Microsoft Getting Closer to the Fire

Posted by tadelste on Jan 12, 2006 4:42 PM EDT
LXer; By Tom Adelstein
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A dispute that has kept the House Ethics Committee from considering Majority Leader Tom DeLay's activities may have ramifications for Microsoft. When one begins to untangle the remarkable political organization created by Microsoft and lobbyists Preston, Gates Ellis et al, you find some uncanny coincidences.

The ethics committee, the House's mechanism for enforcing rules for members, has operated for exactly one day since Congress convened in January. In the meanwhile, a former Preston, Gates and Ellis lobbyist, Jack Abramoff has become the target of several serious investigations and the focus of the D.C. media.

Abramoff left Preston Gates in 2000. Even so, he's a problem for the firm's management. Reports have surfaced questioning Abramoff's financing of travel for lawmakers, especially House Majority Leader Tom DeLay (R-Texas). All of the spending under investigation happened while Abramoff worked at Preston Gates.

The Washington Post reported that airfare to London and Scotland in 2000 for House Majority Whip Tom DeLay (R-Tex.) was charged to an American Express card issued to Jack Abramoff. House ethics rules bar lawmakers from accepting travel and related expenses from registered lobbyists.

How Does This Affect Microsoft

Many people believe that Microsoft helped construct Preston, Gates & Ellis as an alter ego for the Business Software Alliance. The firm of William H. Gates Sr., father of Microsoft co-founder Bill Gates, merged with Preston in 1990. The later old line Seattle firm started when Harold Preston located in Seattle from Iowa in 1883 and began practicing law. Jim Ellis joined Preston in 1949.

By getting William Gates Sr. together with Preston, Microsoft suddenly had an organization that looked like a law firm and not the legal department of Microsoft. The Seattle firm also had a small office in Washington, D.C. which helped Microsoft and the Business Software Alliance reach out and affect government policy.

But, Preston, Gates & Ellis needed to show some lobbying fees and clients other than Microsoft and the BSA. Adding Abramoff did just that. Additionally, he had his own clients and did not have to work on any Microsoft or BSA business.

Bad Choice

Adding Abramoff accomplished the goal of diversifying Preston, Gates & Ellis revenue and client base. But, Jack Abramoff didn't fit the culture. While most lobbyists seem happy with a six figure salary, Jack made millions annually. He also could be considered a maverick.

Now, the partners of Preston Gates must deal with the consequences of discovering their firm is listed on the invoice for Tom DeLay's plane fare to Scotland. They may also have to consider how deep and far the probe of their firm may go. For example, both Preston Gates and the Business Software Alliance are listed as contributors to the campaign of Senator Patrick J. Leahy, the Chairman of the Senate Judicial committee that ruled on the Government's settlement with Microsoft.

Meanwhile House majority leader Tom DeLay says that expenses on his trip were paid by a nonprofit organization and that the financial arrangements for it were proper. He contends that he had no way of knowing that any lobbyist financially supported the trip, either directly or through reimbursements to the nonprofit organization.

Non-profit organizations, foundations, multiple corporate entities seem like the products of a firm like Preston, Gates & Ellis. Someone will want to look into those issues. For example, on June 7, 2005, Bill Gates profile on shows that he's contributed $59,100 since 1999 to all political candidates. Of course, that's personal money. Given the tens of millions of dollars attributed to Microsoft in campaign contributions, it might look like some kind of front organizations have made contributions beneficially for the welfare of the richest man in the world.

And the connection between Tom DeLay and Jack Abramoff: DeLay helped defeat a bill that would tax Preston Gates clients - American Indian casinos. You have to also wonder if those casinos used Microsoft Office.

Stay Tuned

As they say around my part of the country, there's no telling what you might see as the days start to pass. For sure, the media won't let the Tom Delay story go. Further, the guy blocking the committee hearings is the representative from the state of Washington. Is that just another coincidence? Perhaps it is.

Respectfully submitted

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