Amazon

Judge Rules Chicago Can Keep Its Amazon HQ2 Bid Secret, Rejecting FOIA Lawsuit

Chicago becomes the latest major metropolis to hide the massive tax breaks it's offering to Amazon.

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Jim Young/REUTERS/Newscom

An Illinois judge ruled last Thursday that the city of Chicago does not have to reveal the details of its bid to become the site of Amazon's massive new headquarters, shielding the city's offer of huge tax breaks and other handouts from public view.

Lucy Parsons Lab, a digital rights and transparency advocacy group, filed a public records lawsuit against Chicago in February after the city refused to disclose its bid, citing a competitive advantage exemption. Since the corporate giant announced in 2017 that it was seeking a site to build a second headquarters, nicknamed HQ2, major cities across the U.S. have been vying for Amazon's favor, often dangling billions in tax breaks and other incentives to the company.

But the exact details of those offers have often been hidden from the public. Chicago is only one of 30 cities that has refused to disclose its HQ2 bid, according to a public records project by MuckRock.

Chicago reportedly offered Amazon $1.32 billion in "Economic Development for a Growing Economy" tax credits. Lucy Parsons Lab was seeking the city's bid as well as communications between Chicago Mayor Rahm Emanuel. However, a Cook County circuit judge rejected the group's effort to pry loose those records.

"The City of Chicago could suffer greatly by this very disappointing ruling," says Freddy Martinez, director of Lucy Parsons Lab. "We raised this lawsuit to bring transparency to a very critical issue in our city and are outraged that we lost. This raises the potential for a very serious loophole where the city can offer private companies massive tax breaks in secret with virtually no oversight. These tax breaks are being offered to Amazon, one of the richest corporations in the world, which pays no federal tax at all."

Chicago is "notorious for gaming tax payers and putting them on the hook for decades of awful economic policies," Martinez continued, pointing to the city's bizarre deal to lease out its parking meters to Abu Dhabi. "We don't even know the details of this bid but we expect that taxpayers could end picking up the tab for Jeff Bezos for decades."

As The New York Times reported last week, places like Newark, Austin, and Miami-Dade County have all refused to disclose their Amazon HQ2 bids—sometimes even city councils are kept in the dark—or released documents that are almost completely redacted:

A primary reason for the information blackout is that, in many cases, the bids were handled by local private Chamber of Commerce affiliates or economic development groups that aren't required to make their negotiations public. Many of the groups are also not covered by Freedom of Information Act or state open-records requests.

But another reason is gamesmanship. Some cities say they want their Amazon proposals to remain confidential to avoid showing their hand to rivals. And Amazon required the finalists to sign nondisclosure agreements that forbid the local groups to release proprietary information about the company […]

The few bids that have become public are breathtaking financial packages that indicate just how much states are willing to pony up to woo Amazon. Maryland put together an $8.5 billion tax incentive and infrastructure bid, and local and state officials in New Jersey got legislative approval to offer Amazon $7 billion in tax credits and incentives to pick Newark.

Whoever gets the final rose in this unseemly municipal edition of The Bachelor will likely see a big influx of jobs, construction, and housing demand (50,000 jobs and a $5 billion investment in construction, if you believe Amazon's numbers), but the public should have the opportunity to see exactly what their officials are putting them on the hook for in exchange for those potential jobs.

As Reason columnist Veronique de Rugy, a senior research fellow at the Mercatus Center, wrote in July, the sort of subsidies that cities are throwing at Amazon do little to enrich anyone besides the recipients of them. Take Maryland's absolute unit of a bid:

My Mercatus Center colleagues Michael Farren and Anne Philpot did the math: The bid, when added to $2 billion in infrastructure spending also being promised, amounts to 3 percent of Maryland's anticipated tax revenue over the next 10 years.

That should fill residents and businesses in the state with dread. While there's no doubt Amazon's HQ2 would add something to the economy, a broad body of economic research has shown that targeted state subsidies to private businesses—while often promoted as a "market-friendly" means to boost growth, jobs, and development—have little to no net positive effects. And as George Mason University's Christopher Coyne and Lotta Moberg wrote in a 2014 working paper, such subsidies are in fact often damaging, because they misallocate scarce public resources while encouraging rent seeking, regulatory capture, and cronyism.

Bonus: Watch ReasonTV's parody video of two desperate small-town mayors vying for Amazon's sweet, sweet jobs. "Alright, bullet train. You want a bullet train? Because I'll eminent domain this whole fucking town."

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28 responses to “Judge Rules Chicago Can Keep Its Amazon HQ2 Bid Secret, Rejecting FOIA Lawsuit

  1. Democrats love them some government transparency!

  2. Would it really matter if the ugly deets were made available to the Windy City voting public?

    1. Or to amazon. They aren’t moving to Chicago.

  3. Funny video! Good job guys.

  4. It should be noted that while Chicago lavishes companies with crony giveaways (most of which never amount to jobs, so at least the Amazon plant will provide jobs), it’s poor neighborhoods continue to experience the worst crime rates in the country.

    Of course, if you live in Lincoln Park like Chapman, what concern is it to you if some poor kids are being shot up? You need to polish that turd and reassure yourself that you made the right decision not moving to NYC after college

  5. How many decades of corruption does it take before you start blaming the voters?

    I get that for rich white people, Chicago is an exciting place to live.

    Are poor black people that isolated from how nice the rest of the country is? Are all their cousins in Detroit?

    1. Black people are the largest demographic leaving the City. Also, immigrants, who no longer settle in the City, but in its suburbs, instead.

      http://www.chicagodefender.com/2018/0…..-diminish/

      Chicago is the only one of the ten largest cities to see population declines since the last census.

