- President Donald Trump has lashed out at Amazon.
- But he hasn’t focused much on a trend involving the company in his own backyard.
As President Donald Trump attacks Amazon over sales tax collection, its deal with the US Post Office, and for CEO Jeff Bezos’ ownership of The Washington Post, the company looks poised to become the biggest player in Washington, DC, outside of the federal government.
- Signs have increasingly pointed to Amazon locating its much-hyped and sought-after second headquarters in the Washington, DC, metro area – a project that could bring with it some roughly 50,000 new jobs.
- The company is competing for a bevy of lucrative government contracts, including a deal worth billions with the Pentagon to provide the military with cloud computing services. A source told Business Insider earlier this month, they “can’t imagine any possible way that the deal could be stopped” between Amazon and the Pentagon.
- The company already has a contract for $US600 million to provide similar services to the Central Intelligence Agency.
- Amazon employs one of the largest lobbying staffs in the city, and its lobbying efforts are growing. Amazon spent $US15.4 million on lobbying in 2017, up more than $US3 million from the prior year, Reuters reported.
“Up until now, Washington, DC, has largely been a company town of one. The US government,” Terry Sullivan, campaign manager for Republican Sen. Marco Rubio’s 2016 presidential bid, told Business Insider. “Amazon appears poised to dramatically change that dynamic.”
Aside from his frequent attacks linking Bezos and The Post, which has no direct relationship with Amazon, Trump has barely touched on any of these Amazon developments. He has yet to make any comment about the company’s extensive HQ2 process, and he has only publicly discussed Amazon’s lobbying efforts in terms of The Post, falsely claiming the publication is a vehicle for Amazon lobbying.
Oracle co-CEO Safra Catz, whose company is in direct competition with Amazon for the massive Pentagon contract, did bring it up at a recent dinner with the president. Catz complained to Trump that the bidding process was designed so that Amazon could win the bid, but Trump did not give any indication that he would put his thumb on the scale.
Where Trump has focused
Trump has instead zeroed in on sales tax collection and the company’s deal with the US Postal Service. Both of his attacks are misleading.
For instance, on the sales tax issue, Amazon recently moved to collect sales taxes on its inventory in the 45 states that have such taxes as well as Washington, DC. The Trump Organisation’s online retailer, Trumpstore.com, collects sales tax in just a couple of states. Online retailers are obliged to collect the taxes only in states where they have a physical presence.
He has falsely accusedThe Post of being a “lobbyist weapon” for the company, seeking to keep politicians “from looking into Amazon no-tax monopoly.” He baselessly called the publication a “big tax shelter” for Amazon, the stock of which he said would “crumble like a paper bag” if the company “ever had to pay fair taxes.” And he attempted to brand the paper as the “#AmazonWashingtonPost.”
The Post has pushed back on any assertion that Bezos has influenced coverage, or that Amazon is paying its bills.
Trump’s attacks on the connection between The Post and Amazon often happen when the publication publishes critical articles on him.
“There isn’t anybody here who is paid by Amazon,” Martin Baron, the publication’s executive editor, told The New York Times. “Not one penny.”
Baron said Bezos has “never suggested a story to anybody here.”
Kurt Bardella, a former spokesperson for Breitbart News and Republican Rep. Darrell Issa of California, told Business Insider that Trump’s “targeting of Jeff Bezos, Amazon and the Washington Post clearly stems from petty jealousy,” not from concerns about Amazon’s continually growing stature – including right in the president’s backyard.
“Trump has created a fictitious conspiracy in his mind where Jeff Bezos is the reason why the Post scrutinizes the Trump Administration,” Bardella, who is no longer a Republican, said. “Trump also views Bezos as a rival in both wealth and stature. He desperately craves the acceptance and stature that Bezos is the beneficiary of.”
Bardella said that “unlike Trump,” Bezos won’t be “derailed” by “a public tantrum on Twitter.”
“Putting HQ2 in the DC, Maryland and Virginia region will give Bezos a game-changing presence in Washington that will outlast the Donald Trump presidency,” he said. “At a time when the Trump Administration is unravelling before our very eyes absorbing resignations and terminations, Bezos is essentially creating his own economy within Washington that will allow him to out-manoeuvre and outlast Trump.”
‘Amazon must be very careful and walk a tightrope’
Lawmakers have put Amazon under the microscope as Trump has lashed out.
Sen. Bernie Sanders of Vermont, who ran for the Democratic presidential nomination in 2016, told CNN earlier this month that Amazon has gotten too big and that Congress needs to take action. Sen. Marco Rubio, a Florida Republican, tweeted that potential “‘new economy’ monopolies will require close monitoring,” pointing to Amazon.
One Republican lobbyist told Business Insider that the sense is that Capitol Hill lawmakers will move on to scrutinizing Amazon and Google following Facebook, whose CEO Mark Zuckerberg testified to both the House and Senate this week.
“I would be shocked if Congress didn’t do something on tech this year,” the lobbyist said.
Others have put Amazon’s lobbying and political donations under the microscope.
The company’s PAC actually gave a majority of its 2016 donations to Republicans. But some on the right view Amazon as having a liberal bend. Certainly, Trump has made such connections regarding Bezos, Amazon, and The Post.
“I think the lesson for all of the tech companies is that having a corporate political viewpoint is not conductive to generating shareholder value,” Barry Bennett, an adviser to Trump’s 2016 presidential campaign, told Business Insider. “When companies like Google and their executives invested millions in Hillary, they made friends and enemies. Amazon must be very careful and walk a tightrope.”
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.