By Eric Johnson, Alexander Cohen and Alina Selyukh
WASHINGTON/SEATTLE, June 26 (Reuters) – Presidential
candidate Barack Obama, his Blackberry always close at hand, was
the darling of the technology world and it rewarded him with
generous donations to his 2008 campaign.
Although he is still raising far more money there than
current Republican rival Mitt Romney, Obama in 2012 is finding
Silicon Valley to be tougher terrain.
He lags behind his 2008 campaign in donations from workers
at Internet, computer and telecom equipment powerhouses such as
Google, IBM, Hewlett Packard, and Cisco
, according to a Reuters analysis of federal disclosures
from the Obama presidential campaign committee.
The Obama campaign has raised $1.44 million through May from
employees of 15 top tech companies, as compared to $1.6 million
donated by the same companies’ staff four years ago.
Romney, a former private equity executive, is making inroads
to a key source of cash for Obama, who some tech leaders view as
anti-business because of uncertainty that they blame on the
Dodd-Frank financial regulation reform and the healthcare
overhaul. Both laws were pushed by the Obama administration and
enacted in 2010.
Romney’s support for the extension of Bush-era tax cuts for
the rich and his free trade credentials also endear him to some
Silicon Valley entrepreneurs, although they worry about him
igniting a trade war with China over the value of its currency.
Romney has raised almost $340,000 during this election
campaign from the 15 tech companies’ employees, far behind his
opponent but already ahead of the roughly $240,000 that
Republican presidential candidate John McCain picked up through
May 2008.
Obama’s message in the wake of the economic crisis has
antagonized some on Wall Street and in Silicon Valley. The late
Apple CEO Steve Jobs told Obama he would not win a
second term without being more business friendly, according to
Jobs’ biographer Walter Isaacson.
And Netscape co-founder Marc Andreessen has switched to
Romney after backing Obama last time.
“In 2008, the Obama administration looked like the best game
in town,” said tech sector analyst Roger L. Kay. “Fast forward a
few more years and you see a lot of disappointment.”
After years of sluggish economic growth and persistent
unemployment, Romney has swooped in with a simple prescription
to keep the tech sector humming: deregulation, lower taxes, and
bolder piracy protection from China.
“Romney can talk the technology game better than Obama can.
Romney was a (venture capitalist),” said John Backus, a venture
capitalist who worked for Romney at private equity firm Bain
Capital.
“I don’t think Romney wins the Valley, but he is going to
increase his share of the donation pie substantially.”
While the numbers are small, Romney did slip past his rival
among one group that is vital to the tech world. He has raised
$392,300 through April from venture capitalists, some $20,000
more than Obama, according to federal disclosures compiled by
the Center for Responsive Politics.
Obama has attracted roughly $3 million from the computer and
Internet industry so far this campaign, leaving Romney trailing
with just under $1 million collected in the same period,
according to CRP. The figures do not include donations from the
telecommunications industry.
“There is no doubt that, in terms of money and votes,
Silicon Valley will be Obama territory,” said Steve Westly, a
venture capitalist and major Obama fundraiser in California.
VALLEY CONCERNS
All the same, Obama supporters in Silicon Valley and
big-dollar Obama fundraisers say his campaign and the White
House are worried the Romney campaign will be able to narrow the
cash lead in the tech sector.
The campaign formed an inner circle of the technology sector
elite – called “Tech for Obama” or T4O – to provide “significant
financial support” and deeper access to the tech community,
according to sources involved and marketing materials.
T4O held its first formal conclave in Chicago on May 18, the
same day as the IPO of social media company Facebook.
Its roughly 50 core members include Salesforce.com CEO Marc
Benioff, LinkedIn co-founder Rusty Rueff, Yelp co-founder Jeremy
Stoppelman and Stephen Pagliuca, a managing director at Bain
Capital, according to marketing materials.
On that day, paying $5,000, some members gathered for dinner
with Google’s Executive Chairman Eric Schmidt and Obama’s
campaign manager Jim Messina.
T4O hopes to strike a tone that is starkly different than
Romney’s laissez-faire message, stressing the necessity of a
partnership between the public and private sectors, higher
federal spending on education and research and – in contrast to
Romney’s proposed crackdown on China – a more nuanced approach
to allegations that Beijing is involved in the sophisticated
theft of U.S. intellectual property.
“When the companies like Microsoft and Google who have been
operating in China for a long time listen to Romney on the stump
they think: ‘If he did what he says he is going to do, he would
ruin our markets,'” Kay said.
Romney, for his part, has an informal “innovation coalition”
that handles outreach to the tech world and policy formation.
The Republican’s business background, which McCain lacked,
has helped him on Wall Street as well as in Silicon Valley and
other tech enclaves like northern Virginia.
“People creating jobs in Silicon Valley are very
entrepreneurial, very much geared to be capitalists, and the
current administration, frankly, is more of the socialist bent,”
said Daniel Dumezich, a Chicago-based tax attorney and major
Romney fundraiser.
Federal financial disclosures show that together with his
Super PAC (political action committee) allies, Romney has
received thousands from Texas Pacific Group partner Dick Boyce,
Cisco CEO John Chambers and Hewlett Packard CEO Meg Whitman –
who made a fortune as CEO of eBay during its big years of growth
and who lost the 2010 California governor’s race.
To try to keep the sector on board with Obama, T4O members
argue that the White House, which for the first time has a chief
technology officer, has done much to support tech, such as
spectrum re-allocation, trade agreements and opposing
anti-piracy bills which were later killed in Congress.
Both Romney and Obama have talked on the stump about
immigration reform – favored by many in Silicon Valley – to ease
restrictions for highly skilled workers or those with degrees
from U.S. universities.
Romney is critical of what he views as the administration’s
anti-business maneuvers, such as lawsuits launched by the
Justice Department and the Federal Trade Commission against
Apple and Google, respectively.
The White House can side-step gridlock in congress to give
the tech sector more of what it wants, such as harnessing new
technologies to make better use of government-held radio
spectrum and relieve congestion, a recommendation made in a
report by the president’s panel on science and technology.
That report was partly authored by T4O members and $35,800
donors to the Obama Victory Fund: Google’s Schmidt and
Microsoft’s chief research and strategy officer Craig Mundie.
“No one thinks this is going to be a landslide for either
side,” said Rick Marini, a T4O member and founder of
Facebook-powered professional networking application BranchOut.
“We need to be vigilant about fundraising.”
