Google Sought To Hide Political Dealmaking 283
A blog entry by Michael Kanellos at ZDNet links to and expands upon an article in the Charlotte Observer. Last year Google was apparently throwing its weight around in North Carolina, seeking tax breaks from state and local legislators. When the company didn't get what it wanted pressure was brought to bear on legislative aides, journalists, and politicians. The search giant was especially touchy about keeping the negotiations secret: "Executives didn't want anybody even to mention the company's name for fear that competitors could learn of its plans. Most involved with the negotiations were required to sign nondisclosure agreements ... That posed challenges for elected officials, charged with conducting the public's business in the open. As the tax measure wended its way through the legislature, some lawmakers began linking it to Google." The results of this deal are extremely lucrative for both sides. Google brought some $600 million in investment and as many as 200 jobs to the state, and legislation enacted with Google's help is projected to save the company some $89 million in taxes over 30 years.
Um (Score:5, Insightful)
Re:Um (Score:2, Insightful)
Beatup (Score:3, Insightful)
The blog accuses Google of "[trying] to browbeat lawmakers".
But the article simply states that Google, in negotiating with NC and six other states, asked for confidentiality.
Ultimately, Google chose NC. Presumably, NC offered the best tax breaks to support 200 new jobs.
The blogger even says "Tax breaks actually are not that unusual."
So where is the evil?
Re:Beatup (Score:5, Insightful)
In a democracy, legislatures do not draft laws under non-disclosure agreements. The proper operation of a democracy hinges on transparency. There is a strong possibility here that Google was asking the legislators to violate the open meeting or sunshine laws of their own state, which guarantee that government business is done in the open. This is why some legislators refused to sign the NDAs.
That's where the evil is.
Re:Um (Score:1, Insightful)
Re:Beatup (Score:5, Insightful)
The people should be able to judge how their government is acting. The fact that google is asking this is not that weird that politicians on the other hand agree is the worst part. Lets hope (I know it wont) they will notice this the next elections.
Nothing Evil there (Score:5, Insightful)
Lets see, NC gets $600 Million investment that could have gone elsewhere, 200 odd new jobs (and tax revenue from employee's) that also could have gone elsewhere and it just cost them $89 million tax revenue over 30 years, tax revenue that they would probably not have got if they had not done the deal.
Sounds like NC got the better end of the deal by a long margin
The secrecy and nondisclosure agreements are pretty standard, for reasons that are obvious if you give it two minutes worth of consideration
Re:Beatup (Score:3, Insightful)
"They evil is with the Nondisclosure Agreement!"
The article states, "Executives didn't want anybody even to mention the company's name for fear that competitors could learn of its plans."
And the Google guy is quoted as saying he recognizes the need for legislative due process. "We respect the legislature needs to conduct its business, to deliberate on bills," Weiss wrote in a June 7 e-mail to Hobart. But legislators must understand that the project likely will be canceled if anyone "mentions the company's interest in the bill, North Carolina, or the project itself."
So the article doesn't even suggest that Google was seeking to quash debate on the issue or the principle of the tax break, merely to have the specific company name and project details kept confidential.
Those are normal requests in business negotiations.
Still, NC could have declined Google's request. And Google could have chosen to work with one of the 6 other states that were able to respect its request for confidentiality
That Google and NC worked through all the issues suggests... goodwill rather more than evil, wouldn't you agree?
At least 200 North Carolina citizens with new jobs would surely agree, don't you think?
Re:Beatup (Score:5, Insightful)
If a bill is being drafted specifically for a company, then the public should know which bill it is and which company it is. If Google can't pursue the idea without those stipulations (and the fact they're requiring a special law makes me immediately say they shouldn't be pursuing the idea, I'd need to be convinced they should pursue it) then tough luck.
The fact that the NC legislators are willingly helping Google in covering up their actions in creating a law simply spreads the evil, it doesn't negate Google's evil.
Open Source Search (Score:2, Insightful)
You are gathering information, which needs storage, and you need huge amounts of bandwidth and processing power. The actual algorithm is rather unimportant in that context.
So while it might be interesting to see corporations and universities team up to create a search engine, it is questionable if the costs are worth it.
What would you say is the advantage of an open search engine, other than having a competitor to Google (and there's still Yahoo, MSN, Ask.com for that)?
Tall poppy syndrome (Score:5, Insightful)
Your at least a decade too late, the ship has sailed and it's called google.
"Yeah, the shine's definitely gone off Google, eh? at the rate google (and yahoo) are swallowing up other sites there's going to be some major monopolising going on."
