Money Buys Access In Government

Silicon Valley is increasing spending in Washington D.C. and Sacramento

By Stephen Stock, Liz Wagner and Jeremy Carroll
|  Friday, Apr 27, 2012  |  Updated 6:59 AM PDT
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The NBC Bay Area Investigative Unit digs through federal and state campaign finance records to uncover who Silicon Valley's top corporate officers are giving to in Washington D.C. and Sacramento, and what these tech titans are getting in return. Stephen Stock delivers the story.
<i>This story was published Feb. 28, 2012 at 11:58 p.m.</i>

The NBC Bay Area Investigative Unit digs through federal and state campaign finance records to uncover who Silicon Valley's top corporate officers are giving to in Washington D.C. and Sacramento, and what these tech titans are getting in return. Stephen Stock delivers the story. This story was published Feb. 28, 2012 at 11:58 p.m.

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From Sacramento to Washington D.C., in politics money is power. But how much money buys access in the halls of government? And does big money leave the rest of us on the outside looking in on our democracy?

The NBC Bay Area Investigative Unit followed the money and found dozens of big Silicon Valley companies are spending millions to gain access to politicians on both sides of the aisle.  We also found that in some cases, the companies gained business from the government.

We dug through five years of state and federal campaign finance records to see what the top corporate officers at 40 Bay Area companies gave. The CEOs, presidents and vice presidents alone gave $11,929,966 to political campaigns and political action committees during the last three campaign seasons.

No one contributed more than Elon Musk.

Musk builds and manages the American dream. From PayPal to Solar City, Spacex to Tesla, the companies Musk helped create define Silicon Valley’s cutting edge technology and commitment to the environment.

Musk has achieved a lot in a relatively short period of time. He founded his first company at age 23, and currently serves as chairman of the high-end electric car company, Tesla Motors, and CEO of the private space exploration company, Spacex.

We also found that Musk is fast becoming a major player in politics.

According to federal and state election records, Musk is the largest single donor among Silicon Valley’s corporate officers in the last two years. Records indicate that he has personally given $336,450 to dozens of candidates and PACS since 2008. Musk gave both Gov. Jerry Brown and Meg Whitman $25,900 each for their 2010 runs for governor. That amount is the maximum allowed by law.

“If you don’t write those campaign contributions, you’re not going to have a seat at the table,” said Daniel Newman, president and co-founder of Maplight, an organization that tracks donations and the influence they can buy.

Newman said he expected to see more money coming out of Silicon Valley, because, as he puts it, the return on investment is so high.

He believes Silicon Valley companies are actually late to the money game.

“The tech companies have been playing catch up over the last years,” Newman said. “You see Facebook (and) Google increasing (their) lobbying spending. This is because these companies are finding out that they have to be Washington players too, just to keep running their businesses the way they want.”

Anno Saxenian, Dean of the School of Information at UC Berkeley, has studied Silicon Valley and its influences since the 1970s. She believes corporate officers at Silicon Valley companies are recognizing what is at stake in the elections, and that they are trying to shape them.

“I think they do increasingly have to be at the table,” she said. “You know, they are engineers. They’d rather just solve problems and get products out the door. But increasingly, I think this is just part of doing business as a big company.”

Despite spending millions, tech companies in the Bay Area are decades, and tens of millions of dollars in political contributions behind other major industries.

“The entertainment, telecom, oil, pharmaceutical, (and) many other companies,” Newman said, “have relationships going back decades, very close ties between lobbyists and members of Congress.”

“So Silicon Valley is just now catching up?” investigator Stephen Stock asked Newman.

“They are just catching up, exactly” Newman responded.

We also found that the campaign contributions fall in different ways along partisan lines.

In the last two federal election years, Democrats got $1,561,845. That is almost twice the amount as Republicans received from Silicon Valley corporate officers. That number is $825,354.

But the same donors gave Republicans $1,610,220—twice the amount as Democrats in statewide races in California. Democrats received $793,499.

“I think Silicon Valley is pretty much split between the Republican/Democrat side of the house, so it’s not a deep partisan divide and it’s more about certain issues that they care about deeply,” Saxenian said. “I think their perception is that they have to because some of these issues are life or death for them. They perceive that regulation that they consider excessive of the Internet will really cut off their lifeblood—certain kinds of reforms of copyright, things like that. There are a number of issues now that they have a big stake in.”

The top political recipients include President Obama, who received $218,700 in 2008. By comparison, Sen. John McCain’s received $97,450 in the same year.

The President has received $47,300 in individual campaign donations from Silicon Valley corporate officers so far this election year.

Presidential candidates Mitt Romney and Jon Huntsman were the only republicans to get any individual donations from our list of Silicon Valley corporate officers so far, receiving $3,500 and $500, respectively.

But those same donors also gave lots of money to other republicans, most of whom are from outside the state of California. Powerful senators such as Orrin Hatch of Utah received $29,800, Mitch McConnell of Kentucky got $16,000, and House Speaker John Boehner received $27,500.

“What does all this money buy?” Stock asked Newman.

“Money buys the influence,” he said. “This is a drop in the bucket for them. Yet if they are a big donor to a politician, they are going to get their phone call returned, they are going to get the meetings. So we have companies and lobbyists able to buy access to the politicians for a very small amount of money compared to the billions of dollars that are at stake.”

We discovered that some of the biggest donors do, in fact receive, as well as give, to Washington.

Take Elon Musk, for example. In 2010 he gave $151,300 to federal politicians. That same year, his company, Tesla Motors, closed on a $465 million loan from the Department of Energy.

eBay officers gave $213,400 to federal candidates over the last five years and picked up $4,447,938 in federal stimulus money.

And Yahoo officers gave $47,748 to federal politicos and got $9,921,887 in federal cash.

“It surprises me how little it takes to buy access, buy the votes in Congress,” Newman said. “Now sometimes people in Congress get elected believing a certain way and they’ll continue to vote a certain way and they’ll keep getting money from industry. So I’m not saying that people are changing their vote because of the money. But overall these seats in Congress are bought and influenced by special interests who give candidates the money to get elected and money to stay elected.”

While there is no proof that these political contributions are in any way direct payoffs for federal contracts, these big donations clearly buy access to politics that regular citizens can’t get.

“If this were illegal then writing a check and having a lawmaker vote a certain way would be bribery. But it is legal,” Newman said. “But in my view it is still bribery.”

About 10 years ago Silicon Valley ranked 53rd out of all industries in the total amount of lobbying and spending in Washington. Now, Silicon Valley companies as a group rank fourth nationally in political spending. That is more than $1 billion, or a 250 percent increase in some cases.

All of that money doesn’t count Super PACS, which do not have to disclose who donates, or how much an individual gives. Experts estimate that tens of millions of dollars more are given to Super PACS that we’ll never know about, unless disclosure rules change.

In a statement eBay spokesperson Amanda Miller wrote, “eBay Inc. believes it is important to disclose our lobbying and political activity in a clear and transparent fashion, and we make this information available on our Main Street site. The company does not comment on the personal activities and contributions of our executives and employees.” You can read the full statement here.

Chevron issued a statement saying, “Our lobbying efforts provide Chevron’s perspectives on energy and other public policy issues important to the company.  We lobby ethically, transparently and in a bipartisan manner, in accordance with all laws and regulations.” Read Chevron’s full statement here

Elon Musk and Tesla Motors declined to comment for this story. Adobe, Cisco, Google and Microsoft also declined comment. 

To view the complete California campaign finance records database click here.

To view the complete federal campaign finance records database click here.

If you have a story we should investigative, email us at theunit@nbcbayarea.com

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