For One U.S. House Race, an Election Microsoft Can’t Lose

No matter who wins in one U.S. House district in Washington state in November, Microsoft Corp. (MSFT) can’t lose.

Democrat Suzan DelBene, the first-term incumbent in the seat that includes Microsoft’s headquarters, is a former executive in the company’s mobile-phone division. Pedro Celis, the Republican challenger, worked there as a distinguished engineer, a title used for top technical talent.

Their campaigns echo each other, touting their Microsoft experience to say they’d be the best fit for the tech-heavy 1st District north of Seattle, while raking in tens of thousands of dollars in donations from current and former workers for the world’s largest computer software maker.

A campaign between company alumni “would seem to be a pretty good deal for Microsoft,” said Travis Ridout, a professor at Washington State University who studies campaigns and elections. “I can’t see how that’s a bad thing.”

It’s unusual, too. While many companies have friends in high places, few members of Congress represent their former employer’s headquarters. That will be key for Microsoft as Congress debates limits on using technology for spying, patent legislation, tax-law changes and whether to expand immigration visas for high-tech workers -- all issues Microsoft has lobbied on during the last two years.

Photographer: Tom Williams/Roll Call via Getty Images

Democrat Suzan DelBene, the first-term incumbent in the seat that includes Microsoft Corp.’s headquarters, is a former executive in the company’s mobile-phone division. Close

Democrat Suzan DelBene, the first-term incumbent in the seat that includes Microsoft... Read More

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Photographer: Tom Williams/Roll Call via Getty Images

Democrat Suzan DelBene, the first-term incumbent in the seat that includes Microsoft Corp.’s headquarters, is a former executive in the company’s mobile-phone division.

While DelBene and Celis agree on many of Microsoft’s goals, they differ on how to accomplish them, a divide that mirrors the standoff in Washington preventing action on many of those issues altogether.

Comprehensive Plan

On immigration, for example, the two are aligned with their partisan colleagues. DelBene supports a comprehensive immigration plan passed by the Senate last year, while Celis wants to rewrite the system one piece at a time, as is the preference of House Republican leaders.

Then-Microsoft Chief Executive Officer Steve Ballmer in June 2013 urged lawmakers to pass the Senate bill, S. 744, co-signing a letter with other technology executives.

DelBene said “it’s still a pretty small number” in the House -- between 10 and 50 -- who can discuss technology issues without getting lost. On the most complicated issues, such as software patents critical to Microsoft, it’s lower, she said in an interview.

The emphasis on her former employer carries over to her office in the nation’s capital. When she was first elected in 2012, DelBene found “pretty old” equipment in her congressional office -- Washington is notorious for that. Now, it’s all new, and all with software from Microsoft.

Windows 8

“We have Windows 8 machines for our office,” DelBene said. “All of our staff have Windows phones. Some have desktops. We have a couple of folks who are using a Surface. I use a Surface.”

Celis was born in Monterrey, Mexico, and calls himself an “American by choice.” He worked at Microsoft for 14 years, rising to chief technical officer of the company’s SQL Server database-management group before working on the Bing search engine. He was named a distinguished engineer before he retired in 2012.

His campaign yard signs and T-shirts read “Vote for Pedro” in red letters similar to those used in the 2004 film “Napoleon Dynamite.” In the movie, a Mexican immigrant named Pedro runs for class president and wins.

Celis said he learned at Microsoft to “talk first about the problem we’re trying to solve” before working on the solution. “Usually there’s disagreement on something because they disagree on what problem to solve.” Immigration, he said in an interview, is one of those things.

Foreign Engineers

Microsoft can’t get enough U.S. visas for the foreign engineers it hires, so many have to work in Vancouver. The company in May announced plans to open a training and development center in the Canadian city, whose mayor said the expansion would add 400 jobs.

Microsoft’s headquarters in Redmond anchors a corner of the 1st District, which stretches from the Seattle suburbs north to the Canadian border. The company employs about 43,000 in the region, most at its college-style campus.

