Can Silicon Valley Disrupt The Democratic Party?

By: Peter Hamby
By: Peter Hamby
Ro Khanna wants a show of hands.  "How many of you have heard of LinkedIn?"

Ro Khanna is an evangelist for the thriving tech economy based in Silicon Valley and the favorite son of its wealthiest visionaries.

CUPERTINO, California (CNN) -- Ro Khanna wants a show of hands. "How many of you have heard of LinkedIn?"

The 37-year-old Indian-American Democrat, the darling of Silicon Valley's tech elite and a vehicle for their budding engagement with Washington, is addressing a cafeteria full of advanced placement government students at Cupertino High School. Most of them are Indian or Asian-American, the sons and daughters of the programmers and tech company employees who populate this neatly manicured California town where Apple is based.

Khanna launches into a riff about LinkedIn founder Reid Hoffman and the power of technology to radically improve business and society. Khanna thinks he can apply similar lessons to politics.

"We have to disrupt the system," Khanna says of Washington, criticizing that notoriously inefficient town on the other side of the country.

The nod to innovation is typical of Khanna's stump speeches across California's 17th Congressional District, a majority Asian-American district that encompasses the heart of Silicon Valley and is home to some its most famous companies, including Cisco, Yahoo and Intel.

Khanna, a lawyer, Stanford economics professor and former trade official under President Barack Obama, is an evangelist for the thriving tech economy based here. Consequently, he's also the favorite son of its wealthiest visionaries.

Khanna's list of financial contributors reads like a Bay Area society magazine: Sheryl Sandberg, Shawn Parker, Marissa Mayer, Marc Andreessen and John Doerr are among the executives and venture capitalists backing his campaign. Google Chairman Eric Schmidt is on board. So is California Lt. Gov. Gavin Newsom, himself an advocate for using technology to streamline government.

Khanna has raised more than $3 million since announcing his bid last year.

'It's like a startup!'

"What is the biggest difference between Silicon Valley and Washington?" Khanna asks the Cupertino students. "The biggest difference is that here, there is a sense that failure is OK. Risk-taking is OK. It's only here in Silicon Valley where I said to different people, 'I am running against a seven-term incumbent, here is my plan and here is how I'm going to win,' and they said, 'That makes perfect sense! It's like a startup!'"

As with many of the conversations with entrepreneurs in and around San Francisco these days, it's easy to get caught up in Khanna's optimism and his faith in the promise of technology to change the world. It's also hard to miss their considerable self-regard.

But one Cupertino student, Saul Fuhrmann, raises his hand and brings the conversation back down to earth with a seemingly simple question that will ultimately determine whether Silicon Valley can install one of its own in Washington.

"What's wrong with Mike Honda?" he asks.

Honda is the 72-year-old, seven-term incumbent Khanna is trying to unseat. He's also a widely admired fellow Democrat who has done next to nothing to offend voters here since his election in 2000, though the district was re-drawn in 2010 and includes plenty of Republicans and independents.

With California's new "top-two" nonpartisan primary system, Khanna and Honda are primed to face off, Democrat-on-Democrat, in the general election this November if both emerge, as expected, as the top finishers in June's primary.

Unlike former California Rep. Pete Stark, the irascible Democratic congressman Khanna considered challenging in 2012 before shying away, Honda is almost universally regarded as a nice guy and a loyal party soldier.

Honda's allies are bewildered by Khanna's attempt to boot him from office.

"Ro does not have a good reason against Mike," says Ben Field of the South Bay AFL-CIO Labor Council, a coalition of unions that is backing Honda. "His reason for running against Mike is that he wants to be in Congress. That's not a good enough reason."

Money, youth and technology vs. old-school power structure

Khanna's campaign is not just a test of Silicon Valley's nascent efforts to stake a claim on the American political process. It also presents a more basic political challenge: Are money, youth and technology enough to overcome the old-school power structures of the Democratic Party?

Honda has the full-throated support of the region's Democratic infrastructure -- a constellation of interest groups, labor organizations and local activists who look at Khanna and see a group of millionaire and billionaire business leaders trying to purchase a seat in Congress. Of particular worry are Khanna donors like Peter Thiel, the libertarian-leaning hedge fund manager, and JetBlue chairman Joel Peterson, who have given money to Republicans like Sen. Ted Cruz of Texas and 2012 GOP presidential candidate Mitt Romney.

The financial muscle of Silicon Valley Democrats, socially liberal but staunchly pro-business and skeptical of institutions, has been a growing source of anxiety for old-line party regulars in California.

"We want labor Democrats, not business Democrats!" San Francisco Labor Council chief Tim Paulson declared at last weekend's California Democratic Party convention. The remark drew noisy cheers from delegates, according to the San Francisco Chronicle.

On Monday, the state party officially endorsed Honda. It joined a raft of other Democratic groups in doing so, including Planned Parenthood, the Sierra Club, Daily Kos, MoveOn.org, a range of labor unions and grass-roots liberal organizations like the Progressive Change Campaign Committee and the Howard Dean-founded Democracy For America.

"We don't need corporate Democrats," says Charles Chamberlain, Democracy For America's executive director. "There is no reason to replace Mike. It's like the tech industry is trying to buy a seat in Congress with Ro, and that's unacceptable. Google has enough representation in Congress."

