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Issue of the Week: April 21, 1999
Silicon Valley No Sure Thing For Gore
      It is early April in the lush spring hills of posh Woodside, CA, one of San Francisco's wealthiest suburbs. Outside a faux-Tudor mansion with a huge swimming pool and a stunning view of the Bay below, Vice President/presidential candidate Al Gore is showing off his dexterity with computer jargon to an enthusiastic crowd of wealthy supporters — almost all of them high-tech executives.
      Freely using tech terms like "Moore's Law" — the proposition that computer chips double in power every 18 months — Gore praises the phenomenal economic growth in the region and calls nearby Silicon Valley the future of the country. He then spins his vision for the country with policy points selected to resonate with the assembled donors: investing in education, reducing class size, making the research and development tax credit permanent.
      It's a stump speech Ronald Reagan or George Bush never could have given. The crowd of about 350, who have paid $1,000 each for the privilege of driving the winding roads to the manicured new home of E-Loan co-founder Janina Pawlowski to hear Gore at one of his first California fundraisers, roar approval.
      "I can't see anyone who is better positioned than Al Gore to win the presidency," says Mark Michael, general counsel at 3Com, one of many executives who has established a relationship with Gore during his 55 visits to the region since becoming vice president in 1993.
      With Democrat Gray Davis newly ensconced in the California governor's mansion, and a robust economy that's helping to spawn new e-commerce millionaires like Pawlowski in the region every day, Gore's position as Silicon Valley's darling seems secure.
      So why is he looking over his shoulder?

The GOP Moves In
      The answer is in the newfound political confidence of the nation's major high-tech region and its power brokers. Republicans — who were absent in the 1992 and 1996 presidential elections in Silicon Valley — are not going to concede this time. For the first time, Republican strategists in the area are working hard to dispel the notion that the area is a stronghold for Democrats. And if they succeed, they could cost Gore 54 vital electoral votes next year — and with them his shot at the White House.
      To begin, the Republican Leadership Council sponsored attack ads to coincide with Gore's visit this month. The region's bipartisan lobbying group, TechNet, also put together a print ad signed by about 55 of the area's best-known Republican high-tech leaders, encouraging Texas GOP Gov. George W. Bush to run for president.
      "In '92 and '96, you had Republicans throwing their weight behind [President] Clinton, that is in part because of the frustration of trying to get [former President] Bush... and [1996 GOP nominee Bob] Dole... to take note of what was going on in tech," said Tim Bajarin, president of Creative Strategies, a technology market research firm in Campbell, CA, and a member of TechNet.
      "Going into this election, I don't think you'll have that throwing of the weight to the Democratic side... because it is clear that Bush and [Senate Commerce Committee Chairman John] McCain can lead the charge on technology, the same as Gore," Bajarin said.
      At the same time, Silicon Valley's enormous wealth has never been so important to presidential candidates, facing the massively expensive ads in a TV age campaign. Money, never a minor player in politics, is now the mark of success or failure: without plenty of it, a candidate will never get his or her message across. Both Gore and Bush have aimed to build war chests of close to $50 million to pay for the steady blitz of campaign ads needed for the primary season.

Independents Make The Difference?
      California, too, has catapulted in importance in the election process since moving its primary to March 7. The state will be part of "Super Tuesday," when at least nine states will hold primaries. Those results will, in all likelihood, determine the major party nominees.
      With approximately half of Silicon Valley's executives and wired workers registered as independents, presidential candidates will have to swing a large swath of middle-of-the-road voters, who mostly want the government to keep away from their business affairs and their personal lives. That means they want candidates who favor neither taxes nor a religious agenda on moral issues such as abortion or homosexuality.
      "I would say well over half of the executives in Silicon Valley are very, very busy tending to their store and are not that involved in politics," said Floyd Kvamme, partner at the influential venture capital firm Kleiner Perkins Caufield & Byers. "They consider themselves libertarian and they don't want government involved."
      So far, Gore has the leg up, but he has some significant weaknesses to overcome. Currently, his heaviest baggage in Silicon Valley is his identity as the No. 2 man in a scandal-ridden administration, where he has yet to emerge independent from Clinton's shadow.
      "Right now Gore is seen as this sort of wooden guy who follows Clinton around and Bush is this romantic figure, but he hasn't said anything in the broad sense as of yet," said Jonah Seiger, principal at mindshare Internet Campaigns, an Internet campaign consulting firm.
      In a Pew Research Center poll released April 18, Gore's association with Clinton was found to have contributed to a drop in his favorability rating, and he lagged behind Bush, 41 percent to Bush's 54 percent.
      In addition, Gore is part of an administration that initially opposed lifting the ceiling on H1-B visas for foreign workers — a touchstone issue for Valley companies desperate to fill specialized jobs — and currently opposes loosening encryption controls and has been opposed to pending Y2K litigation relief legislation in Congress.

