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s I have noted from my Bach Seat, the revolving door or regulatory capture between the federal government and the tech titans isn’t new. The tech titans like Google (GOOG), Facebook, and Apple (AAPL) hire former feds to protect their turf while their web 2.0 applications attract attention from lawmakers and regulators concerned about issues like privacy, competition, pricing, and other aspects of the online economy.
Tech Firms Capture White House Staffers
“These companies are at the crosshairs of privacy and policy issues and they see people in the White House and federal government as protectors of their plans to expand into new markets,” Jeffrey Chester, an online privacy advocate and executive director of the Center for Digital Democracy told the Washington Post. “These are uber influence-makers they are hiring.”
Three examples of this in the Washington Post article are:
- Google’s green energy initiative hired consultant Colin Crowell, who is both a former senior adviser to the FCC’s chairman and a former aide to Rep. Edward J. Markey (D-Mass.).
- AT&T’s (T) lobbying leader James Cicconi, is a former staffer for George W. Bush. Mr. Cicconi has a long track record of regulatory success at the FCC and approval of several mergers for AT&T.
- AT&T also hired Bill Clinton spokesman Mike McCurry heads Arts & Labs, a group that has lobbied against Internet access rules known as net neutrality, for AT&T, Verizon and cable companies.
Facebook Hires Former Clinton Spokesman
The Washington Post reports that Facebook recently hired former Clinton White House spokesman Joe Lockhart to its communications team, as the company faces increased scrutiny caused by the company’s global expansion and treatment of data shared by the site’s more than 600 million users and its privacy practices. Mr. Lockhart, who served as press secretary for President Bill Clinton will be vice president of global communications. Mr. Lockhart will be located at the company’s Silicon Valley headquarters and report to Elliott Schrage, VP of global communications, marketing, and public policy.
Facebook has also hired former George W. Bush deputy chief of staff, Joel Kaplan, to head its D.C. federal lobbying and policy shop. The Facebook office had just one employee in 2007 and now has a dozen on staff.
Larry Summers to Join VC Firm
Silicon Valley venture fund Andreesen Horowitz has added former White House economic director Larry Summers as an exclusive “long-term” special adviser. The Washington Post reports. Marc Andreesen, a co-founder of the venture capital investment firm, said the appointment brings the former government official’s international economic expertise to a fast-changing high-tech industry where Internet companies are quickly expanding overseas and fundamentally changing the way business markets work. Summers doesn’t have experience in tech, but that’s not why the venture firm wants him, they said. As the former Treasury secretary and a noted economist, the venture firm wants his economic knowledge to help companies think more broadly about how they can break into new markets and bring their services to various industries.
Andreesen Horowitz, with investments in Facebook, Digg, and Zynga, said Mr.Summers will receive “long-term” compensation, which would probably include a stake in companies or the fund, but Andreesen declined to give more details on their arrangement.
AT&T Gave Cash to Merger Backers
Eliza Krigman at POLITICO.com reports that AT&T (T) is lining up support for its acquisition of T-Mobile from a slew of groups with no obvious interest in telecom deals, except that they’ve received big piles of AT&T’s cash.
AT&T says it supports nonprofit groups because it’s the right thing to do — and not because of any quid pro quo. “For decades, AT&T has proudly supported numerous diverse groups and organizations,” a company spokesperson told POLITICO.
But not everyone’s buying it according to the article, “The money that nonprofits receive from their corporate sponsors sticks not only in their bank accounts but in their minds,” Ellen Miller, executive director of the Sunlight Foundation, told POLITICO.com. “This is what I think of as deep lobbying — there is an expectation that when push comes to shove, these groups will come out in favor of their benefactors.”
AT&T’s corporate giving arm, the AT&T Foundation, doled out $62 million in 2009 to support a variety of arts and education programs, charities, and organizations according to the article. Jim Cicconi, AT&T’s senior vice president and top lobbyist, chairs the foundation. some of the payments AT&T has made include
The NAACP received a $1 million contribution from AT&T in 2009 and has received funding in the six figures dating to 2006, according to the group’s annual reports. The NAACP was one of the first groups to announce public support of the T-Mobile acquisition. William Barber, head of the North Carolina chapter of the NAACP, told POLITICO that AT&T’s financial support did not influence his group’s decision to write to the FCC in support of the merger.
GLAAD which has received $50,000 from AT&T, recently backed the merger deal. Rich Ferraro, a GLAAD official, told POLITICO, “We do not make policy decisions based on what’s best for our corporate sponsors.”
The Columbia Urban League received a $25,000 grant from the AT&T Foundation in 2009 to offer “underserved populations with resources to help their children achieve academic success,” according to the foundation’s IRS Form 990. On May 27, the group’s president and CEO, James McLawhorn, wrote to urge the FCC to approve AT&T’s acquisition of T-Mobile.
Some public interest groups question whether AT&T is now cashing in on its status as one of the country’s biggest corporate donors. I wrote about AT&T’s habit of showering everyone with money here
Related articles
- Larry Summers warns of “Financial Armageddon” (tech.fortune.cnn.com)
- On Call: GLAAD backtracks on AT&T-T-Mobile merger support (cnet.com)
Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.
Regulatory capture occurs when governmental bodies created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure, as it can encourage large firms to exploit the public.
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