PRM’s Amazon bid lawsuit heads to a hearing

By Mike Kaszuba and Matt Ehling

New court filings show that state officials have become more strident in denying they possessed Minnesota’s unsuccessful bid for Amazon’s second corporate headquarters (HQ2) — a position that appears to be at odds with earlier records showing that they worked closely on the bid with economic development non-profit Greater MSP, and had access to bid information through an on-line file-sharing system.

The filings show that one official at the Minnesota Department of Employment and Economic Development (DEED) now says that an earlier agency e-mail was “inarticulate” when she offered to “walk through a final draft proposal” with state legislative leaders last year, due to the fact that DEED did not have a copy of the Amazon proposal.

Recent legal filings from DEED and Greater MSP also uniformly refer to the Amazon bid as “Greater MSP’s bid,” even though the bid was repeatedly described as being undertaken on behalf of the State of Minnesota in scores of internal DEED e-mails.  

The filings are among the latest developments in a year-long attempt by non-profit organization Public Record Media (PRM) to have the Amazon bid made public.  PRM filed a lawsuit this summer against both and DEED and Greater MSP for denying access to the bid.  Although ten months have passed since Minnesota was eliminated from competition for the Amazon project, Greater MSP has fought the release of the bid, citing competitive reasons.  Meanwhile, DEED – despite the existence of numerous e-mails showing it was working in tandem with Greater MSP for over six weeks – continues to maintain that it never received a copy of the final bid, nor any drafts.  

A hearing on the case will take place in Ramsey County District Court on November 20th.

Searching for Minnesota’s Amazon bid

After Minnesota’s HQ2 bid was submitted to Amazon in October of 2017, PRM sent an open records request to DEED seeking both the bid, as well as correspondence between DEED and Greater MSP about the compilation of the document.  DEED initially produced three pages from the bid document – a cover sheet, and a summary of state economic incentive programs – and stated that it did not possess the remainder of the bid, since Greater MSP “took on the task of compiling Minnesota’s response and submitting it to Amazon.”  An open records request submitted to Greater MSP was met with a refusal to release the bid.  Under Minnesota’s Data Practices Act, private contractors who perform government work are covered by data disclosure laws to the extent of the government functions they perform.

DEED subsequently produced correspondence about the state’s collaboration with Greater MSP on the Amazon HQ2 proposal.  DEED’s document release contained e-mails indicating that DEED and Greater MSP employees had joint access to a file-sharing portal called “Box,” and that they were able to send and receive Amazon-bid data through the portal.  In one e-mail – sent days before the Amazon bid was due – DEED employee Thu-Mai Ho-Kim wrote to Valerie Vannette of Greater MSP, stating, “Hi Val.  Was looking at the Box files, and it looks like you guys have been busy putting together a final package.  It looks good!”

PRM presented DEED with the “Box” e-mails, along with a renewed request for the Amazon bid and any drafts possessed by the agency.  An attorney for DEED responded, stating that “the final Amazon bid document, as well as draft versions of final bid document, was never collected, created, received, maintained, or disseminated” by DEED.  PRM subsequently filed a lawsuit against DEED seeking the bid and drafts, and later added Greater MSP to the suit.  Both DEED and Greater MSP have filed motions seeking to dismiss PRM’s lawsuit.

Since its creation less than a decade ago, Greater MSP has been an influential player on economic development issues in Minnesota.  It is led by some of the Twin Cities’ biggest business heavyweights — when the Amazon plan was announced last year, top officials from Health Partners, Medtronic, Cargill, Ecolab and Target and other notable Minnesota companies served on Greater MSP’s board.

Internal e-mails show push for secrecy

Agency e-mails obtained from DEED show a coordinated effort by both DEED and Greater MSP to keep details regarding the Amazon bid out of the public eye.  DEED e-mails show that:

• Before the Amazon bid was due to be submitted, the city manager of Inver Grove Heights wrote to DEED, seeking a copy of the bid.  DEED’s Jeff Rossate replied, stating:  “GMSP/DEED are not sharing the final product (at this time).  The reason – it is not a matter of trust with the communities, but if it is distributed and a community receives a [request for government data] from media, the entire proposal would be subject to public viewing.“  Rossate added, “We are in discussions with Greater MSP as to how a limited ‘viewing’ of the proposal with key community contacts [could] occur.”  A new DEED court filing, however, dismissed the email’s importance, stating “there is nothing nefarious about GMSP or DEED” discussing how the state’s public data laws operate.

