E-gov companies lobby agencies
Electronic-government companies are trying to strike it rich on the Internet with a deceptively simple game plan: Put government services online, just one click away from the public. They're competing for contracts to provide digital government services-from automobile registration renewals to tax collection.
Some e-government companies have turned to well connected K Street heavyweights for help in getting local, state, and federal agencies to purchase their Internet services. The companies have tried to gain instant credibility by recruiting prominent politicians-turned-lobbyists, such as former Republican National Committee Chairman Haley Barbour and former Texas Gov. Ann W. Richards, a Democrat, to serve on their various boards.
The financial stakes are high for the e-government businesses. Spending on e-government services by local, state, and federal agencies is projected to quadruple from $1.5 billion in 2000 to $6.2 billion in 2005. And there's plenty of room for growth after that. Fewer than 1 percent of government services are online.
Some Internet analysts estimate that the value of government services on the Internet conducted by business, individuals, and governments could reach $2.2 trillion. "There's not a government agency out there that couldn't benefit from e-government services," says Andres Irlando, the vice president for government relations at New York City-based govWorks.com.
Consider Link2Gov Corp., a five-year-old Nashville, Tenn., company whose Washington office is headed by Everette James, a former deputy assistant secretary at the Commerce Department. Earlier this year, Link2Gov retained the Washington law firm of Verner, Liipfert, Bernhard, McPherson and Hand, which was given an option to acquire an equity stake in the company.
Verner, Liipfert lawyers have introduced Link2Gov executives to the political establishment in many states and are providing the Internet firm with political and commercial intelligence. To help drum up business, former Gov. Richards, one of Verner, Liipfert's so-called rock stars, joined Link2Gov's board of directors and received stock in the company.
Former Tennessee Gov. Lamar Alexander, a Republican, is a board member and a shareholder as well. Link2Gov also has an outside team of 24 state and local lobbyists and is developing a partnership with accounting firm giant KPMG International to expand its state government business. The company has signed 30 contracts with state and local agencies in 10 states. They include contracts with health boards in Texas to handle license renewals for health professionals online and another with the Department of Motor Vehicles in the District of Columbia to handle online renewals of vehicle registrations.
A leading rival, ezgov.com, which is based in Atlanta, has retained Barbour Griffith & Rogers for help landing government clients. Haley Barbour, the lobbying firm's superstar, sits on ezgov.com's advisory board. "We've used Barbour and other consultants and lobbyists to facilitate introductions with mayors, county executives, governors, and chief information officers," said Edward Trimble, the company's president. Because the decision to offer services online is typically "made at the top of government agencies," Trimble added, "it's very helpful to have strong introductions."
Former Sen. Sam Nunn, D-Ga., and Charles H. Dolan Jr., the former executive director of the Democratic Governors' Association, who's now a senior vice president with Ketchum, a Washington public relations firm, are also on the advisory board. For extra clout, ezgov.com has added to its board of directors former Govs. Mario M. Cuomo of New York and Zell Miller of Georgia, both Democrats, and former Rep. Jack Kemp, R-N.Y. All three have small equity interests in the company.
Ezgov.com's firepower appears to be paying off. Launched in 1999, the company has already signed contracts with 20 state and local agencies. Its Internet assignments include handling the annual renewals of securities for Georgia's secretary of state; the processing of speeding tickets for Cobb County, Ga.; and the compiling of tax assessments for Riverside County, Calif. Another 30 contracts are in the final stages of negotiations. Ezgov.com, with an eye to winning federal agency contracts, signed a strategic partnership with IBM Corp. in early June.
Meanwhile, govWorks.com, another strong player in the e-government field, has hired the Washington law and lobbying firm of Patton Boggs to boost its state business and to help win federal and international contracts. "They are helping states and agencies reduce the red tape for citizens regarding all types of municipal services," explained Michael A. Brown, a Patton Boggs lobbyist who is the son of the late Commerce Secretary Ronald H. Brown. "I'm assisting the company with introductions in the U.S. and internationally and helping them develop a strategic plan."
So far, govWorks.com has focused on state and local governments. It has landed contracts in Augusta, Ga., Groton, Conn., Pasadena, Calif., and Rochester, N.Y. But government relations chief Irlando said that Patton Boggs is helping the company develop a game plan for expanding into the federal marketplace. GovWorks.com has also tapped former Rep. Bill Paxon, R-N.Y., now a senior adviser at Akin, Gump, Strauss, Hauer & Feld, and former Reagan White House Chief of Staff Kenneth M. Duberstein, the president of the Duberstein Group, to serve on its advisory board. Former Sen. Alan K. Simpson, R-Wyo., and former Energy Secretary Federico Pena are board members. Each owns a small equity interest in the company.
Because the Internet is a global phenomenon, govWorks.com has started to solicit business abroad. Colombia recently chose the company to offer some government services online. Patton Boggs' Brown adds that his mission includes signing up government clients in Africa, Asia, the Caribbean, and South America.