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web posted June 12, 2000

Judge orders Microsoft split

Calling the world's largest software maker "untrustworthy," a federal judge on June 7 ordered Microsoft to be broken into two smaller companies to prevent it from violating state and federal antitrust laws in the future.

In a scathing memorandum that accompanied his 14-page decision, U.S. District Judge Thomas Penfield Jackson said he was ordering the breakup because the company was totally unwilling to admit that it had violated federal antitrust law and has shown no willingness to modify its business conduct.

The court has "reluctantly come to the conclusion that a structural remedy has become imperative: Microsoft as it is presently organized and led is unwilling to accept the notion that it broke the law or accede to an order amending its conduct," the judge's memorandum said.

If Judge Jackson's breakup order survives the appeals process, it would be the largest court-initiated split since AT&T agreed to be broken into a long distance company and seven regional phone companies under a 1984 consent decree.

Jackson ordered Microsoft to be divided into a PC operating systems company, and a company that holds the remainder of its business, including its dominant Office suite of applications, the Internet Explorer Web browser and other businesses. While Jackson delayed the implementation of a split until Microsoft has exhausted its appeals, he required the company to draft a plan for how it will accomplish the breakup by Oct. 7, 2000.

Microsoft immediately vowed to appeal the decision, a process which could take up to two years, depending on whether the Supreme Court agrees to hear the case before a federal appeals court does.

"This is the beginning of a new chapter in this case," Microsoft Chairman Bill Gates said in a video statement. "We will be appealing this decision, and we have a very strong case on appeal. This ruling is inconsistent with the past decisions by the appeals court, with fundamental fairness and with the reality of the marketplace."

The Justice Department plans to ask for an immediate review by the Supreme Court. If the high court agrees to review the case, it could speed the process. Justice also prefers the Supreme Court route because an appeals court favored Microsoft in a previous antitrust action against the company.

Joel Klein, Justice's lead antitrust enforcer, laid the responsibility for Wednesday's ruling squarely on Microsoft's top executives.

"Microsoft itself is responsible for where things stand today," Klein said. "Its repeated illegal actions were the results of decisions made at the highest levels of the company over a lengthy and sustained period of time. They reflected defiance of, not respect for, the rule of law."

In his memorandum accompanying the final ruling, Judge Jackson also noted that Microsoft had thumbed its nose at the law in the past.

"In earlier proceedings in which a preliminary injunction was entered, Microsoft's purported compliance with that injunction while it was on appeal was illusory and its explanation disingenuous," Jackson said.

Jackson's ruling also imposes a series of restrictions on Microsoft's conduct, which take effect in 90 days and remain in place for three years as the case moves through the appeals process. Microsoft is expected to immediately ask for an injunction against those measures.

The restrictions are designed to prevent Microsoft from using its monopoly power over PC operating systems to crush competing software products that threaten to disrupt its monopoly position. Judge Jackson previously concluded that Microsoft undertook a campaign to eliminate a threat it faced from "middleware," such as Netscape's Web browser and Sun Microsystems' Java technologies. Middleware is software that operates between an operating system and another type of software application.

The restrictions prohibit Microsoft from punishing hardware and software companies working on competing products. Along the same lines, Microsoft wouldn't be able to favor computer companies and software developers that helped Microsoft exclude competitors. Other interim provisions include:

  • Requiring Microsoft to license Windows to PC makers under uniform prices and terms according to a schedule accessible to the government and those PC makers;
  • Barring Microsoft from interfering with the way PC makers set up start-up screens, the Windows desktop, preferences, and Internet connection wizards;
  • Requiring the company to disclose technical information about its operating systems to independent hardware and software companies so that those companies can design products that are compatible with Windows;
  • Prohibiting Microsoft from degrading the performance of "middleware" made by other companies;
  • And restricting the company from binding middleware products, such as a Web browser, to its Windows operating system unless access to that middleware can be removed by PC makers or end-users.

In his findings of fact in the case, Jackson also concluded that Microsoft attempted to monopolize the Web browser market and unlawfully tied its Web browser to its operating system when it issued Windows 98.

Microsoft felt especially threatened by Netscape's Web browser and Sun Microsystems' Java programming language because they could be used to write applications that can run on multiple operating systems, Jackson found. Under the breakup order, Microsoft's operating systems business would be prohibited from distributing new versions of Microsoft's Web browser software.

The split companies also would be barred from sharing officers and directors, and one company would be prohibited from owning stock in the other.

The separated companies also would be barred from sharing important programming tools called Application Programming Interfaces unless those APIs were also made available to independent software and hardware vendors.

White House says some Gore office e-mails probably gone forever

The White House says some e-mails in Vice President Al Gore's office from 1998 and 1999 may no longer exist because they were not captured on computer backup tapes.