• Mike Langley, Greater MSP’s top official, communicated with DEED commissioner Shawntera Hardy regarding the confidentiality of the Amazon bid.  When Hardy was quoted in a news article that carried the headline “Minnesota Amazon Bid will be Secret”, Langley urged DEED officials to “correct the record.”

“This is obviously not what you said, but what they decided to print to attract attention,” Langley wrote to Hardy in a September 8th e-mail last year.  Langley then attempted to make sure Hardy understood the difference between what the article claimed, and what he said was in fact happening. “I know that you [instead] meant our final submission to the company will not be shared publicly, as that would give every other state and region in North America a competitive advantage over us.”  The reporter and editor who wrote the article and headline, Langley added, “haven’t thought that through.”

“Together, as you have indicated, we will be conducting an open and transparent process in the region to ascertain all potential site and approaches that will meet the company’s requirements,” Langley told the DEED commissioner.

Three minutes later, Hardy replied: “Thank you for this note and yes, I will tonight clear the record.”

• A set of talking points was shared by Greater MSP and DEED as Hardy was about to make a television appearance in early September of last year to talk about the Amazon bid.   “Amazon has requested a level of confidentiality in the proposal, which is completely normal for this type of project, and we will respect that request,” the talking points stated.

• In a September 21st e-mail, Greater MSP official Mike Brown noted that Minnesota communities submitting locations for the proposed Amazon headquarters would be encouraged “not to reveal details of their submissions publicly.”

“Please let us know your thoughts on the email,” Brown wrote.  “It would be great if you could reply to this email so we know we are in agreement.”  Brown also added that he understood that DEED would contact the governor’s office “to make sure there is alignment there [too].”  

DEED Commissioner Hardy replied, writing: “The email is aligned with my thoughts.”

• Four days later, Greater MSP e-mailed DEED officials on the same topic.  A September 25th e-mail from Greater MSP’s Brown described how the organization had contacted local governments in Minnesota and “asked those who have submitted to not share any further details of their submissions publicly, as we are competing with many states and regions.”

“Are people comfortable with this statement?” Brown asked.  “I am fine with this,” DEED’s Rossate replied the same day.

• At one point, Greater MSP wanted local governments in Minnesota (which are bound by the state’s public data laws) to sign non-disclosure agreements (NDAs) to keep them from talking publicly about the bid.  “Greater MSP would like all 18 communities to sign [non-disclosure agreements] in an attempt to limit local leaders from talking publicly about their submissions” of potential building sites for Amazon, DEED’s Allison Jones wrote in a September 25 e-mail last year.

In an e-mail to Governor Mark Dayton’s office, Jones noted that, “DEED does not recommend Greater MSP’s approach [regarding NDAs for communities.]  Neither Greater MSP nor DEED have any way of policing local comments, especially if not all communities sign.  Local communities may also resent Greater MSP and the state [for] preventing them from speaking publicly.”

“Instead Greater MSP and DEED can talk to communities about the benefit of limiting their public comments,” she added.

Jones then added a direct question for Governor Mark Dayton, writing, “Governor, are you okay with DEED’s recommended approach re:  NDAs for local communities?”  Jones’ e-mail to the governor’s office also stated, “Let us know when you hear back tomorrow because this will require coordination with Greater MSP.”

Differing reasons offered for bid confidentiality

Documents show that as DEED and Greater MSP prepared the Amazon bid in the fall of 2017, the two organizations at first gave differing reasons for not making bid details public.

DEED spokesman Shane Delaney told a reporter in a September 29, 2017 e-mail that the state agency was not releasing the proposed sites in Minnesota for the Amazon headquarters because “it would put us at a competitive disadvantage with other states.”

DEED then went a step further – telling another reporter on October 4th of last year that it would also not disclose which other Minnesota companies might be assisting with the bid because of the “competitive disadvantage it would bring to Minnesota’s proposal.”

But DEED – along with Greater MSP – would later instead cite a non-disclosure agreement that both entities had signed with Amazon as the reason for keeping the bid and its details secret.

