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 ral arguments
in the federal government's antitrust case against Microsoft began
on Monday. Anyone reading the two
new books about the battle — Pride
Before the Fall by John Heilemann and World
War 3.0 by Ken Auletta — would have to conclude that
the case never would have been brought without the political intervention
of some powerful Silicon Valley companies that turned to the political
arena to duke it out with a tough competitor. Prominent among these
complainers were Netscape (now part of AOL-Time Warner), Sun Microsystems,
and Oracle Corp.
Oracle's interest in bringing the full weight of the government
down on Microsoft isn't surprising. As I wrote on TechCentralStation
last July: "Larry Ellison and Oracle sell very expensive database
software products. Bill Gates and Microsoft sell very inexpensive
database software products. This looks like trouble to Larry Ellison,
so rather than using guts and creativity to respond in the marketplace,
he whines to the government that his company is being victimized
by Microsoft."
But he went further. Press reports in June revealed that in 1999,
Oracle hired Investigative Group International, the powerful Washington,
D.C., private snooping firm. IGI, as the Wall Street Journal
reported, "promptly went trash-hunting" — literally prowling
through dumpsters containing the garbage of trade associations and
other groups friendly to Microsoft.
Ellison's response to this sleaze? "I feel very good about what
we did," he told the press. "All we did was to try to take information
that was hidden and bring it into the light. I don't think that's
arrogance. That's public service."
This sordid history came to mind recently when Bill Clinton
| “Bill
Gates and George W. Bush can teach Larry Ellison and Bill
Clinton a thing or two about class and integrity.” |
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— who, in a more figurative sense, has done some Dumpster diving
of his own — gave a speech on Feb. 19 at an Oracle applications
conference in New Orleans. Clinton and Ellison, it seems, are cut
from the same cloth.
The president received an estimated $100,000 for his appearance
alone, and there was doubtless a handsome honorarium, too. It launched
Clinton back into the speaking circuit after a rather inauspicious
start.
Clinton, of course, has been in the spotlight lately for some controversial
pardons, notably that of Marc Rich, who fled the United States 17
years ago to avoid federal charges, including racketeering and tax
evasion. Clinton also pardoned a cocaine trafficker and a notorious
fraud artist, allegedly at the behest of his brother-in-law.
The former president's first outing on the lecture circuit did not
go so well. When word got out that he would be appearing for $100,000
at a Morgan Stanley Dean Witter high-yield bond conference in Florida,
many of the firm's clients were outraged. A few days after the talk,
Philip Purcell, the MSDW chief executive, apologized to his customers.
Then, two weeks ago, UBS Warburg, a division of the Swiss financial
firm UBS AG, canceled a speech by Clinton for fear of stoking a
similar controversy.
But Ellison, undoubtedly grateful for the Clinton administration's
aggressive action against his archenemy Microsoft, stood firm. Ellison
had earlier hired Joe Lockhardt, the presidential press secretary,
as an Oracle executive.
Does all this look a little sleazy? It does to me.
Thomas A. Schatz, president of Citizens Against Government Waste,
put it this way: "The government's case against Microsoft has been
about favoring individual competitors rather than impartial application
of the law. At the very least, this speech creates the appearance
of impropriety and further illustrates the former president's tin
ear for ethics."
The former president has one tin ear; Larry Ellison has the other.
The government's drive to break up Microsoft has not only hurt that
company's stock, it has played a major role in the 50 percent decline
of the tech-heavy Nasdaq. Oracle's own shares have suffered as well.
In New Orleans, Clinton joked, "I knew Ellison is a genius, but
ever since my former secretary, Joe Lockhardt, joined Oracle four
months ago, Oracle's stock went up, and my popularity went down."
In fact, Oracle's stock fell to $22 in late November, then rallied
to $33 in January but tumbled back to $22. Oracle's peak, last September,
was $46.
Milton Friedman said two years ago that Silicon Valley companies
would "rue the day" they invited the government in to solve their
problems with Microsoft. Judging from their collective stock performance,
I would say that was an accurate prediction. My guess is that the
higher court will rule in Microsoft's favor. That's what I would
like to see: the software company defeating a dangerously flawed
view of antitrust law on the merits, rather than calling in a favor
from the Bush administration.
Bill Gates and George W. Bush can teach Larry Ellison and Bill Clinton
a thing or two about class and integrity.
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