News: CJ Exclusives

Status of Boeing Records Disputed

Attorneys call for improvements in state's public-records law

Carolina Journal’s attempt to gain access to records on the Boeing-GTP incentives began Dec. 19 with a phone call to the Commerce Department’s Linda Weiner, assistant secretary for communications and external affairs. Weiner said that some of the information would be made available, as allowed under North Carolina’s Public Records Law, after the Christmas and New Year’s holidays. She also said that much of the records were confidential, such as trade secrets pertaining to Boeing, that were exempt from the public records law.

Carolina Journal followed up its telephone call with a letter on Dec. 29 again requesting the information. Weiner responded with a letter. “As you and I discussed during our phone conversation of Dec. 19, 2003, the records you have requested relate to an economic development project involving private industry. Such records often contain confidential information protected from public disclosure under various provisions of the North Carolina Public Records Act,” she wrote. “As you know from our conversation, the NC Department of Commerce is currently in the process of reviewing and evaluating records relating to this project to identify those records, which may be released consistent with the confidentiality provisions of the Act. Now that we have your records request, we will contact you as soon as this records review process is completed.”

After having failed to hear from the Commerce Department as of early February, CJ hired a law firm to gain access to the records. A legal complaint accompanied by a letter was delivered to Secretary of Commerce Jim Fain on Feb. 5. Don Hobart, a Commerce Department lawyer, responded that he hoped the redacted records could be made available Feb. 11 or Feb. 12. But first, Commerce officials, he said, needed to study the records to determine which ones should be kept confidential because they contained Boeing trade secrets or might compromise the state’s economic development efforts.

Finally, Commerce officials allowed CJ and a reporter from The Free Press of Kinston to review some of the public records Feb. 13. The second installment of the records was made available to all media Feb. 16.

Amanda Martin, general counsel for the North Carolina Press Association and whose firm represented CJ, was not pleased with the Commerce Department’s delay. “I think the Public Records Law worked ultimately in that the public got the information it was seeking. But the law was slow in working, and that can be a problem,” she said.

“It seems the Department of Commerce was unreasonable until they were put to the test. The public shouldn’t have to do that,” she said.

John Bussian, legislative and First Amendment counsel for the press association, said the public is entitled to open records without having to engage in brinksmanship.

“Had the Commerce Department delivered the records requested by the media when the department was first asked for them, the state’s open records law would have worked as it is presently designed to work. Instead, Commerce threw a bunch of marbles on the floor and essentially dared the media to walk over them, claiming in the case of Boeing that the department’s records could be withheld from the public and press after Boeing had decided to build its plant elsewhere.

“And the Commerce Department never even replied to a request by a daily newspaper in eastern North Carolina that asked to see the same records. It wasn’t until a lawsuit was threatened that the lion’s share of the requested records were released. So, unfortunately, the state came up way short in meeting its obligation of prompt and full disclosure to the public in this instance.”

Both Martin and Bussian anticipate greater trouble down the road as the state expands its role in economic development.

“No question, as economic development becomes one of the more important issues in our state, the more the state will claim exemptions to the Public Records Law,” Martin said. “We’re going to see the issue more and more. I think the public needs to be vigilant.”

The records law should be reworked to meet the challenge, Bussian said. “The recent wave of incentives offered by the state signals that more and more tax dollars will be handed out without public oversight. And that, in my mind, sounds the alarm more than ever for the need to overhaul the present open-government statutes in North Carolina, which currently permit huge sums of tax money to be promised to corporate interests — as relocation and development inducements — without any member of the press or public knowing about it before these deals are done.”

Bussian sees widespread misuse of exemptions under the guise of “trade secrets.”

“There has been a noticeable increase in the number of conflicts between the media, in its watchdog role for the public, and the government over access to all kinds of information that the government now claims as exempt from disclosure under the broad banner of trade secrets,” he said.

“The trade secret claim was one of the excuses that rang hollow when offered by the Commerce Department in refusing public and press access to the department’s incentive package offered to Boeing. This kind of shell game by the government is on the rise, and continues in the face of clear directives from the N.C. Supreme Court that the state’s open-government laws are to be interpreted broadly with any questions about the interpretation being resolved in favor of allowing public access.”

Demonstrating the extent of secrecy in government-corporate negotiations, Martin cited a case of The News & Observer of Raleigh vs Gale Force Holdings, with whom the city of Raleigh entered into a contract for use of the RBC Center.

A weakness of the records law, Bussian said, is the latitude government wields to suppress information on business deals. “The secret treatment given to economic development meetings and records in North Carolina is as restrictive as anywhere in the country. Compare North Carolina’s law on the subject to Tennessee’s, for example. In Tennessee, you begin with the position that all economic development discussions and records are open to inspection as a matter of law. Only if the commissioner of Tennessee’s economic development commission and the state’s attorney general agree that certain parts of an economic development record are sufficiently ‘sensitive’ can that part of the record be withheld. That doesn’t happen often, and look at the success Tennessee has had in attracting industry. Here, the public is denied the chance to see or hear anything about incentives — in every case where they are offered — until it’s over.”

“The NCPA’s Legislative Committee leadership has given some preliminary thought to targeting for repeal the current economic development secrecy features of the state’s open government laws. Given the dollars at play today in the incentives game, it’s high time the state legislature re-examined that culture of secrecy,” Bussian added.

Wagner is editor of Carolina Journal.