Microsoft and Officials in IBM's Linux Hot Tub

Posted by tadelste on Feb 25, 2006 10:34 AM EDT; By Tom Adelstein
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Microsoft doesn't seem to worry about missing a software release. They also haven't worried about paying off private anti-trust cases. But when they start posting exhibits on their web site in defense of legal rulings, then doubt, suspicion, or lack of confidence in future outcomes have become a preoccupation in Redmond.


Microsoft hasn't faced a legal challenge they couldn't handle in past with the exception of the United States v. Microsoft. Today, the Redmond company faces serious challenges to its existence as S. Korea and the European Community seem intent on having Microsoft pay a price that could tarnish the Microsoft reputation.

Microsoft created a monster during their US anti-trust trial when they claimed that Linux provided a competitor. Microsoft's attorney cross examined an expert witness and showed him a box of Red Hat 5.1. The expert had not heard of Linux and from that point Linux started to grow and mature.

Aside from the Linux challenge in the market, two other serious challenges loom on the horizon for Microsoft. If you have read the IBM's subpoena, then you understand how much contempt IBM has for Redmond. Now that IBM rid itself of the IBM PC company, it can challenge the nemesis it helped create in the early 1980s.

The second challenge doesn't have the public exposure it deserves. But with the probability of a civil war in Iraq and with his many detractors, George Bush could get caught up in the Microsoft mess. The hush over the Jack Abramoff and Ralph Reed connection might turn into a roar.

IBM Requests a Subpoena re Linux

The IBM subpoena reads like it came out of a blog or mailing list in the Linux community. One could easily say, "This is common knowledge we've discussed for years". So, why do you ask is IBM only know bringing these items up now?

Here's what IBM first requested in the first paragraph alone:

Agreements relating to any UNIX product involving Microsoft and AT&T, USL, Novell, Santa Cruz, or SCO, including but not limited to: (a) the software licensing agreements with AT&T executed by Microsoft on December 1, 1981, August 13, 1986 and May 27, 1988; (b) the sublicensing agreement with AT&T executed by Microsoft on October 9, 1986; (c) the letter agreements with AT&T acknowledged by Microsoft on October 13, 1983, June 13, 1984, January 17, 1985, September 30, 1985, December 10, 1985, August 21, 1986, October 1, 1986, June 26, 1989, January 31, 1990, June 6, 1990, and July 20, 1990; (d) the letter agreement with USL acknowledge on June 16, 1992; (e) any Source license agreement with SCO; and (f) the Release, License and Option Agreement with SCO effective as of April 29, 2003 and amendments thereto.

The agreement to purchase a SCO license always seemed odd to me. Microsoft became the first licensee of UNIX from AT&T in 1981. Subsequently, they continued to reaffirm their standing. They handled over Xenix to Santa Cruz in exchange for approximately 33% of Santa Cruz's stock. So why did they need to pay the former Caldera a licensing fee?

Like I said, this request for documents known to the public seems late in coming. IBM's lawyers possibly obtained their information concerning these documents from public SEC filings or a database where the information existed. They may have even come from IBM's own legal files.

I encourage you to read the rest of the subpoena yourself. It's difficult to convert and display since it's made up of images instead of text. You may find it remarkably obvious and something one would expect the Department of Justice to have filed on behalf of the citizens of the United States of America.

The Abramoff-Reed Connection

From 1998-99, Jack Abramoff, a Preston Gates lobbyist received $560,000 to lobby on behalf of Microsoft. Abramoff's associate, Ralph Reed received a $240,000 annual retainer while serving as a senior consultant to the Bush Campaign 2000. Reed's company's internal documents showed that his mission involved identifying and recruiting prominent Bush supporters to personally write and lobby Bush to back Microsoft.

Reed's contract with Microsoft came to the public attention and 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. But in typical political practice, the issue got deflected.

But the connection between Reed and Bush's campaign had the possibility of significant embarrassment. A litigant in a case prosecuted by the US Department of Justice had a paid lobbyist on the staff of a Presidential hopeful.

Reportedly, Dick Cheney arranged for Enron to hire Reed so he would not show up in the official expenses of the Bush-Cheney campaign. Reed continued to recruit staff for Bush and they lobbied for Microsoft. While Reed says he had little contact with Abramoff, the high-powered Microsoft lobbyist went to school with Reed in Beverly Hills. Meanwhile, Abramoff, who Bush says he didn't know, says he had frequent contact with the President.

The prosecutor for the Department of Justice against Microsoft, David Boise, also represented Al Gore in the Florida voting recount fiasco. Boise didn't exactly endear himself to Bush. But, Boise became the attorney for SCO against IBM. Boise also represented IBM in years past as their defense counsel against monopolistic practices.

Soon after Bush's inauguration, an appeals court overturned Judge Jackson's break-up order and the new DoJ got a new judge, Colleen Kollar-Kotelly. She approved what amounted to slap on the hand for Microsoft. Not a big surprise considering the new administration and the new attorney general.

