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Sunday, August 6, 2000 - Page updated at 12:00 AM

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Cantwell's banking on her years as dot-com exec

Seattle Times staff reporter

THE Democratic rivals for U.S. Senate both say their experience as executives makes them ideal political leaders. Today, we examine Maria Cantwell's role at the groundbreaking dot-com RealNetworks. Later, we'll look at Deborah Senn, state insurance commissioner.

Politics paved the way to high-tech success for Maria Cantwell, and now that success is her road back to politics.

The former legislator and congresswoman is touting her five years at RealNetworks as a selling point in her race for U.S. Senate. As an executive during the company's groundbreaking years, Cantwell said, she learned firsthand the promise and problems of the "new economy."

The company, which developed audio and video technology for the Internet, also gave Cantwell millions of dollars needed for a late entry into the Senate race. She has dropped almost $1.5 million into her own campaign.

And it gave her a timely, high-profile issue - Internet privacy. In television commercials that ran last week, Cantwell pledges to protect individual privacy from Internet invasion.

But as much as privacy gives Cantwell a signature cause, it also gives her opponents a big target.

While at RealNetworks, Cantwell directed the cleanup of what some call the Exxon Valdez of Internet-privacy gaffes. She ran consumer affairs when privacy advocates discovered that a popular RealNetworks software program could secretly store information on its customers.

Now as a candidate, on leave from RealNetworks, Cantwell is promoting laws to protect Internet privacy - a position at odds with the industry's preference to police itself.

She says few are better equipped to balance the competing interests of the industry and the public: Managing the crisis at RealNetworks showed her the risks of the brave new world of the Internet, and gave her the language to address those risks in the Senate.

But her transformation - from a young congresswoman who pushed Internet freedom to an ambitious executive who pushed her company's advantage to a Senate candidate pushing for privacy legislation - has left critics wondering:

Is Cantwell an Internet reformer who learned from her experience?

Or is she a political opportunist seizing a marketable moment?

Cantwell's Democratic primary opponent, state Insurance Commissioner Deborah Senn, is branding Cantwell's position hypocritical and demanding she resign from her job as senior vice president of the consumer and e-commerce division at RealNetworks.

"A privacy pledge from Maria Cantwell is like asking Jesse James to promote bank security," Senn said.

Born to politics

The daughter of an Indiana lawmaker, Cantwell grew up in a political climate. She was the first in her family to go to college, graduating from Miami University of Ohio in 1981.

She moved to Washington state in 1983 to campaign for then-Sen. Alan Cranston, D-Calif., who was trying to win his party's nomination for president. In 1986 she became the youngest woman ever elected to the state Legislature. In 1992, she became the first Democrat in 40 years to be elected to the 1st Congressional District, home to many of the region's major high-tech firms.

Cantwell had never worked as a manager and knew little about the intricacies of high tech. But she immersed herself in industry issues. Among the people who lobbied for her support was Rob Glaser, the fast-talking founder of RealNetworks.

Glaser, a former Microsoft executive, was on the executive committee of the Electronic Frontier Foundation, which advocates equal access to and free speech on electronic media.

The industry was battling a Clinton administration proposal to build surveillance capabilities, the so-called Clipper Chip, into computers, allowing the government to access personal information. At the same time, the industry wanted the right to protect its own software from hackers by using encryption capabilities.

Glaser found an ally in Cantwell.

The freshman lawmaker scored a coup when she persuaded the Clinton administration to drop its proposals.

But just months later, Cantwell lost her seat, by fewer than 2,000 votes, during the 1994 Republican sweep. She took the defeat hard, vowing to get out of politics and, as she says, "dig in on something."

She called Glaser, who had just started what was then called Progressive Networks, named in honor of his political leanings. Over breakfast, she asked if there was a fit for her in high-tech.

"I wanted to come back to the Northwest and live, and there were things going on in the technology field," Cantwell said. "Here was a guy who knew a lot about these things from Microsoft."

That night, Glaser phoned Cantwell and offered her a job.

"I saw the technology and read the business plan and I was impressed," she said.

Live audio and video were not yet available over the Internet. Cantwell sensed a breakthrough in that area would mean global success - and that Glaser was the visionary to make it happen.

"I thought it was the next step in multimedia on the Web."

Out of her element

RealNetworks could not have been further from Congress.

Coffee cups and half-eaten sandwiches littered the office. Workers sported ponytails, tattoos and dreadlocks. A laid-back computer whiz napped in the coat closet. A teenage genius wrote Internet code.

