When The New York Times revealed in April that Microsoft had hired Ralph Reed, the onetime executive director of the Christian Coalition, to lobby George W. Bush on the company's behalf, the story that generated all the attention was Reed's obvious, if bizarre, conflict of interest--he was also a paid adviser to Bush's presidential campaign. But the underlying story, largely overlooked at the time, was something bigger: the increasingly Republican tilt of Microsoft's presence in Washington, D.C.
Not only has Microsoft hired a disproportionate share of its lobbyists from the Republican side of the aisle; it has also showered money on a host of political advocacy groups aligned with the GOP's most antitax and antigovernment wing. (A mere sampling of the groups now feeding at the Microsoft trough: Americans for Tax Reform, the Cato Institute, and the Heritage Foundation.) But perhaps the most striking thing about Microsoft's campaign to gin up grass-roots opposition to the government's proposed breakup of the company is how strongly it resembles the tactics deployed by Big Tobacco and the NRA.
Pioneers of corporate-financed grass-roots (often called "Astroturf") organizing within the tobacco industry and the NRA have perfected ways of imitating genuine groundswells of public support or opposition. The most common tactics include launching and funding front groups to support a client's cause; paying political consultants to generate phone calls and letters to politicians; and, perhaps most effective, using phone banks and highly targeted calling campaigns to manipulate public opinion.
Which brings us back to Ralph Reed. Phone bank work is, as it happens, the specialty of Reed's consulting firm, Century Strategies. And what he got in trouble for with Microsoft was a form of grass-roots work--often referred to as "grass tops"--in which the consultant solicits letters and phone calls from local business and community leaders on behalf of a client. But Reed isn't the only one doing this. If Microsoft Astroturf has the look and feel of the tobacco and NRA variety, that's no accident: Over the past two years, the software giant has hired many of the same people who pioneered Astroturf organizing for the tobacco lobby and the NRA.
Over the past decade, two companies in particular have played a conspicuous role in organizing grass-roots campaigns for the tobacco lobby and the NRA: DCI, an Arizona consulting firm that specializes in phone bank work, and Direct Impact, an Alexandria, Virginia-based outfit that focuses on grass-tops solicitation. Last year Microsoft hired one of Direct Impact's key grass-tops experts, Michael McMahon, to coordinate the company's campaign. DCI was retained to handle phone bank work and other grass-roots advocacy. Another company, Stateside Associates, was hired to coordinate grass-roots activities at the state level.
DCI is the creation of Tom Synhorst, a Republican political operative and onetime field coordinator for the R.J. Reynolds tobacco company, who first made a name for himself by helping Bob Dole pull off an upset victory over George Bush in the 1988 Iowa caucuses. In subsequent years, Synhorst remained close to Dole, but he found his real niche in phone bank work. DCI, as well as a cluster of allied companies in which Synhorst also holds an interest, has worked for the tobacco industry for most of the 1990s. In 1998, when Congress was poised to sign off on a comprehensive tobacco settlement, the industry retained both DCI and Direct Impact to engineer a coordinated campaign of grass-roots opposition to the bill. In 1999, in the wake of the Columbine school shootings, the NRA paid out more than $300,000 to DCI and another phone bank operator, Optima Direct, to rev up opposition to renewed efforts to regulate firearms. More recently, DCI has been hired by the Health Benefits Coalition, a trade association of for-profit HMOs trying to thwart congressional action on the patients' bill of rights.
Synhorst's name has repeatedly surfaced in connection with Ralph Reed's. Not only are both men currently working for Microsoft and for Bush, but both were also involved in one of the most notorious episodes in Bob Dole's 1996 presidential campaign. As Dole faced a surprising challenge from political newcomer Steve Forbes, his campaign was widely suspected, though never quite proven, to be guilty of what has come to be known as "push-polling"--in this case, playing on Forbes's softness on abortion and his father's homosexuality. Properly speaking, a push poll is an attack phone call disguised as a poll--"Hi, I'm doing polling for the Iowa caucus. Do you find it not offensive, somewhat offensive, or morally repugnant that Steve Forbes's campaign is run entirely with money given to him by his promiscuously homosexual father?"--but it can also refer to "advocacy" phone calls that use particularly damaging or misleading information about an opposing candidate. In 1996 Reed was still executive director of the Christian Coalition, but was informally working on Dole's behalf and was widely believed to have helped orchestrate Dole's push-poll campaign. Synhorst denied having participated in any such effort, but his firm was in charge of phone bank operations for Dole.
