Judge rules Amazon bid can be kept secret


A Marion County Superior Court Judge found an intent in 2005 legislation that never was. Judge John Chavis ruled on April 24 against a public records request for the Indiana Economic Development Corporation/Indianapolis bid in the nationwide contest to land Amazon’s second headquarters.

The lawsuit was brought by Tax Analysts, a non-profit organization in Washington, D.C., and its staff reporter Lauren Loricchio, who have been attempting to collect the 238 proposals that Amazon received. According to Indianapolis Star columnist James Briggs, the Indianapolis bid is becoming an “increasingly rare holdout.”

The dispute centered on language in the Access to Public Records specifically inserted for the new IEDC in the 2005 General Assembly. In my legislative wrap-up of the session for The Indiana Publisher, I wrote: “The legislature agreed that the new Indiana Economic Development Corporation (IEDC) will be subject to Open Door Law and Access to Public Records Act and audits by the state Board of Accounts.

(The ruling) guts the intention of the legislature to allow the public to know what the IEDC was committed to providing a commercial prospect.

H.E.A 1003 was authored by then Rep. Randy Borror, R-Fort Wayne. The bill shifted the state’s economic development efforts to the private entity, but Rep. Borror accepted a committee amendment by then Rep. Scott Reske, D-Pendleton, to specify that the IEDC would fall under the scope of the state’s public access laws. Then Sen. Vi-Simpson, D-Bloomington, suggested the IEDC be subject to audit bye the state Board of Accounts as the bill moved through the Senate on its way toward passage. Then Gov. Mitch Daniels signed the bill into law on Feb. 9, 2005.

Those changes to Borror’s bill didn’t even crop up in the ruling by Judge Chavis, which focused on language that was part of Borror’s introduced version of H.B. 1003. The language allowed the IEDC to keep records related to negotiations between IEDC and industrial, research or commercial prospects confidential at the discretion of the entity if the records were created while negotiations were in progress.

The next paragraph stated that “the terms of the final offer of public financial resources communicated by the corporation to an industrial, a research, or a commercial prospect shall be available for inspection and copying [under the Access to Public Records Act] after negotiations with that prospect have terminated.”

With negotiation records allowed to be kept secret, Borror included language requiring the IEDC to certify that the disclosed record “accurately and completely represents the terms of the final offer.” The language would make IEDC officials think twice about withholding any of the terms in that final offer from the public because they would then be consciously violating the law.

There was no dispute before Judge Chavis that IEDC and Indianapolis submitted a response to Amazon’s request for proposals and that response included dollar amounts to which Indianapolis and Indiana would commit to land the Amazon HQ2 and a general overview of incentives, The response included the total amount of EDGE tax credits the state would commit to granting over a 10-year period. The response included commitments from the Skills Enhancement Fund for training of new Amazon employees, an Industrial Development Grant for infrastructure improvements, and detailed legislative initiatives that could be pursued to assist in the creation of the headquarters.

The response led Amazon to announce that Indianapolis had made the cut to 20 finalists for the HQ2. Amazon officials visited Indianapolis in March 2018 to gather more information on the proposal, but that was the last Indianapolis heard from Amazon. Amazon announced on Nov. 13, 2018 that it would split HQ2 between New York and Arlington, Virginia, and Nashville, Tennessee, would host a new logistics and transportation hub.

Loricchio made her records request for Tax Analysts in January of 2019. In March, Chris Cotterill, COO for the IEDC, denied the request, saying that there was no final offer made – that its initial offering of incentives could not be considered a final offer. Luke Britt, Indiana’s Public Access Counselor, declined to conclude that IEDC had violated the state’s public records law without the ability to see the document in question. Tax Analysts then filed the lawsuit as allowed under APRA.

According to Indianapolis Star columnist James Briggs, the Indianapolis bid is becoming an “increasingly rare holdout.”

Judge Chavis did determine that “final offer” does mean the last offer made by IEDC to a prospect. ‘‘The proposal was the last in a process as Indianapolis’ negotiations ended with Amazon. … Giving the words [in the statute] their plain, ordinary, and usual meanings, Indianapolis’ proposal appears to meet the dictionary definition of a ‘final offer.’ ”

That should have been the winner for Tax Analysts, but Chavis then threw a curveball that I contend was never an intended reading of the statute.

The judge determined that if the IEDC didn’t certify the accuracy and completeness of the information, then the offer wouldn’t qualify as a final offer that would be required to be released to the public upon request.

“If the terms of a final offer are not certified for accuracy and completeness, then statutorily under I.C. 5-14-3-4-(b)(5)(C), it cannot be considered a final offer, Otherwise, Clause (C) would have no meaning whatsoever,” Chavis wrote.

Wrong – the certification was intended as an affirmative statement by IEDC that the released document was the complete and accurate last offer presented before the termination of negotiations.

The trial court ruling gives the IEDC the ability to never release a final offer by merely refusing to certify the last offer made. It guts the intention of the legislature to allow the public to know what the IEDC was committed to providing a commercial prospect. In the case of Amazon, we can surmise that the commitment was probably at least $1.5 billion. That’s the amount that was offered by the IEDC and Gary in that city’s proposal to Amazon, which Tax Analysts obtained from the northwest Indiana city.

In a footnote, Chavis was puzzled that neither side addressed Clause (C). “The court is somewhat surprised that the parties did not discuss Clause (C) in more detail as the Court concludes that it is depositive of the issues presented in this case.”

Sorry, Judge Chavis, but it wasn’t addressed because no one interprets the language in that fashion.

The clause says “When disclosing a final offer …, the Indiana economic development corporation shall certify that the information being disclosed accurately and completely represents the terms of the final offer.” The certification is an additional requirement for the IEDC when it releases what already has been determined to be the last offer – the certification does not create the final offer.

I realize Indiana courts don’t recognize the legislative history behind the passage of a bill and are constrained to rule on the language as it was approved by the General Assembly, but as someone who lobbied on H.E.A. 1003, I can say Judge Chavis’ reading of the statute was never articulated as the intent for adding Clause (C) to the introduced bill. The intent was to allow the public to know what state incentives or resources were being offered to economic development prospects after negotiations were done.

My understanding is Tax Analysts will appeal this trial court ruling.