The Influence Peddlers
In 1999, the Information Technology Association of America (ITAA), an Arlington,
Va.-based trade group with a $6 million annual budget, spent $1 million to lobby
federal legislators and promote the group's political agenda. The number-one issue for
the ITAA: Y2K-specifically the Y2K Act, which limits litigation against companies
responsible for Y2K glitches. Passage of this bill was a huge victory for the IT
vendors that constitute the ITAA, yet a significant setback for their CIO customers who
got stiffed by buggy software.
The ITAA is hardly alone. It's one of about a dozen IT industry associations staked
out on Capitol Hill, each of them spending millions of dollars annually to affect
legislation on behalf of their technology vendor members. Intel Corp., Microsoft Corp.,
Oracle Corp., Sun Microsystems Inc. -- each of these big-name suppliers holds multiple
memberships among these groups, sitting on boards and committees, helping draft their
political marching orders.
And Y2K is but one of several policy issues these vendor groups have influenced.
They were huge players in swaying Congress to increase the quota for H-1B immigrant
work visas in 1998, and last year they helped convince the Clinton administration (in a
particularly stunning policy reversal) to ease export restrictions on encrypted
Now, post-Y2K, lawmakers are finally prepared to debate such hot-button technology
issues as e-commerce and intellectual property regulations -- issues in which
technology vendors and customers alike have vested interest -- and no doubt the IT
trade groups are primed and ready to be the voice of the vendors.
But who will speak for the CIOs?
In a city where image and influence are everything, CIOs have neither. Their only
approximation of a trade association is the Society for Information Management (SIM), a
Chicago-based professional group that relies largely on a bare-bones budget and member
volunteers. Unlike the IT trade associations, SIM has no significant presence in
Washington. And unlike the vendors, CIOs have no visibility with key policy-makers. In
fact, one Republican congressman -- considered one of the most IT-savvy legislators in
Washington -- had to ask when contacted by CIO, "What exactly is a chief information
officer -- the person who manages the computers, or the one in charge of
Worse than unknown, CIOs are out of touch. "Most [CIOs] don't have a clue "Most
CIOs don't have a clue what's happening in Washington. -Dr. Leon A. Kappelman,
professor of business computer information systems, University of North Texas" True,
the companies CIOs work for belong to their own trade associations, but these groups
lobby for their own industry-specific policy issues -- health care or tax reform, for
example. They leave IT issues to the IT trade groups, which consequently are the only
voices many lawmakers hear. Thomas J. Donohue, president and CEO of the U.S. Chamber of
Commerce, one of Washington's largest and loudest business associations, believes CIOs
can balance this perspective by asserting themselves as the people who know IT best.
Can is the operative word; so far CIOs have chosen to keep their distance from Capitol
Hill. "[CIOs] say, "We don't do Washington,'" grumbles Donohue, who doesn't hesitate to
label IT executives "arrogant" and "naive" for refusing to get in the game with the
issues that affect them. "That's not the way our society is organized," Donohue says,
addingg, "People who 'don't do Washington' eventually come around."
Vendors in Action
Government, like nature, abhors a vacuum, and in the absence of CIOs, the vendor-
driven trade associations have stepped forward to flex impressive muscles. Funded by a
who's who of American high-tech vendors, these trade groups employ researchers,
marketers and legions of registered lobbyists to focus on political agendas set by
their member subcommittees. And it works. Among some of the IT trade groups' recent
Y2K. This issue was brought to the federal front burner in 1995 by the ITAA,
which established a Y2K Task Force to educate the public and private sectors about the
millennium bug, as well as to influence legislation. The ITAA was a key supporter of
the 1998 Y2K Information and Readiness Disclosure Act, which forced companies to go
public with their Y2K preparedness, and the aforementioned 1999 Y2K Act, which limits
post-Y2K litigation. This latter bill was controversial, dividing opinion along IT
vendors and customer lines. Of course, in the end, the vendors had roughly a dozen well-
financed IT trade associations supporting their stance; the customers had none.
