TECH MAY 20, 2013
Silicon Valley is raising its voice in Washington these days. The tech industry has been interested in the federal government for decades, but now it’s demanding things more loudly: Google spent $18.2 million lobbying in 2012. Mark Zuckerberg and a pack of executives launched an advocacy group that’s tackling immigration reform. And on Tuesday, Apple CEO Tim Cook will make a rare appearance before Congress, telling senators how tax policy ought to change.
If they’ve come to Washington with sticks, however, there are plenty of carrots available back in California. And as far as politicians with no particular ties to the area, few have made as much of a stir as New Jersey Governor Chris Christie. A February swing through Hollywood and the Bay Area netted him nearly $700,000, with most of that coming from the latter, according to the Wall Street Journal. His latest campaign filing reads like a who's who of hot Internet companies: In addition to his buddy Zuckerberg, there are the CEOs of LinkedIn, Dropbox, Pinterest, and Zynga, plus high-profile investors Marc Andreessen, Peter Thiel, and even the Democratically aligned venture capitalist John Doerr. Christie won them over in an appearance at Zuckerberg's house, where he "captivated" the 60 executives in attendance, one attendee told the Journal.
Their $3,800 checks won't make the difference between a Christie win and a loss; the bulk of his $3.4 million war chest still comes from Jersey burgs like Morristown and Parsippany. But the personal endorsements could boost his appeal among the young and tech-savvy, as well as lay the foundation for a national run in 2016. And that whiff of success hasn't gone unnoticed. After getting out-fundraised in the Valley for years, Republicans have been beating a path back out west lately: House Majority Whip Kevin McCarthy, of California, led a delegation on a listening tour of sorts through the region's high-profile boardrooms in April, while Texas Senator John Cornyn and Senate Minority Leader Mitch McConnell, of Kentucky, headlined fundraisers in Menlo Park.
It's a smart strategy: The Internet industry has become a significant donor over the past decade. Led by tech giants like Intel, Google, Oracle, and eBay, the sector gave $64.4 million nationally in the 2012 cycle, up from $46.7 million in 2008 and $30.5 million in 2004. Some companies have even set up loosely organized executive giving plans—not requirements, just suggested guidelines—to coordinate and maximize the impact of their donations. Those numbers will only grow as technology flourishes and legacy manufacturing industries fade.
So if you're a Republican politician, what's the best way to get yourself a chunk of that largesse?
Just like any big business, tech companies do play both sides of the aisle, and donate more to whatever party's in power (their PACs and heavy-hitter CEOs tend to be more balanced in their giving than rank-and-file employees, who overwhelmingly write checks to Democrats—Google’s PAC contributed more to Republicans in 2012, for example, while 80 percent of its employees’ dollars went to Democrats). But the Valley does have certain temperamental characteristics that a would-be buckraker would be wise to figure out.
Step One: Get introduced
If you're starting cold, go through one of the established industry associations that has a foot in both Washington and California, like the 16-year-old Technet or the relatively ancient Silicon Valley Leadership Group, both of which can arrange an audience with the right people in short order. "If there's a two-stop shop to Silicon Valley money, it's them," says Democratic consultant Donnie Fowler. In the late 1990s, a founding Technet staffer named Lezlee Westine proved so good at raising money for Republicans in the Valley that Karl Rove brought her into the White House.
Step Two: Hone Your Message
Historically, Republicans haven't been as successful at courting youngish Valley types. Along with doing socially conservative things like opposing gay marriage, they fail to differentiate fast-growing tech companies from traditional businesses—and some first-generation tech giants like Cisco, HP, and Intel—that just ask for low corporate tax rates and fewer regulations. Silicon Valley also wants to be left alone, but fundamentally recognizes the value of government for helping to prepare its raw material, whether by investing in research and development or reforming our immigration and education systems so that they grow the talent pool. Fowler calls this philosophy "progressive libertarianism"—something George W. Bush just didn't understand.
"The Bush administration was an old-economy White House. They looked at workers as costs, like you would pay your electric bills, rent, and your salaries," Fowler says. "For the new economy, ninety percent of my assets walk out the door at 5:00 p.m. every day. They're people. That fundamental misunderstanding by Republicans has really kept the door closed for a long time. Republicans will come here and say, we're against regulation, we're against taxes. And that's not enough."
Jim Green, a former Democratic National Committee staffer who ran technology outreach for the Obama campaign in 2012, says politicians from both parties can court tech donors with a message that government is flawed, but fixable. "The typical fundraising email that might go out to base supporters of either party is not what will win you supporters in the Valley," Green says. To demonstrate, he riffs on the text of a stock appeal to tech donors. "'Washington, D.C., is not catching up to the gravity of the challenges we face. Recognizing that, you're trying to close that gap between the politics and the reality. Here are three things that I'm focused on, but I want to hear from you.' Portray yourself as a problem solver, someone who looks at data and facts to inform their decisions."
Step Three: Play the Long Game
A lot of people can say the right things to tech companies, and then go back to Washington and go back to their old ways of thinking. "Silicon Valley tends not to kiss on the first date. And we don't like one-night stands—we like relationships," says Silicon Valley Leadership Group chairman Carl Guardino. "And that means, get to know us on policy. As you do that, you will earn our respect, and a natural outflow of our respect is earned political support. To think you can fly in and fly out isn't practical or successful."
For example, Guardino talks of bonding with Kevin McCarthy back when he was a freshman representative in the California state house. The Leadership Group now hosts the Bakersfield Republican once a quarter, visits him in D.C. a couple of times a year, and holds twice-monthly conference calls with different House committee chairs. But McCarthy—now the third-ranking GOP House member—also serves up a lot of partisan red meat, crusades against environmental protections and infrastructure investment, and sometimes votes against things like funding for scientific research. Perhaps as a result, the tech industry isn't one of his biggest sources of cash, and for trying so hard to make inroads, he was only their 20th-favorite legislator in 2012.
Guess who’s at the top of that list, though? The sainted libertarian Ron Paul, with former Massachusetts Senator Scott Brown—who had an independent streak of sorts while in Congress—not far behind. Chris Christie himself is no establishment darling, either. Which suggests that the perhaps best way to raise money as a Republican in Silicon Valley is to be not much of a Republican at all.