Car Alarm in Oklahoma
Driving through an absurd incentive cover-up.
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Canoo — a company that makes not boats, but electric cars — announced earlier this month that it will open a new plant in Pryor, Oklahoma. Oklahoma was in the hunt for a Tesla plant that wound up in Austin, Texas, so officials there are spinning this as a very solid consolation prize.
According to Canoo CEO Tony Aguila, who spoke with Reuters, Oklahoma is providing more than $300 million in tax breaks to the corporation, in return for a promise of 2,000 jobs and a half a million to $1 billion in investment, with potentially “millions more” in subsidies available for hitting certain benchmarks.
Is that number accurate? Probably, because it'd be a very strange thing for a CEO to lie about in an interview with a journalist. But no one in the state government will confirm it. Oklahoma officials are taking the often-seen secrecy around corporate incentive deals to truly absurd lengths.
The state Department of Commerce, for instance, won’t confirm any details, citing a provision of state law “meant to protect business plans, feasibility studies, financing proposals, marketing plans, financial statements or trade secrets, proprietary information for the purpose of business development or customized training and related confidentiality agreements and information.”
Of course, protecting actual proprietary information is a perfectly valid thing for state government to do — but the CEO already admitted the size of the incentive package publicly, so it’s pretty unclear what the Commerce Department is protecting by refusing to say if it’s real or nonsense. This isn’t the ingredient list for McDonald’s secret sauce or anything.
Brent Kisling, the executive director of the Oklahoma Department of Commerce, says the department isn’t making incentive information public because the deal isn’t official — which is pretty weird, since the Department and Oklahoma Gov. Kevin Stitt held a whole event to announce it and released this slick little video too.
Kind of weird to go to all that effort for a deal that isn’t done, no? It seems to me like claiming the deal isn’t finalized is just a convenient excuse to keep the subsidy package under wraps.
Speaking of the governor, Stitt also signed a non-disclosure agreement with Canoo preventing him from disclosing details of the deal. He’s the highest-ranking official I have ever seen sign one of these corrupt agreements under which public officials are legally prevented from discussing the details of how they’re spending public economic development money. (If someone knows of another instance of a governor doing this, please let me know.)
Just days before Stitt admitted to having signed the agreement, he said “Transparency is a top priority of our administration.”
Hilariously, when the news organization CNHI Oklahoma asked Stitt why the details about Canoo weren’t public, he initially said, “Yeah, I mean, I think you ought to talk to the Legislature and pass a law to make that all public, but right now it’s private.” Someone apparently wasn’t too happy with that answer, because, as CNHI reported:
Less than an hour later, however, his office sent out a statement clarifying that Stitt misspoke and what he said was not actually his position. His office then sent out an additional statement Monday afternoon.
“It is important that we are able to protect specific details of discussions we have with companies for competitive reasons as (we) continue to recruit more jobs to Oklahoma,” Stitt said in that follow-up statement. “The incentives offered to Canoo, and other companies, are through programs authorized in statute and contain performance-related provisions to protect taxpayers’ investment and ensure a net financial benefit to the state of Oklahoma.”
And again, this is all in service of protecting information that the CEO of the corporation in question already publicly disclosed to a working journalist. It’s like trying to cover up a crime committed on live television.
Why are Oklahoma officials doing any of this? I can’t know for sure, but it seems like they’ve drunk so deeply of the Kool-Aid corporate leaders pour when arranging incentive deals that they don’t even know where their duties to the state versus to the corporation in question begin and end.
A few Oklahoma lawmakers and state Republican Party officials have expressed concern about how this is all going down. If they wanted to, as I’ve noted before, members of the legislature could ban public officials from signing non-disclosure agreements in economic development deals. They could also tighten the state’s public records laws so that negotiations between corporations and officials are open or the materials made available immediately, or at least required to be disclosed once any sort of public announcement has been made.
There’s also a case to be made, according to one expert on Oklahoma open records law, that the Commerce Department is actually exceeding the law’s restrictions. Lawmakers could demand accountability there, too, if that charge proves to be true.
While the particulars of this story are laughable, they’re only the usual abuses perpetuated on taxpayers taken to an extreme. But, oh, what an extreme it is. Oklahoma voters should demand much, much better.
ONE MORE THING: I’ve written before about cities, counties, and even some states capping the fees that delivery app corporations such as UberEats and DoorDash can charge restaurants. Most locales only capped fees temporarily in response to the pandemic, as shutdown orders forced restaurants to rely on delivery much more than they had before.
But San Francisco has decided its fee cap is good enough to keep around permanently.
Read this to understand why the delivery apps are using a predatory business model that harms small, independent restaurants, thus making the case for fee caps and other regulations.
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— Pat Garofalo