Trade Federation The Trade Federation was an interstellar shipping and trade conglomerate during the waning years of the Galactic Republic , one so powerful that it had its own representatives in the Galactic Senate . Viceroy Nute Gunray secretly allied with the Sith Lord Darth Sidious to invade the peaceful planet of Naboo and cause a crisis in the Republic government , although his occupation was thwarted by Queen Padmé Amidala and her forces . Escaping imprisonment , Gunray pledged his droid forces to the Confederacy of Independent Systems , and the Federation fought Republic and Jedi armies throughout the Clone Wars . Gunray and his fellow Separatist Council members were killed by Darth Vader at the end of the war , and the Trade Federation was nationalized by the newly - formed Galactic Empire . The Federation would often force planets into exclusive contracts , which in several circumstances gave them the ability to blockade planets and control system politics . History . Early Foundations . The Trade Federation was notoriously operated by members of the Neimoidian species , who were known for their business skills and cutthroat dealings . It became one of the wealthiest corporate organizations in the galaxy , and came to control a large portion of interstellar shipping passing through the Outer Rim Territories . It was given representation in the Galactic Senate of the Republic , and used its influential seat to lobby for greater power . Its ultimate goal was to control all galactic trade routes , ports , and freighter s , and was willing to do anything to increase profits and avoid Republic taxes . The Federation maintained exploratory craft during the last decades of the Republic ; Everi Chalis ' s mother attempted to sell her six - year - old daughter to the captain of one such craft , though the captain refused as Everi was too small , but gave her a packet of nectrose crystal s instead . The company also maintained droid manufacturing facilities on worlds including Akiva . The Federation was keen to protect its profit margins ; after the agricultural scientist Leo Leonis and his wife Tepha created genetically modified crops for the planet Chrona , the company let their inventions rot in warehouses for the benefit of its own profits . Within a year new crops were distributed , and the Republic settled the court case in the Federation ' s favor , despite testimony from Leonis himself . As of 34 BBY , the Trade Federation was a monolithic organization expanding its reach into the Outer Rim by utilizing loopholes in the Republic ' s Free Trade Zone legislation , and continued to increase its sway in the Senate . Galactic industrial conglomerates such as the Federation were responsible for an economic upswing for senator s , lobbyists , and entrepreneurs on Coruscant who placed themselves in the service of such groups . Determined to monopolize the Free Trade Zones , the Federation caught the attention of several lommite mining concerns in the Seswenna sector , and embroiled itself with the troubled King Veruna of Naboo . Association with the Sith . Prior to the Invasion of Naboo , the Federation came into contact with the Sith Lord Darth Sidious , who had a vested interest in the organization ' s projects and operations . Allying in secret with Sidious , the Federation attempted to establish mining facilities in the Kellux system , beyond the sanctions of the Republic , but their droid defenses were waylaid by a pirate faction which utilized electrostatic field generator s to render the droids inoperable . Sidious sent his Sith apprentice , Darth Maul , to assist the stranded Federation allies , and the Zabrak arrived in time to destroy a squadron of orb - wing s and board the captured Federation battleship over Kellux . He fought and killed the pirate s , and cut down the surviving Neimoidian s to prevent word from returning to Sidious . In response to Prop 31 - 814D , a Senate law which enabled taxation of the Free Trade Zones , and while following the orders of the manipulative Sith Lord Darth Sidious , the Trade Federation blockade d and invaded Naboo with its droid army . The invasion served as a pretext for Naboo ' s Senator , Sheev Palpatine — secretly the public guise of Sidious himself — to be elected Supreme Chancellor . During this period of time , the Trade Federation was headed by Viceroy Nute Gunray , who oversaw the invasion and installed himself in the Theed Royal Palace until Queen Padmé Amidala ended his occupation . Viceroy Gunray was arrested by Republic officials and sent to answer for his crimes , although he evaded imprisonment after multiple trials and retained his position as head of the Federation . However , the Federation ' s monopoly on Outer Rim shipping was broken due to the