Ashcroft role in Microsoft case raises ethics issue
Donations: He withdrew from Enron probe, but not antitrust suit

Greg Gordon and Les Blumenthal; News Tribune Washington, D.C. bureau



WASHINGTON - Attorney General John Ashcroft withdrew from criminal investigations into the collapse of Enron Corp., which gave more than $60,000 to his political committees during a failed 2000 Senate campaign.

But Ashcroft has stayed involved in a bigger case - the government's antitrust suit against Microsoft Corp. - even though the computer software giant, its officers and lobbyists also were substantial donors.

Microsoft, its political action committee, founder Bill Gates and other top corporate officers donated $22,750 to Ashcroft's political committees from 1997-2000. Lobbying firms that represented Microsoft gave another $33,000. In addition, Microsoft donated more than $700,000 to a Republican committee that helped bankroll a $1 million advertising blitz on Ashcroft's behalf.

These connections underscore a potential problem for the former Missouri senator: Ashcroft is the first attorney general to have left Congress for the nation's top law enforcement job in a quarter-century - a period in which congressional fund raising has escalated sharply.

Legal ethics experts say Ashcroft's acceptance of nearly $9 million in senatorial campaign donations just before joining the cabinet is, at minimum, creating awkward appearances and could raise questions about his independence.

After inheriting the Microsoft antitrust case from the Clinton administration, Ashcroft's Justice Department negotiated a controversial settlement that is being reviewed by a federal judge.

Ethics experts and lawyers who have followed the case split over whether disclosure of the Microsoft donations should prompt Ashcroft to end his involvement to avoid an appearance of a conflict of interest.

Northwestern University law professor Steven Lubet noted that the Microsoft case was far along before Ashcroft took office. But, he said, "given his decision to recuse himself in the Enron case, he would obviously need to think about whether he needs to do that here."

Stephen Gillers, vice dean of the New York University School of Law, said that there is no clear standard for recusals in such cases, in part because no recent attorney general came from Congress. Discovery of the Enron and Microsoft donations, he said, "spotlights a problem we have to attempt to address."

In the Microsoft instance, Gillers said, "Ashcroft has to acknowledge that his campaign was the beneficiary of Microsoft's largesse" and that "he was advantaged by the company's generosity."

But, he said, because no rule yet exists that would require Ashcroft to recuse himself, the sums of money "are not enough to warrant criticizing him" for not doing so.

Justice Department spokeswoman Barbara Comstock said that equating Enron and Microsoft would be "like comparing apples and oranges" when it comes to recusal decisions. The department only just opened its criminal inquiry into Enron, while the antitrust suit has been pending for years.

She said of the Microsoft case: "There weren't any conflicts here that rise to the level of a recusal. No recusal was warranted in this matter."

Another Justice Department spokeswoman, Gina Talamona, said Ashcroft has been briefed regularly on the Microsoft case by Charles James, chief of the department's antitrust division. Ashcroft has been supportive of James' decisions, including his approval of the proposed settlement, Talamona said. Ashcroft and James together announced the settlement in November.

Microsoft spokeswoman Ginny Terzano said the company's contributions to Ashcroft had "no bearing" on the antitrust case.

She said Microsoft is hopeful that U.S. District Judge Colleen Kollar-Kotelly of the District of Columbia will approve the "tough but fair compromise" the company worked out with the Justice Department and nine of the 18 states that joined in the lawsuit.

The settlement was reached after a federal appeals court upheld a ruling that Microsoft had abused its monopoly power but threw out a lower court's plan to break the company in two.

Under the proposed deal, Microsoft would be required to give its rivals more access to its industry-dominating software. The company's compliance would be monitored by a three-person independent panel.

Critics say the settlement falls far short of ensuring that Microsoft would stop engaging in predatory actions.

Connecticut Attorney General Richard Blumenthal, among nine attorneys general who have refused to join in the settlement, said Ashcroft has not seemed to be "an active, visible" participant in the case. A recusal decision, he said, "is a personal one he has to make based on his ability to be fair and impartial."

Iowa Attorney General Tom Miller, who also refused to join in the settlement, declined to comment.

But Bob Lande, a University of Baltimore law professor who has closely monitored the antitrust case, said Microsoft's contributions to Ashcroft could undermine public confidence in the settlement.

"Absolutely, appearances are important," Lande said. "If he recused himself in Enron, he should have recused himself in Microsoft."

Jim Turner, a Washington lawyer who chairs Consumers for Computing Choice, agreed. He added that "the decisions in Microsoft are going to influence the entire technology community and economy for as long as we can see forward."

Microsoft's PAC and employees gave $55,900 to President Bush's presidential campaign, and gave more than $700,000 to the Republican National Committee, which financed pro-Bush ads in states across the country, according to an analysis of Federal Election Commission reports by campaign finance consultant Dwight L. Morris and Associates. Microsoft also donated $100,000 to Bush's inaugural committee.

Last June, Microsoft Chief Executive Officer Steve Ballmer met with Vice President Dick Cheney, but both men said later that they did not discuss the antitrust case. Ashcroft has said the White House did not interfere in settlement negotiations.

Microsoft gave Ashcroft financial support in several ways before his narrow defeat in the Missouri Senate race. The company's PAC donated $9,000 to Ashcroft's re-election campaign. In 1998, Gates, executive vice president Robert Herbold and the PAC donated $3,750 to a separate leadership PAC the Missouri senator set up to help other GOP candidates.

Microsoft also donated $10,000 in unregulated "soft money" to a joint fund-raising committee set up by Ashcroft and the National Republican Senatorial Committee. Federal law bars earmarking such donations for a specific candidate, but critics allege that it goes on all the time.

Besides the donations to Ashcroft-related committees, Microsoft gave nearly $740,000 to the National Republican Senatorial Committee, most of it in soft money. The NRSC, which raised tens of millions of millions of dollars, transferred more than $2 million in soft money to the Missouri Republican State Committee in advance of the 2000 election. The state committee ran nearly $1 million in thinly veiled "issue ads" on behalf of Ashcroft, according to a Brigham Young University study.

Ashcroft is the first attorney general to move from the Senate since Ohio Republican William Saxbe did it in 1974. Richard Thornburgh served as Pennsylvania governor from 1983-86 and as U.S. attorney general from 1988-91. Previous campaign donations were not a major issue for either of them.

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* Staff writer Les Blumenthal covers issues of Northwest interest in Congress. Reach him at 1-202-383-0008 or les.blumenthal@mcclatchydc.com.


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