While DEED told a reporter on September 12th of last year that the state agency was not under a non-disclosure agreement with Amazon, DEED would soon enter into such an agreement, according to records obtained by PRM.

In a September, 2017 e-mail to the governor’s office, DEED’s Allison Jones wrote that “DEED is under a [non-disclosure agreement] with Amazon that is compliant with Minnesota law.”  In an October 13th e-mail last year, Greater MSP’s David Griggs informed a Bloomington city official – who wanted to know if the city would get to review the final proposal – that “we have been asked by the client to keep the proposal confidential.”

When the bid was submitted to Amazon in October of last year, at least one DEED official wondered what the state agency should tell the media.  “There is nothing new” to say, wrote Blake Chaffee, DEED’s deputy commissioner, in an October 13 e-mail.  “We would be issuing the same statement for the 7th time.”

“Media outlets are already frustrated with a lack of details and I think we end up adding to that,” Chaffee added.

“[We] still will not be able to provide any new insight into the state’s bid – [just] the usual color commentary,” Chaffee wrote to the governor’s office the same day.  “[Is] it your expectation that we send a note to the press once it’s been submitted?  With some kind of a statement about how goddamn excited we are about this thing?”

Greater MSP’s Griggs meanwhile sent a list of talking points to DEED and other public officials on October 18th – the day before the state’s bid was due to Amazon.

The list of talking points stated: “All regions participating in Amazon’s site selection process were required to sign non-disclosure agreements and to submit their proposals in confidence.  To honor those conditions, we’re not at liberty to share much information about our proposal.  Furthermore, given the intense competition for this opportunity, it’s not in our best interests to show our cards.”

The talking points were marked “confidential” and “not for distribution”, according to a heading at the top of the document.

Hearing on motion to dismiss the lawsuit

PRM has argued in its court filings that DEED violated the state’s open records laws by failing to produce the bid or any drafts, and also stated that Greater MSP was likewise subject to the open records laws because it had performed a “government function” for DEED through its work on the bid.  The complaint in PRM’s lawsuit maintained that DEED’s own internal documents showed the state agency had “clear access” to the bid while it was being assembled, and that Greater MSP would be responsible for disclosing the Amazon bid in the event DEED was unable to produce it.  PRM also argued in its court filings that DEED demonstrated “willful violations” of the state’s public records laws, and sought an injunction against such practices.

Both DEED and Greater MSP have responded by asking the court to dismiss the case.

DEED, in both its court response and in earlier correspondence, said that it “never collected, received, maintained, or disseminated” the bid; did not have a full copy of the bid; and had already made public everything that it was obligated to under the law.  DEED has also stated that whether the final Amazon bid was ever stored in the “Box” file-sharing portal “is unknown by DEED,” and that some of the data in the portal is not “government data” subject to disclosure under the state’s Data Practices Act.

Memos and declarations filed by Greater MSP claim that the business non-profit never stored the final Amazon bid (or any drafts) in the Box portal, and that just eight “hard copies” of the final bid were printed – and that five of those were sent to Amazon.  The declaration of Greater MSP CEO Michael Langley states that of the remaining copies, Greater MSP’s lawyers had one, and that Greater MSP had the other two, with one “filed securely in my office.”  Langley wrote that Greater MSP “alone, drafted and submitted the bid” and that the private business group had signed a non-disclosure agreement with Amazon, in part, to keep private “information Greater MSP may receive about Amazon’s operations and businesses.”

In recent legal filings, DEED’s attorneys have stated that “a private entity [Greater MSP] created the proposal and submitted it to Amazon in an attempt to convince it to locate its second headquarters in Minnesota.”  Greater MSP’s legal filings likewise characterize the Amazon bid as “Greater MSP’s bid.”

However, thousands of pages of e-mails produced by DEED show an extensive collaboration by both DEED and Greater MSP on the Amazon bid, and repeated references in DEED correspondence characterize the bid document as the “State of Minnesota’s bid,” including the bid’s cover page, which begins with the following sentence:

“On behalf of the State of Minnesota we are proud to submit our state’s response to Amazon’s call to establish a second corporate headquarters in North America.”

The cover page is signed by Governor Mark Dayton, as well as by the majority and minority leaders of the Minnesota Legislature.

Story updated on November 21, 2018 at 3:10pm to add further detail about the history of Greater MSP.