Encryption. Although it was the Clinton administration that stepped forward
to ease export controls on encrypted software, that didn't come about until years of
hard lobbying by the IT trade groups. Arguing that encryption restrictions hampered the
global competitiveness of the American software industry, the vendors got backing from
Rep. Bob Goodlatte, who built a groundswell of congressional support for his Security
and Freedom through Encryption (SAFE) Act of 1999. The SAFE Act subsequently was
championed by at least two IT trade groups -- the Business Software Alliance and
Software and Information Industry Association, both based in Washington and both
supported by the likes of Microsoft and Sun Microsystems. Not that the encryption
reversal should be construed as a blow against CIOs -- indeed, their companies may well
benefit from fewer restrictions. But it is a sign of how the White House can be swayed
by the IT power brokers.
IS Staffing.The ITAA again was at the forefront of the effort to publicize
the high-tech staffing shortage and affect federal legislation to ease it. In Congress,
the ITAA and several other IT trade associations successfully lobbied -- twice -- to
raise the quota of H-1B visas for nonimmigrant foreign workers. While the extra influx
of foreign programmers is good for IT suppliers who operate on short-term product
development and delivery cycles, it does little to address the needs of non-IT
companies that are starving for help recruiting, retaining and reskilling permanent IT
Perhaps the IT trade groups' most visible show of force was a mid-1998 "fly-in" of
more than 30 high-tech CEOs (Intel's Andy Grove and Hewlett-Packard Co.'s then CEO Lew
Platt among them) to meet one-on-one with key government leaders to discuss three
specific issues: Y2K, encryption and Internet taxation. A public relations stunt?
Perhaps. But it was a fruitful one -- within a year, Congress passed the Y2K Act and a
three-year moratorium on new e-commerce taxes, and then the Clinton Administration
performed its celebrated encryption flip-flop.
Harris Miller, president of the ITAA, downplays the significance of the lobbying
effort on behalf of IT vendors. "Lobbying is another word for education," Miller
says. "The media likes to talk about 'buying votes,' as if this were all about back-
room politics, but at the end of the day you've got to have intelligent arguments on
your side if you're going to sway people."
And yet, as the tobacco and gun industries have proven, a big pocketbook and a
persistent message also provide great powers of persuasion. With these capabilities,
even the smaller IT trade associations wield great influence over lawmakers. Consider
the Information Technology Industry Council (ITIC), a Washington, D.C.-based trade
group of just 30 members (the ITAA, in contrast, boasts 11,000 direct and affiliate
members). Yet, the ITIC's membership includes HP Co. and Microsoft plus a $3 million
public policy budget earmarked for pushing the group's political agenda. Rhett Dawson,
president of the ITIC, says big-name members bring instant credibility when it's time
to discuss the group's primary e-commerce and intellectual property issues. "We're
relatively small, but because of [our members'] size, we have a presence in Washington.
They give us a lot more agility, visibility and people on the ground," Dawson says. "I
find that if we can get our message and participation together, then we can usually
succeed at what we want to do in Washington."
When Worlds Divide
If CIOs quietly support the vendors' positions on such issues as encryption and e-
commerce taxation, then, fine, they've got friends in Washington. But what happens when
CIOs and vendors disagree?
Such a dispute arose in early 1999, when IT professor Kappelman, representing SIM
on the ITAA's Y2K Task Force, came out against the Y2K Act. Unwilling to tie CIOs'
hands with litigation limits, Kappelman knew he was going against the ITAA's vendor-
friendly grain, yet his minority opinion was tolerated -- until he spoke his mind to
Congress. After that, he was barred from task force meetings. "They didn't mind if I
disagreed privately," Kappelman says, "but as soon as I went public, that was it."
The ITAA's Miller defends the Kappelman ban. "Once he made it clear that he was
totally opposed to our strategy, we did what we'd do to any dues-paying member: we
excluded him," Miller says. "You can't have the fox invited to the chicken meetings. If
we did that, then anything we discussed could potentially end up in The Washington
Post the next day."
But if it's squelched, then how can the minority voice be heard? This is
Kappelman's concern. "The vendors are the only voice; the customer has none," says
Kappelman, who fears the ramifications of lawmakers deciding IT issues solely on vendor
input. "If the voice they've been hearing tells them [a position] is right, and no
other voices are being heard, then eventually it's going to look right to them."
