Tracy Westen is no typical Internet executive. A gray-haired college professor who has focused on public service since the 1960s Free Speech movement at the University of California, Berkeley, Westen lacks the usual obsession with “brand building” and “eyeballs.” Nevertheless, he’s in the unusual position of trying to turn a not-for-profit Web site into a real company.
In 1996, Westen co-founded the Democracy Network, a nonpartisan, nonprofit interactive project to encourage voting and citizen participation in government. A joint project of the League of Women Voters and the Center for Governmental Studies, the Web site offers information about local, state, and federal elections.
Last month, the Democracy Network made the surprising decision to sell out to Grassroots.com, a San Bruno, Calif.-based IPO-minded startup. Seeing a booming business in politics, Grassroots has made news by using stock options to lure high-profile political operatives such as former New Hampshire Gov. John Sununu and ex-White House spokesman Mike McCurry. The company’s plan: Strike Internet gold by helping citizens organize political movements, find information about issues, and decide which candidates to support.
Under the terms of the acquisition, both the League of Women Voters and the Center for Governmental Studies (which was also founded by Westen) have become Grassroots shareholders with seats on the board. Grassroots will make unrestricted cash contributions to both organizations, but the company won’t disclose the amount of those contributions.
Some people are horrified. “This is the commercialization of politics,” says Michael Weiksner, chairman of a new nonprofit called the Democracy Project, which is setting up an online town hall. “It doesn’t really sit right with the mission of Democracy Network or the League of Women Voters. Grassroots is doing exactly one of the things we fear.”
Others see a trend in the making: Nonprofits are realizing that the costs of running a successful Web site climb with the number of users–and at the same time, the foundations they turn to for funding often refuse to commit to long-term support.
Which is why Westen decided to sell.
The 58-year-old Westen, now Grassroots’ chairman, says the Democracy Network board was simply facing reality. “The more successful the site became, the more danger of bankruptcy we faced,” he says. “The more hits we got, the more expensive were our bandwidth costs. If we were successful beyond our wildest dreams, we would have been put right out of business.”
Since its founding, the Democracy Network survived on grants from foundations–$20,000 here, $30,000 there. But with interest in politics high due to the current presidential campaign, the site’s server charges totaled $35,000 a month. Foundation grants weren’t going to be enough. “Foundations are enormously valuable resources,” Westen says. “But to take it to the scale that it really deserved to be, not only did we need a fairly secure ongoing source of funding, but a substantial investment of capital.”
Westen’s vision was that the site wouldn’t hang its future on one presidential race but would make a name for itself by providing information about the estimated 125,000 other elections each year. The Democracy Network was designed to allow any candidate to participate, regardless of their fund-raising ability. Unlike the televised debates in the latest California gubernatorial race, which featured four candidates, the Democracy Network offered an ongoing interactive debate among 17 candidates.
Those who know Westen well are confident he can maintain the public trust that goes along with operating a not-for-profit. Grassroots has committed to maintaining the Democracy Network site as is, while also seeking new sources of revenue, such as designing Web sites and collecting campaign contributions for political candidates. Grassroots will accept advertising but not on the Democracy Network pages.
“Tracy is probably as thoughtful and committed a public citizen as there is,” says Jeff Cowan, dean of the Annenberg School for Communication at the University of Southern California, where Westen teaches a popular communications-policy course.
Sean Treglia of the Pew Charitable Trust says that he was initially startled by the decision to privatize the Democracy Network, but he has come to believe that the public-private partnership might be the wave of the future. “Since political information on the Net is moving toward a for-profit model,” he says, “this may be a fantastic opportunity to influence that market.”
Doug Bailey, founder of FreedomChannel.com, a nonprofit that provides candidates a way to reach voters via Net-based video-on-demand, says he expects his own organization to face some of the same issues as Democracy Network. “I don’t see anything wrong with the blurring of the lines of a not-for-profit being folded into a for-profit, as long as none of the standards are sacrificed,” he says.
Westen learned the political ropes in the 1960s, when he preceded Bill Clinton as a philosophy student at Oxford University. In 1964, he started law school at UC Berkeley, the same year the was campus shut down over First Amendment issues about whether one could distribute leaflets in the school’s main square. After graduation, Westen went to work for Covington & Burling, a Washington-based law firm, where he focused on public interest law. After leaving the firm, he represented the American Civil Liberties Union in a case against the Lyndon B. Johnson administration over limits on the number of people who could protest in front of the White House at any one time.
In the mid-’60s, 95 percent of the population got its information from three TV networks. For people with alternative political views, demonstrating was one way to get their views covered. Westen thinks some lessons from his struggles then can be applied to the current situation on the Net.
“In the ‘60s and ‘70s–and to a certain extent today–the broadcast medium creates an audience but does not allow you to have access,” he says. “The Internet provides an alternative. This lets you get your message into the electronic stream, but the question still remains whether anyone will find your door. That increasingly depends on marketing.”
Westen understands the political process from the government side as well. He served as legal assistant to Federal Communications Commissioner Nicholas Johnson in 1969 and 1970, and he later became deputy director for consumer protection at the Federal Trade Commission. Sixteen years ago, he founded the Los Angeles-based Center for Governmental Studies, which set up the California Commission on Campaign Financing. The Center persuaded California officials to establish the California Channel, a sort of C-SPAN for coverage of legislative proceedings and the state Supreme Court.
But Westen sees the future of politics in the Internet. Thus the Democracy Network has a special place in his heart. “The growth of the Internet doesn’t mean the vegetarian candidate from Kansas will become president,” he says. “But it does mean that, at the margins, there is a greater capability of potentially viable candidates in ways there weren’t before.”
Westen points to the ways in which Minnesota Gov. Jesse Ventura used the Internet to generate support in 1998. This year, GOP presidential candidate Sen. John McCain of Arizona has been able to gain momentum against Texas Gov. George W. Bush, a well-financed, party-anointed candidate.
The only question that remains for Grassroots is whether there’s a profitable market for political information. “I trust Tracy well enough so that if he finds being in a commercial setting violates his sense of democratic principle, he’d blow the whistle,” says Michael Cornfield, professor of political management at George Washington University. “But I’m still skeptical about whether it’s going to work.
“There’s a fundamental problem with political sites,” Cornfield says. “Parents are parents 365 days per year. There are car buyers 365 days per year. I don’t see that kind of demand for civic or political information. I hope I’m wrong.”