This year, once again, Synhorst and Reed were working for the establishment Republican candidate. As The American Prospect reported ["The Firewall Next Time," January 31, 2000], Reed was telling associates in Republican circles last fall that Bush staffers were compiling lists of South Carolina households for a phone bank attack on McCain, just in case he picked up momentum in the New Hampshire primary. When I interviewed Reed in late December, he denied ever making such statements. But when the Bush-McCain race hit South Carolina, the Bush campaign unleashed a massive anti-McCain phone blitz more or less exactly as Reed's associates said he had promised it would. "I've never seen anything so barbaric as the [phone] attacks on McCain," one high-level McCain staffer told me in early May.
While the most concerted work in Microsoft's Astroturf campaign has gone into soliciting letters and calls to members of Congress and to state attorneys general who are participating in the Justice Department's antitrust suit, the company has also been setting up grass-roots citizens' coalitions to agitate on its behalf. One of the more humorous examples is the grandiosely titled Freedom to Innovate Network (FIN), which has a prominent link on the front page of the Microsoft Web site. According to the FIN's site, the group was founded in response to an "overwhelming amount of correspondence [Microsoft] received from around the U.S. and overseas regarding the trial with the Department of Justice and other public policy issues. The FIN is a non-partisan, grassroots network of citizens and businesses who have a stake in the success of Microsoft and the high-tech industry." But when I pressed a PR representative from Microsoft on whether the FIN was a truly independent organization, he ultimately conceded that it was "really just a Web site" run by Microsoft.
A more sophisticated effort has gone into the Association for Competitive Technology (ACT), a putatively independent coalition of "industry leaders and emerging stars in computer software, hardware, consulting, and the Internet," which has devoted almost all its resources to fighting Justice's antitrust case. The ACT Web site lists eight members, including Symantec, Microsoft, and Visio (which is owned by Microsoft). ACT is, in effect, a front group, nominally independent, but organized on Microsoft's behalf and arguing its positions. (When I asked an ACT representative what percentage of the organization's funding came from Microsoft, she refused any comment other than to say their funding came from the group's "members.") Yet the organization and its president, Jonathan Zuck, are frequently featured in media reports arguing the Microsoft line from an ostensibly "independent" perspective. Last October, Zuck founded another organization, Americans for Technology Leadership (ATL), which bears a striking resemblance to ACT. The organization's founding members include ACT, Microsoft, and three antitax groups, at least two of which have received donations from Microsoft.
How do McMahon, Synhorst, and Microsoft's other grass-roots operatives fit in with all these organizations? Microsoft declined to make McMahon available for an interview. And while Microsoft did confirm that Synhorst's DCI had been retained as a consultant, it insisted that another DCI employee, Tim Hyde, and not Synhorst, was handling the company's account. In any event, the web of connections among DCI, ATL, and Microsoft is striking. While working for Microsoft, DCI has also provided consulting services to ATL. And Josh Mathis, the man Zuck installed as ATL's executive director, is also an employee of DCI, who still works out of the same Washington, D.C., office as Synhorst and Hyde.
Of course, as this issue of TAP goes to press in mid-June, it might appear that all of the software giant's expensive lobbying efforts have been for naught: The company is reeling from Judge Thomas Penfield Jackson's ruling that it be broken up. But Bill Gates and his legal team are already moving forward with their appeal, and there's no question that the grass-roots campaign has yielded some results. One attorney general, for example, South Carolina's Charlie Condon, was persuaded to withdraw his state from the government antitrust suit. He subsequently received a $3,500 campaign donation from Microsoft and was later installed as the chairman of a new Microsoft-supported organization called the Republican Attorneys General Association, which is housed at the Republican National Committee.
The real question, of course, is whether Microsoft's aggressive lobbying and PR campaign will pay off in a more accommodating attitude from the Justice Department should George W. Bush be elected president. But even many of Microsoft's conservative supporters believe that it is too late for the company to stop the antitrust case. "It's just too late to fix their problems legislatively," one prominent conservative Microsoft booster recently told me. And the desperation arising from that realization has led the company into some recklessly foolish efforts to manipulate the court proceedings. In one particularly ham-fisted instance, Microsoft lobbyists and several Microsoft-supported political advocacy groups pressed legislators to sharply reduce funding for the Justice Department's Antitrust Division--a gambit that only confirmed the reputation for bullying the company is trying to shake.
This foolhardy effort to punish their legal adversaries with such nakedly political means is a telling episode in Microsoft's still-evolving presence in Washington politics--not for what it says about the company's hardball tactics, but for what it reveals about its corporate naïveté. Microsoft has the look of a company with much less sense than it has money to burn. The company's top brass invest their political maneuvering with the same sort of zeal they brought to developing new software, but in a world where such aggressiveness can sometimes be counterproductive. Microsoft's shotgun marriage to D.C.'s right-wing activists makes it look even less like the people in Redmond know what they're getting themselves into. And many of the activists themselves remain suspicious of whether their new patron is really committed to conservative ideals. Don't expect Microsoft to drop its new friends anytime soon. But this company's political education is still a work in progress. ¤