Biotech, Beer, and the Public's Right to Know

July 6, 2006By Chuck Sheketoff

Oregon competes with many other states to roll out the best red carpet for desirable companies to locate or expand here. State officials and agencies tailor incentive packages, using our tax and lottery dollars. What does Oregon get from these companies in return?

In Oregon, it's hard to tell, and too often, the companies - not public officials - get to decide whether to share the details with the people - you and me - who are footing the bill. We have to wait until after the ink on the deal dries.

Take Genentech, for example. Considered by some to be the "founder of the biotechnology industry," Genentech has the largest proportion of FDA-approved manufacturing capacity for the production of biotech medicines in the world. This California company, with manufacturing facilities in Spain and California, wants to locate a new facility in Oregon.

Why? According to the company, Oregon's "advantageous business environment," high-quality available labor force, and development-ready land with supporting infrastructure were key factors. The company also likes the fact that its profits will hardly be taxed under Oregon's new corporate tax scheme.

In March, Governor Ted Kulongoski announced that Oregon "committed" $4.8 million in public funds to Genentech, including $2 million from the Governor's Strategic Reserve Fund, for training and infrastructure improvements.

What will Oregon get? "Potentially 300 new jobs" by 2015, according to the Governor.

The Oregon Center for Public Policy asked for the details regarding how Oregon was going to spend the $4.8 million and what we'd be getting for the money in terms of jobs, benefits, and clawback provisions that ensure that if Genentech doesn't deliver they'd pay Oregon back, and the like.

State officials denied our request under a law that allows Genentech to declare that the information is confidential until all negotiations with the state are completed. Because of this company-imposed blackout, we don't know how many of those possible jobs will come from Oregon's labor pool and how many will be Genentech transfers.

Even though the Governor made the public announcement, he couldn't and won't tell us exactly how he's going to spend our tax and lottery funds, or what Genentech is promising to provide in return. That makes it hard to applaud the deal.

Eventually, Oregon's Public Records Law will allow us to see whether Governor Kulongoski made a bargain that included an enforceable job commitment from Genentech. Even then, tracking it down will be no easy task. Interested Oregonians will also have to track down data each year to keep up with how Genentech is doing.

About the same time Genentech was nixing public inspection of their Oregon deal, Illinois Governor Rod Blagojevich was announcing that Illinois had lured Pabst Brewing Company's corporate headquarters to the Chicago metro area from Texas.

The Illinois Corporate Accountability for Tax Expenditures Act will allow anyone with access to a computer to view online Pabst's annual reports on their progress toward their employment commitments. Illinois thinks their taxpayers should be able to check online to see whether the subsidized companies are fulfilling their promises.

Oregon should follow Illinois and other forward-thinking states into the 21st Century. The public has a right to be able to check online to see whether the subsidized companies are fulfilling their promises and whether our tax and lottery dollars are well spent. Who can argue against the need for an Oregon Corporate Accountability for Tax Expenditures Act? What would they be trying to hide?