Stressed-out caffeine junkies skipped meals and pulled all-nighters at headquarters, a single large room above a Pioneer Square pizza parlor.

Cantwell, comfortable in business suits and marble hallways, was an odd fit. She found herself in a band of tech pioneers who saw themselves as modern-day Johann Gutenbergs or Alexander Graham Bells.

"We were blazing a trail," Cantwell said.

Cantwell's job as vice president for marketing was to convey that excitement to a skeptical news media and potential consumers. The breakthrough came in September 1995, when RealNetworks broadcast a Mariner-Yankee baseball game live over the Internet.

"There were moments like that when you felt like you were a part of history," Cantwell said.

In five years, the company became a major dot-com force, with 800 employees in offices around the world. Cantwell moved up in the firm and, as RealNetworks stock soared, she became a multimillionaire.

At the center of the whirlwind was Glaser, a roly-poly Yale graduate who completed three degrees in four years.

Those who have worked with him say he is brilliant and intimidating - a genius prone to temper tantrums and screaming fits. He once kicked a chair across a room when workers bungled an online news conference.

Cantwell sometimes played buffer to Glaser's bluster.

"He kicks the chair out the door at the engineer. I couldn't believe it. He was screaming and yelling," said a former employee who asked not to be named. "And there's Maria calming him down - `C'mon Rob. Everything's OK' - like a mother with a tantrum baby."

Many who worked with Glaser and Cantwell are reluctant to be openly critical, fearing backlash in the competitive world of high-tech.

But some say privately that Cantwell shared a few of Glaser's rougher traits. She could be hard on the 100 workers in her division. She yelled on occasion, and at least once came down so hard on an employee that she left her sobbing in the bathroom. Some employees dubbed her Maria Cantsmile.

Others say she was well-liked and respected, but driven and demanding. She was known to hold conversations while typing. She would dismiss employees midsentence, saying, "Fine, fine."

"I think I was focused," Cantwell says. "And I think if (employees) weren't focused on what I thought they should be focused on, I'm sure I'd remind them to get focused."

Cantwell "worked six days a week and thought about it seven," said another former employee, who also asked not to be named. "Maria is more one-dimensional than most people in terms of her absolute and complete dedication to whatever she's doing at the time. That can be good or bad."

Even Cantwell says her time there was a blur. "Every day was like the two weeks leading up to election night," she said.

`The voice of the consumer'

Cantwell brought an outsider's perspective to RealNetworks. She knew the buzzwords but wasn't technical - something she says she regrets but others say was a plus.

"So many software folks design software for technophiles. She was the voice of the consumer," said Erik Moris, a Drugstore.com executive who worked with Cantwell when he ran the marketing and communications division in 1996. "Maria was the counterbalance."

Being a woman also made her something of an outsider in a mostly male industry. But Cantwell was used to that; women made up only 11 percent of Congress when she was there.

While Cantwell's drive could be tough on employees, it was a boon to the fledgling company. In late 1995, when software sales were lagging, Cantwell made it her mission to meet an annual sales goal by Christmas, a month away.

"She said, `We're not going to let a day go by when we don't think about this,' " Moris said.

Every day she called executives together to brainstorm. By the end of the month, the goal was met.

"In this business you can get distracted by lots of things," Cantwell said. "There are tons of concepts and ideas. The emphasis has to be on finding goals."

She gained a reputation as a consensus builder who put her political skills to work on the job. She hired several former campaign workers for her division. And she pitched ideas to as many people as possible, soliciting and refining ideas until they were bulletproof.

"She's not always in your face telling you what to believe. She's a great listener," said John Beezer, who worked as a contractor to design RealNetworks' Web site and is now Cantwell's campaign Internet director.

Glaser says Cantwell was integral to his company's success.

"I had every reason to believe that she would turn out to be as world-class as she is," he said. "I knew she was going to be great."

But Cantwell disappointed some in the political arena by not maintaining strong political ties during that time; she hasn't been a big player for any other candidates or causes.

"As a former legislator and an executive at RealNetworks, she was in a position to do something," said attorney Jenny Durkan, a local Democratic activist. "And she was not there at the table."

Durkan, chairwoman of the state attorney general's task force on consumer privacy, is supporting Senn for U.S. Senate.

RealNetworks' privacy gaffe

Cantwell's expertise in consumer privacy carries some baggage.

