Microsoft and Abramoff: Influence in an Anti-Trust Outcome?

Posted by tadelste on Jan 12, 2006 4:31 PM EDT; By Tom Adelstein
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[Ed note: This article went into embargo right after publication. We brought it back after finding new evidentary material on which we will report soon.]

As a news organization, we first reported back in June that we had suspicions that ties existed between Jack Abramoff and Microsoft. Our initial report tied together research when the Washington Post disclosed that Preston Gates had paid an invoice for a trip made by Tom DeLay to play gold in Scotland. (Sorry that's a Freudian slip. I meant golf.)

Abramoff's guilty plea of last week helps us make our case and allows us to demonstrate our suspicions regarding Microsoft's ties to the Bush administration. The guilty plea also allows us to question whether Microsoft received favorable treatment by the Bush Justice department by paying Abramoff and his aides and partners, starting with Ralph Reed.

Our main concern deals with whether or not our government can use Microsoft's status as a monopoly and possible ties to a slew of politicians to stop its global attack on Linux.

Many observers have questioned the penalty phase and settlement in the case of UNITED STATES OF AMERICA, Plaintiff, v. MICROSOFT CORPORATION, Defendant. The general consensus among many observers says Microsoft got off too easy and "the fix was in".

Ralph Nader's">letter to the court probably provides the most succinct summary of the various critics. Follow these excerpts:

  • We note at the outset that the decision to push for a rapid negotiation appears to have placed the Department of Justice at a disadvantage, given Microsoft's apparently willingness to let this matter drag on for years, through different USDOJ antitrust chiefs, Presidents and judges. The proposal is obviously limited in terms of effectiveness by the desire to obtain a final order that is agreeable to Microsoft.

  • We are disappointed of course to see a move away from a structural remedy, which we believe would require less dependence upon future enforcement efforts and good faith by Microsoft, and which would jump start a more competitive market for applications.

  • The proposed final order addresses important areas where Microsoft has abused its monopoly power... A need to have broader disclosure of file formats for popular office productivity and multimedia applications. Moreover, where Microsoft appears be given broad discretion to deploy intellectual property claims to avoid opening up its monopoly operating system where it will be needed the most, in terms of new interfaces and technologies.

  • Moreover, the agreement appears to give Microsoft too many opportunities to undermine the free software movement.

  • It is astonishing that the agreement fails to provide any penalty for Microsoft's past misdeeds, creating both the sense that Microsoft is escaping punishment because of its extraordinary political and economic power, and undermining the value of antitrust penalties as a deterrent.

So, let's just say a considerable concern exists that Microsoft got off the hook without penalties for their monopolistic practices from the past. They wiped most of the state' anti-trust suits away at the same time. The government did not break them up. They remain free to continue behaving as a monopoly in restraint of trade.

How did they pull it off? Well, I don't know, but I have my suspicions. Let's look at some interesting documents that might indicate they had help. The first of the documents is a 1998 report showing that Jack Abramoff lobbied for Microsoft. In figure one, you can clearly see that Abramoff did something for Microsoft. In figure two, you can see what the firm billed for his services. Also notice back in figure one, Abramoff collected money from the Business Software Alliance and the Mississippi Band of Choctaw Indians.

FIGURE ONE: US Lobby Registration & Reporting Disclosure Page -1998

Figure two is a supplemental report. You can click on this link to get the original page, then click on the filing type link to see the LOBBY REPORT

FIGURE TWO: Lobby Report Section 5 -1998

In the next year, you can see in figures three and four that Abramoff, once again, received money to lobby for Microsoft. In Figure three, you can also see his firm billed the Business Software Alliance and American Classic Voyages Co. So, any attempt to distance Preston Gates, Microsoft and the Business Software Alliance from the Abramoff capers would appear fruitless.

If the Bush Justice department does not investigate these connections, I would think that everyone in the world should start asking questions about the Administration's involvement with Microsoft.

