BOOK EXCERPT
MARCH 22, 1999 VOL. 153 NO. 11

Microsoft and the G.O.P.: Antitrust Insurance?
BY VIVECA NOVAK/WASHINGTON
 

CAPITOL APPRECIATION: Gates has been spending more time -- and money -- in D.C.

Republicans know at least two things about Microsoft: it is an $11 billion enterprise and, thanks to the antitrust suit brought against it by the Clinton Justice Department, it is willing to invest some of that money in the G.O.P. So when Microsoft was listed as a "table sponsor" for last week's gala dinner of the National Republican Congressional Committee, indicating a $25,000 donation, nobody was startled. The surprise may come as further Microsoft contributions are tallied in coming months. Sources tell TIME that the committee's top officials have asked the software giant for $1 million--which, if delivered, would place it among the uppermost donors to either party. A committee spokeswoman wouldn't confirm the amount but said it was expected that Microsoft would give "a very considerable amount" beyond the table fee.

 Bill Gates has opened a multifront war against the antitrust actions filed last year by the Federal Government and 19 states. The $1.3 million handed out by Microsoft in 1997 and '98--two-thirds of it to Republicans--was three times its outlays in the previous election cycle.

 In some states that have sued the company, including New York, Microsoft has retained operatives with ties to the attorneys general to argue against the litigation. Former Republican Party chairman Haley Barbour is arguing Microsoft's position with Republican Governors. The company's other lobbyists include four former members of Congress--Republicans Rod Chandler and Vin Weber and Democrats Tom Downey and Vic Fazio--and former aides to Senate majority leader Trent Lott and House majority leader Dick Armey.

 What can Congress do for Microsoft? A Justice Department official says it could pass legislation that would effectively override any court-imposed solution in the antitrust case. And there are precedents. In 1981, AT&T tried, without success, to avoid a breakup by pushing a bill to restructure the company on more favorable terms. Much later, regional Bell companies, chafing under restrictions of the AT&T decree, were able to get it rendered moot by the 1996 Telecommunications Act. A blunter approach would be to forbid the Justice Department to spend any funds enforcing a court decree. Congress "could make it tough," says the official. But such a fight is likely only if Microsoft invests wisely in Washington.END

IMAGE CREDITS | JOE MARQUETTE -- AP