Gore himself may have been told about the problem more than a year ago, says Rep. Dan Burton, R-Ind., who calls the White House's disclosure about problems with message traffic in Gore's office "the latest outrage" in the tale of missing White House e-mails.

Congress has been investigating why the White House failed to archive and review thousands of e-mails to determine if they should have been turned over under subpoena to investigations ranging from fund raising to Whitewater and Monica Lewinsky. The archive problem came to light early this year in a lawsuit by a conservative group, Judicial Watch.

Burton said June 8 a witness recently told the House Government Reform Committee she wrote Gore a memo at the vice president's request in April 1999 about e-mail in his office not being properly archived.

Burton's request for the memo "has led us to discover that" an "error apparently prevented e-mail on the OVP server from being backed up from the end of March 1998 through early April 1999," White House lawyer Steve Reich wrote in a letter to the congressional committee. OVP stands for Office of the Vice President.

Reich said that the White House has been unable to find any memo by the witness to Gore on the e-mail archiving problem.

White House spokesman Jim Kennedy had no immediate comment on whether Gore had any recollection about the matter.

In the vice president's office, computer contractors failed to schedule a back up of the computer "E" drive. However, some of the e-mails may be available from any paper copies that staffers kept and any messages staffers stored on their individual computers.

Some of the e-mails also may be available on backup tapes for the main White House computer system. Some Gore staffers' computers were tied in with a computer archive, providing another possible source for at least some e-mails.

The e-mail system in Gore's office is separate from the main White House computer system, where an e-mail archiving problem has led to missing message traffic for a period of over two years starting in August 1996.

In a March 28 interview with The Associated Press, Gore waved off the issue of missing White House e-mails as a red herring inspired by Republicans.

The vice president said he did not know how much e-mail he'd written, "but whatever is there will be disclosed -- fully and completely."

House passes estate tax repeal that could meet up with Clinton veto pen

The House of Representatives approved a Republican-championed bill that would completely roll back the 84-year-old federal tax on estates, despite the strong objections of the Clinton Administration and the likelihood of a presidential veto should it arrive at the White House in its current form.

The GOP bill to eliminate the so-called death tax passed the chamber by a vote of 279-136 early on the afternoon of June 9.

Motivated by their intentions to pass at least some targeted tax legislation during this election year, and unmoved by the administration's protestations -- including a sharply worded letter penned by the president that specifically threatened the bill with a swift veto -- the House's majority Republicans pushed ahead that morning with the debate, and drew proceedings to a close in just a handful of hours.

"The death tax is the wrecking ball of a life's worth of achievement and success," House Ways and Means Committee Chairman Bill Archer (R-Texas) said during a speech on the House floor. "It's time to bury the death tax."

"Americans don't believe the IRS should be operating a toll booth on the way to heaven," said Rep. Sam Johnson (R-Texas), also a member of the Ways and Means panel.

The Republican bill would reduce estate taxes over 10 years at an estimated cost of $105 billion out of the projected federal surplus.

The administration says the estimated cost of $50 billion a year to the federal government after the repeal is completed in 2010 would be untenable.

Supporters argued that the federal treasury would not be as adversely affected as detractors were estimating. The estate tax, Rep. Christopher Cox (R-California), argued, may already be a draw on federal accounts, because it encourages people to find ways to spend their accumulated wealth before death.

"How is it that it is in some instances cheaper to dispose of assets before death?" asked Rep. Kenny Hulshof (R-Missouri), a proponent of the bill.

Many who argued against the bill described it as a break for the wealthiest 2 percent of the population, and predicted it would drain so much money out of the government's coffers that priorities such as prescription drugs for Medicare recipients will never be realized.

"This should be titled the 'billionaires' protection bill,'" said Rep. John Olver (D-Massachusetts).

"You have given the wealthiest [portion] of the population a break, and now you are coming before the American people and saying, 'We don't have enough money to protect the sick and the old," said Rep. Bernie Sanders (I-Vermont).

Current law exempts $675,000 of a deceased person's estate from the federal tax, and $1.3 million for farms and small businesses owned by a decedent.

Even though the estates of only some 2 percent of all people who die are ever subjected to the tax -- many of them, of course, quite well off -- stories told by farmers and small business owners about their tax fears and the high costs of estate planning have proved politically compelling enough for the issue to move forward in Congress.

Elimination of the estate tax has remained on the House GOP leadership's agenda since the party took control of the chamber in the wake of the 1994 midterm elections.

An attempt to repeal the estate tax was featured in last year's $792 billion tax cut bill, which was vetoed by the president.

This year, Republicans have broken apart the contents of that bill, and have attempted to push portions -- such as this estate tax bill and a similar repeal of the marriage penalty tax -- through the chamber as separate bills.

Democrats argued on the floor that the move to repeal the tax was nothing more than a political stunt, saying the bill stood little chance in the Senate, and no chances of survival at the White House.

