Pittsburgh and Amazon HQ2

Is Pittsburgh breaking Right-to-Know Law by shielding its Amazon HQ2 bid?

Pennsylvania’s open records gatekeepers say it’s an ‘unusual situation.’

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Jasmine Goldband / The Incline
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Citing a desire not to tip their hand or dull their competitive edge, Pittsburgh officials have declined to divulge much of anything about their bid to host Amazon’s newest headquarters.

There have been glimpses. There have been rumors. But most of what has emerged from City Hall has been carefully managed and meticulously scripted.

That trend continued this week, with Pittsburgh denying no less than three right-to-know requests seeking to pull back the curtain and compel the release of relevant documentation. Officials argued that the release of such information could harm Pittsburgh’s chances as it competes against hundreds of cities and states across North America, all with an identical interest in snagging Amazon’s “HQ2” golden ticket — up to 50,000 new jobs and billions in investments to the winner.

But while some of those cities and states have revealed aspects or the whole of their pitches — this includes the conversion of an old horse racing track in Boston, huge development sites in Toronto and tax incentives galore — Pittsburgh has been decidedly more guarded with its own. Some released details unprompted and soon after the bids were submitted, while others have had to release information under public record laws, which differ from state to state.

In Pittsburgh, officials shipped their two-inch thick pitch to Amazon in October after spending between $300,000 and $400,000 on its assembly. They’ve said little or nothing about it in the weeks since.

Critics say the result is a strange intersection of private sector interests, public sector ambitions and, far down the totem pole, the public’s right to know.

But while the city is completely within its rights to tiptoe or play it safe in what amounts to a continent-wide game of poker, the rules change slightly when dealing with open records requests like those denied earlier this week.

‘An unusual situation’

The city said its proposal is subject to a non-disclosure agreement with Amazon, citing this reason in its denial of those records requests.

Meanwhile, Amazon has denied making any requests for secrecy, saying cities are free to discuss the details of their bids if they like, per The Seattle Times. The vast majority, including Pittsburgh, have opted against it.

Amazon’s own request for HQ2 proposals includes a line reading, “certain aspects of the Project and details regarding the company are confidential, proprietary, and constitute trade secrets.”

Marie Reilly, a professor with Penn State’s law school, said this language seems to be aimed more at protecting the company’s interests than the details of individual HQ2 bids. From a competitive standpoint, though, she said the motivation for bidder secrecy is much easier to discern.

“If bids were not confidential, no one would want to go first,” Reilly said.

“In construction it’s common for bidders, even though they’ve been assured of confidentiality, to wait until the absolute last minute to submit their bids because they’re still afraid to go first and don’t want to be the anchor that drives all other bidders” or which informs the rest of the review process.

But even if the NDA applied to the city’s bid, would that trump the public’s right to know?

Experts, public access advocates and officials with Pennsylvania’s Office of Open Records say no.

“A confidentiality or non-disclosure clause in a contract, settlement agreement, etc., cannot trump the Right-to-Know Law,” Erik Arneson, executive director of the OOR, told The Incline.

Additionally, he explained, government agencies are usually the ones receiving bids, not the ones placing them. Because of that, he added, “This is an unusual situation.”

But the inverted roles alone do not determine anything under the Right-to-Know Law, Arneson clarified.

“Speaking generally, the Right-to-Know Law allows agencies to withhold at least portions of records which include real estate proposals relative to the disposing of real property; proposals related to the procurement or disposal of supplies, services, or contracts; trade secrets; and internal, pre-decisional deliberations,” Arneson added. “Whether any of those exceptions — or others — might apply in this case is something that can only be decided during the course of an appeal.”

Mayor Bill Peduto at The Incline and WESA's mayoral forum.

Pittsburgh Mayor Bill Peduto

Jasmine Goldband / The Incline

‘The city’s strongest argument’

As of Thursday afternoon, the OOR had received two appeals of Amazon HQ2 RTK refusals. Both were from the Tribune-Review, one involving a RTK request denied by the City of Pittsburgh and one involving a request denied by Allegheny County.

But what will the result of those appeals look like? To be sure, the answer depends on who you ask.

This is partly because while legal precedent in Pennsylvania doesn’t explicitly favor confidentiality clauses in RTK cases, there’s still a broad spectrum of legitimate public access exemptions available to the city in their attempt to keep the Amazon bid under seal — some of the same mentioned by Arneson above.

