Where Tech Companies Spent Millions in Municipal Elections—and Lost

How much political power does $1.5 million buy?

That’s how much Amazon donated to a Seattle Political Action Committee that aims to swing the city council towards a more pro-business agenda. The company, which is headquartered downtown, has influenced the council successfully before, donating $25,000 to a campaign to kill a per-employee head tax that would have gone towards funding homelessness initiatives in the city.

This time, according to early voting results, Amazon didn’t win.

To be fair, it didn’t quite lose, either. Out of the seven city council candidates Amazon supported, two appear poised to win their elections, and a third race remains neck and neck. That’s not enough to secure a majority on Seattle’s nine-member council, but it could be enough to exert influence.

Among the blows to Amazon is a comeback for council member Kshama Sawant, a pro-labor city council member in the Socialist Alternative Party who’s long been a thorn in the side of Amazon and other large corporations. She edged ahead of Egan Orion on Saturday, after initial counts had her opponent with a comfortable lead.

Sawant branded the head tax the “Amazon tax,” and called this week’s election a fight over the “soul of Seattle.” Framing the stakes of the election, Sawant told the New York Times recently: “The question is: Is Seattle going to become a playground for only the very wealthy, or is it going to be a city that serves the needs of ordinary people?”

Amazon wasn’t the only business that spent big on city campaigns. From San Francisco to Jersey City, tech companies poured money into nudging the outcome of ballot questions on whether to regulate, tax, or expand their power, in some cases contributing to new spending records at the city level. And despite million-dollar campaigns launched by companies like Juul and Airbnb, Amazon wasn’t the only one to see voters defy them.

In San Francisco, a measure that would have overturned the city’s e-cigarette sales ban lost by an overwhelming margin, meaning the moratorium will hold. Initially, venture-backed vape pen company Juul spent $11 million on a campaign to overturn the ban, but it pulled its support before the vote amid public health concerns.

In Jersey City, a bill to regulate the 3,000 Airbnb rentals that locals complain are flooding the city with unruly tourism passed, despite a $4.2 million campaign by the short-term rental platform to defeat it. Airbnb blamed the hotel lobby, which spent only $1 million.

And also in San Francisco, Uber and Lyft took a different strategy: They both supported a small tax of 3.25 percent on most Uber and Lyft rides, introduced as an alternative to a more punitive tax that could have been levied without voter approval. The ride-hailing companies contributed comparatively modest amounts—according to campaign finance records, Lyft donated $400,000 and Uber $300,000—and the initiative was leading slightly as of publication.

Tech-money-fueled campaigns aren’t new in San Francisco. Last year, a tax on businesses to support affordable housing and homelessness not unlike Seattle’s was on the ballot, inspiring entities like Lyft, Stripe, Square, and Twitter founder Jack Dorsey to donate hundreds of thousands each to the effort to defeat it. But in that case, Salesforce and its CEO Mark Benioff also dropped almost $5 billion to pass it. Though the measure was approved by voters, it won by less than a two-thirds margin, and is currently tied up in court.

Amazon’s spending in Seattle was part of a particularly notable phenomenon: The council race was the most expensive in the city’s history, even as it tested the strength of a new initiative intended to curb big money in politics.

Under a “democracy voucher” program that came into effect this year, all registered voters in the city were sent four $25 vouchers to spend on any candidates they wanted to support—but only those who agreed to spend less than $150,000 on their general election campaigns. When business interests in the city banded together with the Chamber of Commerce to start a PAC called Civic Alliance for a Sound Economy (CASE), and the cash started pouring in, candidates who had initially opted into the program asked to opt out, worried they wouldn’t be able to compete without hustling for more money.

By Election Day, the New York Times reported that “11 of the 12 general election candidates who participated in the voucher program had been released from the limits.” CASE pulled in more than $4 million, with a quarter coming from Amazon, and the rest from other companies with Seattle-area offices, like Google, Expedia, Starbucks and Microsoft.

M. Lorena González, one of two council members who represents the entire city and wasn’t up for reelection this year, is sponsoring a bill that would tighten campaign finance restrictions even more, limiting the amount corporations can donate to PACs, and effectively abolishing super PACs like the Chamber of Commerce’s CASE.

“We operate in an environment where corporations like Amazon can make unlimited contributions, because there are no regulations,” she told CityLab. “As a result you saw them put a fistful of cash on the scales of democracy to tip the city council in their favor.”

Even presidential candidates Bernie Sanders and Elizabeth Warren condemned Amazon’s spending. “In a city struggling with homelessness, Amazon is dropping an outrageous amount of money to defeat progressive candidates fighting for working people,” Sanders tweeted.

CASE argues that the candidates it endorsed will not only be good for business, but for the city: Its website says they all “demonstrate a strong commitment to improving the quality of life and economic opportunities for all Seattleites,” particularly when it comes to easing traffic congestion and improving transit, instituting systemic reforms around homelessness, and supporting local business growth. Polls conducted by the Chamber and local newspapers showed that residents were disappointed with the current council, and ready for change.

González noted that what aligns several of the CASE-endorsed candidates is also an emphasis on maintaining Seattle’s “regressive tax system,” “using punitive criminal justice system tools to address homelessness,” and “not tackling criminal justice reform as a whole.” (CASE didn’t respond to a request for comment.)

With Amazon achieving less than a majority hold on the council, the takeaway some Seattle progressives left with Wednesday was that it could have been worse. “Imagine the Chamber and Amazon honchos this morning looking at City Council strategy for next year,” Seattle’s former Democratic mayor, Mike McGinn, tweeted. “Those business honchos are not sitting there clapping each other on the back saying ‘We killed it last night!’ They’re saying ‘crap—how the hell do we get to five votes on anything—we have completely lost control of the council.’” He added that during his term as mayor from 2010 to 2013, the Chamber of Commerce held seven of the nine seats, giving it a stronger pro-business bent.

But Amazon’s intervention shows that its interest in—and impact on—politics is only growing in the wake of the struggle over the head tax. On city council candidates, Amazon only spent $130,000 in 2015, according to campaign finance records, meaning their spending increased by more than 650 percent this year. (According to WUSA9, Amazon also spent almost $300,000 on Republican and Democratic house and senate races in Virginia, the state where it’s planning another large campus.)

And its spending is not always in opposition to funding public initiatives. This year, the company contributed $400,000 at the state level to join progressives in opposing a cut to car registration fees that would slash transit funding precipitously (Microsoft spent $650,000). Despite their opposition, it looks like the measure is going to pass.

This spring, the power of big spending will likely be tested again. California’s bill reclassifying gig workers as employees—which could pose an existential threat to sharing-economy companies like Uber and Lyft—could be challenged in a ballot measure funded by the two ride-hailing companies and Postmates, a food-delivery app. Together, they’ve already contributed $90 million to the effort. That’s 60 Seattle city councils worth.

Editor's Note: This story was updated after publication to reflect the latest results of Seattle's City Council races, several of which remain contested. There are now two candidates backed by Amazon poised to win their elections.