Sen. Benjamin Cardin was an initial co-sponsor of Internet anti-piracy legislation that received massive backlash from many in the Web industry.
Democrats, long the darlings of the technology industry, might be losing some of their fundraising edge in Silicon Valley.
With major firms spending more than ever on politics, Silicon Valley has become a necessary stop on the campaign trail for Republicans, too, and lobbyists warn that the industry’s allegiance to Democrats might be waning.
“Six years ago, if you had a ‘D’ next to your name ... you could come to the Valley and pick up a good amount of money from the tech community,” one industry lobbyist told Roll Call. “The Valley is not lock step Democrat anymore. It is like any mature industry. They are covering their bases.”
In the past several months, Republicans have begun to take note of the new opportunities. Freshmen such as Sens. Kelly Ayotte (N.H.) and Mike Lee (Utah) have won allies in Silicon Valley by focusing on a message of limited government and staying away from social issues, several lobbyists said.
“A lot of them are libertarians — the less government is talking to me the better,” one lobbyist said. “God, gays and guns — you talk that up, and the industry recoils.”
The Republican outreach extends to industry activities in Washington. Facebook, for example, which spent more than $1.7 million on lobbying in 2011, announced Friday that it was adding another Republican to its already GOP-friendly Washington office.
TechNet, the major trade association for technology companies, organized events last year for House Majority Whip Kevin McCarthy (R-Calif.) and Sen. Scott Brown (R-Mass.), pulling in more than $50,000 each, according to one source familiar with the fundraisers. In May, a TechNet event benefiting Speaker John Boehner’s (Ohio) joint fundraising committee, which includes the National Republican Congressional Committee, raised more than $250,000.
A Republican operative with knowledge of the party’s fundraisers described the Boehner event as “the first of its kind.”
“It has traditionally been a harder nut to crack than other areas,” the operative said.
Meanwhile, events the organization put on for Democrats have been underwhelming, including separate events for Sens. Bob Menendez (N.J.), Debbie Stabenow (Mich.) and Benjamin Cardin (Md.) that raised only $55,000 combined.
“It was hard raising; there were a lot of questions,” the source said. “The bar is getting raised for convincing people why they need to help folks.”
Another experienced fundraiser agreed: “We see a lot of Democrats heading out there right now who are not successful.”
Menendez and Cardin are up for re-election this year and were initial co-sponsors of the PROTECT IP Act that was anathema to Internet companies. Cardin, among others, withdrew his support for the bill in the face of a massive backlash from those concerned about its effect on Web content.
Internet giants such as Wikipedia and Craigslist went dark for a day in protest of the legislation.
In the wake of the blackouts, scores of lawmakers, mainly Republicans, retreated from the legislation.
“Republicans dropped that bill like flies and the Democrats did not,” another longtime lobbyist said. “The Valley noticed that.”
It’s too soon to tell how the online piracy debate will affect campaign coffers for those who stood by the bill, but lobbyists said the administration’s withdrawal of support might have won the White House some points with disgruntled Internet companies.
Industry lobbyists, Democrats and Republicans alike, seem to be taking a page from the Hollywood playbook. Former Sen. Chris Dodd (D-Conn.), who led an aggressive campaign in favor of the anti-piracy bills as head of the Motion Picture Association of America, threatened to cut off donations after Congress pulled the plug on the legislation earlier this month.
Industry lobbyists say major donors, especially corporations, are increasingly putting key issues — like repatriation of offshore earnings and immigration reform — over party.
Technology companies, led by Oracle Corp., Cisco Systems Inc. and Microsoft Corp., were the major force behind a vigorous campaign for a repatriation tax holiday, a proposal many Congressional Democrats and the administration bashed as a corporate handout. Meanwhile, the industry was nonplussed with the patent-reform bill Congress passed last spring and outraged by the proposals for online anti-piracy legislation in both chambers. Google has also been the subject of an aggressive antitrust probe by the Federal Trade Commission.
“Both from an administration standpoint and a Congressional standpoint, the policies they were pushing were really hurtful to the industry,” another lobbyist told Roll Call.
The trend has played out to varying degrees across Silicon Valley. That is in part due to the changing balance of power in Washington, but there is no question among industry lobbyists and fundraisers that the enthusiasm for Democrats, piqued in 2008 by President Barack Obama, has dissipated.
In the past two election cycles, political action committees at major firms such as Oracle, Cisco Systems and Google Inc. invested significantly more money in Democrats. But early filings suggest Republicans could close the gap in 2012.
In 2006, 84 percent of the nearly $1.9 million Google executives and its employees contributed went to Democrats. In the last election cycle, 70 percent went to Democrats.
Google’s political action committee has raised $570,000 so far this cycle — more than 15 times what it spent six years ago when it first set up its PAC, according to the Center for Responsive Politics. Still, several lobbyists described a general suspicion of the political fundraising process.
“Members see a high-growth industry and they automatically think we have a lot more money to give,” one lobbyist told Roll Call. “I think they are always surprised with how little money is out there for them. This is not the banks, or the pharmaceutical industry, or transportation, which are highly regulated. Tech is not highly regulated.”
Sen. Jeff Flake, R-Ariz., takes a selfie with his cut-out head during the Hoops for Youth 16th annual charity basketball game held at George Washington University's Smith Center, September 8, 2014. The members of Congress team beat the lobbyist team 46-40. Buy photo here.