Tech Execs Join List of Big Political Givers

High-tech executives leapfrogged into the ranks of Orange County’s most generous Democratic and Republican party campaign donors in the election just past, mirroring a national trend.

Computer pioneer David W. Hanna and dot-com multimillionaire Scott Blum--both newcomers to checkbook politics--broke into a familiar field of benefactors that included developer George Argyros and Paul Goldenberg, owner of Paul’s TV. Nationally, technology companies tripled their campaign contributions during the last election cycle.

They don’t top the list yet in Orange County. Longtime Democratic supporter Roland Arnall, owner of Ameriquest Capital Corp. in Orange, led all givers with $390,000 in contributions to the Democratic National Committee over the past two years. Ameriquest is a mortgage lender and financial services company.

Altogether, Orange County donors ponied up more than $2.5 million in “soft money” to the Republicans and Democrats, cash that helped bankroll television ads, voter drives and other campaigning by the parties during the 2000 presidential election.

Unlimited and practically unregulated, soft money donations have been heavily criticized by campaign reform advocates such as former presidential hopeful Sen. John McCain (R-Ariz.). Critics say the flood of money corrupts the political process, and view it as a mammoth loophole that allows corporations, unions and individuals to skirt contribution limits.

Federal elections records show that the two parties collected more than $400 million in soft money contributions nationwide. The money may be used legally for a variety of purposes, as long as the parties don’t directly tout a candidate. The technology sector jumped to No. 8 on the list of top industry donors, up from No. 33 just four years ago, according to a recent survey by the Center for Responsive Politics.

Hanna, one of Orange County’s most generous donors, said he had never been active in politics--but that all changed after he was invited to meet George W. Bush at the start of the election season.

Hanna said he was so impressed with Bush’s economic plan and his accomplishments as governor of Texas, including the retooling of public schools and enacting tort reform, that he campaigned for the president-elect and served on his Southern California high-tech advisory council.

“After going through all of the scandals and lost opportunities of this last administration, I just felt it was time to make a change,” said Hanna, who runs his own venture capital firm in Newport Beach and has headed more than 10 high-tech companies in his career.

The controversy over soft money donations helped to energize McCain’s bid for the GOP nomination. He has promised to reintroduce legislation he proposed with Sen. Russell Feingold (D-Wis.) to ban soft money and enact other campaign finance reforms in Congress next session.

“It’s money that is least accountable,” said Scott Harshbarger, president of Common Cause, a citizen lobbying group that advocates reform. “It comes in the largest chunks in times that matter most to candidates. Its purpose is to get access and influence.”

And with key immigration, data encryption, telecommunications and e-commerce policies being shaped in Washington, D.C., the country’s Internet and high-tech companies have become more engaged in national politics.

The Microsoft antitrust case also served as a wake-up call for high-tech executives and foreshadowed what some fear may be increased government regulation of the industry, Harshbarger said.

The proliferation of high-tech, computer-chip millionaires in California did not escape the notice of Republican and Democratic fund-raisers, who have been aggressively drafting the nouveau riche into the old-world club of money and politics. While some dot-com billionaires have suffered heavy financial losses in recent downturns on the stock market, other high-technology companies are more stable and likely to continue to seek a voice in the nation’s corridors of power.

Wylie A. Aitken, head of the Democratic Foundation of Orange County, said the concerns of most technology executives revolve around nuts-and-bolts finance and industry regulatory issues. Their contributions usually aren’t guided by personal beliefs on abortion, gun control or other divisive social issues, he said.

“Most of the high-tech people are not ideologues; they’re very pragmatic people,” the Santa Ana-based attorney said. “They’re looking for someone who can fix the problem.”

Hanna, who with his wife donated $320,600 in soft money to the Republican Party, said his only motivation was to bring integrity and fresh ideas to the White House. He said his contributions had no connection to any specific legislation, nor any attempt to land a position in the Bush administration.

Blum, head of the venture capital firm Thinktank.com and former chairman of Buy.com, said he became an active Bush supporter after meeting the then-Texas governor at a GOP fund-raiser in La Jolla. Until they met, Blum said, he was comfortable staying on the political sidelines. Even now, he doesn’t consider himself a partisan Republican. He even praised President Clinton’s tenure in office.

