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Trump's Head Is in Amazon's Cloud, and Bezos Knows It

Joe Nocera

(Bloomberg Opinion) -- Dana Deasy, it’s fair to say, has a sterling reputation as a chief information officer. He first took on that role in 2003 at the age of 44, when he became the CIO of Tyco International Ltd. He has also been the CIO at BP PLC, GM North America, and JPMorgan Chase & Co., where he managed 40,000 technologists before retiring in 2017. He was inducted into the CIO Hall of Fame in 2012 and the International Association of Outsourcing Professionals Hall of Fame in 2013. You get the picture.

Since May 2018, Deasy has been the Department of Defense’s CIO. It’s a huge, important job. His group manages cybersecurity for the department and works on artificial intelligence and machine learning. It also works to make sure troops in the field have the data they need at their fingertips. It is in the middle of a desperately-needed digital modernization effort, which includes moving the Defense Department to cloud computing. (Just last week, Forbes reported that the department controlling U.S. land-based nuclear missiles had only recently stopped using 8-inch floppy disks.)

Yet on Tuesday morning, at a Senate Armed Services Committee hearing, Deasy found himself, for probably the first time in his career, having to answer questions about the integrity of his office. You see, it was Deasy’s office that last week awarded a $10 billion cloud computing contract to Microsoft Corp. instead of Amazon.com Inc.

Amazon’s web services division is far and away the leader in cloud computing and was generally assumed to be the favorite. More importantly, in 2013, Amazon had landed a $600 million contract to build a cloud for the Central Intelligence Agency. It has been working with top secret data for years, and already having proper clearances presumably gave it a leg up over rivals.

But, of course, there was one person in the federal government who really didn’t care if Amazon was best for the job. President Donald Trump had made it no secret of that he preferred another company — any other company — to get the contract over Amazon. In his nearly three years in office, Trump has frequently gone after Amazon, presumably because its chief executive officer, Jeff Bezos, also owns the Washington Post, a paper Trump loathes.

The Defense Department contract was originally supposed to be awarded in August. But shortly before the expected announcement, Trump weighed in. “I’m getting tremendous complaints about the contract with the Pentagon and with Amazon,” Trump told reporters. The contract hadn’t been competitively bid and the terms were stacked in Amazon’s favor, he complained.

(We also now know, thanks to a new biography(2) of former Defense Secretary James Mattis, that Trump directed him to “screw Amazon” out of the contract in the summer of 2018. Mattis told those making the decision to ignore Trump’s directive.)

Then, in late September, the White House asked the new defense secretary, Mike Esper, “to review the contract after President Trump expressed concerns that the award would go to Amazon,” as the Washington Post put it. The Post reported on October 22 that Esper had recused himself from the review because, he said, his son worked for one of the bidders, International Business Machines Corp. (IBM had already been eliminated, however.) Four days later, the Defense Department announced that Microsoft had won the contract.

Is this starting to sound familiar? Think back to some of the moves by the Justice Department’s antitrust division under Trump: It tried to bust up AT&T Inc.’s merger with Time Warner Inc. while letting the merger of the Walt Disney Co. and 21st Century Fox Inc. sail through. It stretches credulity to believe that it is purely a coincidence that Time Warner’s CNN unit is another media outlet Trump hates while Fox is owned by Trump’s biggest media ally, Rupert Murdoch.

More recently, the antitrust division embarked on a truly ludicrous investigation of auto companies that chose to side with California in its dispute with the Trump administration over auto emissions.

Americans need to have faith that federal agencies are acting without bias — and especially that they are not doing the bidding of a president who wants to weaponize the agencies to harm his enemies and reward his friends. It’s hard to have that faith with Trump in charge.

And so it is when looking at the Defense Department contract. Maybe because of his prior reputation Deasy didn’t face harsh questioning, but a few Democrats did ask the operative question: Did the president’s desire to keep Amazon from getting the contract play a role in the decision?

Not surprisingly, Deasy said no. The team evaluating the bids were kept anonymous so no one could influence them, he insisted. “Never in my discussions with the deputy secretary of defense or the secretary of defense…did I divulge who the awardee was,” he said in the hearing. “To the best of my knowledge,” he added, “no one from the White House contacted any member of the source selection team.” The Democrats at the hearing seemed mollified by his response. But they’ll never really know. Nor will the country.

There is a decent likelihood that Amazon will try to get the decision reversed, either by appealing to the General Accounting Office or by going to court. Whether or not Trump was involved, the perception that he was will be a key part of Amazon’s appeal.

And yet another federal agency will see its reputation stained by that perception — whether it’s true or not. 

(1) The book is titled, “Holding the Line:Inside Trump’s Pentagon with Secretary Mattis.”

To contact the author of this story: Joe Nocera at jnocera3@bloomberg.net

To contact the editor responsible for this story: Timothy L. O'Brien at tobrien46@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."

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