GOP Targets Clinton Turf in Silicon Valley

Beset by scandal and shunned even by many in his own party, Bill Clinton will leave Washington this week to visit some of his most loyal and generous allies. His destination: Silicon Valley.

The president expects to raise a tidy sum for Democrats at a fund-raiser Friday at the new Tech Museum of Innovation in San Jose.

Against the backdrop of the presidential sex scandal, the stakes for the Democrats continuing to hold sway over Silicon Valley are huge. Historically aloof from the political process, the Valley in a few short years has come to account for about a quarter of the more than $4 million the high-tech industry has poured into federal candidate and party coffers in this election cycle so far.

Unlike high rollers in other industries, Silicon Valley executives bring more than vast wealth to the table. Their innovations, entrepreneurial drive and aura of technological progress offer an association that politicians of both parties relish.

Democrats Get 72% of Donations

About 72% of industry donations from the Valley and nearby Bay Area cities have gone to Democrats in this election cycle, compared with just 33% from high-tech sources in the rest of the nation. Silicon Valley high-tech companies and employees gave a phenomenal 97% of their soft-money donations--funds that cannot be used to support a particular candidate but are central to party building and get-out-the-vote efforts--to Democrats. Outside the area, similar businesses gave only 24% to Democrats.

But Clinton’s difficulties could boost Republicans’ efforts at silicon-to-gold alchemy in an area that both parties have targeted as a critical sphere of influence.

In the last year, the GOP began to reach out in earnest, partly through the increasingly influential Technology Network Federal Political Action Committee, known as TechNet. That avowedly bipartisan group supports the major parties in equal measure as it pushes a common high-tech agenda.

But the Silicon Valley companies and technologists that form the base of TechNet’s power are voting with their checkbooks. And they are voting overwhelmingly Democratic.

The Bay Area’s well-known liberal politics may play a role in this disparity. But it’s far from an explanation. Massachusetts, whose Route 128 region represents perhaps the second-most-prolific font of new technologies, has at least as solid a liberal-Democratic voting record. Yet high-tech companies and their employees there give mostly to Republicans.

The techno-cognoscenti say that top Democrats “get it,” that is, they support the rapid ascendancy of the Northern California-style information economy.

“It goes back to 1992, when 23 of us endorsed Clinton,” said Sandy Robertson, chief executive of BancBoston Robertson Stephens & Co., a San Francisco investment bank that specializes in high-tech start-ups. His $459,712 in contributions over the last six years make Robertson the area’s largest high-tech donor during the last three election cycles. Nearly all those donations went to the Democrats.

“[Clinton] had a meeting with us all and endorsed some pro-business things like NAFTA and made a very good impression. He seemed to understand that technology is very important to the economy of the United States,” said Robertson, a former long-term Republican who switched parties shortly after meeting Clinton.

“Since that time, he has really come through on a lot of the issues. The one that really got people turned on was the uniform standards for securities litigation.”

That legislation, which Clinton backed and was passed by Congress, would effectively limit shareholder lawsuits by restricting them to federal courts. Companies in the highly volatile tech-stock sector consider it a priority.

Robertson and John Young, former chief executive of Hewlett-Packard and a lifelong Republican, view the Clinton administration as having hijacked pro-business positions they would have expected from moderate Republicans.

Valley executives are more “issue-oriented” than high-tech execs in other parts of the country, Young said. Democrats embrace key issues, such as rapid Internet development and technology-oriented educational reform, he said, while Republican preoccupations with limiting access to abortion and promoting school prayer distract the party from its characteristic role as the champion of corporate America.

“You’re not going to get a lot of traction in Silicon Valley if you come in with a moralizing agenda that is socially intolerant,” said Wade Randlett, a key Democratic fund-raiser.

But to Rep. Thomas M. Davis (R-Va.), who represents the technology-rich suburbs of Washington, Silicon Valley companies are simply out of step with the mainstream. He attributes Democratic leanings in the Valley to smooth prospectors like Randlett mining the mother lode of Bay Area liberalism.

Indeed, Rep. Tom Campbell (R-San Jose), who represents portions of the Valley, views his constituents as more libertarian than liberal.

“The Valley started with the notion that it did not need government,” he said. “That ethos still largely remains, and it has both social and economic dimensions.”

Many Republicans can’t figure out that in the Valley, protecting the Internet from undue regulation is only half the battle, Campbell says. “Equally important is ‘Stay out of my private life.’ ”

This attitude embraces gay rights, abortion rights and communications security, he said. “The opposition to [unfettered] encryption is hard to understand in Silicon Valley.”

Vice President Often Visits ‘Gore-Techs’

Democrats added an active ingredient to a generally liberal social agenda and pro-business economic posture: celebrity. High administration officials and Democratic politicians lavished a degree of attention on the Valley that Campbell called “without parallel and without precedent.” Vice President Al Gore visits so often that a group of execs he meets with have been dubbed “Gore-Techs.”

“A lot of TechNet’s members are unsophisticated politically, and a great many are new to this process and they are star-struck,” said Dan Schnur, a GOP political consultant.

Sen. Ron Wyden (D-Ore.), a favorite of high-tech donors, says Silicon Valley executives seem to embrace leaders of either party who understand that the Internet has changed the economy fundamentally.

For their part, Republicans would like to combine support for the Valley’s economic engine and the traditional magnetism between large companies and the GOP to fuel a resurgence as the tech revolution grows beyond adolescence.

Campbell expects an uphill battle but sees cause for optimism. He credits House Speaker Newt Gingrich (R-Ga.) with focusing Republican attention toward Silicon Valley. Gingrich and Senate Majority Leader Trent Lott of Mississippi, as well as several GOP presidential hopefuls, have made pilgrimages to the high-tech mecca. And Rep. Christopher Cox (R-Newport Beach) has become the chamber’s chief proponent of making the Internet a tax-free zone.

Campbell points out that Republican lawmakers support the controversial H-1B visa plan that Clinton has threatened to veto. That bill would vastly increase the number of foreign high-tech workers who can be hired by U.S. companies--a key legislative goal for Valley executives. Schnur predicts that the GOP will attain fund-raising parity in the Valley by the 2000 election cycle.

In Silicon Valley, alliances can change almost as rapidly as the prices of Internet stocks. Mitchell Kertzman, chairman of Sybase Inc., a large maker of database software in Emeryville, headed the American Electronics Assn. in 1990. Kertzman told John H. Sununu, then George Bush’s chief of staff, that the Republicans were making a big mistake by taking the industry for granted.

“He thought I was nuts,” Kertzman recalled. Two years later, Clinton came to the Valley and swept the Republicans aside.

But the Democrats haven’t been inoculated against arrogance, said Kertzman. After giving almost $180,000 to Democrats in the last three election cycles, Kertzman scaled back his contributions to a trickle after being alienated by incessant fund-raisers.

“This will be a competition for at least a decade. You don’t become Hollywood for the Democrats in a heartbeat,” said Randlett. “You have to win every day.”

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1997-98 Donations to Federal Candidates and Political Parties

Non-Silicon Valley computer related companies and their employees, nationwide

Republican: $2,061,649 (66%)

Democratic: $1,040,637 (33%)

Total: $3,128,105

*

Silicon Valley computer-related companies and their employees*

Democratic: $710,462 (72%)

Republican: $277,270 (28%)

Total: $989,787

* Includes a few companies from adjacent Bay Area counties.

Researched by JENNIFER OLDHAM / Los Angeles Times

Source: Center for Responsive Politics based on Federal Election Commission data.

Note: Through Aug. 1. Represents all companies whose aggregate donations exceeded $1,000; this equals 96% of all funds.