High tech makes push for China trade bill

Republicans make no apologies for courting the high-tech industry. Indeed, since the government sued Microsoft Corp. for antitrust violations, Republicans were some of earliest and fiercest critics of the move, seeking to smear the case with the ill fortunes of an embattled Clinton Administration Justice Department.

The stakes are high. The GOP's grip on the House is tenuous at best. The Democrats, still smarting at the 1994 loss of the House - after 40-years of control - to the so-called Newt Gingrich led "Republican Revolution," are salivating at the thought of regaining it this election year. And both are courting the absurdly wealthy and increasingly hungry-to-play high-tech industry in an effort to win their support.

The GOP unabashedly rolled out its "e-Contract 2000" on May 5th, an event that sounded more like a technology love fest than a hardcore political agenda.

"America's high-tech future is vested not only in the use of the Internet, but in the creation of all sorts of new high-tech products being developed all over the nation," said House Majority leader Rep. Dick Armey, R-Tex., at the unveiling of the e-Contract. Armey then essentially waved a red flag at the high-tech industry, signaling them about the hottest and highest-priced lobbying issue in Washington, D.C. now: this week's vote on permanent normal trading relations (PNTR) with China.

"We'll vote this month to extend [PNTR] with China," Armey said, "to ensure that high-tech America can export to the growing Chinese economy."

The Democrats have countered with similar programs and similar promises. But on the China issue they have run into an ideological dilemma: historically the Democratic party is supported by organized labor, which ardently opposes PNTR for China on the grounds that low-paid Chinese workers will siphon off American jobs.

The fact is, the high-tech industry finds itself competing for influence and recognition in Washington, D.C. on a time frame much like the "Internet time" clock they face in the business world every day. Although for years the high-tech industry shunned politics, and Washington, D.C. especially, its players have learned that Washington, D.C. and its ways can hurt them if they don't pay attention.

"As the [new economy] companies have grown along with the industry they're now running into the political process and the threat of regulation," said Dan Hoydysh, director of Unisys corporation's Washington, D.C. office. "What these companies have to do - and some of them didn't even exist two years ago - is they have to deal with the fact that Washington can do things to their industry," said Hoydysh, a former Department of Commerce official. "Everybody has to pay attention to what Washington does."

Ten years ago the high-tech industry was barely a blip on Washington, D.C.'s radar screen; the industry as a whole had almost no official full-time Washington, D.C. representation and political contributions - the mother's milk of the political process here and the currency of access and influence -were almost non-existent.

But in the last few years, the high-tech industry has burst on the Washington, D.C. political lobbying scene with a vengeance and it has done it faster than any other group, says Sheila Krumholz, research director at the Center of Responsive Politics, a Washington, D.C.-based organization that tracks and analyzes political contributions. The high-tech industry "came from nowhere in the early part of '90s," said Krumholz, "to being a powerhouse in Washington at least on the lobbying scene. ... It's amazing how far they've come."

China PNTR isn't the first high-profile lobbying effort the high-tech industry has embraced, but it may be the biggest issue in which it had the opportunity to have an impact.

The high-tech industry is "well positioned" to influence the China issues, "because of their contributions [on previous issues]," Krumholz said, "and because of their Washington representation" they are able to add China to "the list of high profile issues they're fighting for."

The computer and high-tech industry has ponied up a total of $13 million in political contributions this election cycle that comes from political action committees, "soft money," which goes to the parties and not to individual candidates and from individuals employed by the high-tech industry.

That total is equally split between Republicans and Democrats, with Democrats currently holding a small edge ($6.7 million to $6.2 million), according to figures complied by CRP.

As high-profile as the China PNTR issue is, however, Krumholz said she isn't sure that the industry's money has significantly increased because of the close vote.

But the industry does seem to be trading on its newfound clout and recognition to be a major player in the China vote. The high-tech industry has "a lot of clout as much as anything because of the potential for lucrative relationships that they promise," Krumholz said. "The new wealth in the industry is astronomical and the politicians see that as an important source to tap into for their re-elections efforts."

Hoydysh of Unisys says the industry is being well-received on Capitol Hill despite the fact that its political contributions pale by comparison to those of long-time players such as the financial and insurance industries, which are traditionally the biggest political donors year after year.

Companies in high tech, especially the dotcoms, are "perceived as the crown jewels of the new economy," Hoydysh said, "in addition, the high-tech industry employs a lot of people as well."

And those employees mean votes and votes mean re-election -- and to get re-elected takes money, which means a politician has to garner support from the deep pockets, which means ... the cycle never ends. Only certain players become more or less important over time. The rising stars on the political scene seem to be the "engines" of the new economy -- and these upstarts aren't above flexing their muscle.

When House Minority Leader Dick Gephardt, D-Mo., broke ranks with the Clinton administration and came out publicly against the China PNTR vote, the early grumbling of revolt swept through the ranks of high-tech industry lobbyists.

Threats, some subtle, some not, were made to Rep. Robert Matsui, D-Calif., a staunch supporter of the China vote, that because Gephardt had blind-sided them with his announcement, they would "punish" the party by withholding money.

"I don't think there's any sort of generic idea that we're going to punish one party or another," Hoydysh said, brushing aside rumors of revolt on the heels of Gephardt's announcement. But the China issue is being used as leverage, says Holly Bailey also of the Center for Responsive Politics.

Members of the influential Washington lobbying organization called the Business Roundtable, which includes companies such AT&T, Motorola, Lucent and Time-Warner among many others, have contributed roughly $15.2 million to House lawmakers, Bailey reports, during the current election cycle.

An analysis of those contributions along with projected "yes" or "no" votes on China peels back the political contribution as influence game: House members projected to vote "yes" have received an average of $46,000 this cycle from Roundtable members; members expected to vote "no" have received an average of $23,000.

The gap becomes even more blatant when broken down by party, Bailey reports. GOP members voting "yes" have received an average of $50,000 from Roundtable members. Those voting against China took in about $32,000. Democrats expected to vote "yes" on China have collected about $32,000, those voting "no" an average of $20,000.