But it was time for a change, Blum said, adding that he found Bush to be the most appealing candidate.

“He just seemed like a normal, regular guy. He likes to fish. He likes to have a couple beers--beers that don’t have alcohol, of course,” Blum said. “I like what George stands for. I like what he did in Texas with education.”

Blum and his wife, Audrey, who live in Monarch Beach, donated $75,000 in soft money to the GOP. Overall, they contributed $100,000 to the Republican cause in 1999-2000, Blum said.

Both Parties Woo the Nouveau Riche

Blum supports the tax credits in Bush’s proposed tax package, and he hopes Bush will back increased government procurement over the Internet. Blum has no plans to lobby Bush directly, however. Instead, he’ll work through Bush’s high-tech advisory committee, headed by Texas billionaire Michael Dell of Dell Computer Corp.

“We bring ideas to Michael Dell, who’s the chairman, and he brings the ideas to Bush,” said Blum, a committee member.

Robert E. McDonough of Capistrano Beach, No. 3 on the Orange County donor list, said he contributed $230,000 to the Democratic National Committee to make sure the election wasn’t taken over by a flood of money from wealthy Republicans.

“Had to do it--you can’t compete if you don’t have television,” said McDonough, chairman of Remedy Temps, a national staffing agency with annual revenue of $550 million.

“I saw in Al Gore a continuation of the very good work that President Clinton has done.”

McDonough said he strongly supports eliminating soft money contributions, but doubts that will happen now that Republicans control both Congress and the White House.

“The new party that’s going to be in power certainly knows how to maximize soft money,” McDonough said.

Longtime Republican Duane R. Roberts of Laguna Beach, a venture capitalist and major GOP contributor, said McCain’s bill to outlaw soft money was just an effort to “appease the Democrats.” Real campaign finance reform first should regulate the use of union dues for political campaigns, he said.

“There’s no way to have campaign finance reform without dealing with it on the other side,” said Roberts, who owns 13,500 apartment units nationwide and donated $215,200 in soft money to the GOP.

Roberts held a fund-raiser for Bush earlier this year at Riverside’s Mission Inn, which he owns. Roberts said he made his fortune by building a lucrative food service business, which he launched after formulating and marketing the first frozen burrito. “That’s my big claim to fame,” Roberts said. “It’s gotten a lot of guys and girls through college.”

Federal elections records show that Orange County’s other top soft money contributors include:

* Goldenberg, the self-proclaimed “King of the Big Screen” in La Habra. A longtime Democratic supporter, Goldenberg gave $175,000 to the party in 1999-2000.

* Argyros, multimillionaire developer and Republican stalwart, donated $105,000 through his company GLA Financial Corp. in Costa Mesa. He gave an additional $18,000 to GOP candidates and committees, including contributions to presidential candidates Bush and McCain.

* Former county Supervisor Gaddi H. Vasquez doled out $100,000 to the GOP through his campaign committee. Vasquez resigned from the board in 1995 with close to $300,000 still in his campaign war chest.

* Bob Tuttle, White House personnel director for President Ronald Reagan and a major Southern California automobile dealer, donated $84,200 to the Republican State Elections Committee. Tuttle, his family and business affiliates gave an additional $66,000 to GOP candidates and party organizations.

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On the Money

Orange County’s Top 10 “soft money” donors in the 2000 election:

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Name/Company Party Contributions Roland E. Arnall Dem. $390,000 Ameriquest Capital Corp. David & Virginia Hanna Rep. $320,600 Hanna Capital Management Robert E. McDonough Dem. $230,000 Remedy Temps Duane R. Roberts Rep. $215,200

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Entrepreneur

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Name/Company Party Contributions Paul Goldenberg Dem. $175,000 Paul’s TV & Video Donald M. Koll Rep. $105,600

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Developer

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Name/Company Party Contributions GLA Financial Corp Rep. $105,000 Gaddi Vazquez Campaign Committee Rep. $100,000 Tuttle Click Inc. Rep. $84,200 Robinson, Calcagnie & Robinson Dem. $79,000

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Source: Federal Election Commission