N.C. Secretary of Commerce Jim Fain, talking about the state’s $534 million incentives package to lure Boeing to the Global TransPark, said it quite well for his department and the governor’s office: “We learned a lot during this process.” Amen to that, brother. Add taxpayers and the media to the list of the newly enlightened.
But the lessons learned were about as positive as touching a high-voltage wire: shocking and forever impressive. For it’s evident, after details of the Boeing plan were finally made public — two whole months after the fact — that the Commerce Department and the Easley administration were prepared to sell the farm if only the aircraft manufacturer would continue its courtship with sweet Carolina.
The amount of money involved in the state’s bribe — uh, incentive — was news in itself. Previous news stories, based upon meager information released by the Commerce Department, reported that the Boeing incentives totaled $93 million. To ordinary folks, there’s quite a difference between $93 million and $534 million. But to the high rollers accustomed to wheeling and dealing with taxpayers’ money, apparently the gap wasn’t enough to squeal over.
Had it not been for North Carolina’s Public Records Law, the details and the immensity of the deal might have never worked their way into the sunlight. Instead, government bureaucrats probably would have been perfectly content to sit on the information indefinitely. That way they wouldn’t have to answer to taxpayers suffering the shock and awe of having to donate half a billion dollars to a Fortune 500 company.
No matter whether one is a supporter, or an opponent, of state incentives paid to recruit corporations, most observers would agree that openness is critical to the process. The N.C. Public Records Law generally allows records on transactions such as the Boeing-GTP package to be kept under wraps for a while. That guarantee in the law protects a company’s trade secrets.
It must be emphasized, however, that confidentiality applies only UNTIL the transaction is completed. After the deal has been struck, or a transaction has failed, all records, excluding a company’s trade secrets, are to be made available immediately to the public.
That’s where the Commerce Department dropped the ball on the Boeing-GTP negotiations. Commerce Department officials at first considered withholding not only trade secrets, but also information about the incentives North Carolina had offered to Boeing. In other words, taxpayers, who foot the bill for incentives, would have learned very little of the negotiations. Commerce Department officials also failed to release the records in a timely manner. They eventually did open the documents to public review, but only after Carolina Journal threatened to file a lawsuit in Wake County Superior Court.
This area of the law that pertains to government negotiations with corporations was written to thwart corruption, which it does to some degree. North Carolina, recently victimized by an unscrupulous commissioner of agriculture and an ethically challenged congressman, cannot afford to suffer any more scandals at any level of government. The records law contributed to revelations in both cases.
Economic development and concomitant incentives, however, pose a growing threat to open government. The Bill Lee tax-credit act, and recent far-reaching legislation that strengthened the Easley administration’s hand in pursuing other types of economic development, have opened a whole new can of worms for government watchdogs to sniff.
The Public Records Law, as it currently stands, lacks the enforcement power that will be required to discourage the potentiality of corruption that inherently accompanies economic incentives packages. Violators of the law now face two penalties of questionable consequence: (1) a court can order a state agency or official to release the records, an action that should have happened anyway; or (2) a court, depending upon a judge’s ruling, can allow a complainant recovery of attorneys’ fees. In practice, though, a judgment for recovery is unusual, media lawyers say.
The General Assembly, when it convenes in May, should consider measures to fortify the Public Records Law and increase the penalties for violations. One option would be to make it a misdemeanor, or felony in a flagrant case or for a repeat offender, for custodians of public records to impede open government. Another option would be for the court to automatically make a violator pay a complainant’s attorneys’ fees and court costs. A stiff fine, or possibly jail time, would further deter noncompliance.