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By Sam Skolnik
Amazon.com Inc. has been in talks with several Homeland Security Department component agencies in the hopes of striking deals to sell AmazonFresh groceries to federal immigration detainees and provide lockers at airports, according to an email obtained by Bloomberg Government.
DHS has started buying goods through Amazon Business by way of a centralized agency account. This occurred after Amazon alerted DHS in April 2016 that agency officials already had thousands of separate accounts with Amazon and Amazon Business, the company’s business-to-business unit.
Amazon is now seeking to grow its relationship with DHS in a variety of ways, according to 114 pages worth of emails obtained in response to a Freedom of Information Act request from Bloomberg Government that sought answers to two earlier FOIA requests filed by government contracts consultants Larry Allen, president of Allen Federal Business Partners, and Ray Bjorklund, president of BirchGrove Consulting.
“I’m not saying it’s good or bad,” Bjorklund told Bloomberg Government regarding an expanded relationship between Amazon and Homeland Security. “But I hope DHS spends enough time thinking about this to ensure openness and transparency.”
The fact that Amazon might be first to the market with novel ideas, while possessing a powerful platform, “shouldn’t close the door to competition,” Bjorklund said.
DHS officials also have found that workers at the Federal Emergency Management Agency, and apparently other DHS components, have been making purchases with their own credit cards for personal use — against DHS policy, the email trove revealed.
Using an account to buy goods wasn’t the only way DHS could benefit from a relationship with Amazon, Amazon Business executive Kelly Gegich wrote in a March 10, 2017, email to a DHS official named Robert—the rest of his name was redacted.
“We’ve heard from a variety of components about their interest in other services that Amazon provides,” Gegich wrote.
According to Gegich, they include:
Amazon spokeswoman Lori Torgerson declined to comment on the status of the project ideas mentioned by Gegich.
“We regularly communicate with a variety of Amazon Business customers regarding opportunities to leverage our consumer offerings in their own business environments,” Torgerson told Bloomberg Government in a written statement.
The notion of AmazonFresh delivering groceries to ICE detainees could quickly raise several issues for the agency.
There’s the issue of price — concerns about high-end grocery runs being made to federal immigration detainees — and whether such a deal would be in the best interest of taxpayers.
In the wake of Amazon’s purchase of Whole Foods, the AmazonFresh delivery service reportedly boasts more than 800 items from Whole Foods’s in-house brand. Though Whole Foods’s prices generally have decreased in recent weeks, according to reports, the chain has consistently suffered a reputation as offering overpriced groceries.
Amazon’s competitors have raised concerns about early versions of the online marketplace provision in the National Defense Authorization Act. The concerns that Amazon unfairly stands to benefit with the lion’s share of profits could be raised again, Bjorklund said.
There’s a risk in turning one or more of these ideas into a “monopoly situation,” he said.
The FOIA documents include several exchanges in which questions were raised about workers using their own credit cards to pay for items off of Amazon Business’s DHS account for their “personal use.”
In one April 10 email exchange that appears to be between several DHS officials — with some of the names redacted — a DHS accountant named Marie Beatriz Dreuth was asked, “Can Amazon Business be used to make purchases using their personal credit card?”
A second official, whose name was redacted, responded, “No, they can’t use AB for personal purchases using their credit card.”
This prompted the first official to reply, one minute later, “I did not think so. But I have discovered that folks are using their personal credit cards.”
In a separate exchange that day, an unnamed DHS official asked Peter Donnelly, who appears to be a Chicago-area based Amazon official, whether there was a “plan or process” to deal with the issue. Donnelly suggested that DHS officials reiterate that all purchases are visible to DHS management.
Usually that “discourages rogue spend as customers do not want their personal shopping habits being reviewed by their employer.”
A DHS spokeswoman didn’t respond to questions by deadline.
The FOIA emails make clear that some DHS officials have balked at the increased role of a private company like Amazon taking over what used to be governmental functions.
An unidentified DHS official expressed concern in a February email exchange about complying with the Trade Adjustment Assistance Reauthorization Act of 2015. At the same time, the official broached a broader concern:
“We are worried about TAA compliance, sourcing concerns, amongst other things,” the official wrote, “and didn’t think that Amazon would ever be a player in the Government space.”
To contact the reporter on this story: Sam Skolnik in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Daniel Ennis at email@example.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
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