Hasta La Gadget!

Starbucks had already mastered the art of doing business on multiple continents as it grew from a niche coffee retailer in Seattle into a global brand with thousands of outlets from Saudi Arabia to Peru. Now the company smelled a fresh opportunity that required a presence in mysterious territory with its own unique culture: Washington, D.C.

It was 2004 and Congress was considering a law that would provide substantial tax breaks to nearly any company engaged in manufacturing. Though this term conjured images of textile factories and steel mills, Starbucks argued that the definition of manufacturing should — for purposes of calculating its tax bill — be stretched to include the roasting of coffee beans.

Starbucks hired an outside lobbyist, Michael Evans of the Washington powerhouse K&L Gates, paying his firm $60,000 that year, according to lobbying reports. Evans was only a year removed from his previous incarnation as a top lawyer on the Senate Finance Committee, the panel that writes the nitty-gritty of tax law. At his urging, lawmakers soon delivered what became known as “the Starbucks footnote,” a clause added to a 243-page tax bill called the American Jobs Creation Act.

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