Posts

Bredesen Busy Traveling, Lecturing, Promoting Health Policy Book

Former Gov. Phil Bredesen remains zip-lippped about what’s in the state’s deal with Amazon.com, although he has plenty to say about what he’s been doing since leaving office, which is traveling the country making speeches, mostly about health care.

“I’m not retired. I’m not vegetating,” Bredesen said. “I’m very active and trying to figure out how I can best use the next few years.”

Bredesen was at a campaign event Saturday in support of Nashville Mayor Karl Dean, who is running for re-election.

Nashville is still home base for Bredesen, but since leaving office in January he has traveled to various locations, from Chicago to Florida to the West Coast, to speak. He has primarily talked about health care, including one joint appearance with former Florida Gov. Jeb Bush, but he has also spoken on the state’s experience recruiting international businesses like Volkswagen and Wacker Chemie.

One domestic business recruitment with Bredesen’s brand on it, however, remains a point of controversy in the state. Amazon is building two large distribution centers in and near Chattanooga. The Internet sales giant is making a $139 billion investment, offering 1,400 jobs and comes in with the agreement that it will operate without collecting sales taxes as a retail outlet would.

A couple of key lawmakers have cried foul, presenting legislation to force Amazon to collect the tax, but that effort has met resistance and even a threat from Amazon that it might pull out if forced to collect. Lawmakers have even asked the state’s attorney general to weigh in on their effort. The bill has been deferred to 2012.

Among lawmakers’ questions have been to what degree the agreement with Amazon has even been in writing.

“I’m just not commenting on stuff that’s going on like that right now,” Bredesen said. “We had an understanding with Amazon, and it was really Matt Kisber (former commissioner of Economic and Community Development) who did all the detail work on the thing.

“I think it was the right decision. I think the current governor thinks it was the right decision to get them here. I think they will be an important piece of the economy.”

The Bredesen administration made the deal after Bill Haslam was elected governor in November but before Bredesen left office. The most widely reported explanation for the arrangement has been that Bredesen told Haslam the state could either grant Amazon the ability to avoid collecting the tax or see the company go a few miles down the road and build its facility in Georgia. The same issue has played out in other states. Bredesen wanted the jobs in Tennessee, and Haslam has publicly said the state will honor the commitment.

Bredesen said there were compelling reasons for striking such a deal.

“Part of what appealed to me about Amazon was I worked real hard to get some of the knowledge-based jobs that require a college education, where you’ve got good salaries and so on,” Bredesen said. “A lot of the Amazon jobs are a little different from that. They’re working in a warehouse. We need those jobs, too.

“There are a lot of people in this state who just need a job with a good company with good benefits, and they’re not going to go back to college to do it.”

When asked last week where the attorney general is on the Amazon issue, Sharon Curtis-Flair, spokeswoman for Attorney General Robert Cooper, said, “We’re working on it,” but she offered no elaboration on a potential opinion or when it might come.

Bredesen said getting a well-respected company like Amazon to build in Tennessee at a time when jobs are hard to come by seemed like the right deal to make. He was asked about the precedent, however, of setting up that arrangement, since Amazon is already making overtures of building even more distribution centers in Nashville or Knoxville.

“I think the governor has got to figure that out,” Bredesen said. “But in the scheme of things, if an Amazon were to be located here, ultimately these tax issues are going to be solved by the Congress.”

Haslam has also said no single state should have to work out the issue of collecting sales taxes on online sales. The issue is complex. Amazon is based in Seattle. Company officials point to the commerce clause of the U.S. Constitution and say the existence of a “fulfillment center,” as Amazon is building, does not create substantial presence, known as nexus, to qualify as a point of sale.

“The two facilities happened on my watch, I think we made the right decision, I think the governor has backed that up, and how he treats the next two or three is up to Gov. Haslam,” Bredesen said.

As for the former governor’s travels, they’re the kind of speaking engagements one would normally expect after the publication last year of Bredesen’s book, Fresh Medicine — How to Fix Reform and Build a Sustainable Health Care System.

“I had a lot of requests to do that after the book came out in the fall, and you really can’t do it as a sitting governor,” Bredesen said. “You can’t take off and go to California for a few days and give speeches.”

He said the topic in such settings is beginning to move more toward the future of the health care system, rather than just reaction to the health care reform law. Bredesen’s book is due for a paperback version this fall.

“I’m up to my eyebrows in health care,” Bredesen said.

The event with Jeb Bush was a health care discussion held by the venture capital group Health Evolution Partners, where they had a “D” and “R” program, with Bredesen the “D” as a Democrat and Bush the “R” as a Republican.

