Apple Steps Up Lobbying in Washington Amid Push Into Health Apps

(Bloomberg News/TNS) -

Tim Cook recently traveled to an unfamiliar destination for an Apple Inc. chief executive officer: The U.S. Capitol.

During the trip last month, Cook posed for a photo with Sen. Orrin Hatch, the Utah Republican taking over the Senate Finance Committee this year. It was one of the meetings Cook had while in town, which also included a stop at Apple’s store in the Georgetown area.

Apple, which has come under increasing scrutiny as the world’s most valuable company, is becoming more of a regular around Washington. While co-founder Steve Jobs shunned the nation’s capital, Apple lobbied the White House, Congress and 13 departments and agencies from the Food and Drug Administration to the Federal Trade Commission in 2014 through the third quarter, according to OpenSecrets.org. In 2009, Apple lobbied only Congress and six agencies.

It’s all part of a broader push by Cook, who took the reins in 2011, to make the Cupertino, Calif.-based company more open while laying the groundwork for new products that naturally attract more government scrutiny. That includes Apple Watch, the smartwatch arriving in stores this year, which has applications that track user health data.

“They’ve learned what others before them have learned — that Washington can have a great effect on their business,” said Larry Noble, senior counsel at the Campaign Legal Center, a Washington-based nonprofit that scrutinizes money in politics.

Kristin Huguet, a spokeswoman at Apple, declined to comment for this story.

Apple’s spending in Washington remains small compared with other technology companies. Microsoft Corp., which faced an antitrust trial in the late 1990s, spent $6 million last year through the third quarter in Washington, according to OpenSecrets.org, a website that tracks spending. Google Inc. is the biggest technology spender after grappling with its own antitrust scrutiny, with $13.7 million in U.S. lobbying costs in 2014 through the end of September. In that same period, Apple spent $2.9 million.

Apple’s expenditures on Washington lobbying last year were on pace to top 2013’s record $3.4 million, which was already twice as much as what the company spent five years ago, according to OpenSecrets.org.

As the company’s Washington spending has risen, Apple has staffed up in the capital.

Cook himself testified for nearly two hours before Congress in May 2013 over Apple’s use of offshore tax shelters, using the occasion to call for a simplified U.S. tax code.

“We have never had a large presence in this town,” he told senators, before they peppered him with questions about the company’s tax strategies that had left billions of dollars overseas.

Apple’s increasing activities in Washington now offer a window into some of the company’s plans. In December 2013, four Apple vice presidents — including Jeff Williams, of operations, and Bud Tribble, of software technology — met with FDA Commissioner Margaret Hamburg and her staff about mobile medical applications. FDA officials told the Apple executives that they regulate based on the intended use of a device.

A glucometer, which measures glucose levels, may be unregulated if used to measure blood sugar to promote better nutrition. But if it’s marketed for diabetics it’ll likely be regulated, Apple executives were told, according to an FDA memorandum of the meeting that Bloomberg News obtained through a Freedom of Information Act request.

“It’s not unusual for a company that’s a device company to go meet with FDA, and I think Apple is becoming a device company,” Jeffrey Gibbs, a lawyer at the Washington-based firm Hyman, Phelps & McNamara, said in an interview. “The FDA doesn’t want to be surprised, especially if you’re a very prominent company like Apple.”

Jennifer Haliski, a spokeswoman for the FDA, declined to comment on the meeting.

Apple is trying to be more proactive to quell concerns. After the company unveiled Apple Watch and a digital-payment system called Apple Pay in September, Sen. Claire McCaskill, a Democrat from Missouri, and now-retired Sen. Jay Rockefeller, a Democrat from West Virginia, sent a letter to Cook seeking more information about how Apple would keep users’ data safe. It was one of several inquiries that the company got at the time, after high-profile hackings of photos from Apple’s iCloud accounts.

“The recent data security incidents that have affected major corporations, including Apple, demonstrate the need for such federal legislation,” the senators’ letter said.

In September, Apple sent executives to brief staff members of the House Energy and Commerce Committee, whose chairman is Fred Upton (R-Mich.), about its new products, and included a discussion about Apple’s smartwatch, mobile-payment system and health-care initiatives, according to a person familiar with the briefing.

Upton’s committee didn’t respond last week to a request for comment.

“The big question is: Is Apple finally getting it?” said Chris Jones, founder of CapitolWorks, a lobbyist recruiting firm. “Yes, they are. They’re understanding there needs to be a proactive outreach on Capitol Hill and a proactive outreach to the administration.”