Apple and the Washington Shakedown

Steve Wildstrom / May 23rd, 2013

Columnist Tim Carney of the Washington Examiner has a good article on Apple’s problems in Washington, well worth reading is you want to learn something about how the capital really works.

In the popular view of political corruption, lobbyists and PACs shower politicians with money, expecting to buy influence. In reality, the flow runs nearly entirely the other way. Members of Congress spend an inordinate share of their waking hours on the phone, trying to extract contributions from often grudging donors, often with the  not very veiled threat that those who fail to pony up will not find important doors open. Ever wonder why the House and Senate floors are usually empty during “debate”? The members are often at their nearby off-site hideaways, dialing for dollars (Congressional rules prohibit fundraising in the Capitol or in House and Senate office buildings.)

Much of the tech industry refused to join in for a long time, but most of the big companies are now regulars n the lobbying and check-writing circuit. Apple remains a significant holdout.

That’s probably not the reason the Senate Permanent Investigations Subcommittee chose to grill Tim Cook about Apple’s offshore tax avoidance rather than some other multinational CEO. The Senators knew that Apple gets good play in the media. But the treatment of Cook might have been  bit gentler if Apple played the political game with more enthusiasm.

Steve Wildstrom

Steve Wildstrom is veteran technology reporter, writer, and analyst based in the Washington, D.C. area. He created and wrote BusinessWeek’s Technology & You column for 15 years. Since leaving BusinessWeek in the fall of 2009, he has written his own blog, Wildstrom on Tech and has contributed to corporate blogs, including those of Cisco and AMD and also consults for major technology companies.
  • qka

    The final sentence needs to be edited; it is not clear.

    • steve_wildstrom

      Sorry. That “is” should have been “if.”

  • pawhite524

    I think Tim Cook might be able to pull off the role Jimmy Stewart played in Frank Capra’s “Mr Smith goes to Washington,” no?
    So the implication here is that this is not about Apple helping the American public by paying more taxes rather than use the loopholes Congress created for tax avoidance but to get more campaign contributions?

    OK, I’m down with that. BTW, has the IRS contacted you since you printed this article? Just wondering…

    All the best, Steve!

  • lucascott

    I for one am glad that Apple doesn’t spend shareholders money to buy influence. I hope that never changes.

    As for that whole hearing, it was a bit of a joke to me. It was clear what they were doing from the start with only calling out Apple when many companies play similar games. Samsung is likely the worst since they can play games with channel sales to say all revenue happened outside of the US and pay little to no taxes. Microsoft and Google are probably just as bad. Not calling out any of them was horrid.

    And it was pretty clear that they really don’t want to have the tax laws changed, probably because some of them profit from the same legal tricks. And they had no proof that Apple was breaking the law so they just called the company to DC to basically demand they got follow the law and pay more than legally they have to. Really?

    Frankly I’d like to sue them for wasting my tax money with that nonsense

  • mhikl

    Just curious, but would limiting any contributions to $1000 pr individual make such practices difficult? Corporations being “persons” would level to playing field.

    • steve_wildstrom

      The Supreme Court, most recently with the Citizens United has, for better or worse, made any sort of tight contribution limits impossible. So its not really an option.

      • I just read 13 states have passed legislation to overtun Citizen’s United, with more likely to get on board. Here’s hoping for a constitutional amendment!

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