Last November, a New York Times reporter called Real Networks to say Richard M. Smith, a privacy advocate from Brookline, Mass., had discovered the company could secretly track which songs its users were listening to.

The problem lay in RealJukebox, one of RealNetworks' most popular software programs.

RealJukebox lets users download music from the Internet onto their hard drives. But Smith found that the program also kept track of which CDs each user listened to, the number of songs stored on a hard drive and whether the music was stored using other RealNetworks programs.

RealNetworks executives said they compiled data from millions of users in aggregate but never traced the information back to individual users. They said individual identifiers were never stored or passed to other companies.

There is no independent evidence to suggest otherwise. Still, the incident prompted several lawsuits, some of which have been dismissed.

On the Friday afternoon they learned of the allegations, RealNetworks employees shifted into crisis mode.

"The depth of consumer concern was probably unrealized by the company," said David Brotherton, spokesman for RealNetworks. "When it became apparent, Maria stepped forward and organized the company's quick response. She was the lead executive in pulling the smartest people together to address the issue."

RealNetworks apologized for what Cantwell calls a misunderstanding and issued a free Internet patch to block the company's access to personal information. It launched an internal investigation and hired an external auditor.

"We joined in a dialogue to get other companies to do the same," Cantwell said. "We definitely wanted to get everybody's awareness of what we were trying to do and make sure every issue was being addressed."

RealNetworks has pledged not to sell or give away personal information. It hired a privacy officer, and publishes explainers on its Web sites detailing what information the company gleans when users download its software.

Cantwell helped write the software-privacy policy, which she says was the first of its kind. She says RealNetworks now leads the industry in privacy efforts.

RealNetworks' customers can opt out of e-mail marketing updates and any communications their computers might have with RealNetworks. The software still works if customers register under a phony name and address.

But two weeks ago RealNetworks was in the news again for an incident involving RealDownload, a program that allows users to interrupt downloads without losing data. Again, it appeared software allowed the company to track individual customers' use habits.

"RealNetworks has been playing it very close to the edge," said Lauren Weinstein, co-founder of People For Internet Responsibility, a California-based privacy advocacy group.

Executives characterized the tracking technology as a bug and said it was never used. RealNetworks removed the feature and offered an updated version.

Senn objects to TV ads

Regardless of whether actual damage was done, RealNetworks has become a poster child for Internet privacy invasion - one of the hottest issues of the election year.

Some of that taint has followed Cantwell into her Senate race.

In television ads last month, Cantwell began promoting herself as an advocate for privacy. In one of the ads, she looks at the camera and says: "What you do on your computer should be your business and nobody else's."

But Senn last week accused Cantwell of hypocrisy and challenged her to pull the privacy ads.

"In terms of Internet privacy, RealNetworks has not had a good track record," Senn said. "My primary opponent was a top executive at that company. She has literally single-handedly created the need for legislation to protect privacy."

But Cantwell says the lessons she learned at RealNetworks would make her a valuable voice in the Senate. She pledges to work for laws that would require Internet companies to disclose how they collect and use personal data.

"I was convinced after seeing just how fast everything moves and the different players involved (in the high-tech industry), you'd get better protection and clarity with legislation," she said.

Her campaign Web site lists "Ten Things You Can Do To Protect Your Privacy."

Nationally respected privacy advocates have voiced concern that Cantwell is using Internet privacy as a campaign platform. "Certainly there are questions of sincerity there," said privacy advocate Weinstein.

But other advocates said they were satisfied with the steps RealNetworks has taken and now consider the company a leader in e-commerce disclosure.

"RealNetworks had a data (Exxon) Valdez, where data was spilling out and they were trying to clean it up. It was a major reputation crisis," said Dave Steer, a spokesman for Truste, a self-monitoring group created by the industry. "I am one of those people who believes people can have a shameful past and see the light and try to do the right thing. I think RealNetworks is one of those companies."

Other privacy advocates say Cantwell can't be blamed for something that happened in a huge company.

Even Richard Smith, the Massachusetts-based privacy consultant who put the spotlight on RealNetworks, said: "I wouldn't make a big deal out of it. I'd be more concerned about what she's saying now in terms of the larger picture as opposed to what she did at RealNetworks."

Dionne Searcey's phone message number is 206-464-2145. Her e-mail address is dsearcey@seattletimes.com.

For Seattle Times campaign coverage, go to www.seattletimes.com.

Copyright (c) 2000 Seattle Times Company, All Rights Reserved.

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