The Department of Defense is close to handing over a ten-year contract worth over $10 billion to Amazon Web Services (AWS) to handle all of the cloud computing for the Pentagon. Awarding a sole source contract would harm national security and destroy competition for government wide cloud computing services. The process has been stalled by Congress because they have become so concerned about potential cronyism in favor of Amazon, they have put the contract on hold and are mandating that the Defense Department explain the circumstances surrounding the drafting of the request for this contract.
Amazon, with Jeff Bezos at the helm, has enough influence with Secretary James Mattis and other officials that the Department of Defense seem immune to the obvious problems with this request for proposal. This proposal would not only put national security at risk, but also was born from cronyism and the use of raw power to push the administration into approving the deal.
The Wall Street Journal’s Brody Mullins, Laura Stevens, and John D. McKinnon profiled Bezos in June, telling readers “how Amazon became one of Washington’s most powerful players” thanks to cronyism. “Amazon, whose revenues last year topped $177 billion, has become deeply entwined with the federal government,” the article reports. “Mr. Bezos has built one of the largest lobbying operations in Washington, bigger than those of powerhouses such as Exxon Mobil Corp. and Walmart Inc. Its cloud-computing business is a major government contractor, with an estimated $1.5 billion in contracts last year, according to consulting firm GBH Insights. And the company has been pushing hard to change the law to allow government employees to buy more of their own supplies on Amazon.com.” The company has become one of the most powerful political forces in Washington.
Newsweek’s Brendan Cole reported a few weeks later that Amazon workers went on strike over low wages, as Bezos’ personal net worth peaked at over $152,000,000,000. According to Cole, “This is more than the inflation-adjusted amount of $149 billion Microsoft founder Bill Gates hit in 1999 and makes Bezos richer than anyone since the first wealth ranking was published in 1982.” It is ironic that this liberal supporter of many left-wing causes has implemented massive wealth inequality at his own company.
“His net worth [in 2018] has gone up $52 billion, more than the annual GDP of more than 100 countries, including Lebanon, Macau and Slovenia,” the author continued. “The increase this year alone is more than the entire worth of Asia’s richest person, Jack Ma, chairman of Alibaba Group Holding Ltd.” There is nothing wrong with wealth, yet wealth amassed from the taxpayer is not ethical if done using cronyism and lobbying strong arm tactics.
Amazon’s army of lobbyists would be less of an issue if they chose to pursue cloud-computing contracts that did not involve the most sensitive defense data on the planet. However, Amazon’s security track record, specifically with the People’s Republic of China is damning.
In a 20-page cover story published by Bloomberg on October 4, the authors delve into the work the Chinese government has done to infiltrate and expose American companies. “In 2015, Amazon.com Inc. began quietly evaluating a startup called Elemental Technologies, a potential acquisition to help with a major expansion of its streaming video service, known today as Amazon Prime Video. Its technology had helped stream the Olympic Games online, communicate with the International Space Station, and funnel drone footage to the Central Intelligence Agency.”
During due diligence testing, Amazon “found a tiny microchip, not much bigger than a grain of rice, that wasn’t part of the boards’ original design. Amazon reported the discovery to U.S. authorities, sending a shudder through the intelligence community. Elemental’s servers could be found in Department of Defense data centers, the CIA’s drone operations, and the onboard networks of Navy warships. During the ensuing top-secret probe, which remains open more than three years later, investigators determined that the chips allowed the attackers to create a stealth doorway into any network that included the altered machines. Multiple people familiar with the matter say investigators found that the chips had been inserted at factories run by manufacturing subcontractors in China.”
If Bezos receives the $10B contract to handle the Department of Defense’s cloud computing, we run the risk of the Chinese government gaining access to top-secret U.S. military data. After receiving word of security breaches at other companies, “Amazon’s security team conducted its own investigation into AWS’s Beijing facilities and found altered motherboards there as well, including more sophisticated designs than they’d previously encountered. In one case, the malicious chips were thin enough that they’d been embedded between the layers of fiberglass onto which the other components were attached, according to one person who saw pictures of the chips. That generation of chips was smaller than a sharpened pencil tip, the person [told Bloomberg.]” Amazon has denied the allegations.
While other companies like Apple have suffered breaches at the hands of the Chinese, an attack on the scale of Amazon is unprecedented. Until the Department of Defense can be sure that our military service members and national security is safe in Amazon’s hands, Congress would be smart to end this proposal. Cronyism should not lead the Defense Department to turn a blind eye to the obvious security risks present at Amazon and to treat this request for proposal with transparency and fairness.