Congress Gets That Y2K Could Impact Their Campaign Fund Raising & Silicon Valley Could Help (Y2K & Legal Impact Legislation)

I find this rather tunnel vision typical, sad to say. Now that the trial of the century is over, I had hoped for a tad more nobility. -- Diane *Big Sigh*

http://www.rollcall.com/newsscoops/2ndscoop.html

GOP Readies Campaign On Y2K
Davis, Cox, Dreier To Push Plan That Caps Legal Fees

By Jim VandeHei
[Published February 11, 1999]

The year 2000 computer bug is about to inject into Congress one of the most divisive political wars of the year.

The millennium bug will bite when the Republican leadership presents its Y2K liability protection legislation, a bill designed by business leaders to protect themselves from mammoth legal costs that could be affiliated with the computer glitch.

The bill, which was written for GOP leadership by two prominent business groups, may divide Democrats, infuriate the trial lawyers and open the door to a gold mine of campaign donations from business owners, insurance companies and lucrative high-technology companies.

Leadership sources said the bill provoked a scramble among GOP leaders to champion the issue and to become the "go-to guy" for the blossoming high-technology industry as this Congress proceeds.

After a flurry of closed-door negotiations, National Republican Congressional Committee Chairman Tom Davis (R-Va.), a former top executive for a high-technology firm in Northern Virginia, has emerged as the Republicans' point man on the legislation.

Leadership sources said the bill will help raise Davis' profile inside the business community and could provide a windfall of contributions to the NRCC. "There are millions of dollars at stake here over the long run," said one Republican.

Rules Chairman David Dreier (R-Calif.) and GOP Policy Committee Chairman Chris Cox (Calif.) will cosponsor the Y2K bill and play a prominent role in a fledgling outreach program to the high-technology industry.

"Rep. Davis looks forward to working with Mr. Dreier on this. They are natural choices to lead on this bill because of their interest in this industry," said a Davis spokesman.

"This is a classic [Speaker] Denny Hastert [R-Ill.] solution. Both men [Dreier and Davis] wanted the lead, but he decided to make this a team effort with all sides participating," said one Republican familiar with the talks.

Davis, Dreier, Cox and the rest of GOP leadership believe the high-technology industry is fertile ground to mine for new campaign money, so they plan to forge a closer working relationship with this sector in coming months, leadership sources said.

"The fundraising potential is enormous, but it's more important to show the high-tech industry that we care about them and not the greedy trial lawyers," a top leadership aide said.

Davis, Dreier and Cox did not return calls seeking comment.

Davis has already met with some industry bigwigs and more meetings are in the works. Davis and Cox are working similar angles in Silicon Valley.

"The Y2K bill is the perfect launching pad for a new relationship with the high-tech guys," the leadership aide added.

Top executives at the National Association of Manufacturers and the U.S. Chamber of Commerce, the two associations that collaborated to write the bill, will assist the Republican leadership behind the scenes.

In addition, NAM and the Chamber are expected to stand on the front line of a brutal lobbying war over the bill, as the trial lawyers, who form one of the most powerful special interests in America, launch a counterattack to gut the liability provisions.

The Association of Trial Lawyers of America, which gave 85 percent of its $2.4 million in PAC money to Democrats during the last election cycle, vehemently oppose the Republicans' caps on attorney fees and legal and punitive damages.

The trial lawyers can count on a vast majority of the Democratic Caucus to do their bidding during the fight. (According to the Center for Responsive Politics, there is no definite data on how much trial lawyers contribute each year, but the total is significantly higher than the $2.4 million PAC number reflects.)

When the bill hits the floor, both sides will come to the table heavily armed.

From 1997 until the middle of last year, the Chamber spent more than $22 million lobbying, while NAM topped $14 million.

ATLA spent $3 million-plus, but the organization does not get involved in as many legislative fights as the business trade associations do.

"We think it's a terrible mistake and we are opposed to it," said ATLA President Mark Mandell, later adding, "We are going to very intensively lobby against the bill."

