Court testimony reveals another way Pittsburgh and county officials justify sidestepping state open records law in Amazon case

Amazon's campus in Seattle, Washington, spans the city's downtown and South Lake Union neighborhoods. The campus was photographed from the roof of Amazon's Port 99 building. (Photo by Jordan Stead, courtesy of Amazon)

Who owns Pittsburgh’s bid to host Amazon HQ2?

The answer to this question appears to be a critical point in determining if the public has the right to see what the city and Allegheny County have offered to Amazon to lure its second headquarters to Pittsburgh.

On the stand in the Allegheny County Court of Common Pleas on Thursday, CEO of the Allegheny Conference on Community Development Stefani Pashman testified that PGHQ2, a private subsidiary of the conference, owns the bid and merely shared copies of it with the city and county. City and county lawyers argued before Judge Terrence W. O’Brien that the city and county do not own the bid, which means the governments can’t be compelled to release it and that they don’t have the right to anyway.

“They own the proposal, it’s their proposal,” said George Janocsko, a solicitor with the county law department, during arguments on behalf of the government Thursday.

Previously, city and county lawyers argued before the state Office of Open Records why they believe the bid documents qualify as confidential proprietary information and should not be released because they contain trade secrets and information about privately owned real estate.

WTAE, PublicSource and other local media outlets have been requesting documents and other information related to the region’s Amazon bid since late October. Lawyers for Hearst, the company that owns Pittsburgh news station WTAE, consolidated the  cases — with both the city and the county — into a single case that O’Brien is currently hearing. Several lawyers and activists, including the Pennsylvania branch of the American Civil Liberties Union, submitted an amicus brief on behalf of the media outlets last month calling for government officials to release the bid.

During cross-examination by Hearst attorney Ravi Sitwala, Pashman acknowledged that by including information about tax incentives in the bid, including incentives the state Department of Community and Economic Development [DCED] provided, PGHQ2 had developed the bid “bilaterally” with government. Sitwala later argued that that bilateral cooperation meant the bid should be made public.

“The whole point of the Right-to-Know Law is that the business of the government is the business of the people and the government does not have any power, generally, to tell the citizens what they should know and what they shouldn't,” he said.

Pashman also testified that the money spent to put the bid together was “primarily private” and that eight Allegheny Conference employees, representatives from two local universities, two foundations, Mayor Bill Peduto’s former chief of staff Kevin Acklin, Allegheny County Executive Rich Fitzgerald’s chief of staff Jennifer Liptak and PNC CEO Bill Demchak worked on the bid.

All of those people signed non-disclosure agreements with PGHQ2 to not release the contents of the bid, Pashman said, and some people also signed NDAs with Amazon. Acklin, Pashman and Executive Director of the Urban Redevelopment Authority [URA] Robert Rubinstein also signed NDAs with the DCED, promising not to release details about state incentives.

Sitwala argued that because Acklin and Liptak are public employees and worked on the bid during work hours, their work should be made public. He also made the point later that NDAs don’t supercede the state’s Right-to-Know Law and that the ones signed with the DCED — which were entered as evidence — acknowledged that fact.

During her testimony, Pashman further argued that the Amazon bid is confidential because PGHQ2 received proprietary information from real estate owners and that it also got confidential information from other entities, including local universities. Pashman named the University of Pittsburgh, Carnegie Mellon University, Robert Morris University and Carlow University among those who gave PGHQ2 confidential information. Because PGHQ2 has an obligation to protect that information, Pashman said, the bid can’t be released.

During examination, Pashman said she wasn’t sure if PGHQ2 would exist as an entity after Amazon made its choice but that the it would continue to play some kind of role if the company chooses the Pittsburgh region.

At a press conference in January, Allegheny County Executive Rich Fitzgerald (left), Allegheny Conference CEO Stefani Pashman (center) and Pittsburgh Mayor Bill Peduto (right) discuss Pittsburgh's place on Amazon's shortlist for its second headquarters. (Photo by J. Dale Shoemaker/PublicSource)

Local officials have promised for months to release the Amazon bid once the company makes a final choice for where its second headquarters will go. That decision is expected sometime this year. But lawyers for Hearst on Thursday said the bid should be released immediately rather than later.

“The city and the county believe that the citizens should not see this proposal until when they deem it fit, as opposed to now when in fact Amazon is considering it and the community could actually respond,” Sitwala said.

Janocsko said that because the county engages in economic development, the bid counts as a trade secret. The Right-to-Know Law allows governments to withhold information that count as trade secrets. Sitwala pointed out during his argument that the trade secret exemption only applies when private entities submit information to governments, not when governments submit information to private entities.

“This is not a proposal to an agency,” he said. “It's simply the flip-side of what this actually encompasses, of what this exemption is designed to cover.”

While working on the bid, PGHQ2 paid several consulting firms, including Maya Design and HR&A Advisors, Pashman said. HR&A ran a secure dropbox where pieces of the bid were stored. The Pittsburgh region spent between $300,000 and $400,000 to put the bid together with most of that money coming from private businesses. The businesses that contributed have not been disclosed. The URA also contributed $50,000. Pashman also revealed that the PGHQ2 entity was established after work on the bid had already begun, with a final incorporation document dated Oct. 18, one day before the region submitted its proposal.

During oral arguments, Janocsko said the state Office of Open Records [OOR] had misapplied the Right-to-Know Law when it ruled earlier this year that the bid and other documents should be released. He also twice invoked O’Brien himself as he argued, saying first that some government business, like O’Brien’s own deliberations, aren’t public and that the Amazon bid was part of a private negotiation the government was engaging in.

“Transparency is an important value, but like other important values in our legal system, in our government, it's not totally absolute,” he said. Janocsko also suggested that O’Brien should sanction the OOR by ordering it to redo its reviews of whether the Amazon documents should be made public.

Janocsko also said the government needed to keep the bid secret because Amazon coming to the Pittsburgh could be the biggest investment since Andrew Carnegie’s steel mills and that the region desperately needed investment. He said O’Brien knew that, as he used to be a steelworker.

“I'm an old steelworker. You are, too. And I think we're ones of the very few who lived through the collapse of the manufacturing and steel industry in this area,” Janocsko said. “To construe the Right-to-Know Law in this instance, at this particular point in time, is to essentially sabotage any realistic proposal we could have of achieving a groundbreaking private investment in our economy.”

At the end of about two hours of testimony and arguments, O’Brien indicated that the city should turn over a log of the 381 pages of emails that WTAE requested, though he didn’t formally order it. The log would contain some details about the emails and the city’s reasoning for withholding each one. O’Brien called the log “extremely generic” and said he didn’t see why it shouldn’t be turned over to WTAE. O’Brien also asked lawyers for the city, county and Hearst to submit written arguments and figure out a schedule for submitting them to him.

In a separate case, Governor Tom Wolf's office as been arguing against releasing information about state incentives to PublicSource. That case, in Commonwealth Court, is ongoing.

J. Dale Shoemaker is PublicSource's government and data reporter. You can reach him at 412-515-0060 or by email at dale@publicsource.org. You can follow him on Twitter at @JDale_Shoemaker. He can be reached securely via PGP: bit.ly/2ig07qL

  • Robert S

    There’s some shady stuff going on here. Who the hell spends almost half a million dollars putting a bid together? Shady through-and-through