THE INFLUENCE GAME: Big Biz has friend in Locke

Gary Locke is new to the Commerce Department but already known to corporate America, which spent hundreds of thousands of dollars to help re-elect him as Washington’s governor.

His donors included Microsoft and Boeing, two home-state companies that Locke tried hard to please and whose issues he will almost certainly encounter as a Cabinet secretary.

Fortune 500 companies and other businesses gave at least $800,000 to the Democrat’s campaigns for governor, including at least $500,000 for his easy 2000 re-election, according to an Associated Press review of his campaign finance reports. The rest was split between his 1996 race and his 2004 campaign. He ultimately abandoned his third bid and refunded those donations.

Washington is among several states that let businesses donate to campaigns for governor. In Locke’s 2000 race, they could give him $1,250 each for the primary and another $1,250 for the general election.

While the state is known for its high-tech industry, a variety of businesses, including many that lobby in the nation’s capital, gave to Locke: Northwest Airlines; Coca-Cola; grocer Safeway; brewer Anheuser-Busch; Washington Mutual Bank, Wells Fargo and U.S. Bank; drugmakers Pfizer, Bristol-Myers Squibb, Merck & Co., and Schering-Plough; the AT&T and Verizon telecommunications companies; and Texaco and Tesoro Petroleum. Enron, a Texas-based energy company that later collapsed in a fraud scandal, gave $2,000 in November 2001, the month before it filed for bankruptcy.

Also giving were Boeing and Microsoft and their executives and lobbying firms that represented them. Microsoft and donors connected to it gave at least $90,000, almost all for Locke’s 2000 race, and Boeing and people linked to it donated at least $30,000, with most of that also for Locke’s re-election campaign.

Microsoft Corp. and Boeing Co. stand out among Locke’s corporate donors for the frequency with which their interests and activities made his agenda. Both are major Washington state employers with global business and spend millions lobbying in Washington, D.C. Boeing’s lobbying is likely to take on new urgency in light of the Pentagon’s plan to cut back on defense contracts.

In his new role, Locke is almost certain to deal with issues important to the pair, including intellectual property protection, cybersecurity, technical specifications and export controls and other trade matters. Both have long had employees on Commerce Department advisory panels.

Locke represented Microsoft as a private attorney after leaving the governor’s office. He is a longtime Microsoft investor and reported holding up to $250,000 worth of its stock in a financial disclosure statement he filed after his Cabinet nomination.

Locke’s Microsoft stock is a concern, said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a government watchdog group.

“I think it is a problem when a Cabinet official is in a position to make decisions impacting a company and they hold a significant amount of stock in that company because then they’re making decisions that impact their own financial interests,” Sloan said. “I think it is reasonable that Mr. Locke should have to do something with that stock, whether or not he divests it or he puts all of his holdings in some kind of blind trust and lets someone else make the decisions. Or he has the option of recusing himself from any decision affecting Microsoft.”

It was natural that Locke would help Microsoft and Boeing, given their importance to his state, but he now has a new role weighing the interests of businesses nationwide and must be careful not to favor home-state companies, Sloan said.

“I think Mr. Locke will have to be careful in regard to making decisions about any business that contributed heavily to his campaigns because I think there will always be perception issues of whether there’s a conflict of interest,” Sloan said.

Locke plans to divest his Microsoft stock and step away from matters to which Microsoft is a party, Treasury spokesman Kevin Griffis said.

“Secretary Gary Locke joined the Obama administration because the president believes he can do for America what he did for Washington state, which is to create jobs and strengthen local economies by opening up foreign markets to American products and encouraging innovation,” Griffis said.

“It should be noted that in accepting the job, not only did Secretary Locke sign onto the administration’s ethics pledge, the strictest in history, he also left a position at a top law firm in Washington state,” Griffis added. “That’s an obvious sacrifice and he made it to serve the public and improve the lives of Americans.” The salary for Cabinet secretaries is $196,700 this year.

When Locke was governor, Microsoft’s and Boeing’s futures in Washington state were in jeopardy.

Boeing moved its headquarters from Seattle to Chicago, cutting jobs and prompting Locke to take steps to try to make the aerospace company happy lest it scale back further or leave Washington entirely. When Boeing was weighing where to build a new jetliner, it presented a list of desired incentives that Locke did his best to provide. Boeing picked the state.

Redmond-based Microsoft was fighting a Clinton administration antitrust case that threatened to break up the software giant. Locke publicly opposed the Justice Department case and called a federal judge’s early decision to split up Microsoft “draconian, unnecessary and unjustified.”