events of the Naboo invasion , and groups such as Eriadu Mining and Shipping prospered while the Separatist Crisis grew . Baktoid Armor Workshop approached Poggle the Lesser of the Geonosian s to design droid foundries on behalf of the Trade Federation . These factories were secreted under the surface of Geonosis , and mass - produced battle droid s to increase the Federation ' s armed forces . Clone Wars . A decade after the war on Naboo , the Trade Federation pledged support to the Confederacy of Independent Systems , becoming a major military benefactor during the Clone Wars . Publicly , however , the Federation denied all links to the Confederacy of Independent Systems , while maintaining a seat in the Republic Senate and officially taking a neutral stance in the conflict . During the Clone Wars the Trade Federation was often used by the Confederacy and the Sith as a puppet to drive more systems to their causes , though this was staunchly denied . When the Battle of Ryloth occurred , the Republic dispatched Senator Bail Organa and Representative Jar Jar Binks to request use of the planet Toydaria as a staging ground . Upon intercepting the transmission Count Dooku contacted Lott Dod of the Trade Federation to join the negotiations . During the negotiations , Dod stressed that Toydarian involvement with Republic supplies would jeopardize their neutrality , allegedly putting the Trade Federation at risk of attack by Separatist warship s . While the Federation was neutral , Gunray ' s position on the Separatist Council gave the CIS access to use of Federation fleet s . After Cad Bane had stolen a holocron , Gunray loaned a Federation fleet to assist him in killing Bolla Ropal and escaping the Republic . In the end the Federation fleet was destroyed , to Gunray ' s dismay . The Federation was an investor in a developing Geonosian droid foundry , which would produce new battle droids for the Separatist . The Federation had equity alongside in the factory , alongside the InterGalactic Banking Clan who helped finance the factory with collateral of Federation holdings ( if not also to finance other war projects ) . The Trade Federation blockaded the moon Pantora , claiming they were trying to suspend all trade after Pantora had not paid its debts . In actuality , the Federation was working alongside the Separatist Alliance to force the planet into the CIS . Federation officer , Sib Canay arranged for one of Chairman Papanoida ' s children to be held aboard his ship . Trade Federation involvement was uncovered by Ahsoka Tano and Senator Riyo Chuchi . Immediately following this , Dod issued a statement to the Senate that Sib Canay had arranged the kidnapping in his own accord , due to the Separatist ideology of Nute Gunray - reaffirming the neutrality of the Federation and attempting to distance themselves from endorsement of CIS idealism . One member of the Mandalorian Ruling Council was somehow affiliated with the Trade Federation . During a planetary supply crisis , Prime Minister Almec strongly refuted not relying on mega corporations like the Federation or Corporate Alliance . Nationalization and legacy . The Federation leaders were killed by Darth Vader at the end of the war on the volcanic world of Mustafar following the Outer Rim Sieges , and the corporation was nationalized by the newly formed Galactic Empire , while its accounts were plundered by Imperial financier and former Federation employee Arsin Crassus . During the era of the Galactic Empire , the Trade Federation was vilified by many ; Leo Leonis considered its epoch to be a bad dream , and instructors such as Tralls taught a version of the crisis on Chrona that suggested the Federation engineered a famine . Zare Leonis took issue with this version of events , although agreed that the Federation had ruined his family ' s work , and he was glad the company was no longer in business . Organization . A wealthy corporate organization , the Trade Federation was led by a Viceroy ; as of 32 BBY , Nute Gunray held this position , and directed the Invasion of Naboo . The Federation also maintained a seat in the Galactic Senate of the Republic , where it was represented by Senator Lott Dod . Behind the scenes . The Trade Federation was inspired by both the British East India company and the 17th - 18th century VOC ( " Vereenigde Oostindische Compagnie ) " , " " better known in English as the Dutch East India Company . Especially the latter had its own fleet ( one that rivalled most countries ' ) , the right to wage its own wars , negotiate treaties and hold colonies , and a near - monopoly on the extremely lucrative spice trade . The company , considered to be the first ever transnational corporation , would be worth around $ 7 . 4 trillion in modern - day dollars .