The headquarters has its own shuttle bus service, soccer fields, cafeterias and, like any good university, a thriving association for about 100,000 alumni -- half as many as the Big Ten’s Northwestern University in Evanston, Illinois. About 40,000 of them still live in Washington state.

Microsoft Connection

“I’m sure everybody in this area has some Microsoft connection,” said Rishi Jyoti, Sonata Software Ltd. (SSOF)’s North American delivery director for Microsoft Dynamics. Sonata, based in Bangalore, India, helps engineer products for Microsoft in the U.S. and distributes others in India.

DelBene’s message to the tech world is simple. “I have worked in your world a lot,” she told Sonata managers during a meeting at their office in August. “I understand what you’re doing.” She spent about 12 years at Microsoft over two stints ending in 2007.

Sonata’s largest U.S. office has 150 workers a half-mile from Microsoft’s campus. Nearby is an outdoor mall boasting a craft-cocktail-serving movie theater, founded by a Microsoft veteran, and a tech-inspired novelty gift store that has dedicated a wall to “Dr. Who” shirts.

“They basically built Redmond,” Jyoti said of Microsoft. “This was all fields a couple years ago.”

Microsoft employees gave more than $70,000 to DelBene by June 30 for this election, more than to any other individual House or Senate candidate, according to data compiled by the Center for Responsive Politics. Celis came in second at $48,250.

Company Donations

The company’s political action committee also gave $10,000 to DelBene, the same amount it gave to House Speaker John Boehner, according to campaign-finance filings. At least six lobbyists who represent Microsoft gave to DelBene. Chief Operating Officer Kevin Turner gave the maximum $2,600 in April.

Microsoft’s PAC hasn’t given to Celis. He shrugged off the slight, saying it’s routine for companies to back incumbents over challengers even if the challenger is also acceptable.

Major employers often have outsized influence in the congressional district in which they’re headquartered. And in turn, lawmakers fight for the home team.

The Ohio delegation, for example, has managed to persuade Congress to keep building Abrams tanks even though the Defense Department has called for years to cut funding. General Dynamics Corp. builds those tanks in Lima, Ohio.

‘Important Voice’

“Representative DelBene has quickly established herself in Congress as an important voice with a deep understanding of technology policy,” Fred Humphries, Microsoft vice president for U.S. government affairs, said in a statement when asked about the company’s participation in the race.

He cited immigration and privacy as issues she has sought to address. The company also sees possible changes to U.S. tax laws as an important matter as House Republicans and Senate Democrats plot tax-revamp strategies for 2015.

“Although we cannot predict whether or in what form any proposed legislation may pass, if enacted it could have a material adverse impact on our tax expense and cash flows,” Microsoft said in its latest annual report.

Asked how he would address immigration, Celis answered in three parts -- he often gives three-part answers to questions.

Immigration shouldn’t be dealt with in a single plan, he said, but as answers to three questions: How to let people enter the U.S. legally, how to enforce the rule of law, and how to deal with undocumented people already in this country.

‘Humongous Bill’

“Having it all in one humongous bill,” Celis said, “it’s not going to work that big.”

DelBene -- who co-sponsored H.R. 15, the House companion to the Senate-passed immigration bill -- criticized Republicans for stating principles without introducing legislation or holding a vote.

“We have a lot of folks who talk about immigration reform but haven’t put their name on a bill,” DelBene said. People should “be specific about what they support,” she said.

The nonpartisan Cook Political Report rates the race “likely Democratic,” its safest designation for seats still considered in play. President Barack Obama carried the district with 56 percent of the vote in 2008 and 54 percent in 2012.

DelBene took almost 51 percent of the vote in the Aug. 5 primary held among seven candidates from both political parties. Celis finished second with 17 percent, edging a Tea Party-affiliated rival by fewer than 1,000 votes.

No matter who wins, Ridout said, Microsoft will be able to work with them.

“The big companies in a district, they want to cover their bases no matter who wins,” Ridout said. “Anyone who represents that district would be a good representative for Microsoft.”

To contact the reporter on this story: Derek Wallbank in Washington at dwallbank@bloomberg.net

To contact the editors responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net Laurie Asseo, Mark McQuillan

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