Gates stepped down as chairman of Microsoft, but he’s stepping up his influence in D.C. Gates masters D.C. — and the world

Bill Gates did not make a good impression the first time he testified on Capitol Hill.

It was 1998 and the Senate Judiciary Committee was looking into antitrust allegations against Microsoft. Gates evaded the questions. He rambled. He made sure everyone knew he was not interested in playing the political game.


But Gates soon realized that approach wasn’t working — and turned himself into a player.

Gates stepped down Tuesday as chairman of Microsoft, but he’s only stepping up his influence in Washington.

The man who just 15 years ago couldn’t be bothered interacting with Congress has learned to leverage his fortune to drive huge change in U.S. education policy. Now, he’s broadening his focus to take on agricultural policy, immigration reform and even clean energy. Just this week, his foundation pledged financial support for a $25 million fund to provide college scholarships for undocumented immigrants. On the global stage, meanwhile, Gates has sharply criticized the powerful livestock industry as he talks up his vision for solving world hunger by promoting vegetarian diets.

( Also on POLITICO: Microsoft names Nadella CEO)

Few doubt Gates will have an impact in these far-flung arenas: As his work on education has shown, his priorities swiftly become state and federal priorities. His ideas spark multibillion-dollar shifts in public spending.

He does it through the Bill & Melinda Gates Foundation, which he and his wife co-chair. The foundation, based in Seattle, boasts a $40 billion endowment. It awards $3.4 billion in grants each year to public health and other initiatives around the globe. About $400 million is spent in the U.S. — most of that on projects intended to transform education. Those grants go to hundreds of research and advocacy groups that often work together to amplify the foundation’s voice and extend its reach into statehouses, schoolhouses and the U.S. Department of Education.

Gates and his staff at the foundation “have assembled an agenda and a mechanism to achieve their objectives, plain and simple,” said Scott Thomas, dean of the education school at Claremont Graduate University.

They’ve shown, Thomas said, that “you can leverage foundation resources to really affect federal and state policy — and the funding that comes along with that.”

( On POLITICO Magazine: What drives the Gateses crazy?)

Gates had little choice but to dive headlong into politics after the U.S. Justice Department brought antitrust charges against Microsoft during the Clinton administration. It was during that period that he testified before the Senate Judiciary Committee — and was soundly rebuked by Sen. Orrin Hatch (R-Utah) for his apparent disregard for the political process.

Gates learned the lesson. Microsoft dramatically increased its donations in the next election through its political action committee. The company, which at one point had just one in-house lobbyist, ramped up its Washington presence big time, bringing in big names from K Street, including taxpayer advocate Grover Norquist and former Mississippi Gov. Haley Barbour.

Last year, Microsoft’s lobbying expenditures topped $10 million. Among tech industry titans, only Google spends more.

Meanwhile, Gates, who started out with a single-minded focus on his software, began coming to the Capitol regularly to advise members of Congress from both parties on topics ranging from clean energy to polio eradication to science education to immigration reform. He also began traveling with and appearing alongside former President Bill Clinton; the Gates Foundation is a major donor to Clinton initiatives.

As Microsoft’s political presence grew, so too did the influence of the Gates Foundation.

The foundation cannot and does not lobby. But its reach is enormous nonetheless.

( PHOTOS: Bill Gates)

Year in and year out, the foundation dispenses hundreds of grants to organizations of every conceivable size and mission. Think tanks. Advocacy groups. Teachers unions. Public relations firms. Policy journals. Political associations.

All those disparate groups, in every corner of the country, bring an enormous megaphone to the issues the Gates Foundation wants publicized. Their staffers testify before state legislatures and Congress. They publish policy briefs that get wide circulation. They’re active on social media. They get heard.

In addition, several foundation staffers have moved into influential government posts. Education Secretary Arne Duncan’s first chief of staff, Margot Rogers, came from the foundation. So did Jim Shelton, a top policy official who is now acting deputy secretary. Both were granted waivers from conflict-of-interest policies to allow them to continue to work closely with the Gates Foundation after joining the Education Department.

Gates Foundation veterans occupy other powerful posts in the administration as well. Among them: Sylvia Mathews Burwell, the new White House budget director, and Rajiv Shah, the administrator of USAID.

In K-12 education, Gates gets substantial credit — or in some quarters, blame — for the explosion in charter schools, which are publicly funded but privately managed. He’s transformed the way educators are evaluated, putting much more emphasis on student test scores as a measure of effective teaching. And he’s a driving force behind the Common Core academic standards, which push students to read more non-fiction and spend more time on fewer topics in math.

( PHOTOS: Playbook Cocktails with Bill Gates)

The foundation also gambles on new ideas. It has donated $1.7 million to Parent Revolution, a group that promotes “parent trigger” laws, which allow parents to band together to seize control of low-performing schools.

“Long before it had political support, long before we even knew it could work, the Gates Foundation made a big investment in us and stuck with us,” said Ben Austin, who runs the group.