But some moderate-to-conservative Democrats have already defected.

Democratic Reps. James Moran (Va.), Cal Dooley (Calif.) and Bud Cramer (Ala.) have already defied party leaders and signed onto the GOP Y2K liability bill.

Moran and Dooley are considered two of the most powerful members of the New Democrat Coalition, but the organization is not marching in lock step behind this legislation.

"Clearly there will be members of our Caucus who are very supportive of not placing limits on liability and those will oppose this," Dooley said.

Some, in fact, think Moran, Dooley and Cramer have been suckered into a cheap political stunt by Republican leaders.

"The fact that Tom Davis, the head of the campaign committee, may take the lead shows this may be used in a partisan political manner and not as an effort to pass meaningful legislation," said Simon Rosenberg of the New Democrat Network, the preeminent fundraising arm for moderate and conservative Democrats.

New Democrats are particularly interested in the Y2K bill because they have heard Republicans believe the bill will open the door to a new relationship with Silicon Valley, a region to which moderate Democrats have paid particular attention in recent years.

Rosenberg said the NDN raised more than $350,000 from the Silicon Valley and high-technology industry officials last cycle, and on Tuesday night featured Netscape founder Mark Andreessen at a fundraiser. Rosenberg added that the industry cared much more about the securities reform legislation and a bill allowing companies to hire more highly skilled foreign workers last year than they do about the Y2K bill.

Republicans are relishing the early infighting.

"This is one of the big bonuses: It rips the Democrats apart," said one Republican lobbyist.

Y2K Act legislation introduced in the Senate, S.96:

http://thomas.loc.gov/cgi-bin/query/D?c106:1:./temp/~c106f0eBCA::

-- Diane J. Squire (sacredspaces@yahoo.com), February 13, 1999

Answers

Just dont count of Silicon Valley, Washington, to be a Y2K bigger picture get it.

Im convinced its the community grassroots efforts that can make the substantive Y2K difference. Not Congress, Not Big Business. -- Diane

From the Sacramento Bee newspaper:

http:/ /www.sacbee.com/ib/news/ib_news01_19990207.html

Y2K a bore in Silicon Valley: Forward-looking techies see it as yesterday's glitch

By Dale Kasler
Bee Staff Writer
(Published Feb. 7, 1999)

PALO ALTO -- You'd think Y2K would be the talk of Silicon Valley. You'd think the threat of widespread computer crashes would stir passions in the world's computer capital. You'd think the idea of technology on trial as never before would get the juices flowing in a region where technology employs one-quarter of the work force.

You'd be wrong.

Around here, many feel the Year 2000 computer bug is a crashing bore, just another in an endless series of eminently fixable computer glitches -- and a pretty dull one, at that. Yes, it's a significant problem, they say grudgingly, but compared with the latest digital gizmo or some hot new Internet company lighting up the valley, Y2K is yesterday's news.

"Technical people are tired of hearing about it," said Rich Ormond, chief executive of MatriDigm Corp., a San Jose company that makes software for ferreting out Y2K problems. "If you were to talk to an information technology professional and offer them Job A, which is working on Y2K-related problems, or Job B, which is anything else, I'd bet they'd take Job B."

To be sure, Y2K isn't being ignored in the valley. A good many corporations here have been making considerable sums of money selling Y2K remedies, in the form of various hardware and software systems. Companies have been spending hundreds of millions of dollars to fix their internal systems and make sure the products they send out the door are bug free. Moreover, many in the valley are quietly chewing their nails over the possibility of getting sued should any of their products go on the fritz on Jan.

1. Some individuals are stockpiling food and other provisions in the event that Y2K leads to some sort of societal breakdown.

By and large, however, the valley feels somewhat detached from the Y2K mania taking hold in other parts of the country, according to high- tech executives and other observers of the valley scene.

Y2K, also known as the "millennium bug," refers to a simple flaw lurking in millions of computer programs and billions of computer chips: Because they recognize years only by their last two digits, they are unable to distinguish between 1900 and 2000. Unrepaired computers could seriously malfunction on Jan. 1, creating havoc throughout society. By one estimate, corporations and governments worldwide are spending $1.6 trillion to fight the Y2K bug.

