The interim head of North Carolina’s business recruiting efforts is blaming the state’s public records law for the loss of a large jobs deal that instead went to Texas.
But the two states have similar laws, and both allow the public to see details about economic development proposals once a deal is announced.
Richard Lindenmuth, the head of a proposed public-private entity to run the state’s economic development efforts, told the Triangle Business Journal that Texas had an advantage over North Carolina when it came to wooing Toyota officials because of public record laws.
Charlotte narrowly lost out on a bid for the proposal, which will move 4,000 jobs to a Toyota corporate campus in Plano, Texas, according to the Charlotte Business Journal. Texas is offering $40 million in incentives, according to a press release from Texas Gov. Rick Perry’s office.
“Why would a CEO ever let us know where they are looking if they are subject to public records,” Lindenmuth said, according to an interview with the Triangle Business Journal. “Texas knew, but we didn’t. We can’t even have an open, frank discussion about everything.”
It’s unclear what Lindenmuth meant by his comments. A call requesting comment from the state’s commerce department was not immediately returned.
But there’s little difference between the public records laws of the two states when it comes to economic development deals.
North Carolina’s open records law does allow records about economic development deals to be kept under wraps until a deal is reached. Texas law does the same, and both states outline a process to withhold information deemed to be “trade secrets” or “confidential business information” that could harm a company once disclosed.
Lindenmuth, who came from the private sector when he was hired in January on a $120,000 a year contract, also said North Carolina has lost other deals because of public record issues.
“Maybe we just gave the guy’s competitive advantage away,” Lindenmuth says. “In a case like Toyota, they don’t want anybody knowing about it until it’s announced. We’ve lost a number of deals because of that.”
No details were offered in the Triangle Business Journal post about what deals that Lindenmuth, who posted a link on his Twitter account to the story, might be referring to.
— Richard Lindenmuth (@richardl23) May 6, 2014
Lindenmuth, 69, was hired in January to serve as the head of a controversial proposal that will shift the state commerce department’s job recruiting and marketing divisions to a non-profit group called the Economic Development Partnership of North Carolina.
The state legislature has yet to give its final approval authorizing the set-up, but is expected to take up the issue in the legislative session starting next week.
In draft legislation, lawmakers have indicated they want the new entity to be subject to the state’s public records and state ethics law, and the fledgling non-profit’s by-laws also require disclosure with open record laws.
Lindenmuth and N.C. Commerce Secretary Sharon Decker voiced concerns at an April legislative meeting about some of the transparency and ethics disclosures that lawmakers want, according to Raleigh television station WRAL.
Lindenmuth gave an example of an unnamed company that he said was hesitant to talk with state officials for fear information could become public.
“The company was afraid that, if they announced their name here, it would be public information and, therefore, everybody would know that they were coming here, including their employees,” Lindenmuth said, according to WRAL.
Here’s what North Carolina’s public records law says about economic development deals:
“[P]ublic records relating to the proposed expansion or location of specific business or industrial projects may be withheld so long as their inspection, examination or copying would frustrate the purpose for which such public records were created; provided, however, that nothing herein shall be construed to permit the withholding of public records relating to general economic development policies or activities. Once the State, a local government, or the specific business has announced a commitment by the business to expand or locate a specific project in this State or a final decision not to do so and the business has communicated that commitment or decision to the State or local government agency involved with the project, the provisions of this subsection allowing public records to be withheld by the agency no longer apply.”
And here’s what Texas’ law says:
a) Information is excepted from the requirements of Section 552.021 if the information relates to economic development negotiations involving a governmental body and a business prospect that the governmental body seeks to have locate, stay, or expand in or near the territory of the governmental body and the information relates to:
(1) a trade secret of the business prospect; or
(2) commercial or financial information for which it is demonstrated based on specific factual evidence that disclosure would cause substantial competitive harm to the person from whom the information was obtained.
(b) Unless and until an agreement is made with the business prospect, information about a financial or other incentive being offered to the business prospect by the governmental body or by another person is excepted from the requirements of Section 552.021.
(c) After an agreement is made with the business prospect, this section does not except from the requirements of Section 552.021 information about a financial or other incentive being offered to the business prospect:
(1) by the governmental body; or
(2) by another person, if the financial or other incentive may directly or indirectly result in the expenditure of public funds by a governmental body or a reduction in revenue received by a governmental body from any source.