- The Washington Times - Thursday, April 13, 2000

One of the most underreported developments in the Microsoft case is the news that Bill Clinton wants to be briefed on the Justice Department's recommendations in the penalty phase of the antitrust action.
Mr. Clinton's request was made public shortly after he and Microsoft's Bill Gates met at a White House technology conference last week. Did Mr. Gates and Mr. Clinton talk about the immense harm that court-imposed regulations would have on the successful software giant and on the high-tech industry as a whole?
A Microsoft official told me Mr. Gates "never had any private time with the president" while he was here. But it is known that Mr. Clinton has raised concerns with top advisers about the potential for another plunge in the financial markets if the penalties sought by the department's antitrust attorneys go too far in attempting to stifle Microsoft's freedom to innovate, promote and sell its software products.
Mr. Clinton's deputy general counsel and chief fixer, Bruce Lindsey, has said that if the case were settled, "We would be entitled to be involved" in discussions. Mr. Lindsey said the president's participation would be justified because it would involve "policy decisions." Now he has extended that to the penalty phase of the trial.
But Mr. Clinton knows there is much more riding on this case than just antitrust policy. There is Al Gore's presidential campaign and the need to keep the economy humming along smoothly for the next seven months to help pave the way for his election. An economic downturn or a loss of confidence in the financial markets whose phenomenal growth has been driven by the high-tech sector would hurt Mr. Gore's chances in what is shaping up to be a tight election.
Thus, look for Mr. Clinton to intercede in the case to rein in the antitrust zealots, insiders tell me. Mr. Clinton cannot afford to risk a severe penalty against Microsoft that could trigger another sharp sell-off in tech stocks and could cause a severe reaction throughout the wider financial markets. Clinton advisers tell me he worries that the anti-free-market trustbusters at Justice "could go too far."
Another try at a settlement is also a possibility, with Mr. Clinton pushing both sides to come together for one more attempt to reconcile differences and perhaps putting pressure on the Justice Department to cut a deal.
While Mr. Clinton was signaling he has no problems playing politics with antitrust decisions, Republican strategists and technology-industry leaders including Mr. Gates were surprised and disappointed by George W. Bush's anemic, middle-of-the-road statement in the wake of last week's court ruling.
It is well-known that Mr. Bush opposes this case, yet he refused to say so forthrightly. Last week, he issued a terse, two-sentence statement that said it would be "inappropriate to discuss the specifics" of the case while it is pending before the court. Worse, he added that as president he would "fully enforce antitrust laws to foster competition."
That Mr. Bush, a harsh critic of government regulations of the economy, would embrace the antiquated 110-year-old Sherman Antitrust laws, which are desperately in need of reform, is a mystery. It is also a clue he is not getting the kind of politically adept economic advice he needs in these matters.
"I wish he would have taken a stronger position," said Jonathan Zuck, head of the Association for Competitive Technology, which represents 9,000 high-tech companies.
Wall Street economist Larry Kudlow, who advises many GOP candidates on economic policy, was similarly disappointed by Mr. Bush's statement. This was a chance for Mr. Bush to stake out his differences on economic policy with the Clinton-Gore administration, and he did not seize it.
"There's a huge wedge issue here for Bush, if he's true to his instincts and makes the case against anti-consumer and anti-growth and anti-stock-market trustbusting," said Mr. Kudlow who should be on Mr. Bush's team of advisers, but hasn't been asked.
But while Mr. Bush and his campaign were refusing to say anything critical about the case last week, some of his closest aides were telling me Mr. Bush would never have permitted this case to go forward, and that if he is elected president he will "drop it."
"This is not a case he would support as president," a political adviser to Mr. Bush told me.
Said another economic and legal adviser to the Texas governor: "If this was still on appeal by the time he came into office, and had not reached the Supreme Court, I think he would do what happened in the IBM case. I think the suit would be dropped."
The Justice Department's antitrust suit against IBM was dropped soon after Ronald Reagan took office. Mr. Bush's advisers say he would do the same.
Mr. Bush's hostility toward trial lawyers and government lawsuits is well-known. Earlier this year, he told a campaign audience in Seattle, which is close to Microsoft's headquarters, that he thinks "government regulation through litigation" is bad economic policy.
"I am not sympathetic to lawsuits. Write that down," he told reporters at the time. "I worry about [the effect of] lawsuits on job creation. If you are looking for the kind of president I will be, I will be slow to litigate."
Mr. Bush needs to restate that position now. The high-tech industry needs to be reminded that he is on their side in this case, and that Al Gore is with the antitrust zealots who are persecuting one of the most successful companies in American history.


Donald Lambro, chief political correspondent of The Washington Times, is a nationally syndicated columnist.

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