Playing one state of against another is just the regular kind of "evil" found in all big-bussiness, big-bussiness don't pay tax bills like ordinary folk, they negotiate thier tax bill (global corporatization on a smaller scale). Google are paying tax and staying in the US. The politicians did thier job by attracting a large corporate to thier turf and getting gauranteed revenue for 30yrs plus all the spin-off effects on the economy, what more do you want?
Attacking google for this behaviour is like kicking the cat after a bad day, if you want to attack "evil" there are plenty of targets, corporations that lay the planet to waste and supply waring tribes with modern weapons. They destroy lives and feed from the public trough rather than create meaningfull employment and a nice pot of tax money. OTOH: "Kick the cat" often enough and it will scratch your eyes out while your sleeping.
Evil is as evil does - Gump.
The state where I live (not part of the US) built a power plant specifically for an Aluminium smelter, gaurenteed cheap dirty (and drit cheap) electricity for 30yrs or so. They also built a massive sewer to take the waste from a large paper mill and dump it in the ocean and called it a "green project" to rehabilitate the river the mill had already killed. The mill threatened to move overseas/interstate if it had to spend money and went so far as to infiltrate "enemy" community groups in order to discredit them. The crap these places spew and the fairy tale propoganda they use to justify it, is IMHO "evil", but try telling that to anyone who's livelyhood depends on it. Try telling the guy at the nuclear missle plant or the biological warfare lab that his work is "evil" and he will claim he is "preseving freedom" or some such rationalization, to him the thought of not planning for nuclear war is "evil".
I get kind of sick of the "we caught google being evil" shit that accompanies so many articles, it's not like they are claiming they have God on their side or that anyone else is "evil". Here in Australia we have some odd expressions, the one that fits google on slashdot is Tall poppy syndrome [wikipedia.org].
Disclaimer: "you" - not picking on "you" personally, just the general sociopathic pendantry that surround google's brilliantly provocative slogan.
The simple answer: IPO (Score:4, Insightful)
When you make any sort of investment, like buying insurance or a retirement plan, you don't ask how evil the corporations are. All you want is the biggest return for the lowest price, which means the portfolios that will make your investment will be composed of stock from the companies with biggest profit.
Re:Um (Score:5, Insightful)
Here, in the American southeast, jobs are very important. An investment of six hundred million dollars and two hundred jobs is a fair trade for the tax break requested. And I doubt Google will have many minimum wage jobs at their new location.
This is the same treatment given to everyone from bakeries to automobile manufacturers. All will receive tax breaks for new plants and jobs. The only question is how much.
Evil starts with "standard business practice" (Score:2, Insightful)
Evil starts with "standard business practice", doesn't it?
Governments, financed by public money, should be transparent and accountable to the public at all cost, without a very few exception.
Corporate interest would not be one of those exceptions.
In fact, any "standard business practice", which is trying to deform this basic political principal should be refused, reported to criminal investigation.
Attempting to corrupt the political system should trigger the ultimate capital punishment for corporate violators.
Re:Tall poppy syndrome (Score:5, Insightful)
Re:Um (Score:5, Insightful)
The beauty of software is that it takes no capital to develop it, and it is easy for thousands of people who have never met to collaborate. It also takes no capital to test. And it can be generally implemented on small scales as large as big ones.
Wikipedia started off as a site nobody ever heard of. Wiki itself started as an extension to the blog concept. I can run my own wikipedia in my living room if I want to - as long as I keep it quiet and don't have the whole world knocking on my door.
A search engine is useless unless it has indexed a substantial portion of the entire internet. You'd need GBs of data just to know if your algorithm is working. So, it is fundamentally a different problem. Even if you built up the database it is hard for people to collborate on it since they need access to all the data to test new algorithms. Wikipedia scales much better - you don't need to have the whole encyclopedia to test out a new interface model, and the back-end is all commodity software like mysql/apache/etc (that software does require more infrastructure to test - but it is somebody else's project and they could test large table performance in mysql just by having tables full of random data).
The same issues apply to other types of community-based projects. You want cheap drugs, and think open-source is the answer? Well, now you need a bunch of people with chemistry degrees and about $100k minimum worth of equipment in their basement. And even if by some miracle they come up with something how do you test it? Typically you have to pay volunteers to take your pills, and pay doctors to be bothered with handing them out. Oh, you also need to go out and inspect your doctors so that they don't just falsify reports and collect their checks without bothering with actual test subjects (it happens all the time - it would happen more if doctors didn't know that pharma companies would catch them and turn them over to the FDA - this is a punishable crime). That is one of the biggest areas of expense in pharma R&D. Similar issues apply to anything that involves physical reality - like engineering/etc. You can model a new plane on a computer, but at some point you need to build a test model and you can't do that without serious cash. Groups like the planetary society are always drawing up models for interstellar spacecraft, but there is no way to know if they'd work without testing...
