US government privately advised by top Amazon executive on web portal worth billions to the Amazon; The Guardian reports

A top Amazon executive Anne Rung, advised the Trump administration on the launch of a new internet portal which is expected to generate billions of dollars for Amazon, the Guardian reports. The emails seen by the Guardian indicate ways in which the portal will give the technology giant a dominant role in how the US government buys everything from paper clips to office chairs.

Emails exchanged between Rung and the GSA

Anne communicated with a top official Mary Davie at the General Services Administration (GSA) about the approach the government would take to create the new portal called as the “Amazon amendment”. This communication took place in 2017, before the legislation that created the portal was signed into law, later last year.

According to an The Intercept, the amendment, Section 801 of the National Defense Authorization Act (NDAA), would allow for the creation of an online portal that government employees could use to purchase items including office supplies or furniture. Experts even commented on how this deal would help Amazon establish a tight grip on the $53 billion government acquisitions market.

The emails offer new insights into how Amazon has used key former government officials it now employs (directly and as consultants ) to gain influence and potentially shape lucrative government contracts. One of the emails showed the setup of a meeting between Anne and Mary. Rung wrote: “IF the legislation is enacted, I have a sense of how GSA will want to approach this (first you have to select providers, then you will want to implement something incrementally/phased approach), but I want to make sure that I’m not way off the mark. It will help me design a discussion/agenda for our meeting next month.”

On asking Davie if they should wait until after the legislation is passed to discuss it, Davie responded that the administration was planning on moving ahead regardless of the outcome of the bill on Capitol Hill.

The Guardian also reports that it has not yet been determined which companies will build the US government’s new e-commerce portal, but Amazon is expected to take on a dominant role, giving it a good footing in the market for federal procurement of commercial products.

This is not the first time that Amazon has involved itself with the U.S. government. Jeff Bezos, the owner of Amazon and the Washington Post, has had a troubled past with President Donald Trump. However, it seems this hostility is reserved for Trump personally and not the US government. Amazon already operates a cloud service for the US intelligence community, including a contract with the CIA, and has said it can protect even the most top secret data on a cloud, walled off from the public internet.

Stacy Mitchell, co-director of the Institute for Local Self-Reliance, a group that supports local businesses said in a statement that “Amazon wants to be the interface between all government buyers and all the companies that want to sell to government, and that is an incredibly powerful and lucrative place to be.”

Statements from the GSA and Amazon

The Guardian says that Amazon declined to comment on questions related to how much of its business is currently connected to the federal government. However, the tech giant did admit that it had been engaging in “continuous conversations with the GSA” and that it commended the agency for “transforming the conversation around online portals”. Amazon said Rung had been compliant with all White House ethics rules.

The GSA said in a statement to the Guardian that during 2017 and 2018, it had met with 35 companies in 2017 and 2018 to discuss “existing commercial capabilities and conduct market research” regarding the e-commerce platforms. The statement says: “No company has been given special access. Instead, all companies expressing interest in the Commercial Platforms program have equal access to GSA. We cannot speculate on which companies will be part of the proof of concept until proposals are received, evaluated, and awards are made.”

Trouble for Rung?

The Federal law mandates a “cooling off” period of one year before a former senior government official works on projects which he/she has worked on, in the government. It is not clear whether Rung’s communication would be considered a violation of this specific ethics law because there are no details on what exactly she worked on before leaving the government. Lisa Gilbert, the vice-president of legislative affairs at Public Citizen, a consumer advocacy group, said that while she did not believe that the engagement between Rung and Davie was a violation of the law, it was “unsavory” to think that former government officials used their inside knowledge of how the “ballgame” works for their corporate advantage.

Gilbert said “There is nothing inherently wrong in talking to stakeholders who will be impacted by the legislation. Our overwhelming worry is that corporate stakeholders have special access that other stakeholders--like public interest groups--do not get.”

Mitchell, the small business advocate, said the Rung emails “display an inside relationship that other competing companies don’t have” and show how government infrastructure was being designed with input from Amazon, giving it a big advantage.

For more insights on this news, visit The Guardian’s complete coverage.

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