  6. I thought liberals hated corporate handouts.

    Yeah, yeah, they hate it when republicans do it, but not their own.

  7. Anything that involves tax revenue, positive or negative should be transparent and subject to FOI.

    1. If it were transperant, FOIA would be irrelevant.

  8. These tax breaks are being offered to Amazon, one of the richest corporations in the world, which pays no federal tax at all.”

    You know, I *want* to support these people. And then they go and say completely batshit idiotic things like this.

    1. We don’t tax wealth – so being one of the richest corporations in the world is irrelevant.

    2. We tax profit. And Amazon rarely makes any money. They’re burning through cash in an attempt to expand fast enough to maintain market dominance – so 99% of the time they’re operating at a loss.

    Morons.

    1. Maybe we SHOULD tax wealth.

      Amazon receives a ton of federal govt money. If it pays no federal taxes, then it’s just one of the biggest welfare queens around.

      And Jeff Bezos pays far less in income taxes than he receives in govt benefits to his wealth/property holdings. Because he has very little income ($82,000 salary and $1.6 million in ‘security’ expenses which he has to pay taxes on)

      Taxing wealth – not punitively but just to capture the ACTUAL value of govt protection of property/wealth – would make it possible to eliminate marginal income tax rates over even 15%, eliminate the whole capgains and income shifting nonsense, eliminate the death tax stuff which only hurts the moderately successful – and would force companies to make honest decisions about paying dividends

      1. To tax something you must be able to measure/quantify it. Who do you think will determine how thats done, and do you not think that in doing so people will shift thier behavior in some way to circumvent even those efforts? Its wishful thinking.

        1. If the tax is punitive, then yeah folks would hide it. If not, then honestly they wouldn’t. They know the value of what they get being in the US under our rules/laws.

          Cuz one thing makes it very very beneficial for the wealthy to declare their wealth. You declare it – the state will step in to help you find/defend it and punish the trespass. You don’t – then you’re on your own, not even the courts will help (how do they know its yours – because you say-so?), and FYTW. Not many wealthy people really want to live the life of a lone Mafia don unless their earnings/wealth itself are illegally obtained. And in nature, defending a lot of claimed territory also usually means a short life with no Caribbean vacations.

          Switzerland has a wealth tax. They hardly have problems attracting the wealthy to move there and no disincentives to accumulating wealth. The reverse actually. Because marginal income tax rates can drop so much, people stop playing a lot of the income tax games which are much easier to play.

          Who do you think will determine how thats done

          Same way that banks determine your creditworthiness for loans if you own a lot of non-traded assets. This ain’t difficult. In 1999, Trump advocated a one-time 14.25% (1425 basis points) tax on $10million+ wealth. Which actually is nonsense like any one-time tax. But a 50-75 basis point annual tax on say $500+k wealth?

          1. But a 50-75 basis point annual tax on say $500+k wealth?

            Sorry, not giving them a second bite of the apple.

            1. Well congrats then. Your fear of a tax cut for yourself is why a guy like Bezos doesn’t need to give up even the first bite of his apple – and retains the power and influence to land $10 billion in no-bid taxpayer money

              Must be a hell of an important principle.

              1. It’s not Bezos who has the power and influence, it’s the rent seeking assholes in local government that have the power to shut out anyone that questions their use of public policy.

                Not to say Bezos is some powerless peon, obviously, but operating at a loss is usually considered poor business strategy and unsustainable. You know, in a market without government control anyway.

      2. “govt protection of property/wealth” — good one. Who takes more of your wealth than anyone else?

        1. Govt doesn’t tax wealth – remember? And at the local level – even property tax (in most cases) does not fully offset either the sheltering effect of deductions or the price appreciation of the raw land – which are both direct exclusive benefits to that owner from the govt recognition/enforcement of that monopoly claim of ownership.

          Our entire federal tax system is designed to extract money from the broad middle class (income tax – which is mostly in effect a tax on labor) – and at core is based more on myths about ourselves not on the objective accounting that taxes are simply the revenue that funds govt spending (which benefits different classes to very different degrees) so debt need not be issued. The wealthy can avoid that because labor income is irrelevant to most of them. The poor ain’t got nothing to extract and will always be a month or so away from homeless.

    2. Agreed that the comment the guy made about how much Amazon pays in taxes is off the mark. But IMO the value of Amazon is relevant. If you’re going to give tax breaks to someone (which I’d rather not) I’d prefer they went to a company that was less wealthy, other things equal.

  9. (50,000 jobs and a $5 billion investment in construction, if you believe Amazon’s numbers),

    So, about a tenth of that then.

  10. Amazon shareholders are entitled to know this, too.

    -jcr

  11. Lucy Parsons Lab, a digital rights and transparency advocacy group, filed a public records lawsuit against Chicago in February after the city refused to disclose its bid, citing a competitive advantage exemption.

    So where in hell are the Chicago Tribune and Chicago SunTimes? These deals are always a bad deal for locals. But it’s pretty obvious that the main media are serving as the handmaidens of the city govt and its cronies. If they really wanted to investigate and provide actual news, they’d have a ton of ways to make sure the city govt complies with them.

  12. “Alright, bullet train. You want a bullet train? Because I’ll eminent domain this whole fucking town.”

    And by bullet train you mean hyperloop.

  13. What’s unseemly about it? If the local warlords want a profitable enterprise to move in, they need to agree in advance to steal less than usual. Disclose the bid after it is won.

  14. Are we still acting like Amazon won’t end up in or near Austin?

    1. I’m still keeping my fingers crossed for DFW area, but Austin is probably willing to hike it’s skirt up higher.

  15. Governments aren’t businesses, they don’t get to cite ‘competitive advantage’ when the ‘advantage’ being ‘dangled’ involve public dollars and policy.

    Disgusting ruling.

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