Open source software is a wonderful development and in time I think it will transform the ENTIRE industry - just give it a generation. However, until we have star trek style replicators many industries will not be able to benefit from a similar model...
Re:Um (Score:3, Insightful)
It all comes down to the bottom line and the purpose of all businesses is to make money.
$3 million a year in taxes is a lot of money. Why the hell does North Carolina need that much from 1 company????
Does North Carolina have a secret army? What does Red Hat pay? What does any medium sized bank pay?
Re:Um (Score:5, Insightful)
The tax break isn't even that much of a loss of income for the government. If Google are employing 200 people, it works out at $15,000 per new employee. Somewhere between 30-50% of everything earned in the US eventually flows through the government in taxes (income taxes, property taxes, sales taxes, etc), so if Google is paying somewhere between thirty to fifty thousand to each new employee then the government is breaking even or making a net profit.
Of course, some of this goes to the federal government, rather than the state, but I would imagine that they are betting that Google will expand over the next thirty years, employing more people and thus generating even more tax revenue.
This is ignoring, of course, the tax that will be paid by those people employed in construction of the new Google facilities, and any other taxes that Google will pay. I would be very surprised if the state government didn't make a significant profit out of this deal. It sounds like it's good for both parties. The only question really is why Google felt the need to keep it secret.
Re:Tall poppy syndrome (Score:5, Insightful)
How about public accountability in a republican form of government?
"Attacking google for this behaviour is like kicking the cat after a bad day, "
The cat doesn't do much more than follow sunlight around the house, occasionally taking a break to eat. The cat isn't involved in perpetuation a corrupt mechanism and rob the people of access to their own government.
"The state where I live (not part of the US) built a power plant specifically for an Aluminium smelter, gaurenteed cheap dirty (and drit cheap) electricity for 30yrs or so."
Your failure to properly maintain your own government doesn't make it right for others to follow suit.
Re:Tull pappy syndrome (Score:2, Insightful)
Re:Tall poppy syndrome (Score:1, Insightful)
I agree with you on some points, but I'd like to give some context. Google is building a datacenter in Lenoir, NC. Lenoir is a small town, probably 10,000 or so, with a huge unemployment problem because the textile and furniture factories have moved overseas. It is firmly blue-collar; there is no pool of skilled technical workers to run a datacenter. Of the projected 200 jobs, very few are likely to go to Lenoir residents. No, most of them will commute from Charlotte, NC, about 90 minutes away, which has lots of workers but no cheap real estate and construction.
The end result is that Lenoir won't be getting any jobs (except for construction, which will be short-lived, and probably contracted out of Charlotte or nearby Hickory), and they won't be getting much tax revenue, because the highly-paid Google employees aren't going to be paying local taxes, and because they've given Google a huge tax break. In the end, Google is getting a much better deal.
Re:Um (Score:2, Insightful)
Re:Um (Score:2, Insightful)
I agree that states have expenses like road upkeep, schools, etc... But damn, look at any downtown infrastructure, are each of those tennants paying into $3 million a year each. That's a bit much for NC to ask.
You ar either kidding or u work for a G competitor (Score:5, Insightful)
As to operating in a backroom approach, well, that goes on ALL the time. Nearly every company does that with states when they are seeking to come to the state. In fact, I would not be surprised if NC approached Google first, and they kept it quiet. Now, if the deal is kept quiet after the fact, or is not released prior to the congressional vote, that becomes an issue. But the article does not say (or even imply) that.
Re:Um (Score:3, Insightful)
I'm not against Google paying taxes. They should.
$3 million just seems too steep for any business to pay unless it is the only manufacturer of toilet paper or something like that.
Add to that, the 'tax' is from something that isn't generated within NC. The tax is just because a company decides to have an address there.
$3 million per year comes out to be $15,000 per employee/year. That's a bit steep.
Even federal taxes aren't that high if you count what Google will pay added with the employee contrib.
If Google is paying their employees a salary > $1,000,000 - then maybe it's called for but I doubt an office of 200 people will have a payroll of a quarter billion a year.