Opportunities to Influence
As election time nears, Internet regulation, e-commerce taxation and digital privacy
will be huge issues among incumbents and challengers. And with these lively debates
come prime opportunities for CIOs to be heard.
A good place to start is by talking with local, state and national legislative
representatives. There's a dual opportunity here: a chance for CIOs to express their
opinions and to educate legislators about IT issues. Technology is an arcane science to
many veteran politicians, who appreciate a little extra help getting up to speed with
IT concepts and jargon. "Politicians have absolutely been way behind the times," says
Goodlatte, whose own IT education began with his appointment to the House Judiciary
Committee's courts and intellectual property subcommittee. "Members [of Congress] are
becoming increasingly aware of what the Internet means and how it affects their
constituents," Goodlatte says, but given the steep IT learning curve, "there's a much
better opportunity today than ever before for people to contact their congressional
representatives and be heard."
One piece of advice: limit your overtures to your own representatives; don't send
spam e-mail to all 435 House members, saying "I need this." "If you do, then I
guarantee 434 people are going to ignore you," Goodlatte says. "If you can't vote for
them, then they aren't going to respond. Just because technology makes it easy to e-
mail everyone in Congress, some people assume their [spam] will have iimpact. It
The key to influence is information. To be truly effective, CIOs must keep abreast
not just of the latest IT issues, but of how the trade associations are tackling them
in Washington. This information is readily available on the trade groups' Web sites
(see "The Players" left). CIOs also must offer their own informed opinions, either
individually to key lawmakers or through their own business or industry associations.
Traditionally, the non-IT trade groups have shied away from IT issues, but CIOs can
change that mind-set by getting involved and hammering home IT's strategic importance
to business. "There is a massive opportunity for [CIOs] to seize on the idea that the
economy is as strong as it is because national productivity is at an all-time high,"
says Donohue of the U.S. Chamber of Commerce. "Part of that productivity can be
directly attributed to the application of technology to business. The tech guys need to
be talking about this issue."
Whether CIOs as a constituency can speak loudly and persistently enough to balance
what lawmakers are already hearing from the IT vendors is an open question. But the
only alternative to trying is to accept being effectively disenfranchised -- totally
removed from the policy-making process. "Recognize that government is always going to
hear from someone on these issues," Donohue says. "And remember, over time the man who
pays the piper gets to call the tune."
The Top 10 Issues
Here are the hottest IT topics in Washington -- and why you should care about
- Encryption. The Clinton administration has eased restrictions on the
export of encryption software, but only global business leaders -- including CIOs --
can determine whether the new limits are relaxed enough.
their millennium successes and setbacks to help prevent such a situation from happening
or Dell Computer Corp. selling PCs to businesses, CIOs should be concerned with the
question of whether to tax e-commerce transactions. Congress is mulling this issue
its copyrighted material -- magazine articles, music and cartoon images -- in a digital
environment? The Clinton administration advocates market-driven self-regulation, but
content providers may want to send a different message to Congress.
institutions transmit sensitive data? CIOs have a vested interest in helping self-
regulation succeed or risk seeing privacy standards imposed by Congress.
open competition in the telecommunications marketplace. But is the marketplace working
as advertised? CIOs are in the best position to answer this question for regulators.
visas -- good news for high-tech companies that employ foreign programmers. But what
about for nontechnology businesses? CIOs across industries must draw attention to their
unique recruiting, retention and retraining concerns.
federal tax credit, which gives a tax break to all companies that avail themselves of
IT skills training. Several IT trade associations are lobbying to extend this tax
credit indefinitely, but it would behoove CIOs from non-IT businesses to express their
foreign tariffs on U.S. high-tech exports. Now industry leaders want to see customs
duties eliminated on other IT-driven products, such as telecommunications instruments
and some consumer electronics. ITA is quickly becoming a broad business issue that CIOs
should weigh in on.
targets of electronic terrorists. Public utilities, financial institutions and
hospitals are also at risk of hacker attacks. Private-sector CIOs have much to gain --
and much to share -- from helping government protect critical electronic assets.