If you want to understand how Bill Gates, you should carefully read this article that I found in the archives of the New York Times.

WASHINGTON – Twenty months ago, Rep. Billy Tauzin walked into the office of Bill Gates, chairman of Microsoft, bearing a 10-inch-by-10-inch white box and a warning.

Tauzin, R-La., the chairman of a subcommittee that oversees the telecommunications industry, placed the box on Gates’ desk. Inside was a lemon meringue pie, a reminder of another pie that had been thrown in Gates’ face several weeks earlier by a Microsoft critic.

The message to Gates, the richest man on earth and the leader of the digital world, was blunt: You need to make friends in Washington.

At the time of Tauzin’s visit in early 1998, the Justice Department was contemplating filing its antitrust suit against Microsoft.

“I told him he was being demonized,” Tauzin said in an interview. “I said he had to win the antitrust case in court, but there was also the court of public opinion.”

Gates apparently took Tauzin’s message to heart – with a vengeance. While Microsoft and its executives contributed a relatively modest $60,000 to Republican Party committees in 1997, the company’s contributions in 1998 shot up to $470,000 as part of its overall political contribution of $1.3 million. The 1998 figure included donations to political candidates, with the bulk of the money going to Republicans.

This year, the company’s contributions of nearly $600,000 have been more evenly divided between Republicans and Democrats, according to Federal Election Commission records.

Microsoft’s lobbying, focused on swaying Congress and creating a generally friendlier climate in Washington, has had little if any effect on the current antitrust litigation in U.S. District Court, where the company was dealt a major setback on Friday by Judge Thomas Penfield Jackson’s initial findings that it had used monopoly power to stifle competition.

Rather, the lobbying campaign is a long-term strategic push intended to alter the political terrain where future power struggles will be fought.

Campaign donations were just one element of Microsoft’s multimillion-dollar effort to win allies in Washington. The company also poured millions of dollars into an aggressive public relations and political offensive, hiring an armada of well-connected lobbyists and underwriting the work of research groups, academics and consultants who have made arguments sympathetic to Microsoft’s defense in the antitrust case.

The company’s lobbying budget nearly doubled in 1998 from the previous year, to $3.74 million, according to the company’s lobbying disclosure reports, and is on pace this year to significantly surpass that figure.

Gates and his top lieutenants have made dozens of trips to Washington, cultivating powerful figures in both parties and hiring some of the city’s priciest lobbyists.

Microsoft has retained Haley Barbour, former chairman of the Republican National Committee; Vic Fazio, a former Democratic congressman from California; Vin Weber, a former Republican congressman from Minnesota; Tom Downey, a former Democratic congressman from New York and a close friend of Vice President Al Gore; Mark Fabiani, former special counsel to the Clinton White House; and Kerry Knott, former chief of staff to Rep. Dick Armey of Texas, the House majority leader.

Microsoft has also given hundreds of thousands of dollars to research groups, trade groups, polling operations, public relations concerns and grass-roots organizations. It has financed op-ed pieces and full-page newspaper advertisements, and mounted a lobbying effort against an increase in the Justice Department’s antitrust enforcement budget.

In June, Gates met for lunch with the Republican leaders of the House in the small whip’s room off the House chamber. They discussed Microsoft’s public policy agenda, ranging from exports of encryption software to Internet privacy to antitrust actions, said several participants at the meeting. Knott, now a top official in Microsoft’s Washington office, attended the session.

Eight days later, Armey introduced what he called his “e-Contract,” a list of Republican legislative initiatives that pointedly adopted Microsoft’s view of the role of government antitrust actions, like the one that now threatens to dismantle Microsoft.

“When federal agencies use heavy-handed tactics to target specific companies,” the Republican document states in language that echoes Microsoft’s own, “the real message they send to the market place is this: You could be next.”

Armey’s aides insist that the release of the document was just a coincidence and that Republicans had long opposed aggressive enforcement of antitrust laws. Microsoft officials also denied that they had influenced Armey’s priorities or his language. The package of Republican proposals is still before Congress.

Another Microsoft move on Capitol Hill drew criticism for heavy-handedness. Its lobbying to trim the antitrust division’s budget brought a flurry of editorial condemnation. The Washington Post said Microsoft’s actions were “a comical caricature” of a company trying to bully its way through Washington."

One Justice Department official said, “Even the mob doesn’t try to whack a prosecutor during a trial.”

https://archive.nytimes.com/www.nytimes.com/library/tech/99/11/biztech/articles/07strategy.html