Yesterday morning, I happened to put in a call to my old buddy, Tomblin administration Commerce Secretary Keith Burdette, to ask him a couple of questions about the Marcellus Shale drilling boom — things that were kind of far out in the weeds related to the various proposals out there for a natural gas “cracker” plant that some folks believe is the region’s biggest economic development project in a generation.
By the time Secretary Burdette called me back, rumors were starting to swell that an announcement was coming very soon about one of those proposals, the multi-billion-dollar project from Shell Chemical. When I asked him about it, Burdette confirmed that state officials had been told an announcement was coming. Shell told the governor what they had decided, he said, but any information on that would have to wait until Shell went public first.
But from the tone of Secretary Burdette’s comments, it was pretty clear how things had played out:
Under any circumstances, it’s going to be a good thing, Some of us are going to be applauding, and some of us are not. I know there’s an awful lot of pride in trying to be the one who gets the deal, but it really does have a huge regional impact.
The official announcement from Shell came shortly before 1 p.m. From there, the race was on among the West Virginia press corps to figure out how the Shell facility — so much sought after by Gov. Earl Ray Tomblin and state business boosters — ended up going instead to Beaver County, Pa.
In a quick blog post yesterday, I tried to provide some context about how tax breaks and other incentives rarely seem to have much to do with these decisions, and how improving our state’s educational system and infrastructure might help more in bringing new jobs and a higher quality of life to residents. The good folks at the West Virginia Center for Budget and Policy soon posted their own take, explaining that if taxes alone were the issue, Shell would have been better off going to Ohio.
It appears that my friend Larry Messina at The Associated Press got the big scoop, with his reporting of this part of the story:
West Virginia lost the battle to attract Shell’s multibillion-dollar chemical plant because of the costs of relocating a casino that occupies the company’s in-state choice for a site, sources told The Associated Press.
Shell announced plans Thursday to build the so-called “cracker” plant in Monaca, Pa., about 12 miles from the West Virginia border. Two individuals with direct knowledge of the negotiations with Shell, but who were unauthorized to speak publicly about them, said the company’s preferred West Virginia location encroached on Mountaineer Casino, Racetrack and Resort.
Other theories came rushing out. The State Journal let gas industry lobbyist Corky DeMarco suggest that labor unions were to blame, for having the gall to criticize another industry project that’s not hiring local union construction workers. Shell didn’t mention this, and ACT Foundation director Steve White made a strong argument that DeMarco is simply wrong. Republicans activists like former Don Blankenship operative Greg Thomas were falling all over themselves to paint this as Gov. Tomblin’s fault, saying it shows the need for the state to “lower taxes on new investment, controlling cost of government, comprehensive legal reform and implement reasonable regulations” along with “ethics and election reform to show potential investors WV isn’t run by corrupt career politicians.” Over at West Virginia MetroNews, Hoppy Kercheval is so rabid to get a Republican governor that he’s pushing candidate Bill Maloney’s argument along these lines, despite admitting in today’s commentary that Maloney and his campaign are probably wrong about it.
But the truth is: We’ll never really know what happened.
That’s because 99 little words in the West Virginia Code give our state’s economic development agents an exemption from the state public records law and, in the process, a free ride from any real public accountability. That’s right. Check out W.Va. Code 5B-2-1, the second paragraph:
Any documentary material, data or other writing made or received by the West Virginia development office or other public body, whose primary responsibility is economic development, for the purpose of furnishing assistance to a new or existing business shall be exempt from the provisions of article one, chapter twenty-nine-b of this code: Provided, That any agreement entered into or signed by the development office or public body which obligates public funds shall be subject to inspection and copying pursuant to the provisions of said article as of the date the agreement is entered into, signed or otherwise made public.
Where did this nifty little piece of state law come from? Well, it was rushed into the code at the behest of state business leaders and the Underwood administration back in 1997, after The Charleston Gazette won a state Supreme Court ruling that forced the West Virginia Development Office to release records about its efforts to lure a $1 billion pulp and paper mill to Apple Grove in Mason County. Back in the day, I wrote a couple of hundred stories about this project, which was highly controversial because of its potential to pollute the Ohio River with dioxin, strip West Virginia hills bare of timber, and bring in non-union, out-of-state workers for its construction.
Development Office officials under Gov. Gaston Caperton had given us some records about their efforts, detailing some requests for large, tax-free state loans, highway improvements, and other incentives that Parsons and Whittemore wanted for the project. But they had withheld hundreds of pages of records, claiming a broad ability to withhold from release any correspondence between state officials and outside parties like the pulp mill developers. The Gazette thought the people had a right to know what sorts of deals were being offered on their behalf, so the newspaper went to court.
In a unanimous opinion issued in mid-December 1996, the state Supreme Court ruled that we were right. The Development Office had to give us many more records, and some of the revelations were fascinating (subscription required):
— State agents met privately with Mason County schools officials to arrange the closing of a local elementary school that was inconveniently located near the proposed mill site.