Software is never free (as in beer) to develop (Score:3, Insightful)
The beauty of open source for corporations is that someone else spends much or even all of the capital for development. Instead of IBM having to outlay the capital to develop linux in order to sell services, they can simply provide services. Companies like RedHat invests in linux development as a loss leader so that they can sell assorted linux services while maintaining a competitively advantageous position in the market. But the point is that someone, somewhere is paying for development.
States do this all the time (Score:4, Insightful)
The real scandal here is that they can do this at all. Why should corporations be allowed to negotiate taxes? Can individuals do that? "Hello, state! I am thinking of moving to your state and being productively employed! And some of the money I make will be spent in the local economy! Promise! I will do so if you cut me some slack on property taxes and state income taxes!"
You'd get laughed at. Scale? so what, could 200 independent single individuals do the same? Nope. But a corporation can.
The same with those land seizures. XYZ corp wants to put in an import*mart or golf course, the local government seizes some poor guys land, forces him to move or close his business, so the bigger corp can put their crap there. Nuts. Does the opposite ever happen? "Hiya state! I want you to seize this local golf course/stripmall/sports stadium for me. I will bulldoze out all the lamer energy hog neon sign enhanced buildings and ugly crap in the way, and then plow it up at my expense with my tractor and make free community gardens, saving local consumers millions a year with the grocery bill". Go ahead, try to do something like that, see what happens.
It is not "getting to the point", it is well past the point that governments exist to cater to large corporations for the most part. "Hiya largest government! I have a problem" You see, I have been in the entertainment redistribution business for generations. It was costly to do this, every copy cost a lot of money to reproduce and distribute, but we did it and made a lot of profit. Unfortunately recent technological advances have made this sort of business almost completely obsolete, which threatens our bottom line. It is now technically possible to do what we did in the past 100 to 1000 times cheaper, and get the product to the consumer. But we are so used to making so much net profit a "unit" for our products that we can't allow this dangerous replicator technology out there without severe restrictions on the consumers, else we would lose our traditional profit structure, and we certainly couldn't charge the 2 cents a unit that would be possible now..it's UnAmerican! So please pass laws that force our business model to stay in place in perpetuity. Oh, and we need to extend the limits on this "IP" stuff as well, after all, even with the tech restrictions, we want todo this forever! We'll get back to you once that time limit approaches again, and we'll extend it even further! Thanks! Oh ya, here's some completely unrelated huge bags of cash, just an amazing coincidence that we are handing this to you, really, no strings attached!"
Sunshine law is NA for negotiations (Score:2, Insightful)
Re:You call this capitalism? (Score:3, Insightful)
Actually, being from North Carolina - I wouldn't be much bothered if 'improvements' to the state, like Google, did go somewhere else. Charlotte, the Triangle, and now the Triad - one by one shifting from being pleasant Southern towns to being cramped and growing metropoli with more in common with LA than the countryside around them. The majority of the jobs don't go to residents (natives) they go to imports - who want BBQ ribs (rather than Carolina style), and who shop at cookie cutter malls and live in McMansions.
Re:Um (Score:3, Insightful)
That's the weirdest misspelling of "young, well-to-do, scrupulously, and disliked" I've ever seen.
Re:Um (Score:3, Insightful)
True, but you might be getting the same tax break. Let's scale this down from huge corporation to a single citzen level, and see how the deal sounds. $89 million tax break for a $600 million investment and + 200 jobs = $44,500 tax break ($1,483 per year) for a $300,000 house and paying someone to mow your lawn. How much of a tax break do you get for the interest on your mortgage? Is this deal actually evil or are the numbers just large enough to make it sound that way?
Re:Um (Score:4, Insightful)
200 jobs at 50k per job and 15% tax rate (Sate only...) gives 1,500,000 back to NC per year anyway bringing the net 'loss' to the state of 1.5M a year, decreasing over time as salaries go up.
It's not unusual for large corps to get 1:1 tax breakes. ie if you build a 500M car plant, you get 500M or more in tax breaks.
If this is google being evil, they sure suck at it!
JON
Re:Tall poppy syndrome (Score:3, Insightful)
Re:The simple answer: IPO (Score:3, Insightful)
What you advocate would be no different than saying a person should rob banks and mug people because it would be financially more beneficial to them and their family, and that they should be supported in doing so and then defend them to the world when the people call them criminals.
Criminal and corrupt is criminal and corrupt, no matter how you try to wrap a capitalistic American Flag around it. American capitalism has ethics at the foundation of the system, it is sad that so many fiscal conservatives today forget this.