OKLAHOMA CITY — Oklahoma officials are refusing to say how much taxpayer money an electric vehicle company will receive from the state in return for agreeing to build its first manufacturing plant in Pryor.
Lawmakers and open records watchdogs said the decision by the Governor’s Office and the state’s Department of Commerce to withhold the amount and type of incentives promised to Canoo is unusual.
The company received a package of incentives from the state valued at more than $300 million in exchange for promising to create more than 2,000 jobs, the company’s CEO said last week in an interview with Reuters. State leaders, though, have refused to confirm that figure, so CNHI News filed an open records request seeking information about incentives, details about jobs that will be created and any agreements about employee pay.
In its denial of the records request, the Department of Commerce said the information was confidential and cited a provision of state law meant to protect business plans, feasibility studies, financing proposals, marketing plans, financial statements or trade secrets, proprietary information for the purpose of business development or customized training and related confidentiality agreements and information.
Canoo, a Los Angeles-based company, last week said the Pryor plant will include a paint and body shop along with a general assembly operation, a technology innovation hub, customer support, vocational training and a financing center.
On Monday Republican Gov. Kevin Stitt said he would not release details about the incentives, noting that he’s bound by non-disclosure agreements with both the state and Canoo. And though he acknowledged he used the taxpayer-funded Governor’s Quick Action Closing Fund to close the deal with Canoo, Stitt would not say how much he spent of that $20 million fund.
When asked Monday morning if he thinks taxpayers should know the details about the tax incentives, Stitt initially responded: “Yeah, I mean, I think you ought to talk to the Legislature and pass a law to make that all public, but right now it’s private.”
Less than an hour later, however, his office sent out a statement clarifying that Stitt misspoke and what he said was not actually his position. His office then sent out an additional statement Monday afternoon.
“It is important that we are able to protect specific details of discussions we have with companies for competitive reasons as (we) continue to recruit more jobs to Oklahoma,” Stitt said in that follow-up statement. “The incentives offered to Canoo, and other companies, are through programs authorized in statute and contain performance-related provisions to protect taxpayers’ investment and ensure a net financial benefit to the state of Oklahoma.”
Joey Senat, an Oklahoma State University associate professor who specializes in the state’s open records and open meetings law, said he believes the state is misapplying the open records law, but even if it is not, the provision simply states that they “may” withhold the information. With a deal now publicly announced, Senat said the state should release the information.
“When you have secrecy like this, it breeds incompetency, inefficiency and corruption,” he said. “They should err on the side of transparency. It’s not just the public right to know, it’s a public need to know.”
State Sen. Roger Thompson, R-Okemah, the Senate’s budget chair, said he’s concerned that the Department of Commerce has taken the position that it doesn’t have to release a list of what the incentives will cost the state or the type of incentives offered.
“I have not spoken directly with the Commerce Department about the tax incentives, but I intend to, and I intend to get a full list of them,” he said.
He said most governmental entities are usually forthcoming about incentives offered.
“I think if the taxpayers are giving tax incentives, the taxpayer has the right to know what those incentives are, and how long they’re going to last and certainly, as the appropriations chair, I need to know what the fiscal impact is going to be on the state of Oklahoma,” Thompson said.
“I have the same questions,” said state Rep. Kevin Wallace, R-Wellston. “What did we offer to land this guy?”
Wallace, the House’s budget chair, said he believes taxpayers deserve to know the details, but said he’s OK with withholding that information for now. As officials work to close other business deals, he said Oklahoma leaders may not want other states to know how they’re tracking.
Ultimately though, the Legislature, constituents, and taxpayers need to know how Oklahomans’ money is being invested and how they attracted these companies, Wallace said.
“I don’t have a problem with it right now, but we will need to divulge for transparency, absolutely, how taxpayer dollars are being spent,” Wallace said.
During a late Monday night phone call, Brent Kisling, executive director of the State Department of Commerce, said the incentives would be made public — once Canoo and the state finalized their contracts, although the deal was officially announced last week. Kisling said he didn’t know how long that would take.
“It’s certainly not intended to be secretive in any way, but it’s not public until the final signatures are done on the contract,” he said. “As soon as they’re finalized they’ll be public."
Kisling would not provide a dollar amount for the incentives the state has promised Canoo, but said all are performance based.
Republican state Treasurer Randy McDaniel said he doesn’t know the particulars of Canoo’s incentives, but knows that Oklahoma is in a competitive situation with many other states to try to bring in great companies. He said in general it’s unusual not to release information about the tax incentives that a government entity has awarded.
“One thing I’ve liked about the tax incentives of the past has been the transparency and openness and also some of the great clawback provisions to ensure that we are getting a good deal for the taxpayers of Oklahoma,” McDaniel said. “I would put up the quality jobs act as a role model example of that where you’d have to have true jobs and have a payroll before the incentives are effective.”
He said in Canoo’s case, he’ll withhold judgment because he doesn’t know why those incentives are not yet available.
“Nevertheless, as a general rule, I believe that taxpayer dollars and incentives should be transparent,” McDaniel said.
Andy Moore, executive director of Freedom of Information Oklahoma, said he thinks state government officials would be proud of its deal. Releasing the information would also help municipalities understand how they can offer incentives to lure other companies.
“From a transparency standpoint, I think it is important and valuable that the public know how their money is being spent,” Moore said. “Tax incentives involve taxpayer money, and thus taxpayers have a right to know how the government is using those funds.”
Janelle Stecklein covers the Oklahoma Statehouse for CNHI's newspapers and websites. Reach her at firstname.lastname@example.org.