Microsoft heavily funding ‘small business’ lobby

Introduction

A “small business” technology trade group that’s aggressively pressing Congress to ease key immigration laws is heavily funded by one of the world’s wealthiest corporations, according to a Center for Public Integrity review of company disclosures.

Software giant Microsoft Corp. gave the nonprofit Association for Competitive Technology nearly $2.5 million between July 1, 2011, to June 30, 2012, corporate documents indicate.

Microsoft also gave at least $1 million to ACT during the company’s 2009, 2010 and 2011 fiscal years — although it did not disclose the specific payment amounts.

Such payments represent a major portion of the trade group’s annual budget: ACT’s annual revenue from 2008 to 2011 has hovered between $3 million and $4 million, Internal Revenue Service documents show. The association has yet to file its annual report covering calendar year 2012 with the IRS.

ACT brands itself as “the only organization focused on the needs of small business innovators from around the world.”

An ACT spokesman did not respond to multiple requests for comment, and Microsoft representatives declined to comment on the company’s relationship with ACT.

But the trade group’s members include a few of the biggest names in technology. In addition to Microsoft — No. 35 on the Fortune 500 list for 2013 — the association’s 5,000 members include major multinational corporations such as eBay Inc., Intel Corp., Oracle Corp. and VeriSign Inc., according to ACT’s website.

Corporations are not legally required to disclose their payments to trade associations, but some, such as Microsoft, do so voluntarily. Trade associations, which are organized under section 501(c)(6) of the U.S. tax code, are also not required to publicly identify their donors.

Intel’s voluntary corporate disclosure document did not list any payments to ACT in 2012, although the company did contribute $75,000 in 2011 and $215,000 in 2010.

Oracle and VeriSign, for example, do not voluntarily disclose payments to trade associations.

ACT has been among a bevy of tech groups lobbying heavily on the comprehensive immigration reform bill, known as S. 744, which the U.S. Senate approved last month.

Most notable among their concerns: expanding the H1-B visa program, which allows highly skilled foreign residents to work in the U.S. temporarily.

“Your support for S. 744 will allow America to better realize opportunities for innovation and job creation today, as well as secure our economic strength in the future,” read a June 20 letter to Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., that was signed by more than 100 tech executives, including ACT’s executive director, Morgan Reed.

The letter also argued that the legislation “would help ensure that America continues to be the location of the world’s most innovative and fastest growing industries — those that rely on intellectual property and highly educated talent.”

Furthermore, in late May, ACT organized a Washington, D.C., “fly-in” day, bringing 40 developers to the nation’s capital to meet with officials at the White House, Congress and the Federal Trade Commission.

The group touted this lobbying blitz as “very effective” on its website, adding that “ACT lobby efforts in the Senate helped push tech amendments to the immigration bill over the finish line.”

Reed has also stressed the importance of boosting investments in science, technology, engineering and math education for high school and grade school students in the United States, funding for which is also included in the Senate’s immigration bill.

“Simply put, our nation cannot maintain its global technology leadership with a foreign labor dependency,” Reed wrote in an April Roll Call op-ed. “Congress must facilitate a homegrown developer workforce to ensure long-term stability and growth.”

The fate of immigration reform now lies with the U.S. House of Representatives, where its prospects are uncertain. ACT, for one, is continuing to press its case.

“We look forward to progress that will lead to a truly modern immigration system,” the group said in a joint press release with other industry players urging the House to take action. “If we want next-generation industries to be founded in St. Louis instead of Shenzhen, then policymakers must seize this moment and produce legislation that all sides can support.”

Chris Zubak-Skees contributed to this report.