$500K Taxpayer-Funded Subsidy Directly Benefits Google, Tech Giants

Companies have close access to the Obama White House

Google, Alphabet
December 1, 2016

Multi-billion dollar tech giants with close access to President Obama's White House, including Google, are benefitting from a $500,000 taxpayer-funded subsidy that was funneled by the National Science Foundation (NSF) to the Massachusetts Institute of Technology, according to a report released Monday by Sen. James Lankford (R., Okla.).

The government grant, brought to light in Lankford's report titled "Federal Fumbles: 100 Ways the Government Dropped the Ball," details the half-million dollars in federal assistance provided by NSF to MIT in 2015 to perform research on a new method to "design a datacenter's computer network" to help tech companies such as Google, Facebook, and Apple. This new method, known as Flexplane, is said to provide better customization in datacenters to benefit the companies in the future.

The companies are reaping the benefits of the taxpayer-funded research despite combining to pull in hundreds of billions in revenue. In 2015, Google's revenue sat at $74.5 billion as Facebook recorded $17.93 billion in revenue. Apple showed earnings of $234 billion.

The report states that each of these companies invested to build new datacenters around the country. Google, for example, is in the process of building a $600 million datacenter in Dallas while Facebook recently started construction on a $500 million center located in Ft. Worth.

"Over the last several years, these companies invested their money to design and build new datacenters around the country," the report states. "Earlier this year, Microsoft announced it would build a new center in Iowa at a cost between $1.5 and $2.5 billion. Google is currently constructing a $600 million center in Dallas, and Facebook broke ground in July on a $500 million datacenter in Ft. Worth. It was announced earlier this year that Apple is currently building three new datacenters in the United States and Europe at a total cost of $3.9 billion."

The tech companies benefitting from the government-funded research enjoy close access to the Obama administration.

Eric Schmidt, the executive chairman of Alphabet, Google's parent company, has established a close relationship with President Obama. Schmidt also worked with Hillary Clinton's campaign during the 2016 election.

Staffers from Google and its affiliates have visited the White House more than 420 times since Obama took office, according to a report released earlier this year. Google's top lobbyist, Johanna Shelton, has made 128 trips to the White House between 2009 and the end of 2015. The company has said that the topics discussed during the meetings spanned from Internet censorship, patent reform, cyber security, and STEM education to self-driving cars.

Sheryl Sandberg, the chief operating officer of Facebook, has bundled $78,500 for Obama's 2008 and 2012 presidential campaigns. Facebook CEO Mark Zuckerberg has visited Obama on a number of occasions. Zuckerberg was also seated at the head table with President Obama and First Lady Michelle Obama at a dinner honoring Chinese President Xi Jinping in 2015.

Tim Cook, the chief executive officer of Apple, donated $2,300 to President Obama in 2008 and has visited the White House numerous times to speak with officials. Cook and Lisa Jackson, Apple's government affairs chief, were also placed at the head table alongside Zuckerberg at the dinner with Xi Jinping.

Google, Facebook, and Apple did not immediately return requests for comment on the taxpayer-funded research.