Google’s 8th Ranked Lobbying Machine Takes on Spy Debate

Google Inc. (GOOG) is moving its Washington office closer to Capitol Hill after spending $18.2 million on lobbying, more than Northrop Grumman Corp. (NOC) and enough to rank the technology company as the eighth-biggest advocacy spender.

It’s an investment that’s already paying off in increased influence. Google has hired lobbyists and boosted political giving on its way to wins at the U.S. Federal Communications Commission and Federal Trade Commission, and it has entrée to the White House where an employee on leave is helping fix the ailing Obamacare website.

The buildup from an office with two lobbyists 10 years ago to one now with at least 11, and the resulting web of connections, will help as Google seeks to end National Security Agency intrusions into its data that the company calls an “outrage.”

“Google has put itself in the position of being heard when they need to be heard,” Jeffrey Birnbaum, president of BGR Public Relations, a Washington-based media strategy firm, said in an interview. “Decision makers at least know what Google is thinking and what policies it prefers.”

The operator of the world’s most popular Internet search engine has learned a lesson that Microsoft Corp. (MSFT) absorbed the hard way, when neglect of Washington in the 1990s preceded an antitrust lawsuit.

Google adopted the tools for gaining influence: campaign cash, attentive lobbyists and friends on both sides of the partisan divide. Last year the Silicon Valley company hired former Republican Representative Susan Molinari to lead its Washington office, and Chairman Eric Schmidt was a high-profile contributor and backer of President Barack Obama’s re-election.

Need Lobbyist

“Really it just mirrors what Microsoft learned,” Melanie Sloan, executive director of the watchdog group Citizens for Responsibility and Ethics in Washington, said in an interview. “Silicon Valley has had this view that Washington is irrelevant, and what they do is the future. Eventually you realize that may be what you think in your heart of hearts, but you’re still going to need a lobbyist.”

Google passed two Washington power tests when it escaped an FCC probe in 2012 of improper data collection with a $25,000 fine, and the FTC dropped an antitrust probe in January. Now lobbyists for the company are working on protecting its reputation amid revelations about U.S. spying.

Google was “outraged” after a report the NSA intercepted data from its networks, David Drummond, the Mountain View, California-based company’s top lawyer, said in a statement Oct. 31. The incident, detailed by the Washington Post, “underscores the need for urgent reform,” Drummond said.

Spying Outrage

The NSA’s spying is “not OK” and “perhaps illegal,” Schmidt said in an interview with the Wall Street Journal published yesterday.

Google is asking Congress for the ability to publicly release how often technology companies turn over customer data in response to government orders. Companies joining in the push to provide more transparency to its customers include Facebook Inc. (FB), Apple Inc. (AAPL), Microsoft and AOL Inc. (AOL)

“Assertions in the press that our compliance with these requests gives the U.S. government unfettered access to our users’ data are simply untrue,” Drummond said in a June 11 letter to Attorney General Eric Holder and Robert Mueller, then head of the Federal Bureau of Investigation.

Related: Google Takes Its Anti-NSA-Spying Show on the Road

Obama’s administration opposes allowing the companies to reveal data about government orders. The Justice Department in a court filing said allowing the companies to disclose statistics on surveillance orders would help adversaries.

The NSA director, General Keith Alexander, said the agency hasn’t infiltrated the servers of Internet companies such as Google and Yahoo! Inc. (YHOO)

Lobbying Force

An independent privacy board that’s reviewing court-authorized NSA programs may recommend reducing the agency’s ability to retain and mine bulk phone records to three years from five years, the panel’s chairman, David Medine, told reporters in Washington yesterday.

The Privacy and Civil Liberties Oversight Board, which was created by Congress, also may recommend that foreigners have more privacy protections under a NSA program that intercepts e-mails and other Internet communications, Medine said.

To make its case, Google can rely on its lobbyist corps along with a host of outside advocates also on its payroll. The company contracted with 20 firms in the three-month period that ended Sept. 30, lobbying disclosure documents show. Google subsidiary Motorola Mobility, a smartphone maker, accounted for $1.7 million of the 2012 lobbying bill.

‘Massage Chair’

The workers soon can use a 55,000-square foot office less than a mile from Capitol Hill. That’s about half the distance of the office that Google occupied in 2008, when it issued a blog posting touting “signature Google touches like a massage chair, lava lamps, and a game room (with, naturally, Republican and Democratic foosball teams).”

It’s a change from 2003, the year Google first registered federal lobbyists. Then, it spent less than $100,000 and relied on two lobbyists, both employees of the firm Public Policy Partners LLC, according to lobbying disclosure documents.

For the 2012 elections, Google employees and groups donated $3.8 million to political campaigns, including $802,000 to Obama and $40,000 to his Republican opponent, Mitt Romney, according to the Center for Responsive Politics. Google’s political-giving committees distributed $876,000 roughly equally to Republicans and Democrats.

Niki Fenwick, a spokeswoman for Google, declined to comment in an e-mail. Google dropped $4.59 to $1,021.52 at the close of trading in New York.

‘Caught Up’

“They have caught up” after a slow start in Washington, John Feehery, a former Republican leadership aide in the House, said in an interview. “From their reputational standpoints, they have to be strong in condemning NSA. They can’t be seen as puppets.”

Google joined Red Hat Inc. (RHT), Oracle Corp. (ORCL) and other technology companies contributing computer engineers and programmers to help the Obama administration fix the U.S. health-insurance exchange website created under the 2010 Patient Protection and Affordable Care Act. A Google worker on leave is participating.

That may build goodwill with the administration even as Google takes on the NSA, yet it may carry risks in Congress.

To the extent Google helps the White House, it may irritate Republicans, Feehery said. He cited the example of General Electric Co. (GE) Chief Executive Officer Jeffrey Immelt heading a jobs panel for the Obama White House.

“Republicans look at that and say, ‘OK you’re helping Obama - what in the hell are you doing?’” said Feehery, who is president of QGA Public Affairs. “It could definitely cause friction on the other side.”

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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