Few, I imagine, dispute the right of private companies to raise and spend money how they wish, and keep financial records under lock and key.
But Americans treat public money differently. It’s our money and we have a right to know how it’s spent.
Proposed legislation under the Gold Dome would rewrite the part of Georgia’s statute that governs trade secrets, and in the process permit government officials to make secret deals and withhold details about where our money is being spent.
Proponents of SB 159 argue it is needed to make Georgia more competitive. They claim that other states have laws that are friendlier to corporations who might come here, are more protective of commercial and financial information, and that without copying them, Georgia is a less desirable place to do business. Without pulling down the veil of secrecy, they say, Georgia will lose businesses and tax revenue during this time of economic distress.
But what if it was the other way around? What if our recent history showed that measures that close the books to scrutiny make us more vulnerable?
Ten years ago, a local newspaper received a tip that several unknown corporations had received millions in tax breaks by promising to create jobs in Georgia — but hadn’t fulfilled their promises. The Atlanta Business Chronicle repeatedly filed open records requests seeking to identify those companies.
Then-Attorney General Thurbert Baker denied the requests, saying the law prevented the release of the companies’ names. The paper sued, and ultimately, it forced a change to the law. The companies were identified, and some $11.5 million was returned to state coffers.
SB 159 threatens to take the state backward. It doesn’t allow the public the right to see the terms of a deal even when the deal is done, as similar transparency exemptions do in other neighboring states. Further, as drafted, it gives sole right to the person or entity given the deal to announce the proposal or give up the documents. Fat chance.
Elsewhere, laws similar to SB 159 are having serious consequences. California lawmakers passed a bill last year exempting the state’s public records laws from all service contracts for health care in the department of corrections and rehabilitation. The idea was to protect the competitive nature of contract negotiations.
Now, Health Net Federal Services, an HMO providing health care services to prisoners under the state’s contract, is shielding fundamental details about how it is spending hundreds of millions of taxpayer dollars. A company spokeswoman said they would release some details next year, as called for by law. Many Californians are outraged.
Just over half of states have some exemption that exempts economic development deals from open record laws, but that does not mean the laws work in the best interest of the state government or its residents.
The firms are the beneficiaries, according to Jeremy Hall, an assistant professor of public affairs at the University of Texas at Dallas who has studied economic development practices by state.
In his research, Hall found that the bidding wars that erupt among states to lure new businesses overcompensates firms for their relocation decisions. The whole process is turned into a winner-take-all sweepstakes, where states get caught up in winning the competition, rather than making rational choices to maximize the long-term value of the relocation, Hall found.
By promoting this type of secret economic development, Georgia is sacrificing the right of its residents to know what their government is doing and denying them the information necessary to evaluate — and protest — bad choices.
Any attempt to allow secret negotiations should be considered in connection with the important principles that first gave rise to Georgia’s open records laws.
Attorney General Sam Olens is already working to improve language around trade secrets in the open records act, without sacrificing government accountability. He is doing so in a thoughtful manner, allowing for review and debate over the coming year, and plans to introduce it in the next General Assembly.
In the meantime, let’s not sacrifice government accountability because we trust that government officials will do the right thing. It’s our money, after all.
Cynthia L. Counts represents several media companies and is the managing partner for Counts Law Group.
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