Policy dismay may cut tech funds for Obama

By Kim Dixon

WASHINGTON (Reuters) – Eric Schmidt, then chief executive of Google, made history in 2008 when he trumpeted Barack Obama on national television, helping the Democratic presidential candidate win a 5-to-1 donation edge from U.S. technology companies.

Much of the industry’s wealth has typically flowed toward Democrats, in part owing to its liberal locales and younger executives. Obama widened the gap in a big way in 2008, far surpassing the 2-to-1 advantage Democrat John Kerry enjoyed four years earlier from the tech industry.

But in the run-up to the 2012 election, Obama’s record on topics from the Internet to tax policy may cut into the campaign cash he can count on from big tech-connected donors.

“I think his numbers will go down and whoever the Republican candidate is will go up,” said Ralph Hellmann, a lobbyist for the Information Technology Industry Council’s political action committee.

Industry political action committees give primarily to congressional races, leaving executives and other company officials to donate directly to presidential candidates.

Still, they give advice to the executives on giving. The political action committee of the ITIC trade group, which represents Apple Inc, Google Inc and others, gave 65 percent of its donations to Democrats during 2008.

In 2008, donations from executives, workers and others linked to the communications sector gave Obama $25 million, compared with the $5 million that went to Republican rival John McCain, according to the Center for Responsive Politics, which tracks political spending.

An election cycle earlier, Kerry got about $10 million from the sector to Republican George W. Bush’s $6 million.

Schmidt said recently he would play a role in Obama’s re-election campaign, although it is unclear if it will include the kind of testimonial he provided in an infomercial in 2008.



Polls show Obama holding a strong lead over any Republican opponent, although the stuttering economic recovery is not likely to make his task easy.

In April, Obama sought to revive the youthful enthusiasm that was a hallmark of his 2008 campaign, visiting the headquarters of Facebook where he won gushing praise from the social networking giant’s young founder Mark Zuckerberg.

Obama backers met in Chicago in early June and are laying out a strategy to raise more than $750 million to re-elect him, while some analysts see it all adding up to a record-breaking $1 billion campaign.

But Obama may be hurt by dismay among tech heavyweights about some not-quite-fulfilled promises.

One industry official who endorsed Obama publicly in 2008 said there is frustration with “net neutrality” rules adopted by the Federal Communications Commission.

“I think you’ll see a lot of people in the tech community who are disappointed in Obama,” said the official, who was not authorized to speak for attribution, noting the Internet rules leave big loopholes for phone providers like AT&T Inc.

Some in the field trend more Republican. Phone companies like AT&T and Sprint Nextel tend to back Republicans, who are more likely to support industry mergers, for example.

Cisco Systems Inc chief executive John Chambers and Sprint chief executive Dan Hesse both raised big money for McCain in 2008. But Cisco employees as a whole gave more money to Democrats in 2008, the Center for Responsive Politics says.

Obama has beat back some big priorities for tech firms.

Companies from Cisco to Microsoft Corp, whose founder Bill Gates backed Obama in 2008, have been pushing for a tax break to bring home profits held offshore. But Obama has been firm that he will not consider such a break outside of a broad revamp of the tax code, which is expected to take years.

Many predicted that, while the gap may narrow, Obama will retain the historic Democratic edge in tech fundraising.

Ginny Terzano, who worked as a press official at Microsoft’s Washington office for a decade and has worked for Democrats, said there will be ebbs and flows in the backing for Obama among tech companies.

“Some in the sector want to go through a litany of what has and hasn’t been done,” Terzano said. “But Obama’s policies have moved things forward in the right direction more so than not.” (Additional reporting by Diane Bartz and Edwin Chan; Editing by John O’Callaghan)