Tech Plays Politics: Political Spending Explodes, Tips Democratic

There's a common assumption that high tech companies lean to the left politically. And that is true, although it's a relatively recent trend. What's changed even more is the amount of money the industry has spent to influence the outcome of elections.

I looked at the question when reading about the bid for Novell (NOVL) by investment firm Elliott Associates. Looking into the company and its president, Paul E. Singer, I came across this map, from Muckety.com, that shows connections between Singer and a number of conservative political groups:

That got me wondering about the political leanings, as expressed by campaign contributions, of the entire high tech industry. Was Singer unusually tied to conservative politics in comparison? The answer came from the Center for Responsive Politics (OpenSecrets.org ). Here is a table of election cycle contributions of computer- and Internet-related companies and industry-related individuals over roughly 20 years:

Taken in total, the industry has donated 58 percent of its political contributions to Democrats and 41 percent to Republicans. Factor out the last two election cycles and a heavy leaning toward Democrats, and you find the percentages at roughly 55 percent Democrats, 45 percent Republicans. Here's the breakout over time, again from the Center for Responsive Politics:

There appears to have been a strong shift toward contributing to Democrats starting in 2000, or about the time the tech bubble burst. Given that in the previous ten years the industry had given only 47.4 percent of its collective money to Democrats, that's a decided change. Here are some of the factors that I think played a roll:

• The high tech bubble jolted the industry. Because it was a reaction to practices and policies of the previous ten years, tech companies embraced the politicians it perceived as not responsible.
• Over the last 20 years, an increasing percentage of high tech heavy weights have landed on the west coast, where democrats are often in power.
• The tech industry depends heavily on enticing talent with strong benefit packages. Health care has become an increasingly expensive component with no end to sharp increases in sight without government action, and so companies began to lean toward politicians who emphasized reform.
• Republicans have embraced restrictions on immigration even as tech executives have become dependent on a flow of talent from other countries and wanted fewer restrictions, not more.
• Policies during the Bush years helped create the latest economic crash.

As the industry's collective billions have risen, so has its willingness to spend money to influence elections. Given the recent Supreme Court ruling that took the limitations off corporate contributions, you have to wonder how quickly the curve might accelerate in the future. Such companies as Microsoft (MSFT), Apple (AAPL), and Google (GOOG) have vast sums of cash on hand and could easily drop tens of millions -- or even hundreds of millions -- without significantly affecting their balance sheets. History of the last two decades shows the industry's increasing willingness to spend in the political arena. I'd expect the same going forward, except far more.

Image: RGBStock.com user woodsy, site standard license.