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On October 15, 2021, the Tampa Bay Times published an article explaining that the St. Petersburg, Florida city council granted nearly half a million dollars plus a potential future property tax exemption to an unnamed retail corporation, a “mystery company” as the lede puts it. Reading between the lines, it seems the corporation in question required city councilors to sign a non-disclosure agreement preventing them from revealing its identity publicly.
After a bit of speculation that the beneficiary of that public largesse is Foot Locker, something other reports also said, the rest of the article explains what sort of job and investment promises the unnamed corporation has made, and why St. Petersburg leaders think their city can become “the next Austin,” i.e., a place that attracts tech corporations with lots of public dollars.
Nowhere in the piece is there any indication that local leaders granting taxpayer dollars to a corporation that refuses to be named is problematic on any level. There’s no explanation about why the corporation can’t be named—as I said, I’d bet there’s an NDA, but there’s no confirmation—and the whole transaction is treated as routine.
Alas, that’s typical for news stories about local incentive deals. Here’s another one from the September 17, 2021 edition of the Denver Post, with no questioning or explanation for why the four corporations applying for funds get to use silly code names—Project Norman! Project Tempus!—as identifiers as they receive public dollars.
Why does this happen? Why don’t local journalists find these situations, well, a bit corrupt and problematic?
I have two interconnected reasons in mind: one of which isn’t the fault of local journalists, really, and one of which is, but ultimately says more about the wider practice of economic development U.S. communities have engaged in for the last half a century than it does your local reporters.
First, local news has been gutted. According to the Save Journalism Project, 32,000 journalists have lost their jobs in the last ten years. One in five metropolitan-area newspapers has closed since 2004, and many more are shells of their former selves, gobbled up by private equity firms or hedge funds and strip-mined. 60 percent of U.S. counties have no daily newspaper.
A major reason for this precipitous decline in the local news industry, as I wrote here, is that Big Tech ate the advertising industry alive, depriving newspapers of revenue and weakening media so much that publications became tempting targets for financiers looking to make a quick buck. The practical effect of all those cuts and closure is fewer reporters, making less money (so generally being younger and less experienced), and covering wider and wider areas. It’s not uncommon at local news outlets for one reporter to be responsible for several towns at once, if not more.
So to get the same output—never mind increasing it, which a publication’s leaders usually want in order to increase page views—journalists have to write more stories in less time, which means less critical coverage, because critical coverage takes more time and effort. A very quick and easy story to write is “city council or economic development board voted to give X, Y, and Z to a company which promises to create 1,000 jobs.”
According to a study in the Journal of Financial Economics published on August 25, 2021, a local newspaper closure is followed by an increase in corporate misconduct—and that’s only the conduct that regulators catch, so the study’s authors surmise that much more goes undetected. Specifically, they found that in the three years after a newspaper closure, “The number of violations at corporate facilities increased by 1.1% and penalties increased by 15.2%.”
Those numbers certainly make sense, as fewer people doing less thorough work means shady stuff flies under the radar. And that applies not just to corporate misconduct, but to governmental misconduct as well, and economic development misconduct, where the two overlap.
Again, I don’t really blame reporters for this. They have an impossible task, constantly trying to make less into more, and the business model that used to sustain their industry was converted into Big Tech profits, because Google, Facebook, and Amazon can promise much more perfect ad targeting—thanks to their surveillance capabilities online—than a newspaper classified section ever can.
That said, there’s also been a concerted effort to make any lingering questions those reporters might have go away, as economic development officials, local leaders, and business executives portray all the secrecy that pervades these deals as normal and even necessary. “It’s customary now,” as one Illinois city manager said. It’s “required,” a Florida economic development official argued. Corporate executives, as readers here surely know, always portray the taxpayer dollars they receive as the thing that sways their decision for where to locate a new facility, even though research and their own actions show those dollars actually sway very little at all.
When everyone is portraying something as normal, it’s too easy for a local reporter—on deadline, having to meet quotas, harried before getting to the next meeting in the next town over—to write it as normal. That was the whole point of the corporate effort to normalize these practices: to eliminate questions and criticism and make it seem like letting unnamed corporations access public monies with few questions asked is just the way it always works and always will work, so don’t get bent out of shape about it.
Add to that the tendency of many journalists and their editors to think simply writing down what both sides said constitutes the whole job and you have a recipe for corporate secrecy being turned into just the way of the world.
But normal doesn’t make it okay, which is why we need folks pushing the counterstory—which also has the benefit of being true. To start, here’s a factsheet I put together with Arlene Martinez at Good Jobs First with tips for covering Amazon specifically, if you’re so inclined to send it to your favorite local journalists.
And none of this is to say that there aren’t excellent local journalists who consistently write well on corporate incentives, and of course there have been really excellent investigations digging into the chicanery that pervades their use. What I’m concerned with is the day-to-day coverage coming out of city council meetings, planning commissions, and economic development boards—the nitty- gritty details of often dull proceedings that actually determine where and how power and dollars get used and abused in local communities.
There’s no reason these corporations need to keep their names off of their applications for public benefits: they’re not putting secret recipes or blueprints out there. They’re asking for public money, land, and resources, such as water and electricity. The opacity is solely meant to prevent input from residents or other businesses who will be adversely affected by the state subsidizing their competitors. The more we all push to have that be the story, the better off we’ll all be.
Pat Garofalo is the author of The Billionaire Boondoggle: How Our Politicians Let Corporations and Bigwigs Steal Our Money and Jobs, the Boondoggle newsletter, and the director of state and local policy at the American Economic Liberties Project.