One of the most confusing events related to Bush and Microsoft came when the Justice Department told South Korea's Fair Trade Commission that they went too far in an antitrust judgment against Microsoft. That seems consistent with the Bush administration's stance toward Microsoft. That stance seems like one of "hands off".

This is Political

I have a theory as to why the Microsoft-Bush connection hasn't had the public exposure it deserves. Bush's enemies may have as much Microsoft and/or Abramoff money and influence as the former governor. Refer to Following Bill Gates' Linux Attack Money for an idea of the reach of Microsoft into the federal government.

Have you ever chronicled the US Government's efforts to litigate Microsoft? When you step back and take a look, it seems as though the Department of Justice shopped around for a friendly judge and finally got one. You might even consider that we have a former president with conflicts of interest with Microsoft and his cabinet.

Why is this important? Because Microsoft has attacked and continues to attack GNU/Linux, the Free Software Foundation and a host of projects related to open source software. With Microsoft's considerable resources, they have mounted an ambitious campaign unlike any they have undertaken in the past. They intend to wipe Linux from the map.

Here's the progression:

  • DoJ performs massive investigation and enters into a decree->
  • Judge Sporkin refuses to approve->
  • DoJ/Microsoft joint appeal->
  • Judge Jackson hears case and rules to break up Microsoft->
  • Microsoft appeals->
  • Bush DoJ and Microsoft reach settlement->
  • Collen Kollar-Kotelly approves->
  • Microsoft goes back to business and attacks GNU/Linux.

How did this happen? Like I wrote above, Microsoft and their partner, the Department of Justice shopped for a friendly judge until they found one. It starts with a DoJ investigation headed up by Anne Bingaman. Most people believe in the spring of 1994 that she would file a major suite against Microsoft. But, after Bill Gates visit to the White House all that changed.

The DoJ reached a settlement with Microsoft and took it to the first Judge Stanley Sporkin. In a memorandum opinion on Valentine's Day 1995, he launched into Microsoft wondering why the DoJ had made nothing of Microsoft's anti-trust case. Ultimately, Sporkin refused to approve the agreement and Microsoft and the DoJ appealed the decision. That's correct Microsoft and Justice, titular adversaries, filed a joint appeal.

The following June, a federal appeals court overturned Judge Sporkin and assigned the case to a different judge, Thomas Penfield Jackson.

Bill Gates soon thereafter visited China where, after meetings with Jiang Zemin, Windows was declared the official operating system of the People's Republic of China. At just about the time of Gates's visit, the government of China began putting money into the Democratic Party's coffers. Conspiracy theorists find the chain of incidents strange. They consider it an unusual coincidence.

Conclusions Coming

Have you seen the media oust a President before? I was alive and observant when Peter Jennings, Bob Woodward, Carl Bernstein, Ben Bradley, Diane Sawyer and others took out Richard Nixon. If you haven't seen it, then you probably cannot imagine such an event.

At the time, what seemed like the entire US population went on strike. The economy came to a halt, all eyes focused on television reports, crowds surrounded the White House and Capitol Hill. The word Watergate filled every mouth in the country. Nixon had no alternative but to resign.

CNN's Judy Woodruff discussed the event recently.

It is so hard, I think, for young people we know who work here at CNN and other news organizations to even imagine what Watergate was like. To have a White House come undone, an administration come undone, because of some news reporting.

But it wasn't some news reporting. It was the news reporting. You just couldn't avoid it.

People will make negative comments about this article. I have heard them before. You'll see people write, "here's another story about how Microsoft will fail, it'll never happen"; "this guy's a Linux bigot", "with 50 billion in the bank, who can stop them?"; "no one will ever connect Microsoft with these guys"; "bringing Abramoff into the conversation is stupid and a low blow"; "the media will never pick up on this"; "who cares"; "Microsoft owns too many politicians"; etc.

IBM's subpoena may silence a lot of this criticism. The time seems ripe. Bush's war seems in serious jeopardy and the US troops played no part in silencing the riots in Iraq last week. Everyone seems to agree that the time to come home has arrived.

Reports say that Microsoft now has the number one server and has beaten UNIX after almost twenty years. Anytime a company reaches a pinnacle, they know that the next trend will start a downward slope. That's not wishful thinking but management science.

IBM doesn't make many mistakes, especially when it comes to legal matters. They timed their inquiries when they knew they had their best chance. These issues are real.

People have had five years to learn Microsoft's tactics. Posting their "tweaked" compliance documents on their web site usually starts their machine up. But somehow, I don't think the EU will take kindly to being called “false, misleading and unfair”. The EU may also take exception to Microsoft's contention that the commission’s case is fundamentally flawed to an extent that it “would make the imposition of any fine on Microsoft unlawful”

These seem like desperate measures for someone who people believe remains unafraid of anyone.

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excellent article jsusanka 4 2,060 Feb 27, 2006 3:17 AM
$14 Billion and Counting garyedwards 0 2,054 Feb 26, 2006 10:22 AM

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