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How Big Tech Has Upped the Lobbying Ante in DC

Some of the biggest names in technology have been aggressively lobbying to have their voices heard and get their share of government contracts.

by Ben Brody, Naomi Nix, Bill Allison, Bloomberg News / February 16, 2018
From left, White House Senior Adviser Jared Kushner, Apple CEO Tim Cook, U.S. President Donald Trump, Microsoft CEO Stya Nadella and Amazon CEO Jeff Bezos attend a meeting of the American Technology Council on Monday, June 19, 2017 in the State Dining Room of the White House in Washington, D.C. (Olivier Douliery/Abaca Press/TNS) TNS

(TNS) — WASHINGTON — The world’s biggest technology providers saw an opening and a threat late last summer as the White House prepared a report that could influence billions of dollars in government spending on computing contracts. Inc., Oracle Corp., Alphabet Inc.’s Google and Microsoft Corp. all sought to make their voices heard as a key advisory panel named by President Donald Trump drafted recommendations on modernizing federal use of cloud services and other technology.

Their outreach was aimed at the American Technology Council — headed by a onetime Microsoft finance chief Chris Liddell — and took the form of letters spelling out how the administration ought to reshape its tech policy.

That effort to influence the Trump advisory panel is one small part of the industry’s push to make its presence felt more deeply in Washington before a new, self-proclaimed business-friendly administration. Even as lawmakers and regulators increase scrutiny of the tech sector, the letters show how companies are jousting indirectly with each other for what could be lucrative new work with the government.

It continues a long trend of increased lobbying activity by tech giants. According to a Bloomberg analysis of Senate disclosures dating back to 2000, lobbying of the White House and its key bureaus by U.S. tech companies has increased steadily, with an acceleration in the past six years.

In 2000, only Microsoft, Apple Inc., and Oracle disclosed lobbying then-President Bill Clinton’s White House, including offices potentially representing his closest advisers. Disclosures filed with the government show that, in 2017, lobbyists working for Airbnb Inc., Amazon, Apple, Facebook Inc., Google, Microsoft, Oracle, Twitter Inc. and Uber Technologies Inc. sought to influence parts of the Executive Office of the President — which includes Trump’s inner circle and key bureaus such as the ATC, the Office of Management and Budget, the Office of Science and Technology Policy and the Council of Economic Advisers.

“The biggest tech companies have shifted gears and put a lot of resources into lobbying and into the executive branch in particular,” said Craig Holman, a government affairs lobbyist for nonprofit Public Citizen. Oracle declined to comment, while other tech companies didn’t respond to requests.

The companies are pressing the White House on a range of topics. Google, Amazon, Facebook and Apple all lobbied on immigration in 2017, for instance, with Google specifying that it worked on issues related to Trump’s proposed travel bans. Apple disclosed lobbying the White House on tax as the administration and Congress crafted a new law that changed taxes on offshore cash held by U.S. companies. Apple has since decided to repatriate hundreds of billions of dollars and pay about $38 billion in tax on the money.

Trump too is working to foster relationships with technology companies. In March, he created the White House Office of American Innovation, run by his son-in-law Jared Kushner. The initiative aims to collect ideas from business leaders in different industries to help the White House modernize the government’s technology, develop a “workforce of the future” program and address the opioid epidemic.

In the simmering battle over the government’s IT procurement strategy, tech companies presented divergent perspectives.

Ken Glueck, an Oracle policy executive, warned ATC’s Liddell in a letter that the administration’s efforts to modernize the government’s IT systems “are not only likely to fail, but also put the taxpayer at substantial security risk.” A copy of the letter was posted online by the General Services Administration, which oversees procurement.

Oracle signed more than $400 million in unclassified contracts with the federal government in the last five fiscal years, according to Bloomberg Intelligence analyst James Bach. Oracle “is trying to preserve its market share,” said Lydia Leong, an analyst at Gartner. “Obviously they also see the opportunity to grow.”

By contrast, two Amazon executives wrote in a separate letter that the company strongly supports the administration’s push to boost innovation, modernize federal IT systems and migrate to commercial cloud infrastructure. Amazon’s cloud division has already won a multi-year CIA contract, while an affiliate landed a separate $950 million cloud contract with the Pentagon earlier this month. Oracle and other tech companies and trade groups have questioned the Amazon cloud security model and said there’s insufficient competition in awards like these.

Amazon, which has grown its lobbying operation faster and more widely than competitors in recent years, has been positioning itself carefully in Washington. Lobbying disclosures show that former Trump Florida campaign finance chairman Brian Ballard approached the White House as an outside lobbyist on Amazon’s behalf over tax issues and also lobbied Vice President Mike Pence’s office on trade and taxes for the online retailer. Former Trump campaign official Robert Wasinger also worked for Amazon on online sales tax matters as an outside lobbyist for the company. Amazon also disclosed lobbying on aviation and copyright issues at the White House.

Oracle has stepped up too. Oracle’s Safra Catz was one of the first Silicon Valley CEOs to embrace Trump, and was said to have been considered for a spot in his administration. The company also hired Josh Pitcock, a former chief of staff to Pence, as a government affairs executive, according to Politico. Its corporate political action committee and executives gave a combined $29,300 to Representative Devin Nunes, who has emerged as one of the president’s top defenders in Congress.

The tech giants’ White House outreach didn’t begin under Trump: Tech workers and executives donated heavily to Barack Obama’s campaign and started paying more attention to the White House after he was elected. The Obama administration often partnered with tech leaders on policy initiatives such as educating consumers on computer viruses or resettling refugees fleeing the Syrian civil war. In 2009, Obama tapped former Virginia Secretary of Technology Aneesh Chopra to become the nation’s first ever Chief Technology Officer. Silicon Valley fostered the relationship too and some former executives joined his administration.

Now tech companies are treading less-friendly waters in Washington. Companies including Google, Facebook and Twitter are being criticized by lawmakers on both sides of the aisle for a plethora of issues ranging from their dominance of certain markets to allowing their platforms to be exploited by Russian operatives spreading misinformation to influence elections. Some lawmakers have slammed Apple for courting Chinese authorities and for slowing down older iPhones to avoid abrupt shutdowns.

“I call it the bipartisan Silicon Valley squeeze,” said Bret Swanson, a visiting fellow at the American Enterprise Institute. “Silicon Valley going back 20 to 15 years, always had a halo around its head. For the first time it is exposed to real political pressures.”

These days, with unpredictable tweets and policy decisions coming from the White House, any lobbyist needs to be finding a way to engage, said Frank Baumgartner, a political science professor at The University of North Carolina at Chapel Hill.

©2018 Bloomberg News Distributed by Tribune Content Agency, LLC.

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