Piercing Amazon's Veil of Secrecy
A community took on a secret Amazon deal — and won.
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Usually I write about a lot of doom and gloom here, but today, it’s time for a happy story: A community in Frederick County, Maryland, caught wind of a secret agreement that was being negotiated between local leadership and Amazon to build some Amazon Web Services data centers, and made enough of a stink about it to stop the deal in its tracks.
This story has a lot of what I complain about here: Wasteful subsidies, secret negotiations, and a dominant corporation using lack of public information to its advantage. But in this case, the locals turned that secrecy around and used it to protect their own interests.
Data centers have recently been at the center of several local controversies regarding the growing footprint of Big Tech firms, and for good reason. They’re resource intensive, requiring large amounts of water and power, and take up a lot of space. For all that, they don’t create that many permanent jobs: Just 30-50 people work in most data centers, and many of those positions are low-paid or outsourced to some very unsavory subcontractors.
Point being, communities have good reason to question whether having one of these data centers in the backyard is all it’s cracked up to be, even as states, including Maryland, have piled into passing new public subsidy programs in order to encourage their construction.
Which brings us to Frederick County, a rural community about an hour outside of Washington, D.C. My account here is cobbled together from a bit of insider knowledge, as well as local press reports and some educated guesswork.
In April, county officials and county staff met in what they called a “closed session” to hear Amazon’s pitch about bringing several Amazon Web Services data centers to the region — after Amazon had reportedly made the rounds to local property owners with realtors in tow. A day later, officials in the town of Brunswick did the same thing.
But none of them revealed anything to the public about what sort of talks were underway.
Frederick County council members claim they didn’t sign nondisclosure agreements with Amazon, but it seems like county staff may have done so — the county refuses to acknowledge either way, which is usually a sign that NDAs are in the mix. (Full disclosure: I consulted with some of the residents fighting this data center about NDA use in economic development deals.)
But the county officials who didn’t sign NDAs still say they couldn’t discuss the project publicly in order to protect private business information, so they might as well have signed one: That Amazon is Amazon is not proprietary information. Amazon’s SOP has been to keep its name out of any local project negotiations, and it used that tactic here, once again.
Usually these secret deals plow through before anyone knows enough to stop them, which is the point of all the secrecy. But this time, there was a twist: Some local residents got wind of the potential project, and were concerned about, among other things, the resources the data center would command and its environmental impact, which makes sense in an area that still has a fair amount of agriculture and lots of protected park land. (This is similar to the controversy around a data center in Oregon that I wrote about recently, where the corporation and local officials were protecting the center’s proposed water usage as a trade secret.)
Then they took action, asking the state Open Meetings Compliance Board, which is what it sounds like, to ding both the county and the town of Brunswick for violating state open meetings law — which the board did, saying that in neither instance was there adequate disclosure regarding what was being discussed behind literal closed doors. The meetings with Amazon were actually illegal.
From there, the timeline is a bit unclear — again, because the local elected officials won’t divulge much of anything — but what definitely happened is Amazon pulled the plug late last year. According to a county official, and emphasis very much mine, “Amazon seemed to underestimate the complexity of the process the county usually follows for development projects, including opportunities for public engagement if a proposal moves forward.”
Amazon also reportedly didn’t like a county rule that certain zoning changes not occur within six months of an election, which is a measure meant to prevent public officials from doing anything for favored entities on their way out the door or as a way to generate electoral support. According to the Frederick News-Post, “County officials told our reporter that, when they tried to negotiate, Amazon essentially walked away.”
What this boils down to: Amazon didn’t want to include the public in the proceedings or follow local anti-corruption regulations. So it took its ball and went home.
Of course, there are some elected officials, including a state senator who is running for Frederick County executive, criticizing the fact that the deal fell apart. But they don’t explain why their community should simply lay down and accept the whims of a massive corporation that wants to run roughshod over its rules. They’re buying into the big myth of economic development and putting it on steroids: If we don’t literally allow this one corporation to do whatever it wants, they claim, then we can’t succeed economically.
But that’s not true, and I’m glad the community stood up and protected itself. This is also a good reminder that open records and open meetings laws can be useful tools for exposing how the economic development racket actually functions and forcing corporations to be accountable to the public when they want to enter a community. More like this please!
SHAMELESS SELF-PROMOTION: Speaking of nondisclosure agreements, I wrote a piece for the Chicago Tribune explaining why Illinois should pass SB 3038, sponsored by State Sen. Robert Peters and State Rep. Will Guzzardi, which would ban them in economic development deals. Read it here (paywalled).
I’m also testifying today before a Joint Legislative Hearing in New York on economic development issues. You can read that testimony here and watch the hearing here.
ONE MORE THING: Here’s a quick roundup of some sports related stuff I’ve read recently that is probably of interest:
Congratulations to Los Angeles, not only on the Rams’ Super Bowl victory, but on hosting that game in a 100 percent privately-financed stadium. No public subsidies, big winners all around, as Michael Farren explained here.
Speaking of the NFL, though, both Chicago and Virginia seem to be moving toward providing some sort of public incentive for stadiums for the Bears and Commanders, respectively.
This is a good piece from The Center Square about the truly laughable numbers being thrown around regarding the economic impact Nashville should expect if it hosts some World Cup games.
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— Pat Garofalo