Bredesen said he has put the notion of trying to serve at the federal level on health care policy on the shelf, adding that when it came up it was probably given more attention than it deserved. He also said Saturday he has no intention of running for the Senate. Bredesen was at one time considered a candidate to be President Barack Obama’s secretary of Health and Human Services, which ultimately went to Kathleen Sebelius, a former governor of Kansas.

So for now, Bredesen is doing the speech-making tour and deciding what’s next. Bredesen was mayor of Nashville for two terms from 1991-99 and governor for two terms from 2003-2011.

“When I left the mayor’s office, after I left on Saturday, on Monday morning I was setting up my desk in a new office,” he said. “I’ve said this time, don’t do that, when you’ve got one more good career in you. Get a little space. Get some of these speeches done you wanted to do. Do a little writing, and let things gel a little bit.”

Bredesen said former first lady Andrea Conte now “enjoys being out of the line of fire,” and she’s doing a lot of the same things as her husband is.

“She’s been out and active and around doing different things, giving talks to different groups. She is spending serious time in the garden, and we’re having a great time right now,” said former governor Bredesen.

Mike Morrow is a correspondent for TNReport.com, a not-for-profit news organization supported by donors like you.

Ramsey Seeks Details Of Taxpayer-Funded Economic Incentives

Officials in the administration of Gov. Bill Haslam have tried not to point fingers or publicly second-guess actions by former Gov. Phil Bredesen’s team involving major business relocations.

But Lt. Gov. Ron Ramsey appears willing to ask tough questions about the deals sealed by Bredesen’s job recruitment officials, saying lawmakers have been left clueless about details on state deals that came late in Bredesen’s time in office.

Ramsey is wondering not only what is in those deals but asking exactly who made them and suggesting that more people — like himself — need to be part of the approval process since the Legislature has to OK the state money involved.

Ramsey has seized upon statistics provided by the current Department of Economic and Community Development that show only a small fraction of new jobs in the state in recent years has come through relocations.

Such relocation deals were hallmarks of Bredesen’s administration, where high-profile agreements like the arrivals of Volkswagen, Hemlock Semiconductor and Wacker Chemie were hailed with headlines that Tennessee was the place to be for major businesses looking for new homes.

But Ramsey is raising questions about deals that came later, involving Electrolux in Memphis and Amazon.com in Hamilton and Bradley counties.

Haslam has said the state is still pursuing relocations by big companies but that the focus is shifting to expanding businesses already here because that’s where real job growth is.

But if Haslam is reluctant to publicly question the deals made by his predecessor, Ramsey appears to be a willing volunteer. Ramsey, R-Blountville, has said he is “elated” that the Haslam administration is taking a different course on job growth.

Ramsey contacted Matt Kisber, Bredesen’s commissioner of Economic and Community Development, and scheduled a meeting to discuss deals involving the kitchen appliance maker Electrolux and distribution centers by Internet sales giant Amazon.

Kisber canceled, and Ramsey speculated that Kisber shied away from potentially becoming part of a “media event,” since Ramsey had told reporters about the scheduled meeting. Ramsey still held hope this week that he and Kisber could talk.

The issue raises matters of transparency in government. Business relocation negotiations notoriously involve tight lips. The issue has even crept into the local level. One bill considered by the Legislature this year would give a local government authority to designate negotiations as proprietary information.

When the Haslam administration presented its jobs plan last week, the presentation included two pie charts, taken from statistics in the last three quarters of 2009 and the first quarter of 2010, showing that the vast majority of new jobs in Tennessee were created by existing businesses, not relocations.

One chart, accounting for all jobs in the state — those achieved with or without state help — shows only 1.2 percent came from relocations to Tennessee. Another chart showed jobs announced by ECD — jobs where the state had a hand in creating them — and 27 percent of those came through re-locations.

The Department of Economic and Community Development said 85.6 percent of all jobs in the state came from expansion of existing businesses, 13.2 percent from newly created businesses, leaving only the 1.2 percent in re-locations.

Haslam said his interest is in results.

“You look and see: Where are the new jobs coming from? And 98 percent are coming from existing businesses in Tennessee,” Haslam said last week.

“We’re not going to quit recruiting outside our borders, but we are going to make certain we put the right focus on energy and dollars where the results are. So it’s not a question of saying we’re going to quit welcoming people in. Just the opposite. But we are going to focus on where the results are.”

Ramsey climbed aboard his war horse last week, telling reporters, “I think we’re going to look very closely at things that happened in the last month of the Bredesen administration, as they handed out $92 million, more like $100 million, to Electrolux. Apparently that’s in writing. We’ll have to honor it. But that’s pretty easy for a governor who knows he is leaving office in a month to do.

