Tennessee Tower story exposes deal secret under records law

Phil Williams, chief investigative reporter for NewsChannel 5, uncovered confidential state documents that outline an economic development proposal to give Tennessee Tower to the Sears Corporation if it moved its headquarters to Nashville.

The state told Williams that the Tennessee Tower “never really got serious consideration and that the governor never delivered those words drafted for him by his economic development team” for a video presentation. But they wouldn’t let him see the video Haslam did record.

Following is an excerpt from the script obtained by Williams. You can go to the story on NewsChannel5 and read the whole thing:

“We’re so committed to making your new home in Tennessee that we are prepared to offer you one of the premier buildings in Nashville’s thriving downtown.

“Our state office building, the Tennessee Tower, can be an instantaneous and immediate home for Project Neptune’s corporate headquarters. This highly visible and historic building offers over 600,000 square feet of prime office space – located conveniently across from Legislative Plaza and a stone’s throw away from my office in the State Capitol.”

Williams also reports that the confidential documents outline other “possible incentives available to Sears if it brought 6,100 jobs, including a ‘super job tax credit,’ ‘franchise tax savings,’ a ‘standard job tax credit,’ an ‘industrial machinery credit,’ ‘sales and use tax credit,’ a ‘headquarters relocation credit,’ plus ‘training incentives’ and ‘infrastructure incentives’ ” with a total value in one scenario of about $588.8 million.

The story shines light on the tightness of public record exemptions regarding economic development activities in the state. The logic has been that the state is competing with other states to do deals, and the companies they are working with don’t want negotiations public. The Haslam administration is hardly alone among the economic development crowd and others who insist confidentiality is key to a successful program.

The result, however, is that the state can enter into agreements, sometimes committing large amounts of money, without citizens knowing about it. In fact, when Haslam took office, there was complaining about financial commitments by the Bredesen administration to Electrolux in Memphis that seemed to catch off guard both the new administration and lawmakers.

At the time, the Commercial Appeal reported that  Lt. Gov. Ron Ramsey was “considering new legislation requiring a broader range of state officials to sign off on deals that commit the state to funding” because of the Electrolux deal as well as one with Amazon.

“There needs to be legislation to have it be more than just one person, apparently, having this carte blanche authority. I think we at least should have the two speakers sign on to it, the governor sign on to it, maybe the two (House and Senate) finance (committee) chairmen. But I do think there’s been way too much power over the years concentrated in basically one person,” Ramsey told reporter Richard Locker with the Commercial Appeal.

Even lawmakers have trouble getting information.

State Rep. Mike Turner, D-Old Hickory, made an open records request to the Haslam administration for correspondence with Volkswagen regarding incentives or discussion of unionization at the plant.

The governor’s office refused the request, citing the same Tennessee Code 4-3-730(b) that would have made any Sears-Tennessee Tower proposal confidential, boldfacing the last phrase:

“(b) Any binding contract or agreement entered into or signed by the department that obligates public funds shall, together with all supporting records and documentation, be considered a public record and open for public inspection as of the date such contract or agreement is entered into or signed.

 It also cited Tennessee Code 67-1-1702, saying the documents fell under this exception because they constituted “confidential tax information, which includes a taxpayer identity; the nature, source or amount of the taxpayer’s credits, deductions, income and similar tax attributes, and other data relating to a determination of a taxpayer’s tax liability or possible tax liability”:

“(a) Notwithstanding any law to the contrary, returns, tax information and tax administration information shall be confidential and, except as authorized by this part, no officer or employee of the department or of any office of a district attorney general or any state or local law enforcement agency, and no other person, or officer or employee of the state, who has or had access to such information shall disclose any such information obtained by such officer or employee in any manner in connection with such officer’s or employee’s service as an officer or employee, or obtained pursuant to this part, or obtained otherwise.”

 Tennessee Watchdog.org reported the story  in January.

“Basically, nothing that we wanted was attainable,” Turner spokesman Sean Braisted told Tennessee Watchdog “They didn’t give us anything.”

-Deborah Fisher, executive director of Tennessee Coalition for Open Government, can be reached at fisher@tcog.info. 

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