FIGURE THREE: US Lobby Registration & Reporting Disclosure Page -1999

FIGURE FOUR: Lobby Report Section 5 -1999

Next Question: Ralph Reed and Other Bush Friends

Who is Ralph Reed? Ralph E. Reed Jr. runs a political consulting firm and operates as president of the Georgia Republican Party. He was Executive Director of the Christian Coalition 1989-1997. He lobbied for Microsoft until last year and simultaneously served as a senior Bush consultant during the 2000 campaign for President.

The Bush Justice department's pat on Microsoft's hand did not come as a surprise to those aware that Reed was on a $240,000 a year retainer with Microsoft while a campaign strategist for Bush 2000. Reed's connections to Abramoff and Scalion start to emerge from the fog of the wide spread scandals in Washington DC.

Reed has acknowledged that his consulting firm did business with Jack Abramoff and Mike Scanlon, the former spokesman for House Majority Leader Tom DeLay. Reed has said he knew the Washington lobbying firm that later fired Abramoff (Preston, Gates) was recruiting coalition members. Reed's company internal documents showed that the mission was to identify and recruit prominent Bush supporters to personally write and lobby Bush to back Microsoft.

Reed's contract with Microsoft proved an embarrassment to the Bush campaign in the summer of 2000. While under prosecution for anti-trust, Microsoft had hired a number of Bush aides as consultants and lobbyists including Reed.

According to the New York Times, Ralph Reed, a senior consultant to Gov. George W. Bush's presidential campaign, apologized ... for lobbying the governor on behalf of the Microsoft Corporation and promised not to lobby him again on behalf of Microsoft or anyone else.

One has to ask how Reed could lobby Bush for Microsoft, apologize and then say he would not lobby Bush? Microsoft continued to pay him. He could apologize all he wants, the damage already occurred. George Bush, we're told, listens to his advisors. This embarrassment and its subsequent apology sounds like more infuriating Microsoft-style, double-talk.

Meet the Players

We've identified Tom DeLay and Mike Scanlon, Jack Abramoff, Reed, Preston Gates, and the Business Software Alliance. We also will find Karl Rove in this mix. Sourcewatch tells us that "In January 2000, it was revealed that "Karl Rove, President Bush's top political adviser, recommended the Republican strategist Ralph Reed to the Enron Corporation for a lucrative consulting contract as Mr. Bush was weighing whether to run for president ..." Sourcewatch also claims that it allowed the Bush campaign to keep Reed off the payroll.

Additional names keep popping up in the investigations such as Warren RoBold, John Colyandro, Jim Ellis, Sam Walls and Kevin Brady among others. No one knows where this will lead, but one thing seems clear, Microsoft's lobbyists had a hand in asking for lienient treatment from the Bush Justice department.

In this mystery, shouldn't we at least identify the nexus? Is it Jack Abramoff or Ralph Reed? Or, is it someone who we have yet to identify? Whoever started it, certainly had a willing audience of hungry and ambitious politicians from whom to chose.

Now, we can only wonder if that same Justice department will turn over their findings to a special prosecutor. As we discovered during the Clinton administration, a trip to the White House by Bill Gates can wind up in a great deal for Microsoft. And while the Federal District Judge refused to approve the deal until Justice turned over their evidence to the court, Justice refused, appealed the Judge's decision and got a new judge.

Will DeLay's Collusion Spill Over to Microsoft?

The indictment of Tom DeLay by Texas prosecutors looks like the tip of the iceberg. Congress may finally have to hold an Ethics hearing and the closer they look, they'll find Bill Gates' Linux attack money. Will they try to connect the dots? The Gates and Dell family foundations have donated at least $350,000 to at least one of Tom DeLay's charities.

The future should prove interesting for those of us who wonder if justice will ever come to pass.

Note: In the event you attempt to access the link in Nader's letter, it will redirect to a different page. We reported this as a prevalent issue in a story entitle Did Bill Gates Invent Linux and Has He Erased the Evidence?. The story can be found here at web,

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