Canada Markets close in 5 hrs 32 mins

How Amazon’s Klutzy Politicking Backfired in Seattle

Joni Balter

(Bloomberg Opinion) -- For a company that is so good at so many things, Amazon is remarkably bad at politics.

Exhibit A is the latest debacle in its hometown of Seattle, where the company’s push to seat a more politically moderate city council backfired. Campaign cash aimed at producing a less tax-happy council triggered the opposite result and turned a socialist headed for defeat into a martyr.

Amazon has never been known for subtlety. The $1.45 million it spread around in political contributions to City Council candidates not only set a record, but also changed the trajectory of the election.

Polls showed that voters who were poised to replace some leftist council members changed course. After Amazon’s donations became public, they elected five of seven candidates opposed by a business coalition.

One of them was Councilmember Kshama Sawant of the Socialist Alternative party, who declared her come-from-behind re-election victory in front of a giant red sign that declared, “Tax Amazon.” Which the newly Amazon-unfriendly council almost certainly will do.

Amazon employs 54,000 people in Seattle and owns or occupies 47 buildings there. That’s made the city seem like the biggest company town in the U.S., and has probably blinded Amazon’s leaders to the angst and tumult they’ve unleashed in a place that’s become both more prosperous and less livable.

Sawant, who managed less than 40% of the vote in the August primary, went so far as to call Jeff Bezos, Amazon’s founder and chief executive, “our enemy,” and described her victory as a win for working people against the world’s richest man.

“Amazon overplayed their hand,” said Egan Orion, the candidate who lost to Sawant. “I wasn’t able to make my closing arguments. There was so much noise.”

Once Amazon donated in such a big way, the race became nationalized. Senators Elizabeth Warren and Bernie Sanders, the presidential candidates vying for the hearts of the Democratic Party’s left flank, chimed in via Twitter to trash the Amazon contributions.

Here’s what Warren had to say:

Here’s Sanders:

Another winner, Tammy Morales, favors a bevy of local tax options to raise money for homeless services, housing and other needs. Her list includes revisiting an employee head tax similar to one Amazon successfully fought in 2018, plus a local estate tax and a tax on high salaries dubbed an “excess compensation tax.”

Amazon has been trying to fine-tune its relationship with Seattle for years, and concern about relations with the City Council was among the reasons it announced in 2017 that it was looking for a second headquarters location — another endeavor that showcased the company’s limited political skills.

That contest blew up in New York City when politicians and others protested the size of an Amazon enticement package — up to $3 billion in tax breaks and other incentives.

In Seattle, Amazon had mostly maintained a quiet political presence until May 2018, when the City Council passed the Amazon Tax on larger companies, a head tax of $275 per employee.

Amazon promptly announced that it would stop construction on one of its new buildings if the tax were imposed.

The council then hastily repealed it when polls showed it could harm the council at the next election — the contest that ended so disastrously for the company this month.

Starbucks, also headquartered in Seattle, took a different approach, donating a much smaller sum to the business campaign. A Starbucks executive also sent a letter to employees urging a vote for unspecified “change” and invited the public to have a cup of coffee. This was a subtle, defter move, in part because it was hard to tell exactly what the company was saying.

At this juncture, perhaps after apologizing or remaining quiet a while, Amazon has a few choices. It could face probable new taxes gamely or think along the lines of Apple, which recently announced a $2.5 billion plan to ease the housing shortages and affordability crisis in California. Or take a page from Microsoft, the tech giant across Lake Washington from Amazon, which last winter offered a well received $500 million investment in affordable housing and homelessness relief across the region.

To be fair, Amazon has invested in a homeless shelter in Seattle for families, Mary’s Place, which will eventually occupy eight floors in one of the new Amazon buildings. Mary’s Place does great work.

But that answer to the enormous problem of homelessness and housing affordability now seems a trifle. The overall contribution to challenges facing the city is too small to those who believe Amazon needs to step up and invest in ways commensurate with its size and impact.

To contact the author of this story: Joni Balter at jcbalter@gmail.com

To contact the editor responsible for this story: Jonathan Landman at jlandman4@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Joni Balter is a longtime Seattle columnist and writer who contributes to local NPR and PBS affiliates.

For more articles like this, please visit us at bloomberg.com/opinion

©2019 Bloomberg L.P.