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Monday, February 5, 2018

Amazon Wasn't First Tech Giant to Get Ohio's 'Code Name' Treatment

Posted By on Mon, Feb 5, 2018 at 1:30 PM

click to enlarge PHOTO BY MIKE SEYFANG/FLICKR
  • Photo by Mike Seyfang/Flickr
On July 31, 2017, state officials approved $37.1 million in tax incentives for a Facebook project that would bring a $750 million data center and 50-100 permanent jobs to New Albany, a Columbus suburb that Cleveland.com once called “tony.”

The deal was hashed out in secret over four months by the state’s privatized economic development agency JobsOhio. And in public communications about the deal, including press releases up until the day of the groundbreaking, Facebook was referred to by a silly code name: “Sidecat.” Governor John Kasich was shoveling ceremonial dirt for a photo op with other development executives before the public had any clue what was going on.

What was going on: Facebook landed subsidies to the tune of $742,000 per guaranteed job in one of the state’s most affluent communities.

Parts of this arrangement should strike a familiar chord with Cleveland residents. We learned, last month, that the region’s bid for Amazon’s second headquarters also had a silly code name: “Conway.” The use of code names is, in large part, a measure to shield companies’ identities and to obscure public disclosures on their business dealings when they seek tax breaks and other incentives that the public might reasonably question. It’s also in keeping with a disturbing regional preference for secrecy and a larger trend in which big companies — specifically tech giants — control and restrict the dissemination of public information.



A report last week in the Columbia Journalism Review about the New Albany Facebook deal showed how big tech companies skirted public records laws to avoid scrutiny. The usage of code names and subsidiaries was just one obvious example.

“When Amazon negotiates to open a data center, it is rarely, if ever, identified directly as Amazon,” wrote reporter Mya Frazier, a native Ohioan. “Instead, the tech giant negotiates with local officials through its wholly owned subsidiary Vadata, Inc. This makes it difficult for local citizens to immediately know that Amazon, a company worth $656 billion, is the real beneficiary of such generous tax breaks.”

In the Ohio Facebook deal, Frazier was particularly concerned with public records policies. Facebook’s contracts included provisions requiring that the public entity (the state of Ohio) make Facebook aware of all records requests when they were filed. The public entity was also required to give Facebook three days before it filled the request. Amazon has made similar “heads up” demands in its contracts.

Records experts and policy analysts described these provisions as “hostile” and “fundamentally wrong.” But in Cleveland, eyelashes have remained unbatted at provisions like these. Elected officials have been far too willing to submit to private demands in the interest of so-called economic development.

Whether at Amazon’s behest or their own, for example, leaders intentionally gave control of the HQ2 bid to private agencies — Team NEO and the Greater Cleveland Partnership, the region’s chamber of commerce — in order to circumvent public records requests. Though Cleveland was not named as one of the 20 finalists for HQ2, the public and private agencies still have refused to release the bid, claiming its contents are protected trade secrets. Cleveland.com is currently seeking reports produced by the Northeast Ohio Areawide Coordinating Agency for the bid.

Meanwhile, Amazon has clamped down on its finalist cities, requiring that they be even more secretive about ongoing negotiations. In Pittsburgh, one of the 20 finalist cities, members of the team working to attract HQ2 were required to sign new non-disclosure agreements. Further, Amazon requested to only speak with one person moving forward, limiting information flow further still.

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