Romney gains toehold in Silicon Valley fundraising

WASHINGTON/SEATTLE Tue Jun 26, 2012 10:38am IST

Republican presidential candidate Mitt Romney addresses the National Association of Latino Elected and Appointed Officials Annual Conference at the Walt Disney World Resort in Lake Buena Vista, Florida, June 21, 2012. REUTERS/David Manning

Republican presidential candidate Mitt Romney addresses the National Association of Latino Elected and Appointed Officials Annual Conference at the Walt Disney World Resort in Lake Buena Vista, Florida, June 21, 2012.

Credit: Reuters/David Manning

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WASHINGTON/SEATTLE (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."

(Editing by Alistair Bell and Paul Simao)

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Comments (1)
Tom_Mariner wrote:
Forget fund raising — if Mitt Romney wins, you’re going to see a collective sigh of relief and the sound of corporate pocketbooks opening to hire because they know they won’t have somebody getting votes by setting them up as villains. And somebody who they trust will take effective steps to help the economy.

Jun 26, 2012 6:16pm IST  --  Report as abuse
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