In a letter dispatched to Capitol Hill the night before, President Bill Clinton leveled a veto threat at the bill, saying he instead supports "targeted, fiscally responsible legislation to make the estate tax fairer, simpler, and more efficient," particularly in reducing its impact on some small businesses and family farms.

The president argued in his letter that the Republican plan carries costs that will rise exponentially, risking the extended solvency of the Medicare and Social Security plans, and the country's ability to pay down the national debt, among other fiscal priorities.

The president also wrote that the complete repeal of the estate tax would "undermine the progressivity, fairness, and integrity of the tax system."

The Republican plan, Clinton wrote, would also have an adverse effect on charity giving, since that is one way -- through bequests and gifts-- that estates now minimize their tax exposure.

White House spokesman Joe Lockhart repeated the president's assertions the next day, saying, the measure would provide wealthy Americans with a tax break of up to $800,000 a year, and deserved to be subjected to some "truth in labeling."

Reps. Charles Rangel (D-New York), the ranking member on Ways and Means, and Benjamin Cardin (D-Maryland), said on the House floor that small business owners and farmers -- the two groups whose advocates argue are most adversely affected by the inheritance tax -- can be assisted in other ways.

The two aligned themselves with Rep. Charles Stenholm (D-Texas) to create an alternative to the Republican bill that would have been targeted toward farmers and small business owners, and would cost an estimated $22 billion over 10 years.

The alternative bill would provide an immediate 20 percent across-the-board deduction in the tax, and raise the $1.3 million exemption on farms and small businesses to $2 million, while raising the regular $675,000 exemption to $1.1 million in the short term, then $1.2 million by 2006.

Stenholm argued that his bill would provide immediate relief to farmers and business owners, rather than put them through an extended wait.

"[The Republican bill] would make small business owners and family farmers wait for 10 years to get the relief they would get on Jan. 1, 2001, with the Democratic substitute," Stenholm said.

The alternative bill, which was brought up on the House floor as part of the debate on the Republican bill, failed by a vote of 196-222.

Motherhood, Bibles on feminist blacklist at UN

A Canadian funding agency has paid for a study aimed at helping feminist organizations strategize against "pro-life and pro-family" lobbyists at the Beijing +5 conference on women's equality which took place last week at the United Nations.

Among the transgressions of the targeted groups are not following proper procedures at a meeting, wearing buttons reading "Motherhood," lobbying governments and carrying Bibles.

A 40-page paper entitled "Right-Wing Anti-Feminist Groups at the United Nations," produced by some academics at the Institute of Feminist Studies at the University of Quebec in Montreal, describes lobbying tactics of conservative groups and recommends to women's organizations "ways and means for responding."

"This information should support a more adequate response to anti-feminist groups and their anti-democratic strategies during the upcoming United Nations meetings on women's rights," states the paper.

The paper is part of an ongoing project "designed to analyze the discourse and strategies of a number of national governments and groups that claim religion as their authority when they address the rights of women at the United Nations."

The project received a three-year, $98,000 grant from the Humanities and Social Sciences Research Council of Canada.

"Right-wing anti-feminist groups have developed multiple strategies for participating in United Nations meetings," the study states. "These groups seem to have made important gains on the international scene."

The paper came about because feminist groups had expressed unease at the presence of "right-wing anti-feminist groups" at the United Nations, the introduction states.

The paper accuses the groups of not following UN rules of procedure during preparatory meetings for the conference held in March.

"They targeted the work of particular caucuses, intimidated selected delegates, spread false information in their information leaflets, and lobbied national governments," the paper states.

"The representatives of right-wing anti-feminist groups made themselves quite visible, wearing red buttons reading 'Motherhood' or blue ones that said 'Family;' by walking about with Bibles in their hands, as was the case during the panel organized by the Lesbian Caucus; by marking their foreheads with ashen crosses on Ash Wednesday; or, in the case of the Franciscan Brothers, by wearing their robes.

"In addition to being visible, they committed acts of intimidation aimed at representatives of progressive groups. For example, the Franciscan Friars of the Renewal encircled a woman by joining hands and praying aloud," the paper states.

The paper urges women's groups to learn about their opponents "in order to demystify them," and provides "fact sheets" on participating anti-abortion groups, including Campaign Life Coalition of Canada, the American Life League, and the Family Life Counselling Association of Kenya.

Founding dates, head offices, goals and objectives, memberships, budgets, activities and links with other organizations or governments, are listed.

"It's a blacklist," said Gwen Landolt, spokeswoman for REAL Women of Canada, number 10 on the list.

"I feel extremely put out that they are using taxpayers' money to smear and defame us."

Tanya Granic, a Canadian member of the World Youth Alliance, number 12 on the list, said she was not surprised that feminists would write strategy papers, but said she was "shocked" that the government would foot the bill.

