Editorial: Remove secrecy about ownership from grants bill


Friday, February 24, 2012


A so-called compromise that would divulge the business name but not the owners of privately held companies receiving public incentives in Tennessee fails to alleviate concerns about openness and the risk of corruption.

Gov. Bill Haslam's administration is seeking a bill that would keep private information about companies receiving grants from the state. The bill is the companion of a measure that would explicitly allow such payments. The governor wants to set aside $70 million to use as incentives.

Much of the information the administration wants to shield is and should be proprietary. Companies have a right to keep certain processes, materials and other information out of the public eye. No business owner would risk being put at a competitive disadvantage by having rivals learn trade secrets. Confidential negotiations are necessary to attract investment to the state.

But the original bill also would have kept the identities of business owners confidential even after the award of a grant. Led initially by state Sen. Roy Herron, D-Dresden, and joined by the speakers of both houses, opponents argued with justification that companies receiving public money should be expected to reveal their ownership to the public. Herron also warned of the temptation to corruption offered by such secrecy.

The administration offered a compromise of sorts in the form of an amendment that dropped the secret ownership provision. However, the new version calls only for the release to the public of the name of the company receiving taxpayer money, plus its location, number of jobs created and the amount of money received from the state.

That's not good enough.

The rewritten bill still does not require the release of ownership information. A limited liability company receiving an incentive to move a factory to Tennessee could include as investors family members of key legislators, cronies of administration officials or felons, and the public would be none the wiser.

The amendment, Herron told the Commercial Appeal, "does not require disclosure of ownership. This secret secrecy amendment implicitly does what the original bill did explicitly. It makes ownership of these companies secret."

On Thursday, both legislative houses deferred action on the proposal, and in the Senate the bill's sponsor, Collierville Republican Mark Norris, sent it all the way back to committee for retooling.

If the Haslam administration won't support the people's right to know who is receiving public money, then the legislative leadership Senate Speaker Ron Ramsey and House Speaker Beth Harwell must step up. Ramsey told reporters Thursday that if a company doesn't want to reveal its ownership, it shouldn't ask the state for tax dollars.

He's right. The identities of business owners or investors aren't trade secrets. Those who want to accept public money from the state of Tennessee should have no problem revealing their identities to the people of Tennessee. The proposal should be amended again to make this principle crystal clear.