The thought leader on technology for Congress

Ask Khanna and his supporters what's wrong with Honda, and the answer is usually something along the lines of, "It's nothing personal." Khanna says Honda is "a good person and a nice man with many years of public service that I respect."

Khanna argues the face of the district has evolved dramatically since Honda's first election 14 years ago, and that it's time for a leader who understands that the fertile and hilly communities of Sunnyvale, Cupertino and Santa Clara have become ground zero for American economic innovation.

"Whoever represents Silicon Valley should really be deeply knowledgeable on the technology and innovation agenda," said GRAMMY Foundation chairman Rusty Rueff, a startup investor and philanthropist backing Khanna. "If you don't understand cars you shouldn't be representing Detroit or Michigan. Whoever sits in this seat instantly becomes the thought leader for all the rest of Congress as it relates to technology: the policy, the law, the strategy."

Not all of Silicon Valley's entrepreneurs are lining up behind Khanna.

"It is not a monolithic community," says Dilawar Syed, the founder of a Menlo Park-based social media company who supports Honda. The congressman, he says, "has stuck his neck out for people on the margins who are ignored."

"The valley has an allure of innovation and wealth," Syed explains. "We are leading the charge globally in innovation. But we don't want an environment that is not a level playing field. Anybody can speak the language of Silicon Valley. So does Paul Ryan. But it's about getting things done and Mike has."

Transportation, education and income inequality are dominant issues here. Cost of living and real estate prices have skyrocketed, fueled in large part by the tech boom.

'Holistic' differences in visions

Khanna says his campaign is less about substantive policy disputes with Honda --- "on specific votes, on minimum wage, we'd probably vote the same way," he explains --- than the "holistic" differences in their vision.

"I don't think Honda has thought through and put forward a coherent economic vision for the district," Khanna says. Should schools teach coding in the classroom? How do we grapple with globalization? How do you replace low-skill jobs lost to automation?

Khanna says he has the answers. "Mike Honda has not really been part of the innovation economy," he explains. "I don't think he senses the skills of what people are going to need."

Khanna, who wrote a book about manufacturing after leaving Obama's Commerce Department in 2011, criticizes "the reflexive bashing of outsourcing and protectionist sentiment against embracing the global economy. We have to understand that's inevitable, and figure out out how we're going to transition into that global economy."

This is the kind of pro-business rhetoric that worries the organized labor forces backing Honda's supporters. But Honda is also bothered personally by Khanna's challenge, which people around him describe as nothing short of betrayal.

Khanna's ambition is no secret. In 2004, at age 27, he ran against the late Rep. Tom Lantos as an antiwar candidate but was thoroughly trounced by the congressional veteran. Khanna then considered challenging Stark in 2012, only to back away. Stark ended up losing to another Democrat, Eric Swalwell, leaving Khanna with no path up the political food chain.

As he wrestled with his future, Khanna sought advice from Honda, who has counseled other young political leaders in the district. He once e-mailed a Honda staffer after meeting with the congressman in 2010, calling Honda "one of my closest mentors."

"You both have been so encouraging and supportive for the past eight years in helping guide my career in public service," Khanna wrote in one e-mail obtained by CNN.

If Honda is trying to diminish Khanna as a man-in-a-hurry, the Khanna campaign is happy to have the fight. It sees the race as a generational clash as much as a stylistic one.

'Now it's time for others to take a turn'

"If you look around there are a hell of a lot of people from a certain generation in Congress who are saying, 'You know, I have done good things, I am proud of my record, and it's now time for others to take a turn,' " says Larry Grisolano, Khanna's Chicago-based media consultant. "Whether that's Henry Waxman or John Dingell, senior members are saying, 'I'm going to move on.' I don't think that turnover is a bad thing at all. The electorate says we are interested in trying somebody new."

Khanna, with his deep pockets and knack for creating media buzz, is setting the terms of the campaign conversation, most recently grabbing attention for his opposition to the proposed merger between Comcast and Time Warner Cable. Honda came out against it after Khanna did.

Khanna's ability to drive the narrative has been helped by the fact that Honda has so far refused to participate in media-sponsored debates. Nor is Honda keen on taking questions from reporters; his campaign passed on several of CNN's requests for an interview.

Adding to the Khanna buzz: His core group of advisers is staffed with veterans of Obama's data-driven campaign organization, including Grisolano, who plans to leverage the same granular-level television ad targeting used during the 2012 presidential campaign, and field maestro Jeremy Bird.

The metric-based campaign has built a staggering field operation for a House campaign, splitting the district into six regions with six regional vote directors. Almost 450 campaign volunteers have been identified. The campaign has hosted more than 120 meet-and-greets. It has in-language websites and phone banks in Chinese, Spanish and Vietnamese, aimed at the district's diverse population. And Khanna himself is a relentless canvasser, having knocked on more than 2,100 doors on his own.

Honda's organized labor allies boast of their own turnout machinery.

"We always have a large field operation as well as a mail program," said Field, the South Bay AFL-CIO officer. "It's the largest and most sophisticated field program around. We will contact well over 100,000 voters in the spring alone."

Tony Alexander, a lifelong Silicon Valley resident and the political director of a local chapter of the United Food and Commercial Workers Union, says he plans to walk precincts, raise money and "talk positively" about Honda at every turn.

"I have met Ro, I've talked to Ro, I like Ro," said Alexander. "But Mike is a progressive. We have worked with him. I am going to fight for Mike Honda because I believe in him."


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