But many Silicon Valley companies don't view Y2K as their fight, said veteran valley watcher Richard Carlson, a Palo Alto economist. Y2K by and large is the product of computer codes written decades ago for giant mainframe computers -- the so-called legacy systems manufactured by East Coast companies like IBM Corp.

That's why Y2K is so important in a place like Sacramento, where mainframe computers issue payroll checks for thousands of state employees -- and pension checks for tens of thousands of retirees. State government alone is spending $290 million on Y2K; the tab for the rest of the Sacramento area is impossible to calculate.

The valley, by contrast, is home of computing's modern era -- personal computers, servers, the Internet -- and many companies report they don't have to spend much on product de-bugging.

"Netscape doesn't have a legacy system, Netscape doesn't have a legacy anything," Carlson said, referring to the well-known Internet software company based in Mountain View. "We're so new."

Many programmers are new, too, which is another reason for the absence of frenzy. "The current generation of programmers and techies, it's like, 'Hey, we had nothing to do with this, blame the old guys,' " said Tim Bajarin of Creative Strategies Inc., a high-tech market research firm in Campbell. "You just don't have the connection."

That, in turn, fuels the attitude that Y2K work -- which mainly requires a re-writing of ancient computer code -- isn't cool.

"Fixing a glitch is boring," said Jay Aram Bhat, a vice president at Mercury Interactive Corp. of Sunnyvale, a maker of Y2K-testing software. "Programmers are not excited about fixing bugs. They'd rather work on some new exciting language like Java."

Y2K is about the past, not the future, and thereby conflicts with the basic valley mind-set. "So much of the work in Silicon Valley is aimed at the future," said Brad Whitworth, head of Y2K marketing for Hewlett-Packard Co. "That's the engine that drives Silicon Valley."

There's also a sense familiarity breeds contempt: Most valley folks heard about Y2K years before it caught on nationwide.

"You're starting to tune it out," said Jim Olivero, director of Y2K product marketing at Micro Focus, a software company in Mountain View.

Besides, a flawed computer system isn't cause for panic among techies, said Paul Saffo, director of the Institute for the Future think tank in Menlo Park.

"There's a little bit less hysteria," Saffo said. "People around here know that computers crash all the time."

And, the reasoning goes, they know how to fix them.

"The engineers in Silicon Valley solve things like Y2K all the time," Whitworth said. "The difference with all these (Y2K) problems is they're coming due on the same day all over the world. But this is their job."

To a certain extent, the job is done. For the last few years, HP and many other companies have shipped products designed to work in 2000, Whitworth said. Now the programmers are designing other things.

"The people who are doing this, solved this two years or three years or five years ago," he said. "The people who dream up new products have moved on."

So have some customers.

For a while many valley companies enjoyed a revenue bump from Y2K, selling software to fix or diagnose flaws -- or, better yet, selling totally new hardware-software systems to those clients who chose to replace instead of repair.

Now those sales seem to be petering out. Through much of 1999, customers will be hunkered down, getting their existing systems ready for 2000. They aren't buying new systems. This could lead to weakened sales for a region already experiencing softness because of the Asian economic crisis. For example, Redwood City software maker Oracle Corp. recently warned shareholders about a possible Y2K-induced slowdown.

"From a sales perspective, (Y2K) is over," said Carlson, the Palo Alto economist.

Wall Street has cooled to the idea of Y2K as moneymaker. Bloomberg News' Y2K index, which tracks the stock performance of companies profiting from Y2K, has fallen 29 percent in the past year.

Y2K "was a very big subject in '97 and early '98," Carlson said. "Now what people are talking about is Internet commerce."

Some say the valley ought to turn its attention back to Y2K before it's too late. They say the valley's techno savvy may have led to a misguided complacency.

"This problem's going to be different than anything we've ever faced before," said Ormond, the MatriDigm CEO. "The magnitude of fixing it is far greater than what we've ever taken on."

