Politicians Never Die

Politicians Never Die

Politicians Never Die

Tracking politics as it's practiced on the Web.
Jan. 21 2000 3:30 AM

Politicians Never Die

{{Industy Standard Gif#34651}} Slate and the Industry Standard join forces to examine the effect of the Internet on Campaign 2000.

{{Slate's Political Roundup#73099}}

A new adage is proving true in Washington: Ex-politicians don't retire. They join Internet companies.

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Traditionally, those who lost elections or opted out of public service after a long stretch have sought sometimes lucrative and often cushy appointments to corporate boards of directors. It's either that or lobbying. Lately, however, the flow of newly liberated politicos joining the Internet Economy is so great that some of these dot-coms might as well be known as dot-pols.

To be blunt, many of these folks know about as much about managing an Internet business as Bob Dole knows about the chemical makeup of Viagra. They plead ignorance about servers and banner ads and cookies. But they do know politics, and that's precisely why so many venture-capital-backed startups are wooing them. For many fledgling dot-coms, the big-name former politicos will play a key role in their dash for notoriety during this make-or-break presidential election year.

The latest virtual migrations from D.C. to S.V. came Wednesday when former Clinton White House spokesman Mike McCurry and former New Hampshire governor and Bush administration Chief of Staff John Sununu joined a slate of political consultants and contenders on the advisory board of a California-based Web site calling itself Grassroots.com. The site, which will officially launch next month, is a nonpartisan "political action destination," one of a growing number of sites betting that average voters would rather rattle off an e-mail to an elected official than sign a petition, call, or actually put pen to paper.

"I've generally avoided corporate boards," said Sununu, who sits on only one other board—that of Collegelink.com Inc., in which he holds 43,750 stock options, according to filings with the Securities and Exchange Commission. [Correction 1/26/00: Sununu serves on the board of directors of Kinark. He is a large shareholder in Collegelink.com but does not serve on its board.] But Sununu really liked the idea of Grassroots.com. "I liked the fact that they understand the biggest contribution they can make is to give people access to political information at the local level," he said. "There are 120,000 local elections a year. We read about a few hundred of the most prominent ones. Most people are concerned about local issues involving school boards, city councilmen and -women. That's where the real intense action is on the political side."

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As the presidential race heats up, new for-profit political Web sites are launching almost every week. They've cornered the market on generic, political-sounding names—Politics.com, Voter.com, Vote.com, SpeakOut.com, etc., but none has yet to turn a profit. Their business models are all based on attracting a lot of people to content or chat rooms or polls or on making it easier to e-mail elected officials. They all seem to believe they'll reach solvency by attracting advertisers, which tends to overlook the tendency of people on the Internet to turn to already trusted brands for information and commerce.

This crop of political startups is appealing to legions of brand-name politicians willing to lend their names and credibility to often exciting-sounding ventures. Many said in interviews that these new sites that help put people in electronic touch with their representatives remind them of the politics of old, when door-to-door campaigning and kissing babies won out over multimillion-dollar TV blitzes and negative campaigning.

But that's not the only thing that's appealing to the likes of former Reps. Tom Downey, Susan Molinari, and Randy Tate; former Reagan White House Deputy Chief of Staff Michael Deaver; Clinton adviser James Carville; former vice presidential nominee Geraldine Ferraro; and former White House counsel Jack Quinn. The flow of former members of Congress, ex-White House brass, presidential consultants, and former political contenders to the boards (and, less often, to the staffs) of politically oriented Web startups is so great that one would think they were giving something away. Oh, wait, they are giving something away: stock options.

"You're seeing the inevitable cashing in of politicians on the Internet," joked Downey, a former 18-year congressman from Long Island, who is now a high-powered lobbyist in town. "The Internet has already changed commerce and it's going to do the same thing to politics."

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Downey serves on the advisory board of SpeakOut.com, a Washington-based startup that aims to empower users to interact with decision-makers through a community Web service. The company has already secured more than $8 million in venture-capital financing. And it has attracted a bipartisan who's who panel of advisers, including Republicans Deaver, Molinari, and Bond, and Democrats such as Carter Eskew, a former adviser to Vice President Al Gore. Among the duties of the advisory panel are guiding the technologists about politics and helping design products that attract users to the site, according to Ron Howard, chairman and founder, who also founded Hayes Corp., the modem manufacturer.

"There's no question it's a marriage made in heaven," said Downey. "It's your opportunity to be involved in politics, touch on policy, have some impact, and have a piece of a company that could conceivably do very well."

No one will divulge the numbers of options they are getting. These are private companies right now. They don't have to make large stockholders known until the company files with the SEC to go public. McCurry jokes that he doesn't even remember how many options he's been promised, and he really doesn't know if they're worth anything. (The rule of thumb is that they're only worth something if the company is a success and is acquired or goes public.)

"We're not stupid," McCurry joked, about the steady stream of politicians he's following to the Web. "But there is a little more noble cause in this for me. I've been spending a lot of time, in the year plus since I left the White House, talking to people about how we can improve the quality of information available to the American citizen. There should be a little altruism in everyone's life," McCurry said, "and a few stock options."

Some startup CEOs say they don't want to play the game of the Battle of the Political Boards. Justin Dangel, founder of Voter.com, said he was more interested in hiring political experts, such as former Rep. Randy Tate, who led the Christian Coalition until November, and former White House political director Craig Smith.

"Consultants and advisers are liabilities you pay for," Dangel says. "Staff are assets."