"The purpose of this paper is to basically discredit pro-life groups and put up a red light that we're here," she said.

Marie-Andree Roy, director of religious studies at the Universite du Quebec at Montreal, who applied for the research council grant and supervised the paper written by graduate student Anick Druelle, said the paper helped enhance the democratic process.

"We're trying to understand how religious views influence the debate over women's rights," said Ms. Roy.

But Eric Lowther, Canadian Alliance MP and critic on family issues, criticized the funding as politically motivated.

"Taxpayers' money is going to silence the voices of Canadians and anybody else who doesn't agree with the radical approach of [the Canadian government]," said Mr. Lowther.

Garth Williams, chief of public affairs and knowledge transfer for the research council, denied that politics played any part in funding the "interesting paper.

"We fund projects based on the excellence of the research. They are not looked at through a political lens," he said, citing a stringent peer-review process.

The paper "contributes to public debate," he said. "Policy is not made in a vacuum."

He said the council did not put limits on how the research they fund is used.

"We feel that it is important for social scientists to get their work out of the ivory tower," he said.

Gore declares national monuments in Pacific Northwest

Democratic presidential hopeful Vice President Al Gore on June 9 designated two national monuments on behalf of the Clinton Administration during a campaign swing through the Pacific Northwest.

Dressed in blue jeans and a button-down shirt, the vice president declared the Hanford Reach, a prime salmon-spawning stretch of the Columbia River in Washington State, off-limits to road-less development under the 1906 Antiquities Act.

Gore toured the 51-mile stretch of river in a boat named "Can Do II." The area, along with 200,000 acres of surrounding wilderness, served as a security buffer for the Hanford Nuclear Reservation, where the government produced plutonium during the Cold War era.

"Today by protecting the Hanford Reach as a national monument ... we can guarantee that the Columbia rolls on clean and pure for generations to come," said Gore, who addressed a local audience gathered on the banks of the river.

Gore also declared the Cascade-Siskiyou region in neighboring Oregon a national monument. The area includes Soda Mountain and nearby lands where plant and animal life are abundant.

"These lands are among America's great natural treasures, and we owe it to future generations to preserve them," said Gore. "We act today so that, years from now, Americans will still be able to paddle free-flowing waters and hike pristine peaks, enjoying these extraordinary stretches of our natural heritage."

The Reach designation was opposed by some local residents who hoped that some irrigated farming could take place on the land. Republicans blocked attempts in Congress to impose federal restrictions on the river.

But the monuments were declared through President Bill Clinton's use of his executive power under the Antiquities Act.

Bush calls for 'citizen-centered' government

Campaigning in Pennsylvania, Bush on June 9 unveiled additional reform programs he says would create a more "citizen-centered" government that might save tax payers $88 billion over five years.

"Today, when Americans look to Washington, they see a government slow to respond, slow to reform and ignoring all the changes going on around it," Bush told a private audience in Philadelphia, site of the upcoming Republican National Convention.

"Throughout this campaign, I have set forth policies that capture my vision of government reform," Bush said. "They are guided by three principles: government should be citizen-centered, results-oriented, and, wherever possible, market-based."

In particular, Bush vowed to reduce the federal bureaucracy over the next eight years by not replacing approximately 40,000 of the 80,000 senior and mid-level government managers scheduled to retire during that period.

The Texas governor also proposed creating a chief information officer, and spending $100 million on a program to support interagency e-commerce proposals.

In addition, Bush suggested creating a "sunset review board" to recommend elimination of duplicative jobs, and to make government more modern by moving all significant government procurement to the Internet.

"In size and scale, modern government will never resemble what the framers envisioned. In spirit, however, it should always be citizen-centered, always listening and answering directly to the people," said Bush, who spoke at Carpenter's Hall, the site where the First Continental Congress was held in 1774.

As he did during a campaign stop in Knoxville, Tennessee, the day before , Bush took aim at Gore's "Reinventing Government" program. According to project officials, the 1993 program has saved the federal government at least $107 billion by reducing bureaucratic waste, cutting contracting costs and using updated technology such as the Internet to provide services.

Bush refuted those claims, and asserted that the Clinton Administration had "reshuffled" instead of streamlining government.

"The administration claims to have reduced the number of low- and mid-level workers in the federal government. As it turns out, many positions have been eliminated, but the layers of middle and senior managers have multiplied."

The jab came a day after Bush complained about a lack of civility in Washington with comments that were especially critical of the Clinton-Gore administration.

Bush was welcomed to Pennsylvania on June 8 by Republican Gov. Tom Ridge, who has been widely mentioned as a leading candidate for vice president. During his address in Philadelphia, Bush praised Ridge's efforts to reform public contracting in Pennsylvania by using on-line bidding.

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