Al Gore's high-tech star is beginning to fade - From the November 1998 issue of Red Herring

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From: Zhang, Yangkun (Yangkun.Zhang@FMR.COM)
Date: Mon Oct 16 2000 - 08:03:47 PDT

Al Gore's high-tech star is beginning to fade.

By Anthony B. Perkins <>
From the November 1998 issue

In December's Angler we predicted that Al Gore would "continue to get
bludgeoned by his fund-raising scandals" and that the political heat caused
by this controversy would force the vice president "to retreat into his
natural constituencies in the unions and the trial lawyers associations" ("
The <> Underground Gore
<> ). Ultimately, we felt
that these interest groups wouldn't allow the vice president to support the
litigation and education reforms advocated by Silicon Valley and that his
high-tech supporters would be "left disappointed and humiliated."

We were reminded of Mr. Gore's dilemma by the investment banker Herb Allen
(see our <> interview with Mr.
Allen in Q&A, October
<> ), who says he has had
firsthand experience with the "under the table" tactics of the Clinton-Gore
fund-raising machine. "They set up a series of front organizations," Mr.
Allen says. "The one they came after me with was some committee to combat
right-wing radio. It was so transparent it was shocking--but that way you
can give $50,000 to $100,000. These people are really crooked. They play a
whole new ball game. The press doesn't want to deal with it because they all
voted for Clinton. But I voted for him too, and I can't take it anymore."

Recently Attorney General Janet Reno launched a 90-day inquiry into the 1996
Clinton-Gore reelection campaign's spending. At our press time it appeared
that the investigation would lead to the appointment of the sixth
independent counsel to investigate this administration. (It's still hard to
believe that Bill Clinton signed the bill to maintain the
independent-counsel statute.) For Mr. Gore, the issue is whether, in 45
phone calls from his government-maintained office, he knowingly solicited
donations that went to the party not as legal "soft money" but directly to
the campaign. That would make the contributions "hard money"--and illegal.
Ms. Reno and Justice Department officials are poring over a 1995 Democratic
fund-raising memo that indicates Mr. Gore had agreed to a "65 percent
soft/35 percent hard" money solicitation strategy, contradicting his
previous testimony to investigators.

For those who don't have the stomach to take in any more Clinton-Gore
scandals, there are still plenty of policy issues to wrestle with. In
particular, the high-technology industry and Mr. Gore are butting heads over
three major initiatives: visas for foreign-born engineers and executives,
software encryption, and Justice's antitrust cases against tech companies.
In the case of his public fight against immigrant visas, Mr. Gore is clearly
favoring Big Labor over his high-tech buddies. As Paul Gigot of the Wall
Street Journal noted in his September 4 Potomac Watch column, "the
immigrant-visa issue is the first one that has forced the Digital Veep to
choose between a liberal interest and the Valley. And he responded like
Analog Al."

The immigration issue is an interesting one and may well be more important
to the United States' larger economic picture than is immediately obvious.
Paul Romer, a senior fellow at Stanford's Center for Economic Policy
Research, noted recently that a key indicator to which countries should
start paying more attention is their balance of trade in skilled
professionals. "Successful countries will retain their college-educated
citizens and actually attract professionally trained talent from other
countries," he says. Only by maintaining this ample supply of
college-educated professionals, he adds, can countries remain competitive
and prevent wage inequality. Certainly, almost every Silicon Valley company
has felt the squeeze in the market for engineering and executive talent,
which has led to unprecedented inflation in IT salaries. At the same time,
the income of the poorest 20 percent of U.S. households has declined
steadily since the early '70s, according to the Commerce Department.

In an effort to ease high-tech labor shortages, Senator Spencer Abraham (R:
Michigan) sponsored a bill to raise the annual quota of H-1B visas (which
allow foreign-born specialty workers to stay in the United States for up to
six years) temporarily from 65,000 to 95,000 this year, with an increase of
20,000 more visas annually from 1999 to 2002. The bill passed the Senate in
April by a whopping 78-to-20 margin, in spite of White House veto threats.
As the bill was about to hit the floor of the House of Representatives this
summer, however, the White House weighed in with 15 onerous new prolabor
demands. This effort incited Intel CEO Craig Barrett to fire off a letter to
Mr. Gore threatening that "U.S. industry will simply move jobs out of the
U.S. rather than attempt to satisfy the new complex proposed requirements."

But Mr. Gore merely dismissed the Intel letter as a "decision not to work
with the administration." It's easy to see why the technology industry is
frustrated with Big Al and his efforts on behalf of Big Labor to keep our
borders closed to much-needed talent.

A fourth and underreported issue over which Al Gore and the technology
industry are battling is litigation over the year 2000 problem. To encourage
the disclosure of information on the problem, legislation sponsored by
Representatives David Dreier (R: California) and Anna Eshoo (D: California)
would prevent data on Y2K readiness that tech companies share from being
used against them in lawsuits. According to Dan Schnur, the Republican
strategist for the bipartisan public-policy coalition Technology Network
(known as TechNet), there is already $1 trillion's worth of litigation
pending over the Y2K problem, so this could be a crippling issue for U.S.
industry for many years to come. The effort to cut down on such litigation,
of course, doesn't please Mr. Gore's trial lawyer friends and campaign
contributors. That's why the White House has initiated a counterattack that
once again favors the trial lawyers over the tech folks.

So far Mr. Gore has been able to seduce Silicon Valley merely by showing up
and acting like a geek (wow, Al uses email!). But I think we can safely
predict that Mr. Gore's conflicts with his Valley following, affectionately
referred to locally as GoreTech, are just beginning.

Al Gore isn't giving up completely on his high-tech groupies, however: they
represent too much money, and he needs their backing to polish his "man of
the future" image. Mr. Gore made a swing through the Valley this week to
patch things up. His highest-profile stop was at a TechNet fund-raiser at
Netscape cofounder Marc Andreessen's house that netted an estimated $250,000
for California gubernatorial candidate Gray Davis, Jerry Brown's former
chief of staff. The Davis event, although a success, was missing the
high-tech executives who usually turn up for Democratic fund-raisers.
Perhaps the few in Silicon Valley who were previously mesmerized by Digital
Al are starting to see where his true loyalties really rest. Maybe their
sentiments will change in the same way as those of that former Clinton
supporter Mr. Allen, who says, "Al Gore is tainted by all the corruption. We
have to throw all the corrupt guys out." We can't argue with that.

(c)1997-2000 Red Herring Communications. All Rights Reserved.

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