REVEALED: Amazon's Secret Data Center Dealings

Internal Maryland records show how Amazon and public officials collude to block transparency.

Photo credit: Mike Procario

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“Definitely no owners or developers at this stage. Let’s keep this very low-key. We are still deciding if we are comfortable revealing our identity to the local [economic development organization] at this point.”

That’s an email from an Amazon Web Services economic development manager to a senior director at the Maryland Department of Commerce. It was sent during the early stages of a process that was meant to land an Amazon data center in Frederick County, Maryland. Instead, as I wrote here, members of the community banded together to block the project, piercing through Amazon’s veil of secrecy thanks to a clever use of state Open Meetings Law.

But that wasn’t the end. A local preservation group called The Sugarloaf Alliance has been pursuing a public information act case against Frederick County, as well as making a series of public information act requests to other public agencies, alleging that Amazon was far more involved in county business than has been publicly acknowledged.

The Sugarloaf Alliance recently won its case, with a judge forcing Frederick County to turn over extensive records detailing Amazon’s communications with county officials. Those and other records released to the Alliance by state government agencies, including its Commerce Department and Department of Transportation, show that, indeed, Amazon had much more of a hand in guiding county policy than was previously disclosed, with a lot of help from state-level officials.

The Sugarloaf Alliance gave me access to their collection of these newly-released records and emails. They reveal exactly how Amazon colluded with state officials to get the ball rolling on a data center project in Frederick County, and worked hand in hand to keep the public in the dark, using a set of nondisclosure agreements actively pushed by the state Commerce Department. The emails also expose the Commerce Department’s own determination to keep aspects of the process private that should have been public, in order to maintain Amazon’s anonymity.

Finally, they detail how Amazon provided input into legislation that would have ultimately paved the way for its data center, a large facility where it keeps its servers, all without public disclosure.

Together, these records show exactly how the economic development machine works to prevent communities from providing input into projects that affect their lives, livelihoods, and the natural area around them, to the benefit of large corporations.

First, the records show that Amazon had undisclosed input into county policy, providing feedback on legislation proposed in 2021 that would have removed land from a protected reserve in order to give it to Amazon for a data center. You can read the Frederick News Post’s coverage here and here to get the exact details.

I’m going to focus on a period about two years before that, during the summer of 2019, to show how the Maryland Commerce Department played a significant role in ensuring Amazon’s identity remained under wraps. The emails quoted below are between Jayson Knott, a senior director in the Office of Business Development at the Maryland Commerce Department, and Tony Burkart, a manager for Amazon Web Services’ Economic Development and Public Policy divisions.

After approaching the state about initiating a data center project and receiving a list of potential sites, Knott offered to show Burkart around. Knott raised the question of whether county level officials should be there, to which Burkart responded: “I’m not opposed to having other people from the county attend, but we need to get an NDA in place in very short order. Do we have a feel for whether or not they would sign our stock NDA? We don’t really have time to negotiate one.”

So already, Amazon was trying to ensure word didn’t get out about what it was up to, and ensure that county officials didn’t have any of the process occur on their terms as opposed to Amazon’s. (This same email thread contains the message I opened the piece with, in which Burkart wanted to make sure the owners of the land didn’t get wind of what was happening.)

“The county would most definitely sign your NDA,” Knott assured him.

Earlier in the process, county officials were given the chance to submit proposals for hosting a data center, but weren’t allowed to know whose data center it would be — and once they did know, they would be contractually bound into silence.

“Our intent was for the state to launch a blind [request for proposals] into the communities outlined. … We typically use our NDA with communities once we have down selected and visit in person. Does the state have a confidentiality mechanism with communities that would accomplish the same? If we need to amend our process we are happy to figure out what works in Maryland,” said Roger Wehner, director of Amazon Web Services Economic Development department, in an email to Knott. The Department of Commerce proceeded to work with Amazon to sanitize the proposal of every reference to the corporation itself.

The unfortunate part about this is how normal it all was to everyone: Of course, it’s clear that nondisclosure agreements are used in economic development deals all the time, but their normalization and the eagerness with which public officials are facilitating their use says nothing good about how those deals come about. Public officials were not just willing but eager to facilitate the creation of contracts that would ensure Amazon’s identity remained a secret.

But that’s not the end. The Maryland Commerce Department, again with Knott in the lead, took it upon themselves to protect Amazon’s identity during a phase of the process that should have at least been somewhat public, by the department’s own concession.

“As part of the AWS project, the company will need to access state highway rights of way for fiber. Part of the process includes some public notice which may jeopardize their anonymity. My discussion is to make the business-competitive case to do this process anonymously,” Knott wrote to his colleagues.

Again, these are state officials going out of their way to keep people from knowing that Amazon is trying to do business in their communities. It’s icky all the way down. And it’s also nonsense that anonymity is required for the state to be “business competitive.” The state would actually benefit from an open process — maybe some other corporation would pay more for the land, or build something different that creates more jobs — but the “need” for anonymity of baked into the mindset of economic development officials from top to bottom.

Now to be clear, not everyone involved was so blasé about the situation. Two public planners for Frederick County expressed misgivings with the way Amazon’s push was being handled.

“The user had sites in mind, and we’re scrambling to change the zoning so that the user can develop those sites … it’s almost spot zoning,” said one, referring to the changes Amazon sought in the county preservation plan.

“The question for the planners is how to achieve the administration’s desire for establishing these digital infrastructure areas in a manner that is open and transparent, and does not subject me, you, and the Planning Department to charges of secrecy, insincerity, obfuscation, dishonesty or even deception,” wrote another. “Let the proposal stand on its merits, like all Sugarloaf Plan elements. If there is citizen opposition, or an unfavorable recommendation from the FcPc, so be it. Let the politicians make the final weighty decisions — they were elected to do so.”

To be clear, all of this was in service of building data center facilities that lots of concrete evidence shows don’t actually have much of a positive effect on the local economy, particularly when it comes to job creation or sustained economic development. They’re essential infrastructure for the corporations that build them, and yet lawmakers across the country have been convinced that those corporations need and deserve public support.

Fortunately, there’s recent evidence that data center handouts make for bad politics: In Virginia last week, the chair of a county board of supervisors was ousted due to her staunch support of data center development. But that political price, clearly, also needs to flow into the state economic development bureaucracy, which these records show is all too willing to do the dirty work for a giant corporation pushing its way into a community that isn’t interested.

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UPDATE: Last week, I explained why states are reviving or expanding their film and TV tax credit programs, those wasteful handouts to Hollywood that no independent analysis shows are worthwhile. Well, New Jersey is now getting in on the action, with the legislature rushing through a hugely problematic bill that authorizes hundreds of millions of dollars in new tax giveaways, and will cause a host of other problems.

New Jersey Policy Perspective’s Peter Chen and I explained in a new analysis why the bill is so bad and should be rejected by New Jersey policymakers. You can read it here.

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