Slip-Ups Along The Way
      Further, Gore has stumbled with a series of gaffes on technology issues — surprising for a man who has tried to project an image as "plugged in" to the intricacies of the industry. First, he told CNN's Wolf Blitzer that he invented the Internet; days later, his campaign Web site proclaimed itself to be "open-source," confusing programming with Web site design. In between, his site contained a page for children that asked for personal information in violation of government rules, a page that was quickly changed.
      Republicans used the gaffes to attack Gore and make him a butt of jokes.
      "It's become a joke like [former Vice President Dan] Quayle's potato mistake. It's not going to go away," said one executive with SecureIT, a security software reseller in Silicon Valley.
      Gore's supporters disagree.
      "What people are going to remember is the vice president's leadership on tech issues. He has been talking about tech his entire life," said Gore spokesman Chris Lehane. "It comes as part of the territory that as the frontrunner, everyone is attacking him."
      It is also still early in the election process and the gaffes are likely to fade in memory before November 2000. Further, Gore is likely to put forward his own policies that will differ from the current Administration's that would satisfy many tech business leaders. Wade Randlett, Democratic political director at TechNet, is confident that Gore will support all the tech policy issues most important to the industry.
      "Gore really understands the rank and file wired worker in Silicon Valley and they respect his mind. They have heard good things about Bush but Bush hasn't been there and done the work that the vice president has and I think in the end they will reward Gore" with their votes, said Tony Podesta, principal at the lobbying firm Podesta.com, which has a number of high-tech and telecommunications clients. (Podesta is the brother of White House Chief of Staff John Podesta.)
      Still, Gore's mix of weaknesses may give Bill Bradley, Gore's only Democratic opponent, a window of opportunity to take some votes and dollars away from him. On April 13, Bradley's campaign hosted a fundraiser in San Francisco that netted $1 million in one night, compared with Gore's recent trip to the region which raised $400,000. Bradley was also eager to support tech issues. He argues that he understands Silicon Valley better than Gore, because he lived in region while teaching at Stanford University last year.
      Meanwhile, Bush supporters point to his record on technology in Texas. The state has high-tech centers in Austin and Houston, and is home to computer companies such as Dell and Compaq that face policy concerns similar to those of Silicon Valley, Kvamme said.
      Bush exploratory committee spokeswoman Mindy Tucker rattles off a list of accomplishments: creation of a state Science and Technology Task force, calls for an R&D tax credit for Texas companies, work with community colleges to create curriculums that will graduate students qualified for tech jobs and creating an awareness of the importance of technology in the state.
      "George W. really understands high-tech and education. Look what he's done in Texas," said John Chambers, CEO of Cisco Systems, a Republican who has recently become a frequent visitor to Washington to push his policy agenda.
      In fundraising, too, Bush has lots of know-how. Making liberal use of his father's connections, the governor has pulled in $7 million in campaign donations without holding a specific fundraising event. His national policy position on technology and other issues is also likely to be unveiled not long before his first fundraising event in Silicon Valley, tentatively set for June 30, Kvamme said.
      "I think Bush is the first Republican candidate any Republicans in Silicon Valley have been able to get excited about," said one Washington-based Democratic strategist.
      That isn't to discount the viability of any of the other Republican candidates. McCain, House Budget Committee Chairman John Kasich, R-OH, publisher Steve Forbes, Quayle and Elizabeth Dole will all be making their pitches in the area. McCain, as chairman of Senate Commerce and a maverick, has shown himself to understand tech as well as be independent minded, which is attractive to libertarians.
      What could get Republicans in the biggest trouble in Silicon Valley, is if they are unable to hold off the appeasing the right on social issues.
      "If the Republicans don't lead their agenda with the divisive social issues like choice, the Valley will be more Republican" in this election, said Lezlee Westine, Republican director of TechNet.
—by Bara Vaida




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