Ted S. Warren/AP Photo
Seattle City Council member Kshama Sawant speaks at City Hall in Seattle, June 12, 2018. Sawant, with other council members, had favored the so-called “Amazon tax” as a revenue-generating solution to the city’s homelessness crisis.
Long before last year’s democratic socialist takeover in the Chicago City Council, Alexandria Ocasio-Cortez’s victory in Congress, and the 2016 Sanders presidential campaign, there was Kshama Sawant. In 2013, the then–40-year-old former software engineer eked out a 1 percent victory to win a seat on the Seattle City Council running as a member of Socialist Alternative, a fledgling socialist political party. She won re-election in 2015, and has held that seat, in Seattle’s Third District downtown, ever since. For a time, she may well have been the most notable socialist politician, after Sanders, in the country.
Sawant’s election was surprising, but not inconceivable. Seattle is renowned for its liberal leanings, and its quirkiness. And Sawant’s policy agenda aligned broadly with the city’s political inclinations. In 2014, she saw through a minimum-wage hike to $15 an hour, one of the first big-city Fight for 15 victories in the nation, signed into law by Mayor Ed Murray. With a second term secured, Sawant pledged her focus on tackling the city’s exploding homelessness problem, proposing rent control and a head tax on the city’s largest companies to raise money for public housing.
Seattle isn’t just full of scruffy progressives, though. It’s also home to some of the country’s largest corporations, like Starbucks, Boeing, Microsoft, and Amazon, all of which have long enjoyed Washington’s regressive tax environment (the state has no personal or corporate income tax, while doling out massive tax subsidies). Some of those companies rallied against Sawant’s tax proposals in the past. And now, as she’s facing re-election, Amazon has taken an active role in trying to boost her opponent, pledging an unprecedented $1.45 million, including $1 million announced last week, to the Chamber of Commerce’s PAC, Civic Alliance for a Sound Economy (CASE).
The PAC has sought to elevate Sawant’s opponent and reconstitute the Seattle City Council along even more business-friendly lines. Amazon’s startling donation is the largest contribution to a local election “in anyone’s memory,” per The Seattle Times, and an intervention into politics the likes of which hasn’t been attempted by any of Seattle’s corporate titans until now.
Since Sawant’s initial election, Amazon’s growth has been meteoric. The company has ballooned to a trillion-dollar valuation, with a market cap greater than Microsoft’s and a retail operation bigger than Walmart’s, minting CEO Jeff Bezos as the world’s richest man in the process (surpassing fellow Seattle resident Bill Gates). Meanwhile, Seattle has also seen surging rents, while homelessness in the city has exploded: It now ranks just behind New York City and Los Angeles in terms of its homeless population, despite Seattle having a metro population less than half the size of those other cities’.
The showdown between Amazon and Sawant was seeded during 2018. Sawant, along with other members of the city council, pushed for the so-called “Amazon tax” as a revenue-generating solution to the city’s homelessness crisis. The proposal would have levied a $275-per-employee “head tax” on Seattle’s most profitable corporate citizens, corporations netting over $20 million a year. That money would be put to funding new public housing and homeless services.
Initially, the proposal was received favorably. The bill, authored by multiple city council members, passed unanimously, with Sawant drumming up public support via marches and public demonstrations. Of course, $275 per person would hardly make a dent in the bottom line of a trillion-dollar company.
But Amazon has made a reputation for its unwillingness to give an inch on matters of taxation, as it showed in its battle with New York City over a proposed second headquarters. The passage of the head tax incurred the wrath of the company, as well as Seattle’s other corporate behemoths, which went to groups like the Chamber of Commerce to mount an opposition campaign. They quickly threatened a well-funded ballot initiative to overturn the legislation.
In what has also become a signature move for the company, Amazon threatened to move jobs out of the city, in particular by abandoning a downtown office tower. This positioned the plan as a job-killer that would run the city’s largest private employer out of town. With an election cycle on the horizon, the threat of a vicious battle was enough to foment a change of heart within the council: The tax was repealed only a month later, by a 7-2 vote.
The punch line of this sad episode is that, a few months after vanquishing the tax, Amazon pulled out of the office tower anyway, choosing to sublease it instead. It was a move that reflected Amazon’s incredible power to dictate events and suffer no consequences.
Now that the election cycle is active—Seattle votes by mail, and ballots have been distributed ahead of the November 5 Election Day—the city council’s surrender has chummed the waters for the more heated showdown between Amazon and Sawant, and the council broadly. It has also emboldened the company to take a more active role in the city’s politics. Before last week’s million-dollar infusion, Amazon had already contributed $400,000 to the chamber’s PAC, which is turning the cash into direct-mail ads and canvassers to boost Egan Orion, Sawant’s challenger, who has allied himself openly with business groups and advocated for reduced regulations as the solution to the city’s woes.
And while the chamber’s PAC has spent almost twice as much on direct mail and canvassing in Sawant’s race as any other, it’s using Amazon’s cash to actively seed challengers against another progressive incumbent, Lisa Herbold, who voted for the initial Amazon tax, and then for its repeal. The goal is to dramatically change the composition of the city council. There are seven seats on the Seattle City Council up for grabs in November.
It’s not just the company that’s gotten involved, but its executives as well. More than a dozen of Amazon’s C-suiters have also now donated to Orion. The list includes Jay Carney, Obama’s onetime press secretary who is currently PR and policy chief for Amazon. Two of Amazon’s three CEOs, Jeff Wilke and Andy Jassy, have donated to Orion, too, with Jeff Bezos the only one to personally abstain. Execs from other corporate giants have pitched in as well, including Sam Whiting, director of Boeing Global Engagement. An off-year city council race has quickly played host to a broader revolt by the city’s corporate citizenry, which may be a sign of things to come given the popular proposals for increased corporate taxes being rolled out by Democratic presidential candidates at the national level.
To that effect, Amazon’s blitz of local politics has also stirred concern from a number of prominent Democrats, including presidential candidate Elizabeth Warren, and the district’s representative in Congress, Pramila Jayapal. “I am extremely disturbed by the unprecedented amount of money that Amazon has dumped into Seattle City Council elections: not just a thumb, but a fistful of cash, on the scales of democracy,” Jayapal tweeted recently.
The company’s turn to active political kingmaker also raises questions about what might have happened in places like Queens, the onetime proposed location for the company’s HQ2. It seems likely that Amazon would have trained its considerable financial resources on the political process in New York City, which is home to high-profile progressive politicians at the national and state level, including Alexandria Ocasio-Cortez and state Senator Michael Gianaris, both of whom have endorsed Bernie Sanders.
For years, Amazon has kept politics at a distance—four years ago, the company gave just $25,000 to the PAC it has sunk nearly $1.5 million into this year. But as challenges to Amazon’s model have arisen from labor groups, progressive politicians, and activists, it’s entering the arena in a major way. That’s an alarming development for progressive Democrats running in 2020, who may well find themselves taking on not just deep-pocketed Republican challengers, but a newly charged corporate class eager to snuff out any agenda that increases their contribution.