“The City’s strongest argument may be that the bid information is confidential, trade secret under section 11 exemptions,” said Sarah C. Yerger, a principal with Post & Schell, P.C. in Harrisburg and former senior deputy attorney general for Pennsylvania.

“The City will have to prove that the information really is confidential in order to give the City a competitive edge. This argument is found in cases involving confidential proprietary pricing structures. Depending on how much effort was put into maintaining confidentiality, which someone from the City would have to explain via an affidavit to the OOR, there is a good argument that the exemption applies,” she said via email.

Yerger wanted to stress that she has not seen the RTK requests at issue here, nor has she seen the city’s denials. Instead, she spoke only in generalities based on her understanding of the the law.

Reilly said the city might also argue that the same public access exemptions afforded to private companies engaged in active bidding for contracts should be extended to them, now that the roles have been reversed. (Once an appeal is filed, the law allows the city to add justifications for denial not initially cited in a denial letter.)

Others are unconvinced of the merits of these arguments.

“The trade secrets provision cited by the city and county doesn’t apply — that was designed to protect private companies,” said Susan Schwartz, an advocate for open records and Pennsylvania chairwoman for the Society of Professional Journalists’ Project Sunshine.

Schwartz added: “The city isn’t a private company. It would be an issue if the media outlets were asking for information provided by Amazon.”

Schwartz went on to say of exemptions for government agencies involved in certain real estate negotiations: “The real estate item doesn’t seem to apply either — the government isn’t talking about selling, buying or leasing real property. And the whole point of that exemption was to help governments get the best deals they could when buying or selling property.”

For the record, Schwartz said she is not a lawyer and that she turns to the Pennsylvania NewsMedia Association for advice.

Melissa Melewsky, the PNA’s Media Law Counsel, added of Pittsburgh’s Amazon bid and its related RTK responses, “I think an appeal could result in some access since it is unlikely that all parts of the bid package would be exempt. The city is required to release all public portions and only redact that material which is subject to exemption. Moreover, I would argue that the bid is a financial record as it deals with the city’s receipt and/or disbursement of public funds. Most of the exemptions in the RTKL do not apply to financial records, and if one does, the law only allows redaction, not wholesale denial of public access.”

Again, the nature of the state’s open records rule is such that no one can say for sure how all of this might play out.

At least not yet.

‘… for Amazon’s consideration only’

It’s clear that some feel strongly about the city’s moral obligation here, if nothing else.

“Yes, winning Amazon’s headquarters would bring a lot of jobs. Whatever the bid is might very well be worth it,” Schwartz said. “But citizens have a right to know the cost before it’s too late for them to do anything but complain.”

She added: “I understand officials’ concern that tipping their hands could help other areas modify their bids. But those articles you cited say about 30 other cities have released their bids. Pittsburgh should do likewise.  It’s part of the burden it bears as a public entity. Private companies can demand privacy — after all, their investors voluntarily put up their money, and can withdraw their support at any time. But citizens can’t opt out of paying for their government’s promises.”

The Incline reached out to Mayor Bill Peduto’s office and the city’s open records officer on Wednesday and was directed back to a statement issued a day earlier by the Pittsburgh Regional Partnership — that is, Peduto, County Executive Rich Fitzgerald and Allegheny Conference CEO Stefani Pashman. It said:

“As we stated at the press availability the day after the proposal was submitted, we are not going to show our playbook. This is a competition with more than 200 other communities nationwide. We believe not disclosing the details of our playbook provides a competitive advantage.

“We routinely meet with companies looking to invest in this region. Such meetings often include detailed discussions about economic growth and jobs, and proposals – if appropriate – are specifically tailored to what the economic impact of such a location would be to our region. Those companies expect a candidness in the conversations that they have, and that those discussions will be kept private. Without that expected discretion, many would not even consider this region.

“Our proposal defines why in detail, and in the midst of an unprecedented competition, we continue to believe that it is in the region’s best interest if those details – at this point in the process – are for Amazon’s consideration only.”

Peduto Chief of Staff Kevin Acklin, in an email sent to The Incline on Thursday evening, echoed much of this. He added of the RTK request denials and appeals:

“The RTK appeals are being handled by legal counsel, and the legal reasons for excluding information submitted in a competitive RFP for Amazon’s second headquarters will be addressed as part of the process,” Acklin said.

“We are very proud of our proposal, and we look forward to sharing it with the public at the appropriate time. We are in a competitive process that requires the terms to be confidential under applicable law and RFP rules until they are able to be released.”

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