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This Battle of Billionaires Was Inevitable

A surprise decision over a Pentagon contract seems like the latest volley in a war between President Trump and Jeff Bezos

Jeff Bezos, Donald Trump

Cliff Owen/AP/REX/Shutterstock, REX/Shutterstock

The original “Battle of the Billionaires” was a harmless entertainment event, pitting WWE chief Vince McMahon against Donald Trump in Wrestlemania 23. It was notable for being perhaps the last time Trump was not cast as the heel in a public showdown. Nothing was at stake beyond McMahon’s hair, which Trump shaved on camera in the end.

The sequel — a war between Trump and Amazon chief Jeff Bezos — is less entertaining, namely because there is too much that matters at stake. Also, neither one is believable in the Good Guy role.

Much of the action lately surrounds Bezos. Who knows what someone worth $137 billion would consider a bad month, but Bezos is having a pretty rough February.

In addition to Amazon’s much-panned withdrawal from a “second headquarters” deal in New York City — which had the New York Post comparing Bezos to ex-Yankees pitcher Sonny Gray for his inability to “take the kind of pressure New York can dish out” — the Pez-headed tech giant’s dreams of Pentagon riches are suddenly being thwarted.

The blow involves a surprise delay in the award of the so-called JEDI contract, a $10 billion (or more) prize for Pentagon cloud management that once seemed gift-wrapped for Amazon.

The massive military deal, if and when it’s handed out, will likely make Bezos the most powerful man in Washington, even without physically being there.

Bezos would have deep bonds with both the CIA and the Pentagon as a contractor, and own the Washington Post as a pulpit. Trump, fighting off investigations conducted by (among others) his own executive branch, has a couple of Senators, Fox News and a Twitter account. Bezos might easily wield more institutional might in the end.

JEDI would have put Amazon in charge of standardizing the Pentagon’s disorganized mish-mash of computer systems, but federal claims court judge Eric Bruggink just stayed the award.

This started as a lawsuit filed by would-be bid competitor Oracle, whose co-CEO, Safra Catz, is reportedly one of Trump’s biggest supporters in Silicon Valley. The suit suggested Pentagon procurement officer Deap Ubhi’s involvement in the JEDI negotiations constituted a conflict. Ubhi used to work for Amazon and in 2017 tweeted, “Once an Amazonian, always an Amazonian.”

Oracle also charged the JEDI award was a violation of the 2008 Defense Authorization Act, which put controls on so-called “indefinite delivery, indefinite quantity” (IDIQ) awards.

These are government awards in which the contractor is essentially on standby to provide services “from time to time.” Such awards began to flourish after a 1994 law called the Federal Acquisitions Streamlining Act essentially limited the ability of rival firms to whine about it, when another company was given a fat IDIQ contract.

According to a later report by the Acquisition Advisory Panel, within a year after the passage of FASA, the government was spending more on services than on goods. Then, after 9/11, such contracts surged even more. The Department of Defense alone spent $141 billion on service contracts in 2005, a 75-percent increase from 1999.

The most infamous IDIQ award probably involved Halliburton in Iraq. In 2006, at a hearing on “lessons learned” from Iraqi reconstruction, Michigan Democrat Carl Levin testified about what Halliburton revealed about the inherent problems of IDIQ awards.

“That IDIQ contract,” Levin said, “lends itself to abuse because when we finally decide what work we want done … we will have no competition. As a result, we pretty much have to take whatever estimate the contractor offers.” Should Amazon win the JEDI deal, it would essentially become the Halliburton of the cloud. In the same way you couldn’t go to the bathroom in Iraq without seeing the name of former Halliburton subsidiary KBR, Amazon would be a ubiquitous digital presence in the Pentagon and the security services, making bank on an endless stream of services.

There have been charges that the deal was always rigged for Amazon. A pair of Republican congressmen, Steve Womack of Arkansas and Tom Cole of Oklahoma, complained the Pentagon wrote the award in such a way that only one company could get it.

They said the deal requires Defense Information Systems Agency Impact level 6. This highest level of cloud security is a requirement that only Amazon meets, reportedly.

The press also critiqued the deal. A Vanity Fair piece from August of last year argued the 1,375 page JEDI proposal “contains a host of technical stipulations” that would rule out all but a few companies. The magazine pointed to one requiring $2 billion in annual cloud revenues, for instance.

Around that same time, a 100-page privately prepared “dossier” began to circulate in Washington, alleging corruption on the part of Defense officials in their effort to hand Amazon the contract.

The stories surrounding this “dossier,” said to be prepared by the firm RosettiStarr (which has refused comment publicly) are remarkably similar to stories surrounding the Steele report. They suggest a private research firm has been spreading mysteriously sourced tales of corruption to reporters all over the capital, in the hope some of them would bite.

As with the Steele report, no one did bite initially, or at least “for months,” according to NextGov. That site eventually wrote a story of its own in December: “Someone is Waging a Secret War To Undermine The Pentagon’s Next Cloud Contract.”

In other words, both Trump and Bezos have stinging, privately prepared research reports about them and their businesses ping-ponging around Washington.

Each man is convinced the other is scheming against him. Trump believes Bezos (he calls him “Jeff Bozo”) and his minions at the “Amazon Washington Post” are helping lead the Russiagate charge against the White House. Bezos is meanwhile convinced Trump is behind recent attacks on his private life.

He has made this explicit since the National Enquirer ran an expose on the affair between Bezos and Laura Sanchez (an expose that triggered a divorce with Bezos’ wife of 25 years). Bezos accused the Enquirer, its parent company AMI and AMI chief David Pecker of being in league with Trump in an effort to blackmail him with texts and a “below-the-belt selfie.”

Bezos made the charge in a Medium post bearing the unfortunate headline, “No thank you, Mr. Pecker.”

A Daily Beast story claimed “investigators” from “Bezos’ personal security team” were looking at “various figures in the president’s orbit, who might have also had access to Bezos’ or Sanchez’s phones.” It’s come out that the investigation focused on Michael Sanchez, brother of Bezos’ paramour, who is a Trump supporter and supposedly has ties to Roger Stone.

All of which is interesting and also gross, but as the Verge put it recently, though it’s “plausible” that texts and photos were leaked to the Enquirer for political reasons, “there is still no direct evidence to that effect.”

The Bezos-Trump war has captivated Washington and paralyzed the public imagination with tales of far-reaching political conspiracies. So far, though, all we know for sure is that both men cheated on their wives incautiously enough that retch-inducing details about their genitalia have been foisted on the public through news reports.

The next presidential election is still two years away; Bezos-Trump is what we will live off for a while. It is the kind of grubby fight for power between unlikable oligarchs that populations in Third World countries are often forced to follow in place of elections.

If Bezos wins, he becomes the first plausible archetype for a real-world Big Brother, an unelected surveillance overlord with broad political and informational power. If Trump wins, that’s bad for reasons Rolling Stone readers hardly need explained. Somehow, I miss Wrestlemania.

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