On Amazon’s list: D.C. influence

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Amazon CEO Jeff Bezos rarely shies away from a fight, whether it’s battling publishers to conquer the e-book market or warding off investors who want the company to deliver bigger profits.

But the e-commerce giant increasingly is shipping those hardball tactics to Washington, where it is fighting agencies and wooing regulators more than ever before.

The Seattle-based company this year has boosted its political machine, hiring a crop of new lobbyists and writing bigger checks to members of Congress. It recently retained a powerhouse firm in Washington, D.C., to lobby the Federal Aviation Administration on delivery drones and has flexed its muscle to win a key government technology contract. Bezos, meanwhile, raised his Beltway profile through his personal purchase of The Washington Post in 2013.

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The online retailer’s power plays reveal how a company once on the periphery of politics and policy is coming of age in Washington as it expands into new lines of business that draw scrutiny from federal agencies — and require a much higher level of influence and engagement in the capital.

“Everybody knows Amazon’s size and power in retail is enormous, so it really should be no surprise their political influence is, too,” said Sheila Krumholz, executive director of the Center for Responsive Politics. “They don’t seem hesitant to use all the opportunities they have at their disposal.”

The company declined comment for this story.

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Amazon’s aggressive tactics were on display in July, when the Federal Trade Commission prepared to sue it for allowing kids to rack up big bills in its app store. The company went on the offensive, pre-emptively releasing details of the lawsuit while writing FTC Chairwoman Edith Ramirez with a pledge to fight in court. Amazon even recruited support on Capitol Hill, getting Sen. Deb Fischer (R-Neb.) to slam the agency’s approach. A spokesman for the senator said she penned the note after hearing from Amazon and other firms.

With a full wish list in Washington, the online retailer is bulking up. The company recently acquired new office space near the Capitol following a slew of hires, including Steve Hartell, a Cisco aide tapped to direct Amazon’s congressional affairs operation. Hartell joins the company’s growing roster of outside lobbyists, including former Sens. Trent Lott (R-Miss.) and John Breaux (D-La.).

Amazon has some longtime Washington priorities, like postal regulation. It struck a deal last year, for example, with the U.S. Postal Service to ensure Sunday package delivery in certain cities. But the company also has been adding new items to its policy cart, and it’s pushing them more visibly and vigorously than ever before.

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It has been particularly active at the FAA — an agency that, until recently, meant little to the company. To create media buzz about its ambitious plan to deliver packages via drones, Amazon used a flashy “60 Minutes” segment to show off the technology. In June, it signed a high-powered lobbying firm, Akin Gump Strauss Hauer & Feld, to help advance its drone interests in Washington. And the company in July pressed the FAA for permission to test its unmanned aerial vehicles, framing it as a much-needed step for Amazon to maintain its “continuing innovation” in the United States.

“One day, seeing Amazon Prime Air will be as normal as seeing mail trucks on the road today, resulting in enormous benefits for consumers across the nation,” the company wrote.

Meanwhile, Amazon muscled its way into a major, $600 million cloud computing deal with the CIA.

A relative newcomer to government procurement, Amazon’s cloud business won the CIA contract in early 2013, but its competitor, IBM, quickly challenged the award. The Government Accountability Office sided with IBM, and the CIA reopened bidding. But Amazon leapt into action, filing its own protest in court. A judge ultimately agreed with Amazon, leading IBM to abandon its protest.

The online retailer’s cloud officially went online for the CIA and other parts of the intelligence community this week — a huge victory for Amazon as it seeks to expand its Web services business in Washington.

Amazon is known for upending traditional retailers — and conducting tough negotiations with publishers and suppliers — in its drive to become the Web’s leading storefront for everything from books and toys to furniture and fine art. As the company grows, its bare-knuckle style could draw more attention from regulators.

The latest flare-up: Amazon’s standoff with publisher Hachette over e-book revenue, a dispute that’s delayed delivery of some titles and sparked questions about Amazon’s market power. Hachette hasn’t said whether it’s raised antitrust concerns with the government and declined to comment for this story.

Despite its increased spending in Washington, Amazon hasn’t reached the level of some of its tech company peers. Its political action committee donated $174,000 to members of Congress ahead of the 2014 midterm elections, and the company racked up around $1.9 million in lobbying expenses during the first half of the year — far less than the many millions Google shells out each quarter.

Bezos has personally donated to Sen. Patty Murray (D-Wash.) twice over the past year. He’s also pumped $5,000 into a newly created PAC for Blue Origin, his commercial space flight venture. The PAC donated to Reps. Bill Posey (R-Fla.) and Derek Kilmer (D-Wash.), two members of a House Space Subcommittee who sponsored a bill to let private space companies keep rare minerals obtained from asteroids.

For the most part, Amazon remains focused on its own interests — and hasn’t embraced some of the broader concerns of the tech industry.

It has stayed in the background on surveillance reform, a contrast with Google, Facebook and Microsoft, which formed a coalition to campaign for new restraints on the National Security Agency. On other major tech issues, like patent trolls and net neutrality, Amazon hasn’t often weighed in directly, letting an industry trade group, The Internet Association, do its talking.

Still, when Amazon wants something, including from the government, it can be a formidable force. The company’s earlier battles with states over sales tax may offer an instructive lesson.

A 1992 Supreme Court decision meant states could require online retailers to collect sales tax only if those businesses had a local physical presence, like an office. When some revenue-hungry states tried to force Amazon to collect that revenue, the company initially fought back. But Amazon later cut a series of deals with states like California to collect sales taxes, often in exchange for permission to build massive new distribution centers. Those pacts helped the company expand its quick-turnaround delivery operations all over the country.

“They’re very smart,” said Kim Rueben, senior fellow at the Tax Policy Center. “They understand and recognize the power they have.”