“Who is Jeff Bezos?”

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In “Part 1: Behind the Smile in Seattle - Amazon a virtual no-show in hometown philanthropy” the Seattle Times goes beyond attacking the charitable giving of Amazon (NASDAQ: AMZN) and tries to broaden its attack by asserting that paying taxes, following regulations, and employee/vendor treatment are also forms of philanthropy (while implying that Amazon falls short in all these areas). However, Amazon is by most measures learning the political lessons taught by Boeing (NYSE: BA) and Microsoft (NASDAQ: MSFT) – both of which the newspaper praises.

From numerous interviews and speeches given since even before the founding of Amazon, it is clear that Jeff Bezos has always been a practical libertarian, not a principled libertarian. This is nothing unique, even an aggressive libertarian public intellectual like PayPal’s Peter Thiel is involved in a similar mix of interesting sideshows (Founders Fund, Thiel Foundation, Valar Ventures – though with a less Bradbury and more Tolkien flair), and he will pursue an advantage that is presented to him like using New Zealand government money intended for nebulous promotion activities on a more sound (but possibly illegal) investment in his enterprises.

Jeff Bezos is probably not the Great Libertarian Hope.

In the past, Jeff Bezos has taken government NASA money and continues to engage in a nationwide tax campaign that would make even Fabius take note. The company’s most recent strategic coup has won Amazon the prerogatives of a Roman tax farmer (along with effusive praise from that paragon of late-republican virtue Democrat John Conyers, who has stated about Amazon, “Let the record show that there are corporate good guys in this world.”) It is safe to conclude that Bezos is less a rabid Libertarian and more like a classic publican, and certainly not a Republican – if anything he’s a Democrat (as it is the party that receives the bulk of his personal contributions). In short, Bezos is neither the classical liberal philosopher king Forbes hopes for, nor the aloof capitalist Scrooge Seattle elites tar him as. Jeff Bezos is a classic pragmatist (or detractors might prefer “opportunist”), and this is fundamental for investors to appreciate when observing other aspects of his strategy and associations.

In solidarity with its fellow arbiters of mediocre consensus, the Seattle Times shows its blind allegiance to activities it supports like the Washington Roundtable, “a group of corporate executives focused on education and transportation issues.” Needless to say, the paper is concerned that Amazon is not a member – setting aside the reality that the Roundtable has worked hand in hand with local officialdom to produce some of the country’s worst and most expensive public schools not to mention over two decades talking about transit options that are only just now starting to break ground. It is amusing that the public-private partnership (read: taxpayer-subsidized), fantastically slow Seattle Lake Union Trolley is living up to its name and primarily servicing the wealthy Amazon workers that now are the main force for revitalization in the neighborhood (of which Paul Allen is the primary landlord). Surely, keeping high-paid office workers from walking a mile on an even surface is what the taxpayers intended when the city spent $56.4 million for the 1.3 miles already served with more frequency by existing buses. Amazon’s skill at letting third parties work their magic is something most calcium-deficient analysts under appreciate.

Again, the Seattle Times’ amnesia illustrates why the city is doomed to repeat history, and shows (inadvertently) how Bezos is already ahead of big brother Gates. Before being completely scrapped and overhauled, the initial education programs of the Gates Foundation had been given over to the chief spokesman for the teachers’ union (a strong partner of the Roundtable). The former spokesman now runs a consultancy that advises celebrities like Ashton Kutcher and Demi Moore (now splitsville after some philandering) on initiatives respecting women, proclaims Facebook as philanthropy (because forwarding and liking are powerful…), and dabbles in other projects like Ben Affleck’s initiative in the eastern Congo which unwittingly appears to be helping out the genocidaires that were driven from Rwanda in 1994.

The Seattle Times supports its claims that, “At Microsoft and Boeing, philanthropy is a more integrated part of the culture,” with statements from well-known Seattle political hustlers and a disingenuous perspective offered by Microsoft’s former director of community affairs who is now a philanthropy consultant (an activity for which she charges), “[Microsoft] realized it had a responsibility to give back to the community,” but that Amazon remains, “a bit of a black box for all of us. I've not seen much from them in terms of sponsorships, matching grants or employee volunteer programs.”

