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Thursday, February 16, 2012

When openness leads to corruption

Shew! this is going to be a tough one but I will give it a try.

A lot is being made about a bill (SB2207) we are considering to open some information about contract negotiations for economic development. Some information will be made at least semi public. But not all.


What the governor has asked for is something Bredesen never did. Haslam wants to make sure the companies applying for state aid and contracts are strong enough to actually do what they are signing up for. Do they have cash reserves? What is their current cash flow? Do they have an organizational structure that can handle this type project? More or less can Company XYZ and Company ABC do what the state is about to give them money to help them do. Bredesen never asked these questions or for the information so now we are stuck with some dog companies that cant do what we gave them money for.

Haslam decided it was best to at least ask for some basic information of companies XYZ and ABC while in negotiations. Suddenly the Democrats got religion and jumped all over it. Why not let the people see all that information? The ownership of those companies should be known too. Otherwise it looks like a cover up shady backroom deal.

Where were they 3 years ago?

Why is it a big deal? A companies private cash flow information etc. is usually tightly held by a company. No one wants their competitors to know what kind of financial shape they are in or if they are planning a move. It could lead to hostile takeovers, stock volatility, employee panic and all sorts of bad things. To expose that information to the public, would be more a headache then most companies want for something that may not even work out. If no deal is made is an all downside type of thing and could squelch a company from entering negotiations about coming to or dealing with Tennessee.

The The big thing Democrats have keyed on is saying the names of the private ownership of a company now needs to be known and made public throughout negotiations and after an award of contract is made. Open, clean government right? Well, maybe. But maybe not so much. Lets look at a scenario. Two companies are negotiating for a contract. Company ABC and their competitor Company XYZ.

Lets for instance say Company XYZ is owned by a good friend of the person deciding the contract. Company ABC on the other hand is owned by you. Would you want the person deciding the winning bid to know before he makes his decision that his best buddy was a bidder or would you want them to do it blind and vote on the merits of your bid?

Post contract, lets say you own the company. Do you want to expose all the people who may have Lent you money to start your business? At what point would it stop? What if ownership was part of a performance contract? Would they have to expose to your competitors part of a performance contract of a top employee if that was part of their pay? That could start a bidding war for contractors and employees. What about companies who may have stock holders? Some companies may have thousands of stock holders or part owners. Some people may not even know they are "owners" as part of some 401K plan. Should the public know every single investment or investor you have ever made or have? Where do you draw the line?

We are working on it now.

No matter what, it will be more open then it ever was in the past. That is for sure. The hard part is drawing the line on what information is reasonable to give out as well as when and where you draw the line. Open government is good but too much could kill a lot of deals for Tennessee.

Now should we be making those deals in the first place? That is another question for another day....

5 comments:

  1. "Now should we be making those deals in the first place? That is another question for another day.... "

    No, that is the first question that should be asked. This money is not yours to give.

    Arguing Haslam's "F" is higher than Bredesen's "F" still results in failure.

    "Do you want to expose all the people who may have Lent you money to start your business? At what point would it stop?"

    It would stop at the point where they decide not to take my money. Is this any different than the requirements for welfare drug tests?

    Yes, the Dems are hypocrites on this issue, a lot like the Republicans are on those paper ballots. When the **** are the Big Two going to do what is right for once without using each other as their excuse?

    "Where do you draw the line?"

    See link to Rep. David Crockett above.

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  2. I think the last question is relevant today. If my tax money goes somewhere I want to know every place it goes and i have the right to. If it goes to buy TP I want to know. That being said. My money should never go to these scams. If they can not deal with total openness thats a them problem. Maybe it will lead to lower taxes

    ITs about time Tennessee was for Tennesseans

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  3. I know. I feel the same way. I just wanted to give a clear picture of what was going on with this bill first. The spending for ECD is another bill later in the year.

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  4. I believe knowing who (ownership) and if they are capable of delivering what is promised is important for any project. Should the public know every financial detail of a particular bidder? I think not.

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