[Am-info] From Washington Post, 2002 March 16, page A15

[ethical@1of1.net]

    http://www.washingtonpost.com/wp-dyn/articles/A39205-2002Mar16.html


Ashcroft Backed Microsoft Deal

E-Mail Details Need for U.S. to 'Focus on Other Things'

By Jonathan Krim
Washington Post Staff Writer
Sunday, March 17, 2002; Page A15

U.S. Attorney General John D. Ashcroft wanted to settle the Microsoft
Corp. antitrust case to allow the government "to focus on other
things," according to an e-mail from an Ashcroft family friend to a
leading opponent of a proposed settlement between the firm and the
Justice Department.

The e-mail was sent to James Barksdale, the former head of Netscape
Communications Corp., who was hoping that he and Scott McNealy, chief
executive of Sun Microsystems Inc., could speak with Justice
Department officials after hearing that a deal with Microsoft was
imminent.

"I became worried, as did others, how could they be doing this without
consulting with anybody who had been on the other side of this issue,"
Barksdale said in a deposition last month.

So he asked Floyd Kvamme, who is co-chairman of the President's
Council of Advisors on Science and Technology, if there was a way to
get word to Ashcroft to request a meeting.

Barksdale testified that Kvamme enlisted Kevin Compton, a partner in
Kvamme's California venture capital firm of Kleiner, Perkins, Caufield
& Byers, who knows the Ashcrofts. Compton wrote a letter to Ashcroft
on Oct. 25, a week before the settlement was announced.

Barksdale, McNealy and Kvamme did not get an answer from Compton until
Nov. 21.

"There is a longer story here," Compton's brief e-mail said. "I am
sorry I was not able to stop this but Ashcroft just wanted to focus on
other things."

The e-mail went on to say that the Commerce Department told him the
settlement deal "would be a broad range market stimulus as well."

Neither Kvamme nor Compton returned telephone messages seeking
comment. But in an interview with the Associated Press, Compton said
he never spoke to Ashcroft and "felt stupid" writing the letter to
him.

Ashcroft did not answer the letter, referring it to Assistant Attorney
General Charles James, who heads the antitrust division. James did not
write back to Compton until mid-December, more than six weeks after
the settlement was announced, saying that because of anthrax mail
screening, his letter had only recently reached "appropriate
personnel" in the department.

While James told Compton that he would not meet with Compton or other
"third parties," he said other Justice officials had met "many times"
with representatives of Sun, AOL Time Warner Inc. and other companies,
and that McNealy had rejected an offer to meet with Deborah Majoras, a
deputy assistant attorney general, while a settlement was being
discussed.

Barksdale is scheduled to testify next week as hearings begin tomorrow
on whether a judge should impose stiffer restrictions on Microsoft's
business than are provided by the settlement deal. A coalition of nine
states and the District is seeking broader sanctions to rectify
Microsoft's violations of antitrust laws.

Opponents of the deal have long questioned whether Microsoft's
lobbying prompted the Bush administration to approach the case
differently than the Justice Department did under President Bill
Clinton.

Microsoft contributed $2.1 million during the 2000 election cycle, 60
percent of that to Republican Party organizations. The company
contributed $10,000 to Ashcroft's failed Senate campaign in Missouri
in 2000.

James has defended the settlement, which still must be approved by a
federal judge, as being tough on the company and the quickest and most
effective way to restore competition to the market for personal
computer software.

The department also has argued that although a federal appeals court
affirmed that Microsoft had illegally preserved its monopoly, the
government might not have won stiffer sanctions in further hearings.

Susan Dryden, a Justice Department spokeswoman, said only that "the
department's decision to settle this litigation was based solely on
the recommendation of the antitrust division" on the merits of the
case "and not any third party communications."

A Commerce spokesman said the department "has done no studies on the
issue of a Microsoft settlement and rendered no opinions on the impact
of the settlement." The spokesman added that Commerce Secretary Donald
L. Evans has had no conversations with Ashcroft about the proposed
deal.

Microsoft had no comment on the e-mail.

  Copyright 2002 The Washington Post Company



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