The Microsoft Antitrust Case

By Viveca Novak

It's not just the Feds who are on Microsoft's case. Nineteen state attorneys general have joined Justice's suit, so the software giant's lobbying strategies are expanding. Microsoft's tactics range from hiring close pals of several A.G.s to sending a key official to speak to a small town's Chamber of Commerce. State officials tell TIME that the company is also helping fund a new Republican attorneys-general group in Washington.

Consider Iowa attorney general Tom Miller, a Democrat and one of the A.G.s suing Microsoft. The company has hired two of his best friends, both former legislators. "They were in to see me once or twice" about the lawsuit, Miller says, and he's also heard from two former state A.G.s making Microsoft's arguments. A similar strategy seems to be at work in California, where, according to attorney general Bill Lockyer, the company hired a former state senator who is "a very close friend of mine." In West Virginia, Microsoft has taken a tougher tack. According to attorney general Darrell McGraw, it has hired a lobbying firm run by someone McGraw defeated in an earlier race; the lobbyists have attacked him repeatedly, he says.

To build support around the country, Microsoft brought on staff a veteran of Direct Impact, a D.C.-area firm whose clients have included the tobacco industry, managed-care companies and others who want "grass-roots" responses generated on issues. Another addition: Tom Synhorst, a political operative and phone-bank virtuoso who does projects for George W. Bush. And there's evidence of Microsoft's courting business and political players at the smallest levels. In September, senior vice president Craig Mundie spoke to the Cedar Rapids, Iowa, Chamber of Commerce, drawing an overflow crowd of about 900. Last month former Republican National Committee chairman Haley Barbour, who has been helping Microsoft court Republican Governors, spoke to the Hartford [Conn.] Area Business Economists Association about the case; turnout was extremely light.

Given the fact that most of the A.G.s suing Microsoft are Democrats, the company has been an eager supporter of a new outfit that started in midyear, the Republican Attorneys General Association. Housed within the R.N.C., the group will develop policies with G.O.P. principles and support Republican A.G. candidates, says chairman Charlie Condon, attorney general of South Carolina. Among those principles: letting the free market be free. Condon, the only state attorney general to drop off the Microsoft case, won't say how much the company donated to the group. But he isn't embarrassed about the money--or about the $3,500 he solicited and got from Microsoft for his own election coffer after he dropped his state's lawsuit. "I was glad to get it," he says.

--By Viveca Novak