— Public employees at the Development Office encouraged state environmental officials and legislators to weaken pollution limits to make the mill’s operation easier and less expensive (but also more polluting).
— One state official — longtime state development agent Rolland Phillips — even castigated Gov. Caperton for not taking a strong enough public stance in favor of the mill.
— Phillips also ghost-wrote letters for the company, and then wrote the state’s official replies.
— Other documents showed that the project was eligible for as much as $750 million in Super Tax Credits, far more than the $150 million that Development Officials suggested.
Without the Gazette’s lawsuit, all of these things would have remained secret, efforts purportedly taken on the public’s behalf — but without our knowledge and, therefore, without any ability for the public to object and for democracy to work.
It’s important to note that state law already gave economic developers tools to use to protect legitimate confidential information. The state’s Freedom of Information Act contains exemptions for trade secrets and internal documents. But just weeks after the Supreme Court’s ruling in our pulp mill case, lawmakers slipped the broad FOIA exemption through, approving it on a voice vote before opponents knew what measure was being considered (subscription required).
Now for many months, Keith Burdette and other administration officials have given lots of interviews to media members hungry for news of the cracker plant. But as helpful as that is, they only tell us what they fell like telling us. We have no way to get copies of emails, letters and other documents that would help provide the public with a more complete picture.
When pressed yesterday by reporters, Secretary Burdette declined to talk about the casino issue that Larry Messina reported. Burdette said doing so might violate a confidentiality agreement entered into by the state. So we don’t know exactly what went on here — what discussions did state officials have with the Shell and the property owners? What sorts of offers did the state make on our behalf on this issue? Don’t we have a right to know.
The Tomblin administration has already instituted an unprecedented level of secrecy in its dealings with the boom on Marcellus Shale drilling, negotiating legislation in secret and then declaring that industry lobbyists were acting as state “consultants” so that any correspondence with those lobbyists about state rules and legislation would not have to be made public.
Despite constant complaints about government secrecy, some West Virginia agencies are pretty transparent. When Randy Huffman and his state Department of Environmental Protection make a decision, we can for the most part find out the basis for that decision.
Other functions of our government are harder to keep track of. Family court rules make it very difficult for the media to find out if law enforcement agencies are doing their job and protecting women who seek protection from batterers. The State Police hide behind FOIA exemptions to shield them from full disclosure of the facts surrounding brutality complaints. Increasingly, some judges are using broad “gag orders” to keep the public from finding out what happens in their courtrooms. But nothing that our government does on our behalf is shrouded in the level of secrecy that lawmakers have given to the people we pay to help improve our economy and provide jobs, arguably the biggest problems facing West Virginia.
It’s not hard to think of other unanswered questions about Shell’s cracker plant. Did the company actually ask for or want the tax credit lawmakers pushed through, or was this sort of incentive not really that important to Shell? Exactly how many jobs was Shell promising to create? Was the company willing to sign a project agreement that would guarantee construction jobs for local, union workers? What sorts of issues might a cracker run into in obtaining air pollution permits in a part of West Virginia that already doesn’t meet some important air quality standards? Were state development agents running around trying to force weaker environmental rules, lax labor standards and all manner of other questionable public policies down the state’s throats in the name of this one project?
Just as important as those questions, were there reasonable requests made by Shell that the state didn’t do a good job of responding to? How about problems with the “captive” rail service at the West Virginia sites? Was Shell concerned about education and training among potential workers in West Virginia? Was the state government’s financial situation as helpful in convincing Shell our state is a good place to do business as Gov. Tomblin makes it out to be? Were there significant infrastructure issues that Shell wanted to be fixed? If so, how did the state respond?
Most folks who were involved in the pulp mill case and the ensuring secrecy bill focused on their concerns that the amount of taxpayer money the state might give away for a project remain public knowledge. In that regard, the final legislative language provides some relief, saying:
… Any agreement entered into or signed by the development office or public body which obligates public funds shall be subject to inspection and copying pursuant to the provisions of said article as of the date the agreement is entered into, signed or otherwise made public.
But what about the better argument of what happens when an economic deal state officials have pursued fall through? The idea behind a Development Office in the first place is that we have a collective interest as a society in improving our economy, in bringing in new businesses, expanding existing ones, and helping local entrepreneurs to grow their own operations. If that’s the case, shouldn’t we have some way of checking up on these people, to see what they’re doing on our behalf, to find out what they do right and what they do wrong, and be sure they take steps to learn from failures like the Shell cracker plant?
In all of the hand-wringing, attacking and finger pointing that is sure to continue for weeks, do you think that there will be one single elected official who will stand up and say this shows why we need to get rid of that FOIA exemption, and open up the state’s development efforts to public scrutiny?