High tech builds muscle

Flush with victory after the battle over California's Proposition 211, high-technology companies are considering attacks on other issues facing the industry at state and federal levels.

The California Technology Alliance, which was formed specifically to fight Prop. 211, intends to carry its momentum over to other political fights. The alliance, composed of high-technology and biotech firms, plans to provide campaign contributions and work with candidates well before an initiative qualifies for the state ballot, rather than after.

"We raised a lot of money and whipped them good, so we now have a lot more credibility," said Tom Proulx, president of the technology alliance. "We'll get involved in the primaries, so when it comes to the general election we'll already have a Democrat and Republican candidate that we both like."

If high-tech companies make good on this promise, it will mark a major shift for the industry, which has historically avoided significant involvement in politics. In keeping with the libertarian and entrepreneurial philosophies that pervade Silicon Valley, technology executives have kept their distance from government affairs, hoping that regulatory agencies would simply leave them alone.

But Prop. 211 brought a good dose of reality to their view toward legal and governmental issues, and it could likely change the way business is done from now on.

"The lessons of 211 were lessons well learned," said Wayne Sayer, founder of the Wayne Sayer & Associates political consulting firm. "By dealing with this kind of issue on a regular basis, you can head off these fights later on if you address them while they're brewing."

Technology companies across the country amassed a war chest exceeding $32 million to fight the initiative, making the campaign the most expensive in California history. Prop. 211, which sought to expand investors' ability to sue companies over misleading financial information, was seen as a direct threat to technology companies that rely heavily on public investment and stock options for employee compensation.

Not all industry executives, however, are convinced that Prop. 211 will serve as a blueprint for every future political battle. For one thing, they say, the unpredictable nature of the Internet and high technology in general makes it difficult to say which companies will be competitors on any given issue, let alone which ones will be allies. Ad hoc groups based on narrower alliances may be more likely than any industrywide organizations or political action committees.

"Given the nature of things now, there are more timely and opportunistic coalitions formed than any before," said Peter Scacco, director of worldwide public relations for Dell Computer. While companies are pleased that the fight against Prop. 211 was so successful, he said, "people have their heads screwed on straight. Egos aren't getting in the way of business."

Still, Scacco acknowledged that the California initiative "sensitized" the industry to the need for political involvement when it counts. It is only natural, he and others say, for companies to examine ways to address future political initiatives based on the tactics that killed Prop. 211 by a margin of three to one.

That day may already be here. Proulx said there is talk that William Lerach, the well-known trial attorney who spearheaded the drive for 211, is gearing up to introduce a similar ballot initiatives in other states. "We hear he's already planning the son of Prop. 211," he said. "If it's not in California, it will be elsewhere in the nation."

Proulx added that his organization won't stop there. The California Technology Alliance is planning to talk with its members to develop a list of other issues to tackle. "We're not in a red-code status and have to keep up the same momentum. But we do have to remain active and not go dormant."

But first, said Intel's Michael Maibach, they must rest. After all, he said, raising more than $32 million in a matter of months is grueling work.

"[Prop.] 211 was a war, and after a war, you have peace," said Maibach, vice president of government affairs for Intel and himself a former candidate for Congress. "These people who fought will go back to a more normal life. They found they have legs and can run, and if they have to run again, they will."