Austin said he sees an entrepreneurial approach and the risk-taking culture of the tech industry in the foundation’s style — and especially in its continued support after Parent Revolution’s first attempt at organizing parents ended in failure. “If you lose, especially in a highly public way, that ends up on the front pages of newspapers, quite often that leads to … your funding getting cut,” Austin said. But with the Gates Foundation, he said, “it was not about Monday-morning quarterbacking, it was about learning. They understand there is no playbook.”

When the Gates Foundation first funded Parent Revolution, only California had a parent trigger law. Austin and his peers lobbied and promoted the concept and it’s now on the books in several states, including Texas and Louisiana.

Gates has been just as influential in higher education.

His foundation has prodded the federal government to support experimental “competency-based” college programs that grant degrees to students who can prove they’ve gained new skills, rather than those who have earned a set number of credit hours. It has launched an aggressive focus on college completion for low-income students, which President Barack Obama has picked up as a theme.

And it has sponsored 16 papers on redesigning financial aid. The papers’ authors have become a fixture in Congressional hearings on reauthorizing the Higher Education Act.

“The foundation’s influence comes from our ability to work with and support really smart people who are committed to finding solutions to tough challenges in U.S. education and in global health and development,” said Chris Williams, a spokesman for the foundation. “Public policy has always been a focus of our efforts.”

That’s too modest by half for Michael Petrilli, executive vice president of the Thomas B. Fordham Institute, an education think tank that has received Gates funding. Petrilli assesses the foundation’s clout this way: “It’s one of the most influential forces in U.S. education policy, right up there with the Department of Education. Absolutely.”

That power has made Gates a lightning rod.

In the 1990s, Justice Department officials portrayed Microsoft as a ruthless monopoly, out to stifle competition in the software market and drive up prices for the hapless consumer.

Today, some parents, teachers and activists level a similar complaint against Bill Gates, accusing him of using his wealth and his political influence to foist unproven ideas on unsuspecting school districts.

Exhibit A: The Common Core State Standards.

The Gates Foundation has spent more than $170 million to fund groups that have drafted, analyzed and promoted the new academic standards, which are rolling out in classrooms nationwide. It helped states draft applications pledging to adopt the standards in exchange for federal grants. It even joined forces with textbook publisher Pearson’s foundation to develop classes aligned to Common Core.

When a furious backlash emerged from parents upset at the new standards, the foundation responded by pumping in more money. That, in turn, fueled the protests, which now increasingly portray Bill Gates as a malign influence usurping local control of public schools.

“What people are concerned about is that the decision making about what their children are learning and who should teach them is being dictated by special interests, other private entities and the federal government,” said Emmett McGroarty of the American Principles Project, a think tank leading the fight against the Common Core.

Similar forces have been at work in the growing backlash against a Gates-funded database known as inBloom, which was intended to store reams of student information — everything from test scores to attendance patterns to personal hobbies to learning disabilities. The foundation spent nearly $100 million on the database, but most of its partner states have pulled out, leaving only New York as a full-fledged participant.

The foundation’s role has been so sharply criticized that the Education Department recently released a video of Secretary Arne Duncan talking about those critiques with two teachers. When they asked him about a “corporate reform agenda” and raised concerns about undue influence by Gates, Duncan bristled.

“Anyone who thinks that those who are major donors to education … have a seat at the table for the policymaking — nothing could be further from the truth,” Duncan said.

David Bergeron, a former acting assistant secretary at the Education Department, would dispute that characterization a bit — but he said the Gates role was vital in bringing a breath of fresh air to a federal bureaucracy that tends to be averse to change.

Before Gates got involved, he said, the biggest influences on higher education policy in Washington were the associations representing colleges and universities.

“They captured the debate,” he said, and generally promoted the status quo. “You needed something like the Gates Foundation or some other external force to seize on an alternative view,” said Bergeron, who is now a vice president at the liberal Center for American Progress.

Bergeron said he understands complaints that because Gates funds so many policy organizations, the foundation can create a sort of echo chamber, with myriad voices chanting the same tune. But in his view, he said, those voices pushing back against the status quo need to be even louder than they are already.

Gates isn’t taking his eye off education policy. Lately, however, he has added a new focus on U.S. agricultural policy.

Gates has taken to criticizing the livestock industry for consuming too many resources. And he has avidly promoted the biotech industry, supporting Monsanto, a leading developer of genetically modified seed, with an investment through his foundation. He’s also making a big push for plant-based diets, investing his personal funds into two start-ups that are working on using plants, rather than animals, to produce eggs and meat.

Many will be watching with interest, and a bit of apprehension.

“Bill Gates, God love him, he’s well-intentioned,” said Patricia McGuire, the president of Trinity Washington University. “But when he came out with his letter last week saying there would be no more poor countries in the world by 2035 … I understand it’s an intellectual exercise for him, but it comes across as insensitive and extremely arrogant.”

McGuire said she’s seen two sides of Gates’ influence in the education realm: He’s been extremely generous in helping many students, she said, but he’s also tended to be “overbearing” in promoting policy solutions that aren’t necessarily backed up with evidence.

“While we applaud him for wanting to fix things, sometimes [the foundation’s] sense that they know best is a problem, because they don’t always have the best solution,” McGuire said. “You have to listen to the people you want to help if you want to help them well.”

Tarini Parti contributed to this report.