Virginia, Amazon & FOIA

This piece originally appeared in the Virginia Mercury, Nov. 21, 2018.

How hard a bargain did Virginia drive on Amazon? Secrecy pledge could make it tough to find out

by Megan Rhyne

Imagine if you were sitting down to dinner tonight and your spouse said she had something really important to talk with you about.

You’re not totally surprised by this because she’s been gone a lot, taking whispered phone calls, sending late-night texts. But you still don’t really know what might come next.

“SURPRISE!” she exclaims. “We’re moving to Boston!”

She says she’s been in talks with this great company there and they’re going to pay her twice as much as she’s making now, so long as she meets certain goals each year. “They’re giving us a housing allowance, a company car and the keys to the executive washroom,” she says.

She starts next month and the movers are coming in two weeks.

Isn’t this great?

Anticipating your next question, she adds that she didn’t tell you because the company was trying to choose between her and another candidate and she was afraid that if word got out about her salary demands, the goals she agreed to or whether she’d sign a non-compete clause that the other candidate could undercut her.

But it’s all good, right?

This may be the best opportunity that has ever come your family’s way. Ten years from now you may find yourself wondering why you even hesitated.  But right now, you’re feeling kind of blindsided.

Announcements of economic development deals can have that same impact on the public. And certainly that’s how many are receiving the news of the Amazon HQ2 deal with Virginia.

This is the largest economic development project in U.S. history, we’re told. It’s coming at the perfect time for Virginia’s public universities. It’ll generate jobs, millions of dollars.

Isn’t this great?

Yes, it may be. It may be the best opportunity ever to come the commonwealth’s way, and 10 years from now I may wonder why I even hesitated.

But the announcement has come with a cost. Not in dollars and cents but in trust and transparency.

For nearly two years, local and state governments across the country have been coy about the proposals they put together when Amazon opened up the headquarter sweepstakes. In Virginia, citizens were told they’d have to wait until a final announcement was made. At least one locality wouldn’t even confirm whether or not they’d submitted a proposal.

Without access to these early proposals, it’s more than a little difficult to evaluate how Virginia fared. Without knowing what was offered, it can’t be known what was given up.

What was non-negotiable, what was refused, what was accepted in exchange for something else?

When it comes to transparency, these questions become particularly acute. The Virginia memorandum of understanding makes clear that Virginia is to strictly guard Amazon’s trade secrets, something that’s already addressed in the Freedom of Information Act.

But the MOU goes a step further by requiring Virginia to let Amazon know of a records request within two days so that Amazon can decide whether to seek a protective order against release. Virginia is to “cooperate” with Amazon when responding to requests and it must “limit disclosure, refuse to disclose and redact and/or omit portions of materials to the maximum extent permitted by applicable law.”

Amazon, Facebook, Apple and other tech companies have used similar provisions when sealing economic development deals in other states. But there is no comparable provision in Amazon’s MOU with New York, where the other half of the new headquarters will be located.

This raises the question then of whether Amazon suggested the public records provision to both Virginia and New York but only Virginia agreed to it. Why did Virginia agree to let a company put its finger on the scale when balancing the public’s right to know but New York did not?

Because we will want to know.

Economic development projects are built on high hopes and expectations. Promises of jobs and revenue are made in exchange for incentives. The primary way for the public to assess the value and effectiveness of those incentives is through access to public data.

In Los Angeles, a Canadian bus manufacturer sued the city to prevent it from releasing records related to the company’s job-creation and living wage performance, two core aspects of a development deal inked with the city that were widely trumpeted.

Last year, a court ordered the city to disclose the records.

Could the public-records provision in Virginia’s MOU lead to a similar showdown, one in which the company sues to prevent the release of performance data? How can the public independently monitor the company’s promises?

The Virginia MOU refers to JLARC’s oversight, but true transparency and citizen rights under FOIA, is not based on having to take the government or Amazon’s word for it. Public records let the public see for themselves.

In Oregon, public records revealed the state had wrongly awarded millionsin state tax credits to a green energy firm. The bribery and fraud scheme evenutally led to criminal convictions.

Citizens do understand the importance of economic development deals, and Virginians — not just those in the area-formerly-known-as-Crystal-City — will likely reap many benefits from the deal.

But citizens are also suspicious of done-deals, especially those that favor business confidentiality over the public’s interest in accountability.

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