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  •   Gore Caught in Y2K Liability Cross-Fire

    Vice President Al Gore
    Vice President Gore announces an Internet initiative at the White House Wednesday. (AP)
    By Thomas B. Edsall and Stephen Barr
    Washington Post Staff Writers
    Friday, May 7, 1999; Page A2

    Republicans and key business lobbyists are using the Y2K glitch to force Vice President Gore to choose between two important Democratic constituencies: trial lawyers and Silicon Valley.

    High-tech CEOs, many of whom have been courted by Gore, want the vice president to take an aggressive stand for legislation to limit liability for damages resulting from Y2K computer failures. Trial lawyers, in contrast, want to retain as much leeway as they can to sue for damages, and are pressing Gore and the Clinton administration to remain in their corner.

    Republicans, who view the trial lawyers as a political enemy and support the legislation, are openly pointing out the political liabilities of opposing it to the vice president and Democratic Party.

    "Gore is scared to death," said Rep. Thomas M. Davis III (R-Va.), chairman of the Republican Congressional Campaign Committee and a sponsor of the bill. "You have to choose between friends. . . . This one wedges them."

    Chris Lehane, a spokesman for Gore, said Republicans are "trying to create a wedge issue with the explicit desire to inflict . . . political damage on the vice president."

    The House is on the verge of passing legislation unacceptable to the trial lawyers and the Clinton administration because of the liability limits. The legislation also includes a "loser pays" provision and other hurdles to pursuing liability claims.

    A number of these provisions have been eliminated or modified in the Senate version, pushed by Sen. John McCain (R-Ariz.). But a major area of dispute remains, according to Republicans: how to restrain trial lawyers from suing as many corporations as possible, including those on the periphery of damage claims and especially those with "deep pockets."

    The measure poses a conflict for Democrats. Many have strong ties to the trial lawyers, a major source of contributions, and to consumer groups allied with the lawyers. At the same time, high-tech firms are a significant economic presence in many congressional districts and more investors are putting their money in high-tech stocks.

    During the 1997-98 election cycle, lawyers, many of them trial or plaintiff's lawyers, gave a total of $41.7 million to Democratic candidates and the Democratic Party, while contributing $16.1 million to GOP candidates and committees, according to the Committee for Responsive Politics. The computer and electronics industry was far more evenly divided, giving $4.3 million to Democrats and $5.5 million to Republicans.

    For Gore, the dilemma is particularly acute. Not only is he trying to balance competing interests as he puts together his bid for the presidency, but the conflict between trial lawyers and technology firms is perhaps most intense in California, a must-win state for Gore if he is the Democratic nominee.

    Gore's office has been under pressure from both sides, including calls from John Doerr, Silicon Valley's premier venture capitalist and a major Gore fund-raiser.

    Republicans, who have been on the ropes through the elections of 1996 and 1998 and the presidential impeachment process, are gleeful to have an issue that threatens to divide their adversaries and damage Gore's presidential prospects.

    "Al Gore has to chose between his trial lawyer friends and his high-tech friends," said John Feehery, spokesman for House Speaker J. Dennis Hastert (R-Ill.). "It's a huge problem for them. Do they want to support one of the engines that had kept our economy growing at an exceptional rate or their buddies in the trial bar who haven't done anything to make the economy grow?"

    "This is not just about Al Gore, it's really about the future of the parties," another Republican strategist said. "Right now, the political parties are out of date, aligned along issues and an approach to the economy that is 30 years old. Soon, the political alignment is going to be expressed in a division between old and new. This [high-tech] is a group that is up for grabs."

    While Gore has taken a hands-off stance toward the legislation, his position amounts to supporting the trial lawyers because the Justice Department and Clinton have both warned that the bill is likely to be vetoed without major changes.

    A key high-tech lobbyist angry over Gore's unwillingness to get involved in the battle in the Senate said, "The vice president's problem is that he is engaged to two women." Noting that the election will take place in 2000, "just when these suits will be clogging the courts," the lobbyist added: "Does he want this industry to be on its knees, or does he want this industry to continue to drive growth?"

    Most high-tech lobbyists so far are unwilling to criticize Gore publicly. "I'm not interested in embarrassing the vice president, but neither am I going to support him when my industry thinks this is an important bill," said Harris Miller, president of the Information Technology Association of America. "We need some help here and the vice president is the most logical person to offer that help."

    Meanwhile, sources among the trial lawyers complimented Gore. "The vice president would like to have a bill that is fair to consumers, fair to small business, fair to high-tech companies, and fair to all would-be defendants and to all would-be plaintiffs," said a lobbyist for the trial lawyers, who asked not to be named. "He has been letting Clinton be the leader."

    A Gore aide defended the vice president's role, saying, "It is appropriate to let the Senate work its will."

    Since the beginning of the Clinton administration, Republicans have voiced frustration that the Democratic Party has been able to come close to matching the GOP in high-tech contributions. The GOP sees the Y2K liability legislation as a way to end that trend.

    "The Democrats have used abortion, guns, gay rights and all the cultural issues to hammer us in Silicon Valley with great effect. Now, we've got a shot at protecting high-tech's bottom line," a key GOP operative said.

    Rep. David E. Dreier (R-Calif.), chairman of the Rules Committee and a sponsor of the House Y2K bill, said the administration has "been getting away with" claiming to be high-tech ally, despite only reluctant support for allowing foreign technology workers to get visas and overt opposition to high-tech securities legislation.

    Rep. Calvin M. Dooley (D-Calif.), a leader of the pro-high-tech New Democratic Coalition, is aware of the challenge and the risk facing Democrats. "It's important for Democrats to demonstrate to one of the most rapidly growing sectors of the economy that we understand the problems they are facing," he said.

    © Copyright 1999 The Washington Post Company

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