Companies seeking tax breaks from Memphis might be hidden from public via 'code names'

Desiree Stennett | Memphis Commercial Appeal

Depending on how the state attorney general interprets Tennessee's open records laws, the public could soon know less about the companies that request tax incentives to expand or move their businesses to Memphis.

The Economic Development and Growth Engine board voted Thursday to seek guidance from the attorney general's office to determine if three pieces of information —the name of the company applying for an incentive, its parent company and its address — can be hidden from the public but revealed to the board.

Instead, a "code name" would be used to identify the company.

Other information such as the industry, the number of jobs the company plans to create and the average pay of each job would still be released when it is provided to the board.

According to Mark Beutelschies, legal counsel for EDGE, all of the information would need to be shared with the EDGE board to be sure that there are no conflicts of interest that would require a board member to abstain from voting.

"We want to get an explicit understanding from the state that if we held these three pieces of data that it would not violate the open records," Beutelschies said. "We need to get a better understanding because the statute is not clear."

The statute requires that the board reveal information "in a manner that would adequately notify and fairly inform the public." It does not say specifically what information must be released.

If the EDGE board began to withhold the information, it would be veering away from the economic development practices it currently shares with Nashville, Knoxville and Chattanooga, according to Reid Dulberger, EDGE president.

"According to our research, they do what we do," Dulberger said. "Which is, once the projects goes to their boards for votes, they disclose to the public."

However, he added that there are some economic development boards in other parts of the state that are less transparent. He cited as an example Clarksville in Montgomery County in northern Tennessee, which he said uses code names.

"But 'the big four,' if you will, we all do the same thing," he said. "We release that information to the public in advance of your meeting so the public has full information to decided whether or not they would like to be present and be heard ... Some companies wold prefer no one know. We just don't know if that's legal."

For Al Bright, EDGE board chairman, it comes down to whether or not the practice would convince more companies to bring their businesses to Shelby County.

"If using code names more brings in more jobs, by all means, we need to do it," Bright said.

The attorney general likely will not weigh in until early next year.

Desiree Stennett can be reached at desiree.stennett@commercialappeal.com, 901-529-2738 or on Twitter: @desi_stennett.