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Valley lags in political giving

But high tech's donations rising

Mercury News Washington Bureau

WASHINGTON -- Even someone whose idea of high cuisine is hotcakes floating in maple syrup would be hard pressed to describe Waffle House as one of the engines driving the booming U.S. economy. But when it comes to contributions to the national Democratic and Republican parties in this crucial pre-election year, the chain of breakfast-around-the-clock restaurants has given more than Intel, Hewlett-Packard, Cisco Systems and Sun Microsystems combined.

It's not that Waffle House has served up all that much money. But the $40,000 it has given easily tops all but Oracle Corp. among Silicon Valley computer and electronics companies.

Silicon Valley might be awash in cash and eager for more influence in the nation's capital, but at this relatively early stage in its political development it is still more hesitant than other major industries to funnel large donations of so-called unregulated ``soft money'' to the national parties and their campaign committees.

The computer and electronics industry ranked 12th among industries in contributions of soft money in the first half of 1999, according to a study released Monday by Common Cause. While sectors such as telecommunications, securities and investment, insurance and real estate each pumped more than $3 million into the coffers of national political parties, the computer industry gave less than half of that -- $1.486 million.

Still that amount represented more than twice as much as the computer industry gave in the first half of 1995. Such growth indicates the industry might become more of a player in the soft-money game.

``Hard money'' contributions given directly to candidates are strictly regulated under federal election laws -- companies are prohibited from making contributions, and individuals are limited to $1,000 per election. But soft money is not regulated. It comes in the form of contributions to national political parties and their campaign committees. There is no limit on how much companies and individuals can give, leading to contributions of hundreds of thousands of dollars.

While the money technically is supposed to be used for ``party building'' activities, soft money often gets funneled into key congressional races and issue advertisements, which can urge voters to support or oppose candidates based on their stand on specific issues. Eliminating soft money is one of the top goals of those seeking to reform campaign finance.

``Soft money is becoming an increasingly important part of buying influence in Washington, a more important part than it was just four years ago,'' said Don Simon, executive vice president of Common Cause, a non-partisan organization that promotes open, honest and accountable government. ``It's quickly moving to the top of the list of what companies do when they are trying to influence Washington policy with cash.''


Political activity growing

In the first six months of 1999, the national political-party committees raised more than $55.1 million in soft money, an 80 percent increase over the same period before the 1996 presidential election.

In the past few years, Silicon Valley has become more politically active in Washington as it has sought legislation on issues such as high-tech worker visas, Y2K lawsuit liability and computer-export regulations. But so far, the computer industry has focused much more on direct donations to candidates. In the first six months of this year, the industry gave nearly $843,000 to presidential candidates, according to the Center for Responsive Politics, a more than threefold increase over contributions to the Democratic and Republican presidential nominees during the entire 1996 campaign.

Intel Corp., for example, has its own political action committee, but does not make any soft-money contributions.

``Intel has felt traditional direct contributions are the best way to support those candidates whom Intel feels deserve support,'' said John Ullyot, the company's Washington spokesman. The PAC gave $81,000 to candidates in the 1998 election cycle, nearly double what it doled out in 1996 and more than double what it gave in 1992.

Hewlett-Packard Co. also did not make any soft-money contributions this year or in the 1998 election cycle. It contributed $76,750 directly to candidates in 1998.

The main exception in Silicon Valley was Oracle, which ranked 50th among corporations nationwide in the Common Cause study, contributing $115,000 in the first six months of this year. All that money went to Republican coffers. In the 1998 election cycle, Oracle gave $275,463 in soft money, with most going to Democrats. Oracle officials could not be reached for comment Monday.


Microsoft's muscle

The only computer-industry firm to rank higher than Oracle was Microsoft, which was 20th in the study with $205,350. Microsoft has become much more politically active in Washington as it has faced ongoing antitrust battles. Still, for a company its size, the soft-money figures paled next to AT&T's $751,150 and tobacco-maker Philip Morris' $411,961.

But Simon said the totals for the computer industry can be deceiving.

``I certainly consider them a major player in the soft-money game,'' he said, noting that the industry had more than doubled the $667,850 it gave during the same period four years ago. ``This is a young industry compared to the other industry sectors and I think they're learning how to play the game, and the rate of growth we see in the computer-industry soft money indicates they're learning pretty quickly.''

Lezlee Westine, vice president of the Technology Network, a high-tech lobbying group based in Palo Alto, said many high-tech issues cut across party lines. But she expects the Silicon Valley computer industry to give more in soft money as it matures politically.

``A lot of these companies are just not used to giving yet, even directly to candidates,'' she said. ``I have no doubt as the relationship develops, the computer industry will start to feel very comfortable supporting causes or groups that are supporting their agenda.''