“The whole Amazon tax issue, that they’re not paying sales tax, I just don’t think that’s something that should ever have been agreed to. Apparently, it’s agreed to. We’ll honor it. I think all those types of programs in the future are going to be looked at very closely before we do it again.”

Ramsey said he wanted to make sure businesses are held accountable for their side of the deals.

“I am absolutely elated that our Department of Economic and Community Development now will be concentrating on trying to help existing employers here in the state of Tennessee, most of them homegrown businesses,” Ramsey said.

“They grow businesses at three, five, 10 employees at a time. That is where you grow jobs. They’re going to be concentrating on that. I’m excited about that.”

Haslam has been relatively quiet on the Electrolux and Amazon deals. The governor has said the state should honor a previous commitment to Electrolux, and he has said on Amazon, where the issue has been that Amazon is not collecting sales taxes, that the matter needs to be resolved nationally and can’t be handled by only one state.

But Ramsey has expressed concern that the Electrolux and Amazon agreements appear to be “cloaked in secrecy.”

“I just want to try to figure out exactly what we have promised some of these companies because, keep in mind, the Legislature is the ones that have to vote on these appropriations,” Ramsey said.

“I think it is legitimate for us to find out what was promised, and when, and we’re still having a very, very, very tough time getting to the bottom of this.”

The House on Monday approved $106 million in bonds on a 91-2 vote, with most of the financing devoted to Electrolux.

Ramsey said Sen. Randy McNally, chairman of the Senate Finance Ways and Means Committee, and members of the House have also been asking questions about the Electrolux and Amazon agreements. Ramsey said he did not know which state officials approved the deals.

“Not me. That’s all I know,” he said.

Efforts this week by TNReport to reach Kisber were unsuccessful.

“I do think there needs to be a larger group of people that agree to this type of policy,” Ramsey said. “It needs to be a combination of the executive branch and the legislative branch.”

Ramsey said he didn’t remember that anything was kept secret about the Volkswagen deal, where the car maker made a $1 billion investment in a plant in Hamilton County, or the Hemlock Semiconductor deal, which involved a $1 billion investment in Montgomery County, or the Wacker Chemie deal in Bradley County, which also carried a $1 billion investment.

“Yet it seems to be that the deals that were made in the waning moments of the last administration are cloaked in secrecy,” Ramsey said.

He hasn’t even learned much from the Haslam team. Ramsey said he asked Haslam and new ECD Commissioner Bill Hagerty if they had actually talked to the Bredesen people about the matter.

“The answer is no, apparently,” Ramsey said.

Kisber and former Department of Revenue commissioner Reagan Farr together launched Silicon Ranch Corp., a green energy company, when they left state government. Bredesen is listed as chairman of Silicon Ranch and is featured atop Kisber and Farr on the leadership page of the business’s Web site.

Ramsey said there should at least be agreements in writing on Electrolux and Amazon.

“I have not seen anything in writing on either one of those deals,” Ramsey said. “That’s all I’m asking for, some kind of full disclosure, and if it’s something that needs to be kept confidential for business recruitment reasons then I’m more than happy to keep it confidential. Yet at the same time I want to make sure we as a Legislature — at least some members of the Legislature — know the details of some of these meetings.

“The one thing that I’d have to say is it makes you wonder if anything was in writing, if nothing has been presented in writing.”

Legislation sponsored by Memphis lawmakers and considered this week would authorize a local government, with the agreement of the local government’s attorney, to designate records as proprietary information, further preventing details of deals from becoming public.

The legislation, HB1774, would allow a local legislative body to determine that information should not be released because of its “sensitive nature” and that it should be considered confidential for five years. Only after that period would it become public record and open for inspection.

The City of Memphis has posted on its website the Electrolux deal, including a section on confidentiality. That agreement, in Section 12.5, which appears on Page 25 of the document, says:

“Each Public Authority understands the importance to itself and the Company of keeping details concerning the transactions contemplated hereby strictly confidential.

“Accordingly, each Public Authority acknowledges that, subject to all applicable laws which require disclosure of public records, all confidential, proprietary and trade secret information of the Company which has been delivered or otherwise made available to the Public Authorities, including the terms of this Agreement, is subject to the Confidentiality Agreements and may not othewise be disclosed to any third-party except in accordance with such respective agreement or as mandated by applicable law.

“Subject to applicable law, each Public Authority hereby agrees to redact any information in this Agreement which the Company deems, in its sole and absolute discretion, proprietary. The State hereby agrees that it will not publish any of the Letter Rulings issued in connection with this Agreement.”

The document further says that no press releases or other public disclosure about the transaction can be issued by any public authority without approval of the company.