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Not All Bold-Faced Names in Silicon Valley Support Ro Khanna. Here's Why.

BY Sarah Lai Stirland | Monday, June 2 2014

Investor Andy Rappaport, in the blue office shirt, beard and glasses, held a fundraiser for Rep. Mike Honda (D-Calif.) last week

Ro Khanna, an insurgent Democrat challenging seven-term Congressman Mike Honda to win both the figurative and geographic heart of Silicon Valley, is riding high with endorsements from several of the Bay Area’s leading news outlets, as well as support from several of the bold-faced one-percenters of the region.

Nevertheless, Andy Rappaport, a veteran Silicon Valley venture capitalist, and a long-time funder of progressive causes, argues that Khanna’s supporters have all got it backwards. It’s 73-year-old Honda who belongs in the future of California congressional district 17, not a high-tech lawyer, part-time economics professor and former Department of Commerce official who’s authored a book on how modern manufacturing techniques can help America remain globally competitive.

“The argument that, ‘Hey, is Mike a Progressive from the past?’ That’s a very interesting one,” ponders Rappaport in a Sunday morning phone conversation from his home in San Francisco. “And I think the question to ask ourselves is: Do we think that working citizens of Silicon Valley, and working Americans in general, do we think they are adequately represented within the current Congress? And my answer is no.”

It’s a trenchant political argument from a Honda supporter who is keenly aware of the tense economic and political dynamics of the region, where the economic divide between the wealthy and the working class among the widest in the country, according to the Brookings Institution. Rappaport also has a daughter who is a teacher in a public school in the Mission in San Francisco.

Khanna is battling Honda for California’s Congressional District 17, an area that encompasses Cupertino, Fremont, Milpitas, and North San Jose. A recent poll sponsored by local television station KPIX-TV of San Francisco showed that 40 percent of voters support Honda and 21 percent support Khanna. Eight percent of those polled said they’d support Republican candidate Vanila Singh, a Stanford doctor. Just six percent said that they’d vote for executive recruiter Joel VanLandingham. Under California’s primary system, the two top winners of the vote go on to face off in November.

While Khanna has the support of many of the business leaders of Silicon Valley, Honda’s top financial contributors are unions, and to some extent, the race between Khanna and Honda represents a race between two of the Democratic party’s wings: “Future-oriented” business leaders operating in a global economy, and the middle class, employee portion of the party. The race also highlights an intraparty disagreement between the populist Netroots, who support Honda, and many Obama supporters and former 2012 campaign veterans working on Khanna’s campaign.

Rappaport, an independent investor and partner emeritus at the venture firm August Capital, is unusual among his peers in his support for Honda. He held a big fundraising dinner for Honda last week at which California Attorney General Kamala Harris, and several other prominent local San Franciscans attended. For his part, Khanna’s top financial backers are those from the white collar industries of finance, law and technology, while Honda’s top backers are from unions, according to campaign finance analysis from the Center for Responsive Politics.

In an e-mail exchange with techPresident last year, former Tech4Obama national co-chair Rusty Rueff, a startup advisor, philanthropist and Khanna supporter told me: “Ro also thinks like technologists do," and that Khanna’s “'know no barriers attitude' matches the entrepreneurial makeup of the Valley."

But in our Sunday chat, Rappaport suggested that Silicon Valley leaders have the resources to hire lobbyists to represent them. In addition, he questioned this self-centered way of thinking. He also blasted the tech business leaders for complaining that Honda doesn’t cater to them enough. That’s because he’s busy dividing his time between all of his constituencies, Rappaport argues.

“What does it mean not to ‘have a Congressman who looks like us, and thinks like us?’ he asked. “Well there are a couple of ways to look at that. I think the role of a Congressman is not to look just like the employers. I think the employers of a district are very important, and there are tons of examples in US history where the interests of dominant employers, no matter how responsible, don't really address the interests of the communities in which they operate.”

