County officials say NS confidentiality deal normal, but Knoxville says 'not here'
(The following story by Ed Marcum appeared on the Knoxville News-Sentinel website on August 21, 2009.)
KNOXVILLE, Tenn. Jefferson County officials who signed a confidentiality agreement with railroad company Norfolk Southern over a proposed freight facility in New Market said such agreements are business as usual for many elected officials, but that doesn't appear to be the case for other local governments.
And reports show controversies like the one in Jefferson County have arisen in communities around the nation where elected officials have signed similar agreements.
Norfolk Southern plans to build a $60 million truck-rail transfer facility on 280 acres along Highway 11E in New Market near the Knox County line. Projections say the operation could generate 1,801 jobs in Jefferson County by 2020 and up to 2,700 jobs by 2025. Jefferson County leaders see the project as a way to combat the 15 percent unemployment rate that plagues the county.
However, citizen groups such as Jefferson County Tomorrow see the project as a threat to the environment, prime farmland and quality of life in the community. Opposition seemed to reach a flash point in July when word leaked to the community that elected officials had signed confidentiality agreements with the railroad company prohibiting them from publicly discussing details of the project. Leaders like Jefferson County Mayor Alan Palmieri and County Commissioner Phil Kindred said they signed the agreements in order to keep the project focused on Jefferson County and to learn more about Norfolk Southern's plans.
Many in the community remain suspicious despite Palmieri's assurances that no secret agreements were made and that elected officials sign confidentiality agreements every day.
But a check with Knoxville and Knox County showed that officials in both governments steer away from signing such pacts.
"We follow the Tennessee Open Records Law," said Randy Kenner, city of Knoxville spokesman.
Kenner said the city does not have a written policy on confidentiality agreements, but the practice for officials has been to not sign them in order to stay within the law.
Bill Lockett, Knox County law director, said he has not been asked to address the issue of confidentiality agreements in the year he has held his position.
"But I can also say we have never signed a confidentiality agreement during the time I have been here," he said.
If the issue came up, Lockett said his advice would be to follow the state's open-records law and, with few exceptions, that would mean not signing the agreement.
"There are specific exceptions in the public-records act, but they are very limited and very specific," Lockett said. "Almost every document we generate, unless it is an attorney-client privilege or attorney's work product, is subject to the public-records act."
When Norfolk Southern began looking in Jefferson County for an intermodal truck-rail facility location about two years ago, it asked officials who were privy to the search to sign a document agreeing that they would remain mum about the project. The move is not unusual because companies often do not want competitors or land speculators to know they are looking at an area, and they will go lengths to keep it secret, said Doug Lawyer, director of economic development for the Knoxville Chamber.
"For example, someone might fly in (to the) airport and ask to meet with us. It will be a business representative but we don't even know who the company is or who they are representing," he said.
Confidentiality agreements are a routine part of this process, and members of the chamber sign them all the time, Lawyer said. But staff and members of the chamber are not elected officials. According to Tennessee Code Annotated 10-7-503, any document an elected official signs in the capacity of that office is public record. Usually, some entity like a chamber of commerce or quasi-governmental development agency acts as a buffer between companies and elected bodies, serving as the initial contact point for a company and as an organization it can work through. When projects reach a point that elected bodies are involved, confidentiality agreements usually no longer apply.
Before it settled on Jefferson County, Norfolk Southern, which is a member of the Knoxville Chamber, asked the chamber for help in exploring Knox County as a possible location for its facility, said Mike Edwards, Knoxville Chamber president and CEO.
"So, suddenly we are not thinking of them as chamber members, but as an expansion," Edwards said.
Confidentiality agreements were signed, but did not extend to elected officials and became void when the railroad shifted its focus away from Knox County.
In Jefferson County, the county's chamber of commerce also served as contact point for the railroad, but the chamber also involved elected officials such as Palmieri, who said the chamber asked him and County Commissioners Kindred and Murrel Jarnigan to sign the confidentiality agreements.
Controversy resulted, as it has in several other parts of the country when officials signed such agreements. A Feb. 27, 2007, Charlotte Observer story described how elected officials in Caldwell County, N.C., signed a confidentiality agreement with Google Inc. that would not even allow them to utter the company's name at public meetings.
Google was building a $600 million data center near Lenoir, N.C., that would employ about 210 people. According to the story, Google persuaded the mayor of Lenoir and county officials to sign confidentiality agreements, then negotiated for tax incentives, all this months before required public meetings were scheduled to discuss the incentives.
When the meetings were held, the elected officials would only read prepared statements sanctioned by Google and would not take questions or even reveal the company's name. Google, which received a total of $260 million in state and local incentives, including 30 years of tax breaks, later released the officials from their confidentiality agreements.
Frank Gibson, executive director of the Tennessee Coalition for Open Government, questioned the legality and propriety of Jefferson County's confidentiality agreements with Norfolk Southern, saying the state's sunshine law clearly forbids government decisions being made in secret and establishing that any document signed by a public official meets the definition of a public record.
"The concept of keeping information like this secret is unheard of," Gibson said. "It's not good business from the business side or the voters' side."
Gibson also forewarned that the practice of keeping secrets between governments and corporations could spread within governments to where officials are keeping secrets from each other.
"If I were in business, I would be wary of government officials keeping secrets," he said. "I wonder how Jefferson County commissioners would feel if Jefferson County's mayor kept things secret from them. They probably would feel like Jefferson County residents."