Certainly some individuals here are taking Y2K very seriously. Business is up 500 percent at San Jose's Beehive Country Store, which sells prepared foods, propane heaters and other emergency provisions, said owner Francis LeBaron. His customers, half of whom are techies, are worried about possible blackouts and food shortages because of computer malfunctions, LeBaron said.

Jeremy Walker, a vice president of a Mountain View software company called Agresso Corp., said he knows technology workers who are making emergency preparations. "Nearly all technology-savvy people are making preparedness plans," he insisted.

If so, they're probably doing so quietly. An executive at a high-tech think tank in Palo Alto said she believes many in the valley are afraid to speak up about Y2K because of intimidation.

"Half the people will think you're an idiot," said the executive, who asked not to be identified. "Very few people have been willing to stand up and say this is a problem."

Another factor is the threat of litigation, which has forced many in the valley to watch what they say about Y2K. And make no mistake: People here may think the technical side of Y2K is ho-hum, but they are nervous about getting sued over product glitches.

"The buzz is, 'Who's going to sue who, and why, and is it going to stick?' " said Micro Focus' Olivero. "Every law firm you talk to has a Y2K SWAT team."

About three dozen lawsuits have trickled in, notably a group of class- action claims filed against Intuit Inc. of Mountain View, the personal finance software maker and a leading valley company. Customers claimed certain versions of Intuit's Quicken software wouldn't function properly after Jan. 1, 2000, and Intuit was refusing to fix the problems free.

Several suits have been dismissed because it isn't yet 2000, so no one has been damaged.

Nonetheless, more litigation seems certain.

"Nobody's quite sure what's going to happen (come Jan. 1), but they are sure there's going to be a lawsuit," said Richard Gray, a prominent valley high-tech lawyer. "There is a large number of law firms in San Jose, Palo Alto and San Francisco that have portrayed themselves as knowledgeable about Y2K. The legal profession is getting loaded for bear."

-- Diane J. Squire (sacredspaces@yahoo.com), February 13, 1999.

Diane,

Maybe that's why the information at the following link is more candid than expected...

http://freedom.house.gov/y2k/

This is the Y2K page of House Majority Leader Dick Armey.

-- Kevin (mixesmusic@worldnet.att.net), February 13, 1999.

Thanks Kevin. In exploring your link, came across this nice little government Y2K links page...

http:// freedom.house.gov/y2k/resources/links.asp

Its time for everyone in Washington to wake up from the self-induced private lives soap opera and move on.

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), February 13, 1999.

Let's face it, the Republicans have gotten this one right.

They've cast themselves as the defenders of those who have been recent Democratic supporters (high-tech billionaires) against long- time Democratic supporters (trial lawyers). This causes a fight inside the Democratic Party and an almost certain shift in allegiance by the high-tech crowd. The public will see the two parties taking sides as "freinds of trial lawyers" versus "freinds of companies trying to fix Y2K". Where do you think public opinion will fall on this one?

If Y2K is anything less than a total collapse, there are going to be more lawsuits than we can imagine. The computer, chip and software makers are going to be square in the sights of every living lawyer who'd like to own IBM and to take personnal possesion of Bill Gate's fortune. What could the Republicans do with the financial support that Clinton had from the Silicon Valley and Redmond crowd?

Of course, if Y2K is catastrophic, then this is all pointless. But since we hope for the best, this could provide some interesting watching.

WW

-- Wildweasel (vtmldm@epix.net), February 13, 1999.

WW, Chuckles. Well, it's time the Republicans had something going for them! (Kind'a funny when a good many of 'em are lawyers). -- Diane

See also ...

11 February 1999

BILL INTRODUCED TO LIMIT Y2K LIABILITY

http://www.usia.gov/current/news/ latest/99021101.elt.html?/products/washfile/newsitem.shtml

(Y2K Act would forestall litigation morass) (570)
by Paul Malamud
USIA Staff Writer


-- Diane J. Squire (sacredspaces@yahoo.com), February 13, 1999.