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Intel to Upgrade D.C. Presence

Intel Corp., one of the country’s largest and best-known high-tech manufacturing outfits, today is launching an effort to refurbish its brand on Capitol Hill. The two-pronged campaign involves a major inside-the-Beltway advertising push and, ultimately, a transformation of its operation here with a new chief lobbyist.

The moves, top executives for the company say, will define Intel as a U.S.-based manufacturer committed to keeping jobs in America and will help position the company as a leading voice on a range of policy matters including patent and immigration reforms.

“We found that we were doing a really good job of communicating our product and technology to our customers,” said Intel’s Paul Bergevin, vice president in the sales and marketing group and general manager for global communications. “But our research showed we were not doing a very effective job of reaching policy decision makers. Intel has to make clear what its positions are. We have to be more a part of the conversation in Washington.”

The company plans to run ads in Roll Call, The Hill, National Journal, CongressDaily, Politico, Congressional Quarterly and policy-focused Web sites for at least the rest of the year, Bergevin said. He declined to disclose Intel’s budget for the ad buy, but estimates of a six-figure price tag were “not far off,” he said.

Although company executives say they have no hidden motives, industry observers speculate that there’s more to Intel’s stepped-up presence in the nation’s capital.

The chip-maker is facing antitrust suits against it from competitor Advanced Micro Devices in the United States, the European Union and South Korea.

AMD, whose representatives from the Glover Park Group did not return a call seeking comment, has accused Intel of anti- competitive practices, including giving big discounts to companies that work exclusively with Intel.

A ruling in the European Commission is likely to come this year, and if the court rules against Intel, these observers say, the ad campaign and revamped presence in Washington, D.C., could help the company make its case to Congress or the administration to intervene on its behalf.

“They are losing worldwide in all of these antitrust cases,” said one tech industry source who would not be quoted by name.

Another tech industry source added, “AMD filed their lawsuit, and Intel is frustrated. So I think that probably factors into some of their thinking.”

Intel’s general counsel Bruce Sewell, whose departments include the lobbying division, flatly denied that the company was seeking any help from the United States and that it would deal with those suits in the courts. “We’re not trying to position the U.S. government to intercede in those activities,” he said.

Apart from the lawsuit, Intel, like many other companies, has seen many of its legislative agenda items — including patent law and immigration reform — languish this Congress. “They’re not simply crediting this to an election year malaise but deciding they need to really be engaged in Washington,” the second source said of Intel’s renewed focus on Capitol Hill.

Of course, Intel is no stranger to Washington. The company has a 10-lobbyist office in Northwest Washington and has, over the years, spent millions of dollars to lobby the federal government. It also keeps on retainer several K Street firms including American Continental Group and Quinn Gillespie & Associates.

But according to disclosure reports filed with Congress, Intel’s lobbying spending has taken a dive since it peaked in 2002 at $7.1 million. The company, which had revenues of $39.2 billion in 2007, spent $1.8 million on lobbying last year.

Sewell said that back in the 2002 era, the company was working several high-profile issues that concerned the entire tech community, including stock option expensing and class-action reforms.

But the 2007 figure is likely to move higher, he said.

“I wish I had a blueprint that I could give you,” he said of Intel’s future lobbying operation. “I would like to see us increase the amount of staff and time that we spend on this activity in Washington, D.C. We are trying to step up our visibility both through the ads and in conjunction with our presence in Washington.”

Part of the changes on the lobbying side, he said, are to find a new top lobbyist to be based in and to run the D.C. office. Currently, Don Whiteside, who is based on the West Coast, is the interim corporate executive in charge. Not since the late 1990s, under the direction of Michael Maibach, has the person overseeing the D.C. office actually been based here full time.

Anne Gundelfinger, Intel’s vice president and associate general counsel, has been in charge of much of the Washington office, but Sewell said she is on a leave of absence, although, he adds, she is not leaving the company.

“We’re really just trying to figure this out, almost on a daily basis,” Sewell said. “We don’t have nominally a head of the Washington office, but I think we really need one. That’s one of the deficiencies we’ve had to date: trying to run these activities from the West Coast.”

He said his first priority is to find someone to run the office, “then I would want that person to come up with a plan for whether we need to increase the staffing.”

Sewell also said his goal is to raise more for the company’s political action committee, which doled out about $370,000 in the 2006 election cycle, with 65 percent going to GOP candidates, according to federal election data compiled by the Center for Responsive Politics. The PAC has donated more than $180,000 this cycle, with nearly half going to Democrats.

“We’re one of the largest manufacturers left in the United States — manufacturing things at the absolute cutting edge,” Sewell said. So when it comes to legislative issues or discussions on improving math and science education, “We want to be heard. We’d like to be a party to those debates.”

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