Rappaport’s comments might not have struck as much of a chord with the software engineers of Silicon Valley a few months ago. But they have the potential to resonate more closely to their hearts in the wake of the revelations that Google and Apple – among the biggest employers in the district and the region -- conspired to suppress employee wages by agreeing to not poach each others’ staff.

In light of the decline of the political clout of unions in the United States over the past 30 years, Rappaport argues that Congress needs a candidate like Honda more than ever: He’s a candidate that doesn’t have the burden of expectations on him from the very wealthy, and he’s a senior Democrat in Congress and knows the ins and outs of building coalitions and working in Congress. In short, he represents the very people who don’t have the money to buy stronger representation in Washington.

“There is the broader question of representation of those who need it the most, and I take the position right now that on balance it is far better to err on the side of on increasing the representation of workers, and of those who tend not to be heard, and those who tend to be drowned out by monied interests,” he said.

Khanna has made very deliberate efforts over the course of his campaign to make clear that he too, wants to represent everyone in the district, and that he’s not going to be a tool of the tech industry. He marched in a demonstration organized by the Service Employees International Union in its “Justice for Janitors” campaign last year, expressed his support for a “Domestic Workers Bill of Rights” in the California Assembly and Senate, has laid out detailed plans for job creation and worker rights and training, and has proposed an “Internet Bill of Rights,” that is obviously designed to appeal to the Web savvy citizens concerned about their privacy.

Khanna has been arguing that he’s the candidate that is best suited to represent Silicon Valley because he’s the “change” candidate who wants to break through Washington D.C.’s gridlock. That might appeal to the entrepreneurial mindset that made some of his wealthiest backers successful in business, but it’s just borne of a naiveté of how Congress really works, Rappaport said.

“A lot of people, including my wife and myself who when we first started out in activism think: ‘All it takes is a few really determined people like us because we’ve been able to transform really big industries, we can transform government,” Rappaport said. “And then when you get there, you learn, it’s not that easy.”

That’s an interesting and candid perspective from someone who has spent the past 20 years investing in groups and taking part in initiatives to change the nature of the Democratic party, as documented in detail in political writer Matt Bai’s book “The Argument: Billionaires, Bloggers, and the Battle to Remake Democratic Politics.

“I started where a lot of people like Sean Parker is starting now, saying wait a minute! Why can’t we attack these problems the same way we attack the opportunities we’ve attacked in industry?”

Founders' Fund Sean Parker backs Khanna. His colleague Peter Thiel has also donated to Khanna's campaign, as have other prominent venture capitalists and leaders of tech companies such as Facebook Chief Operating Officer Sheryl Sandberg, Google Executive Chairman Eric Schmidt and Yahoo CEO Marissa Mayer, among others.

Honda may represent everyone, but he still is largely backed by unions, which adds another element of uncertainty to the outcome in November. The CA-17 race race is part of a wider debate going on in the Bay Area about the role of unions, and how much influence they should exert in schools and in the workplace. Some locals are still spooked by the spectacular flameout of former Santa Clara County Supervisor George Shirakawa, a popular union-backed candidate who was sentenced to a year in jail last year after it was discovered that he was using public funds to gamble and using campaign finance donations for a secret slush fund.

Despite this dynamic, Honda enjoys a loyal core following from people like Dilawar Syed, a local entrepreneur and president of FreshDesk, a customer management platform. It'll be up to people like Syed to convince his friends and associates that contrary to the San Jose Mercury News' endorsement, Khanna's time hasn't come yet, and that Honda's political experience trumps Khanna's youth and enthusiasm.

""It's very easy for someone to come in and say: 'Let's do these three things,'" he says, pointing to Khanna's proposals and pitch to voters that he offers a fresh approach. "Unless you've been there, and you know how to work with a very dysfunctional institution, I don't care about what someone is going to preach to me about what they will do. It's vaporware."

Photo courtesy of Evan Low/Instagram, former Mayor of Campbell and current candidate for California's State Assembly.