Cronyism Crosses The Beltway

***By Mark Anthony***

In Washington, you have to pay to play, but you get what you pay for.

Recall the now famous words of Mick Mulvaney, a long-time congressman and now key member of the Trump administration. “If you were a lobbyist who never gave us money, I didn’t talk to you. If you were a lobbyist who gave us money, I might talk to you.” That’s how you have to pay to play. But, if you pay, you’ll have his ear. And influence.

Few companies pay more, or have more influence today, than Amazon.com

As the Wall Street Journal reported recently, “Amazon now has an army of nearly 100 lobbyists at more than a dozen lobbying firms working on a list of issues including taxes, trade, government procurement, internet policy, drone regulation, grocery rules, music licensing and, more recently, food stamps. Last year, the company spent $13 million on lobbying, five times as much as it spent five years earlier.” That’s a lot of spending, but it pays off for Amazon in many ways.

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Consider the Amazon cloud. “Overall, Amazon’s cloud-computing business with the U.S. government is expected to grow to $2.8 billion in 2018 and $4.6 billion in 2019, up from less than $300 million in 2015,” the Wall Street Journal reports. “Roughly 10% of the revenue and profits for the unit come from those government contracts.” That is quite a jump, but there’s also plenty of room for growth; the feds spend around $90 billion on information technology. Amazon wants as much of that spending as it can get, and influence is the best way to lock that down.

Or consider that, just last fall, the Department of Defense was preparing to give Amazon a $5 billion contract to provide all of its cloud services. That deal was, rightly, sidelined after more than 1,000 people filed negative comments about the process. But while it’s been delayed, it hasn’t been eliminated. The military may simply be waiting for the spotlight to move on before it moves forward with this big winner-take-all contract. Similar things have happened before.

Or consider the CIA’s cloud computing past. As the Atlantic reported a few years ago, “In early 2013, after weighing bids from Amazon Web Services, IBM and an unnamed third vendor, the CIA awarded a contract to AWS worth up to $600 million over a period of up to 10 years.” And the FBI may also be considering going with Amazon’s cloud. More federal business for Amazon to ring up.

Let’s face it: no company has more money to throw around on influence than Amazon.

It’s currently dangling promises of a “second headquarters” that it says would create thousands of jobs and generate millions in taxes. So local governments are lining up to woo Amazon. That includes three bids from the D.C. area. Want to bet the second HQ ends up close to “the swamp?”

Americans, correctly, dislike cronyism. This country was built by people doing their best in open competition. That often allowed the best ideas to win out. AC current became the standard because it worked better than DC current, even though the powerful Thomas Edison was lobbying for DC current. VHS became the standard because it worked better than Beta, even though the powerful Sony Corporation was lobbying for Beta. Thousands of other examples prove the point.

The federal government needs to move away from the crony capitalism and open up a fair bidding process that gives everyone a chance to compete. Government “of the people for the people” can’t be a vehicle to be sold to the richest people. Our national security, and our very survival, depend on it.

Mark Anthony is a former Silicon Valley Executive with Forrester Research, Inc. (Nasdaq: FORR). Mark is now the host of the nationally syndicated radio and TV show called The Patriot and The Preacher Show which airs on America’s Voice Network. Find out more at patriotandpreachershow.com.

 

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