trust subcommittee.

Microsoft didn't always seek support in Washington. For years, the software giant prided itself on steering clear of national politics and lobbying. But when their legal troubles started, that attitude quickly changed.

"Microsoft, before their anti-trust case, had almost no presence in Washington," Arizona Sen. John McCain told The Chronicle editorial board earlier this year. "Now, I almost don't know a lobbyist who's not on their payroll."

During the last election campaign, Microsoft employees gave more than $50, 000 to the Bush campaign, while the company and its workers gave $500,000 in unlimited, soft money donations to the Republican National Committee for use in Bush's battle against Democrat Al Gore. Gore did not receive any money from Microsoft, according to election commission records.

According to data supplied by the Center for Responsive Politics, Microsoft employees also donated $22,500 to Bush's recount effort, and a Microsoft executive gave $100,000 to the Bush-Cheney Inauguration Committee.

Ideology has little to do with where Microsoft spreads its money. In the 2000 election cycle, the company donated to 247 House campaigns and 61 Senate candidates. House Republicans received $326,000 while Democrats took in $262, 000.

"Companies that are really toeing the 50-50 party split on donations are basically pragmatic," said Sheila Krumholz, research director for the Center for Responsive Politics, a nonprofit group that monitors political contributions. "They court all sides."

Rep. Nancy Pelosi, a liberal Democrat from San Francisco, received $1,000, the same as conservative Republican Rep. Dan Burton of Indiana. Liberal Democratic Rep. Charles Rangel of New York took in $4,000 from Microsoft, while conservative Republican Rep. Dick Armey of Texas received $5,000.

It was the same story in the Senate, where Democrats Dianne Feinstein of California received $8,000 from Microsoft and Edward Kennedy of Massachusetts received $6,000. On the Republican side, Microsoft gave Trent Lott of Mississippi $5,000 and Missouri's John Ashcroft received $9,000.

Ashcroft, who lost his bid for the Senate, has since become attorney general, the man in charge of the Justice Department and its handling of the Microsoft case.

President Bush is waiting to hear from Justice before making any public statements on the future of the case. But White House spokesman Ari Fleischer hinted that the president wouldn't mind seeing a settlement, a position that would match that of Microsoft founder Bill Gates.

"The president believes that people should work hard to enter into agreements," Fleischer said Thursday. "And the president believes that there's too much litigation in our society, generally speaking."




Shown below are total soft & PAC money contributions from Microsoft Corp.

1991-1992        $18,750

1993-1994        $42,741

1995-1996       $120,500

1997-1998     $1,049,816

1999-2000(x)  $2,306,769

(x) Jan. 1 1991 through June 30, 2000(x)

Chronicle Graphic

CHART: (2) PAC Contributions PAC contributions from Microsoft to members of committees with jurisdiction over issues importan to the company are shown below. 1995-1996 1997-1998 1999-2000(x) House Committee on Commerce $12,000 $30,500 $84,000 House Committee on the Judiciary 8,000 26,000 63,999 House Committee on Ways & Means 3,000 13,000 28,500 Senate Commerce, Science & Transportation Committee 4,500 29,000 44,000 Senate Finance Committee 5,000 10,000 16,000 Senate Judiciary Committee 1,000 13,000 39,000 (x) Jan. 1, 1991 through June 30, 2000 Chronicle Graphic

©2001 San Francisco Chronicle


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