In fact, the explosion of Microsoft’s community and civic (political) giving coincided with its Justice Department lawsuit which was the company’s baptism of fire into how formalized corruption and civic protection rackets works in America.

The literal popularizer of the black box is Boeing (a pillar of the Seattle community, though less so since relocating its headquarters to the more pliable Cook County). Like Wal-Mart, Boeing has already learned how to play the game as one blogger pointed out:

In 2009, Boeing laid off almost 3,400 employees in Washington alone. Assuming those employees all collected unemployment benefits, and assuming an average of $500 a month in benefits, those layoffs cost Washington State $1.7 Million per month. That’s over $20 Million a year, which is over six times more than Boeing donated to the United Way in 2011 according to the [Seattle Times] hit piece on Amazon.

Also, well known are Boeing’s arrangements with the federal Export-Import Bank which creatively meets its mandate for small business support by using the majority of its funds to underwrite a significant portion the sales of one of the country’s largest corporations (thus earning the nickname, “The Bank of Boeing”). Less well-known is that the aerospace champion had also learned to limit its candidate contributions to “debt retirement” which is to say it pays off the bills of winners (be they hopers and changers or insider mavericks).

As a result of Amazon not “giving”, one political hustler in the article boldly stated that, “When you get big, you run the risk of being arrogant. And boy, everybody loves bringing down the arrogant guy.” The article unintentionally highlights one of the shakedown tactics popular in Seattle politics which involves unions and other groups interested in the “future” using design review and other “stakeholder processes” to delay and complicate life for those businesses not willing to provide the proper “model” “for the people”. (Also, for good measure they will thrown in a mention of “the children” though usually not theirs.)

On the more benign corporate giving programs like matching employee donations or the (oxymoronic) paying employees for their volunteer time (possibly a similar logic to Peace Corps volunteers who receive income from their six-figure administrators), Amazon’s response is apparently that employees would “be better off figuring out how to do good on their own.” One ‘Zoner interviewed for the Seattle Times article was dismayed that his attempt to set up automatic charitable donations from his paycheck would be charged 6% from the payroll company – though one does have to wonder if the employee was not aware that his bank, like most banks in America, probably make it easy to go online and in five minutes set up new accounts and perpetual transfer directives for free (and confidentially).

It seems clear that Amazon’s emphasis on individual giving (be it from employees or shareholders) is the best way to ensure that those wanting resources to go to MoveOn.org or the Tea Party are honored in the same way as those that prefer to give to neither. However, it is naive to believe that Amazon has excused itself from politics.

The guiding principle of Amazon’s political giving appears to be based less on ideology, and more on incumbency. Of the $111,000 its main corporate PAC donated in 2008, it was a clear 2 to 1 in favor of the Democrats who controlled Congress at the time, but in 2010 Amazon’s $220,000 was almost evenly split between the parties.

Jeff Bezos did find time to personally contribute a $100,000 (matched by blue-leaning Microsoft CEO Steve Ballmer) to defeat a recent Washington State income tax initiative. While bluest of the blue then-CEO Jim Sinegal dropped $22 million of Costco’s money on a successful attempt to abolish Washington State’s monopoly on alcohol sales. Not to be outdone, bluer than thou (except for when they are better red than dead) Boeing continued to be one of the top national donors (11th in 2010) with $2.2 million judiciously shared among both parties.  (Although to put these kinds of expedenditures in perspective, the 2008 presidential candidates combined spent less than half of the $3 billion Americans spend on brushing their teeth each year.)

Despite the Seattle Times selective portrayal of how Jeff Bezos and Amazon give to charities and politics (while giving no sense of how that compares to other hometown corporate leaders and companies), it is clear that the Amazon approach to both activities is the same as its approach to vendors, taxes, and workers – Amazon will do what is required, but it is up to the partner to get what they think is rightfully owed.


Next: The Future with Amazon: Utopia, Dystopia, or Ecotopia?
Previous: Amazon on Foundation’s Edge

 


Nick Slepko has no position in any company mentioned here at the time of publication. Motley Fool newsletter services recommend Amazon.com, and Microsoft. The Motley Fool owns shares of Amazon.com, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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