Anti-Microsoft Scandal

Posted: Apr 01, 2002 12:00 AM
WASHINGTON -- California State Atty. Gen. Bill Lockyer, a 60-year-old veteran of 30 years in Democratic politics, was in Washington two weeks ago for the national conference of state attorneys general and dropped by a federal district courtroom for an hour or so. In progress was the latest stage of antitrust proceedings against Microsoft. His interest may have been stimulated by the more than $75,000 in campaign contributions from corporate rivals of the embattled technology giant. Lockyer was one of nine state attorneys general who dissented from the U.S. Justice Department's agreement to settle the Microsoft case. He was not the only one who visited the Washington courtroom, and not the only one receiving contributions from Microsoft's foes. Contributions to Lockyer are just a little larger, and the consequences greater. University of Texas economist Stan Liebowitz has calculated that Lockyer and his colleagues could cost California's software developers and consumers $80 billion over the next three years. While Democrats have trouble pinning Enron's campaign contributions to Bush administration policy, it is easier to connect the dots in the Microsoft case. The company's competitors want to continue antitrust litigation, and state legal officers are helping after receiving contributions. It looks like more of a political scandal than Enron. Lockyer, former California State Senate president, has his eyes on a future bid for governor. Heavily favored for re-election to a second term as attorney general this year, he has raised $5 million so far to make sure. His listed contributions from Microsoft competitors and their law firms, as of last December, totaled $75,500 -- with $50,000 from Oracle Corp. "With the exception of some of ... Lockyer's top campaign donors," software developer Jonathan Zuck commented recently, "this proposal is all pain and no gain for California." Any scandal here is bipartisan. Kansas State Atty. Gen. Carla Stovall, seeking the Republican nomination for governor, is one of the anti-Microsoft nine. Reports as of last December showed she received between $14,000 and $20,000 from Microsoft foes -- including Oracle and Sun Microsystems. Those two California-based companies showed extraordinary interest in helping a candidate for governor of Kansas. Another Republican state attorney general, Utah's Mark Shurtleff, followed the lead of his state's GOP Sen. Orrin Hatch in joining the anti-Microsoft nine. What turns these conservative Republicans into antitrust zealots may be the influence of Novell Inc., a software company headquartered in Provo, Utah. Kenneth Olafson, a prominent Utah Republican, recently described the "attitude" of Hatch's office: "We're protecting Novell, and that's it. We don't care about the facts or what the economy does." The symbiotic relationship between state attorneys general and Microsoft's foes is shown in Utah. Shurtleff, serving his first year as attorney general in 2001, waited until 15 minutes before the 11 a.m. deadline Nov. 6 before joining the anti-Microsoft group. But lawyers inherited from his Democratic predecessor long had collaborated with Novell. In open court last week, Microsoft lawyers revealed an April 2000 e-mail from the Utah attorney general's office to Novell asking help in drafting language in a possible negotiated settlement that would benefit the company's products. Lawyer Wayne Klein asked for "guidance ... preferably without involving too many people seeing this language." Another example of how Microsoft's enemies seek to utilize political contributions was disclosed in federal court proceedings. James Barksdale, former head of Netscape and a longtime critic of Microsoft, revealed in a recent deposition that he asked Bush administration science adviser E. Floyd Kvamme for help last year in trying to scuttle a settlement. Kvamme, according to Barksdale, agreed to talk to California venture capitalist Kevin Compton -- a fund-raiser for Atty. Gen. John Ashcroft during his tenure as a U.S. senator from Missouri. Compton wrote Ashcroft last Oct. 25 asking for a meeting. Ashcroft properly turned the letter over to Charles James, the Justice Department's antitrust chief. By the time James responded Dec. 19, the suit was settled. "I do not meet with third parties to discuss pending enforcement matters," Assistant Atty. Gen. James wrote Compton. Would that James' state counterparts were so circumspect. With a taste for political spoils developed by their tobacco triumphs, the state attorneys general are unimpeded by federal regulations or regular oversight.