Limits to Transparency in Amazon Deal

Passage contained in Freed tweet

The Commonwealth of Virginia has set new standards of transparency in disclosing the details of its agreement with Amazon, Inc., to build a massive new facility in Arlington and Alexandria with some $2.5 billion in public inducements. But there may be limits to that transparency.

Benjamin Freed, technology editor of State Scoop, tweeted yesterday that the Virginia-Amazon agreement grants Amazon a big exemption from the Freedom of Information Act. He cited the following passage:

The Company acknowledges that this Memorandum is a public record subject to disclosure under the Commonwealth’s public records laws, and that portions of certain materials, communications, data, and information related to this Memorandum may constitute public records subject to disclosure under the Commonwealth’s public records laws and agrees that [the Virginia Economic Development Partnership] and the Commonwealth will disclose this Memorandum. … (a) except as to the disclosure of this Memorandum, give the Company prior written notice sufficient (in no less than 2 business days) to allow the Company to seek a protective order or other appropriate remedy. …

Furthermore, VEDP and the Commonwealth will “(c) cooperate with the Company in responding to any such records request, and (d) limit disclosure, refuse to disclose, and redact and/or omit portions of materials to the maximum extent permitted by applicable law.”

“How is it justified that Richmond will be protecting a private company from governmental transparency?” asks Ken Stiles, who brought Freed’s tweet to my attention.

Good question. I can presume only that the exemption was granted to protect Amazon’s proprietary business information. Respecting the confidentiality of proprietary information is standard practice in the economic development profession. Without such guarantees, business enterprises might refuse to do business. In this instance, it appears that state officials actually extracted a concession from Amazon — the company must go to court within two days and file an injunction. In other words, the company must persuade a judge that it would suffer damage from the release of information.

My understanding is that proprietary data from companies involved in economic-development deals normally aren’t subject to FOIA at all, under any circumstances. The magnitude of the Amazon deal — some $2.5 billion in public funds — may warrant a different standard. I invite readers to weigh in on whether the concession written into the Virginia-Amazon agreement sufficiently protects the public interest.

Update: Megan Rhyne, executive director of the Virginia Coalition for Open Government, argues in The Virginia Mercury that the agreement represents a step backwards for transparency. The MOU not only protects Amazon’s proprietary information, but the two-day heads up to Amazon in FOIA filings represents a concession to Amazon, not a concession from Amazon.

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16 responses to “Limits to Transparency in Amazon Deal

  1. ” I can presume only that the exemption was granted to protect Amazon’s proprietary business information.”

    That’s correct. All reporting of the company’s performance under the MOU (e.g., jobs, wages) will be made public on a regular basis — the same as for all other companies that receive discretionary incentive grants administered by VEDP.

  2. Since you brought it up, Mr. Moret, one of those reports that I have cited in the past is no longer available at the link where it was last spring. One of my first BR posts made reference to it, but I went back to that post to find that report and the link was dead. I think it is referred to as the HB1191 report. Where is it posted now? About time for an update….

    https://www.baconsrebellion.com/wp/development-grants-performance-data/

  3. I’m not going to argue the merits or dangers of the Amazon deal but the “exemptions” granted Amazon are cause for concern, and I speak from experience. In the not too distant past I filed a FOIA request for documents regarding an application by one of Amazon ‘s wholly owned subsidiaries. The initial response was a broad denial of virtually everything requested including materials that were publicly available on the jurisdiction’s website. After considerable back and forth that revealed both a letter from Amazon’s attorneys requesting denial of my request and other correspondence from the jurisdiction that was being copied to the email addresses of several of Amazon’s corporate officers, I was forced to deliver a courtesy copy of a writ I intended to file with the circuit court. Needless to say, that opened the floodgate and documents poured forth, none of which met the criteria for withholding. Let’s see how long it takes someone to test this agreement.

  4. If you think any other major company would behave in a different fashion, you’d be wrong. Step One is always the stone wall. Lawyers don’t get bonuses for saying yes. This particular provision does not really annoy me and I read elsewhere it has been used before in Virginia.

  5. Didn’t say it was wrong, I’m simply not a fan of its use to withhold (at least initially) info or data that should otherwise be routinely provided. BTW, I don’t really blame the jurisdictions or the Commonwealth, these agreements are usually the work of the economic development weasels who would prefer nobody see what they are really doing behind the curtain, or on certain taxpayer paid junkets to Seattle.

  6. So, if someone submits a FOIA request to a Virginia college about a professor, does that Prof get a two-day warning? What about a Delegate? A Senator?
    Or does this apply to just one of the richest monopolies in the world, which gives millions of dollars to the politicians?

    • Yes, far more than a two day warning. As the person who reviewed all FOIA requests to the Office of the Attorney General for four years, there was ample time to frame a reply after internal consultation, and disclosure issues are taken to courts for decision all the time. I’ve also been involved in private company dealings with local government where the company had sensitive data it didn’t want subject to FOIA. The contract set out above does not in any way override existing law that I can see, and it couldn’t anyway. Tis Much Ado….

    • Julie – I think somewhere in between. It applies to any person or company with sufficient money to get our state legislature hyperventilating over the chance to tap yet another vein of legalized graft.

      • For somebody who wants this deal you are being very cynical, DJ. What would you be saying if you wanted the GA to spike it? 🙂

        • Haha. Corruption is eternal in Virginia. In this case a decent deal was done even with the corruption. To me – the question of institutionalized corruption is separate from the Amazon deal.

  7. re: ” Corruption is eternal in Virginia”

    I simply don’t know but would ask if this deal with Amazon is handled any differently in other states .

    Is what Virginia doing pro-forma for most states or is Virginia an egregious example of hiding info?

    My sense is that most economic development – by it’s nature is “cloaked” and it is an arguable point but let me as folks if they have ever been to or listened to a Board of Superviors meeting where they go into closed session to discuss an economic development proposal and they are following the law – they cite the code.

    Is that “institutionalized corruption” ?

    Should the law, instead, require any/all communication and correspondence to be available to the public?

    Or do you think there are some areas that govt the govt and private sector can keep without releasing?

    So I have a feeling that by asking folks these specifics that I’m going to get a lot of different views including perhaps some that will say that no parts of any negotiation should be secret – all of it should be out in the open from day 1 or else it really is “corruption”?

    Here is the State Code pro-forma narrative that is read:
    ” WHEREAS, the Spotsylvania County Board of Supervisors desires to adjourn into a Closed Meeting for a discussion of the award of a public contract involving the expenditure of public funds, including interviews of bidders or offerors, and discussion of the terms of scope of such contract, where discussion in an open session would adversely affect the bargaining position or negotiating strategy of the public body,”

    variations of the above are used when negotiating an ED proposal…

    so the question is – is this basically legalized “corruption”

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