Locke sometimes made several announcements about Microsoft or Boeing in a given week.

For example, the day before the June 2000 Microsoft ruling, Locke’s wife, Mona Lee Locke, and Microsoft co-founder Bill Gates’ wife, Melinda Gates, picked by Gary Locke as co-chairwomen of the Governor’s Commission on Early Learning, announced a $10 million donation from the Gates’ charity to the new Washington Early Learning Foundation. Mrs. Locke headed the foundation’s board. Executives from Boeing and Washington-based Costco Wholesale served with her. She remains a board member with the group, now the Foundation for Early Learning.

Two days after Locke criticized the Microsoft ruling, he named a Microsoft executive to the Washington Technology Center’s board of directors.

When an appeals court later overturned the breakup order, Locke called it “great news” and a victory for consumers. A few weeks later, he visited Microsoft’s campus to sign a bill expanding Medicaid coverage for disabled people who work, saying he chose Microsoft because it’s a “model of equal and fair employment.” When Microsoft finally settled its case with the federal government, Locke said that he was delighted and that “Microsoft can move forward without impediment and continue to be a world leader in software innovation.”

At the height of Locke’s 2003 efforts to persuade Boeing to build its new airliner in his state, he practically had an announcement each day on it. He called a special legislative session to quickly pass a multibillion-dollar incentive package to lure the Boeing jobs to Washington.

“As you can see, we’re working together to help Boeing – by our actions, not just our words,” Locke told Boeing in a June 2003 letter on the state’s efforts. “We are working together to create a lasting competitive business climate that encourages Boeing, its suppliers and others to invest in Washington and flourish.”

Locke frequently looked to Microsoft and Boeing employees when filling state positions. In all, Locke chose at least 15 Boeing employees, five former Boeing employees, a half-dozen Microsoft employees and four past Microsoft employees for state posts. Most were unpaid beyond daily expenses.

The Microsoft employees’ positions included spots on the Governor’s Council of Economic Advisors, the Washington Competitiveness Council and various college and university boards. Boeing employees’ appointments included commissioner of employment security; co-chairman of the Washington Competitiveness Council; and seats on the Committee on Disability Issues and Employment, Industrial Safety and Health Board, Emergency Management Council and Commute Trip Reduction Task Force.

Locke appointed Bill Gates’ father, William H. Gates of Seattle, a partner in the international law and lobbying firm Preston Gates, to the University of Washington Board of Regents. The firm is a former employer of disgraced Washington, D.C., lobbyist Jack Abramoff.

Locke promoted Microsoft and Boeing on trade trips to Asia, particularly China. He made one of his trips there with Boeing’s chief executive specifically to commemorate Boeing’s then-30-year partnership with China; Boeing covered Locke’s $1,634 airfare from Seattle to Beijing. Locke, the first Chinese-American to become a U.S. governor and the first to be commerce secretary, is known for his ties to China, particularly President Hu Jintao, with whom Locke has appeared frequently, even showing him family snapshots.

Locke helped plan an April 2006 visit by the Chinese president to Washington state, a stop that included a dinner at Bill Gates’ home. After leaving the governor’s office, Locke joined a Seattle law firm, where he specialized in China trade and investment.

When Locke played host to the National Governors Association in 2004, Bill and Melinda Gates threw a reception. The governors took a cruise across Lake Washington to get to the party.

Some members of Locke’s administration found jobs with Microsoft, Boeing or Bill Gates.

Locke’s Department of Information Services director previously worked at Microsoft and after leaving his administration became Microsoft’s U.S. national technology officer. Locke’s coordinator for the Boeing jetliner project management office and director of the state Department of Community, Trade and Economic Development went to work for the Bill and Melinda Gates Foundation.

A former Locke chief of staff went to work for Boeing as director of state and local government relations.

Microsoft applauded President Barack Obama’s selection of Locke for commerce secretary.

“As governor of Washington, Gary Locke worked with state businesses both large and small to successfully strengthen the state’s economy and improve its global competitiveness,” Brad Smith, Microsoft senior vice president and general counsel, said at the time. “With Gov. Locke at the helm, the Commerce Department will play an integral role in ensuring America remains competitive in the global marketplace.”

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Associated Press writer Brian Slodysko in Olympia, Wash., contributed to this report.

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On the Net:

Commerce Department: https://www.commerce.gov/