To: Microsoft Top Management
Re: Unsolicited Advice
I am one of the journalists who has embarked on the experiment of working for a software company. I probably speak for all of us when I say that it has been interesting. Recently, it's been especially interesting. A few months ago, everyone I met seemed to think that working for Microsoft was a pretty cool thing to do. Now, strangers treat us like we work for Philip Morris. The company's current legal and public-relations headaches leave me, personally, in an awkward position. I've devoted a good chunk of my career as a political journalist to criticizing the mercenary culture of Washington: influence peddlers, PACs, and so on. Suddenly, I find myself working for a company with big political problems. My bluff has been called. With my own prosperity possibly at stake, would I urge my employer to remain aloof from the Beltway bazaar?
No one else seems to share my disquiet. Ironically, one of the charges leveled against Microsoft of late is that the company has sinned by not playing the Washington influence game forcefully enough. Only now, the analysis goes, is Bill G. realizing his mistake in neglecting to hire lobbyists, dole out huge campaign contributions, and so on. The theme of a recent front-page story in the New York Times was that the failure to flex political muscle demonstrates an arrogance and stubbornness for which Microsoft is now paying the price.
The charge of lacking respect for Washington blurs the issues. It confuses 1) the valid observation that Microsoft often has a haughty attitude in general; 2) the at least arguable contention that it has run afoul of antitrust law; 3) the plausible suggestion that hiring more lobbyists, etc., would be a smart thing to do; and 4) the entirely absurd notion that refusing to pay tribute inside the Beltway amounts to some kind of ethical failing. Sit out the Washington legalized-bribery game? Why, that's downright un-American!
As you know, it's a bit of a myth that Microsoft is only now noticing the other Washington. Since the Justice Department filed suit Oct. 20, the government-relations department has hired no new lobbyists, in-house or on contract. The old roster is intact. It includes such hired guns as Grover Norquist Jr., an adviser to the speaker of the House, and former Reps. Vin Weber, R-Minn., and Thomas Downey, D-N.Y., who happens to be one of Al Gore's closest friends. Norquist and Downey have worked for Microsoft for some time, as have Michael Deaver and his colleagues at Edelman Worldwide, who do PR. Microsoft's D.C. office, with three full-time lobbyists, has been in operation since early 1995. Before that, the company had the help of lawyers in the Washington office of Preston Gates Ellis & Rouvelas Meeds--as it still does. This team has lobbied Congress and the executive branch on all the issues that matter to Microsoft: Internet freedom, encryption policy, immigration for high-tech workers, the tax-deductibility of stock options, extending the R & D tax credit, software piracy abroad, taxation of Internet commerce, and so on.
At the same time, I'm sure you will agree that Microsoft is somewhat diffident about playing politics. AT&T has 50 full-time representatives in Washington to Microsoft's three. AT&T donated $1.25 million in PAC contributions to both parties in the last election cycle. Microsoft gave $43,500. I can't say whether you have kept your political profile low for the right reason--maybe you were just cheap, or lazy, or out of your depth on the other coast. But whatever the cause, I would argue that your relative passivity in Washington is something to be proud of. You haven't tried to corrupt the democratic process by handing out wads of cash. You have done less than any company approaching your size to underwrite the sleazy business of influence peddling. Because Microsoft isn't looking for favors from the federal government, it resists paying a fee to self-appointed middlemen. The company gets no credit for this stance. Mother Jones has a piece in its new issue blasting Microsoft for politicking in Washington, which gives you the distinction of being attacked both for lobbying and not lobbying in the same month.
The practical issue is much harder than the ethical one. Sure, the world would be a better place if there was no corporate money in politics, and no hired-gun lobbyists, as it would if there were no land mines or nuclear weapons. But can one big company disarm unilaterally? Even Charles Lewis of the Center for Public Integrity--the least compromising critic of the revolving door--was quoted in the New York Times suggesting that Microsoft has to do what everyone else does. Other stories have pointed out that competitors are hauling out the big guns. Netscape recently signed, among others, Bob Dole (who couldn't even give his own Internet address correctly on national television) and Greg Simon, Gore's former domestic-policy adviser. Microsoft's competitors see Washington as their salvation. How can you fail to mount a defense?
I can't in good conscience argue that you shouldn't field a team. Modern legislation and regulation are technical and complex. Any big company needs skilled people who can process the implications of proposed changes and argue for its interests. I regretfully acknowledge that it may even make practical sense to have a few hired guns like Norquist, Downey, and Weber around--people of value only for their connections to power, not for any knowledge or talent.
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