ICYMI- K Street Mines for Gold in Silicon Valley
K Street mines for gold in Silicon Valley
Posted 01/22/14 06:00 AM EST
K Street lobbyists are racking up frequent flyer miles with regular trips to Silicon Valley in search of clients.
They are trading power suits for California casual to cash in on the explosive growth of technology lobbying, which has more than doubled over the past decade and shows no signs of slowing down.
Some firms have even opened satellite offices on the West Coast to sell budding entrepreneurs on the importance of protecting their interests in Washington.
“Whatever app is the hot one this week, people are trying to track them down for representation,” said former Rep. Mary Bono (R-Calif.), a senior vice president at FaegreBD Consulting, who helped open the firm’s new office in Palo Alto, Calif.
The courtship of tech firms has become a high-stakes game, especially now that a new breed of tech powers is emerging on the scene.
In the last six months, several Internet companies — including Snapchat, LinkedIn, Uber, Yelp and Twitter — have contracted with lobby firms or registered their first in-house advocates. Many have set up political action committees or joined industry trade groups.
“To a certain extent, you’ve got some players who are going to try and challenge the incumbents,” said Elizabeth Frazee, a co-founder of TwinLogic Strategies, an all-female lobbying firm that is focused on technology. “It’s a natural maturation process.”
Lobbyists, like investors, are trying to find the next Facebook or Google to bolster their bottom lines. They say fitting in with Silicon Valley’s free-wheeling culture is critical to success and requires leaving some of Washington’s social mores behind — starting with the buttoned-up dress code.
“If you show up in khakis and blazer, you’re overdressed. If you show up in a suit, it’s unheard of,” said Jessica Herrera-Flanigan, a partner at Monument Policy Group. “You don’t get the culture if you do that.”
Name-dropping is another big no-no.
“It’s not about who you know or what senator you had dinner with yesterday,” Herrera-Flanigan said. “It’s really about explaining to the companies what you know about their company and the worth of engaging with D.C.”
With so much air traffic between the coasts, major airlines have established regular flights from Washington that cater to the Silicon Valley jet set. The best way to make the trip, lobbyists say, is on one of the two carriers offering nonstop flights to San Francisco from Reagan International Airport.
“The question you ask is, ‘Virgin or United?’ ” said one lobbyist.
The tech industry’s embrace of lobbying has been a boon to lobby shops and trade associations in the Capitol.
Led by industry giants like Google, Microsoft, Oracle and Cisco, lobbying spending by the tech sector has more than doubled since 2001, according to the Center for Responsive Politics. Last year, computer and Internet companies spent almost $133 million trying to influence Washington.
“Google and Facebook are the railroad industry of this generation. The power that railroads had 50 years ago, they have now,” said veteran lobbyist Heather Podesta, who recently signed Snapchat as a client at her firm, Heather Podesta + Partners.
Podesta said she makes trips to California several times a year and often meets with venture capitalists to gauge where the industry is headed.
Some larger law and lobby firms — including Venable and Faegre Baker Daniels, the legal arm of FaegreBD Consulting — have opened permanent outposts in the Valley to grab a share of the Internet gold rush.
Venable hung a shingle on a San Francisco office in October and said it wanted to extend its services to “small, medium and large companies in the region who are increasingly encountering scrutiny from Washington, D.C.”
The firm’s primary tech clients are coalitions and trade groups that have members on the West Coast, including the Entertainment Software Association and the Interactive Advertising Bureau.
Bono, who is not a registered lobbyist, said one of the challenges is teaching tech companies how to deal with Congress’s slow-footed approach.
“Members of Congress don’t necessarily move as quickly as the tech industry,” she said.
Michael Beckerman, the chief executive of the Internet Association, said he flies to San Francisco at least once a month and sometimes takes along lawmakers from outside the California delegation to hear firsthand how the industry is driving the economy.
“The products, services and goods created by our members are used in every town in the country,” Beckerman said, “and [that] makes the member realize that they have a stake in the success of an open and free Internet.”
With issues related to privacy, patents and surveillance cropping up frequently in Congress and at regulatory agencies, K Street is finding that tech firms are more receptive to their sales pitches than ever before.
“What I’ve seen, from a smaller start-ups — [that have become] medium-sized companies — is a willingness to engage, but in a more targeted way,” said Jack Krumholtz, managing director at Glover Park Group, who worked as Microsoft’s first in-house lobbyist from 1995 to 2009.
Microsoft is often cited as a cautionary tale, as it waited 20 years after forming to hire any Washington help, only to be plunged into a costly antitrust fight.
That’s a mistake the next generation of tech firms is determined not to repeat.
“Looking back at the Microsoft experience … that lack of engagement allowed for detractors to come in and define the company,” Krumholtz said. “[Having Washington representation] allows for those companies to come in and define themselves here.”