The Nerds Are Flexing Their Muscle
A new power will be coming to Sacramento, regardless of which party is elected Tuesday to control the Legislature. Like the gold miners, the ranchers and the railroaders before them--and the oil producers and land developers--the nerds are about to take their proper place as a potent special interest.
Or so they say. These high-tech wizards from the Silicon Valley have vaults full of money and a newly acquired taste for politics. But they’re still novices.
“They’ve got a long way to go,” says one savvy Capitol veteran, an ally who insisted on anonymity. “They’ve been viewed as ineffective [politically], as people with a high opinion of themselves, who think because they’ve made a lot of money legislators ought to pay attention to what they say. They’ve come across as very arrogant and very naive.”
The key, of course, is to come across with money. That’s what they’ve been doing this all. Their new political action committee--California Technology Alliance--has dumped about $550,000 into legislative campaigns.
That’s venture capital, as they might call it. And there’s much more where that came from, a seemingly unlimited stash.
High-tech is fueling California’s economic growth. Already it’s our largest export industry, according to the state Finance Department. Silicon Valley exports alone last year leaped by 35%, rising to nearly $27 billion. In the last 21 months, computer software has produced 67,000 new high-wage jobs in California; electronics manufacturing another 52,000.
“We were wondering what was going to come along and replace aerospace and we have the answer now,” says Ted Gibson, chief economist for state government. “The high-tech industry is really what has allowed us to overcome the drag of defense cuts.”
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The prosperous become prey for predators, so they need to participate in politics for protection; also to sway public policy that helps them grow. But the computer nerds always have looked down upon the political class.
“Our attitude was, ‘We don’t like the way the political game is played so we’re just not going to play it,’ ” acknowledges Intuit co-founder Tom Proulx. “But you know what? It’s the only game there is. And if you don’t play, you get what you deserve. We can’t just bury our heads in the sand and assume that what we don’t know won’t hurt us.”
Proulx, 34, is president of the new technology PAC. He and his high-tech buddies were awakened politically by the escalation of shareholders’ lawsuits they considered frivolous.
They have poured an estimated $15 million into the fight against Proposition 211. The lawyer-backed initiative would make high-tech companies even more vulnerable to suits alleging fraud after a stock price had fallen. Other businesses, including Wall Street securities firms, have kicked in at least $22 million, setting a record for ballot prop spending.
Investing in new technology can earn fat returns. But, notes Silicon Valley venture capitalist Brook Byers: “Risk and reward go together. When these things fail, they fail big time. That’s why you put your money in CDs. If you want 20% return, you’ve got to expect risk.”
Byers is on the PAC board along with partner John Doerr. Both describe the Silicon Valley--in Santa Clara County--as less of a region than a state of mind, a pseudonym for high-tech industries throughout California.
“It used to be we were just about personal computers,” Doerr says. “Now we’re also about the Internet and the ‘new media’ and many regulated businesses. We’ve got to be involved politically.”
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The technology PAC has hired a well-connected Sacramento lobbyist, Cliff Berg, who until last year was the Senate’s top staffer. His job will be smoothed by PAC contributions to legislators totaling $1 million to $2 million in future election cycles.
They talk about backing moderates who are committed to education and the environment as well as economic growth and legal reform. But the long list of lawmakers they’ve donated to this fall runs the liberal-conservative gamut, indicating philosophy is less of a priority than practical politics. Their money is going to power.
“They were just geeks doing their high-tech stuff and being libertarian when suddenly they got aroused,” says Assemblyman Louis Caldera (D-Los Angeles), who received $20,000 from the PAC. “Now they’re going to be serious players and rival the trial lawyers, the insurers or anybody else.”
They’re already feeling sharp elbows in the political arena. A tax-the-rich activist last week dubbed them “the new robber barons” and warned they’ll “regret their fascistic intrusion into California public policy.”
Welcome to the Capitol, where sometimes the nicest thing you can be called is a nerd, a geek or a propeller head.
