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As its business grows, so does Amazon’s D.C. lobbying presence

Amazon has sharply increased its Washington presence in recent years, more than doubling what it spends to influence Congress and the executive branch over the past seven years as the Internet giant’s business lines and interests mushroomed.

That spending, which reached $2.5 million in 2012 and is on track to surpass that amount this year, includes retainers paid to six outside firms that seek to affect policy on a broad array of issues, including tax reform, Internet security, cloud computing and shipping. Among the company’s high-profile lobbyists are former Senate majority leader Trent Lott (R-Miss.), former senator John Breaux (D-La.) and Thomas Hale Boggs Jr., chairman and a senior partner at Patton Boggs .

Now, with Amazon founder Jeffrey P. Bezos’s planned purchase of The Washington Post, his company’s profile in the capital is set to rise even further.

Bezos sought to preempt concerns about his ownership of the paper, telling Post employees in a letter Monday, “The paper’s duty will remain to its readers and not to the private interests of its owners.”

The company that Bezos built has much at stake in Washington, and high on Amazon’s list is the sales tax on Internet commerce.

Amazon’s political spending

As a result of a pair of Supreme Court rulings, states can require out-of-state retailers to collect sales taxes from residents only if the companies have a physical presence in the state.

For years, Amazon fought efforts by states where it does not have such a presence to collect sales taxes on its transactions. But as it has built distribution warehouses across the country, the company has become a leading proponent of a bill that would allow all states to collect sales taxes from online retailers. The measure, known as the Marketplace Fairness Act, was approved by the Senate in the spring and is awaiting action in the House.

“They want a level playing field,” said Michael Mazerov, a senior fellow at the Center on Budget and Policy Priorities who studies state tax issues.

Amazon has also hired leading tax lobbyists to prepare for what could be a broad overhaul of the tax code. Of greatest concern to the company, said Edward D. Kleinbard, who served as chief of staff of Congress’s Joint Committee on Taxation, is any change to the way the United States deals with the foreign income of U.S. companies. Companies do not pay U.S. taxes on income earned by foreign subsidiaries unless it is returned to the United States.

“Companies are very concerned that they will be sold down the river by other multinationals with different priorities, so people hire a lot of lobbyists and try to make sure they’re not the ox that gets gored,” said Kleinbard, who teaches at the University of Southern California’s law school.

The company’s recent lobbying efforts, detailed in disclosure reports filed with the Senate, show that its in-house lobbying arm is dealing with a wide variety of issues, including online wine sales, cybersecurity, postal reform, free-trade agreements and broadband service. Like many tech companies, Amazon has backed efforts at the Federal Communications Commission to expand broadband access.

The company’s lobbyists have also been active on the issue of cloud computing. Amazon has been fighting for a contract with the CIA that analysts say would cement the company’s bona fides in the federal contracting field.

In the past three years, Amazon has quickly expanded its presence in cloud computing with its Amazon Web Services unit, winning clients such as NASA, Samsung, Pfizer and the Public Broadcasting Service. This spring, the CIA chose the company for a $600 million cloud computing contract.

IBM, which had offered to do the job at a lower price, objected to the agency’s decision, according to a review by the Government Accountability Office. IBM said that the CIA had unfairly changed some of the contract specifications in the middle of the process. The GAO agreed with IBM’s main contention and in June urged the CIA to restart the contracting negotiations with its modified requirements.

“In response to the GAO decision, the CIA has taken corrective action and remains focused on awarding a cloud contract for the intelligence community,” agency spokesman Todd Ebitz said.

Two weeks ago, Amazon sued in Washington, asking a federal court to approve its contract with the CIA.

Ken Doctor, a news industry analyst, said in a blog post there was a “big downside” to the owner of Amazon also owning The Post, because the Internet company has interests in several “big political issues.” He wrote, “Amazon needs more friends in D.C., and it’s hard to imagine what’s better than owning the editorial page of the Washington Post in that quest.”

An Amazon spokesman declined to comment for this article.

On the political front, the company is far from a heavy hitter. Its corporate political action committee donated $179,000 to federal candidates in the 2012 election cycle, and without a clear partisan pattern. It gave more to Republicans in House campaigns and far more to Democrats in Senate races. It gave $189,000 in the 2010 midterm congressional election cycle.

By comparison, Google’s political action committee donated $881,000 and Microsoft’s PAC donated more than $1 million in the 2012 elections.

Amazon’s increased spending on lobbying is similar to the spending pattern of many tech companies.

In 2005, it was spending $920,000 on lobbying but had ratcheted that up to $2.5 million by last year. This year, the company is on track to break its record. For the first half of the year, Amazon’s lobbying spending is just over $1.7 million.

Amazon is also active in the Internet Association, which the firm launched with Facebook, Google, Yahoo and other Internet companies last year to help fight new regulations.

“As a founding member of the Internet Association, Amazon is an industry leader helping educate policymakers about the powerful and rapidly growing Internet economy,” said Michael Beckerman, the association’s chief executive. “Decisions made in Washington matter. It’s important for the leaders of the Internet economy to have a voice.”

Alice Crites contributed to this report.

Carol Leonnig covers federal agencies with a focus on government accountability.


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