The above-captioned matter was heard as a contested case on June 4, 2012, at which time the complainants and the respondents appeared and presented testimony, exhibits and argument on the complaint.  

     After consideration of the entire record, the following facts are found and conclusions of law are reached: 

     1.  The respondents are public agencies within the meaning of §1-200(1), G.S.

     2.  It is found that, by email dated August 9, 2011, the complainants requested that the respondents provide them with records indicating the outputs generated based upon certain inputs to the Regional Economic Models, Inc. computer program that was used to analyze the 2011 Assistance Agreement between the respondent Department and the CIGNA Health and Life Insurance Company (the “requested records”). 

     3.  It is found that, by email dated September 21, 2011, the respondents declined to provide the requested records, claiming that they were exempt from mandatory disclosure pursuant to §1-210(b)(5), G.S.   

     4.  By email dated and filed with the Commission on October 5, 2011, the complainants appealed to the Commission, alleging that the respondents’ failure to provide the requested records violated the Freedom of Information Act. The complainants asked the Commission to order disclosure of the “requested records” and the “equivalent outputs of economic models in all other cases”.

     5.  Section 1-200(5), G.S., states:
 
          “Public records or files” means any recorded data or information relating to the conduct of the public's business prepared, owned, used, received or retained by a public agency, or to which a public agency is entitled to receive a copy by law or contract under section 1-218, whether such data or information be handwritten, typed, tape-recorded, printed, photostated, photographed or recorded by any other method.

     6.  Sections 1-210(a) and 1-212(a), G.S., state, respectively, in relevant parts:

          Except as otherwise provided by any federal law or state statute, all records maintained or kept on file by any public agency, whether or not such records are required by any law or by any rule or regulation, shall be public records and every person shall have the right to (1) inspect such records promptly during regular office or business hours, (2) copy such records in accordance with subsection (g) of section 1-212, or (3) receive a copy of such records in accordance with section 1-212.

    …

          Any person applying in writing shall receive, promptly upon request, a plain, facsimile, electronic or certified copy of any public record.

     7.  Section 1-210(b)(5), G.S., states in relevant part:

          Nothing in the Freedom of Information Act shall be construed to require disclosure of…(5)(A) Trade secrets, which for purposes of the Freedom of Information Act, are defined as information, including formulas, patterns, compilations, programs, devices, methods, techniques, processes, drawings, cost data, customer lists, film or television scripts or detailed production budgets that (i) derive independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from their disclosure or use, and (ii) are the subject of efforts that are reasonable under the circumstances to maintain secrecy….

     8.  It is found that in December 2011 the respondent Department entered into an agreement with CIGNA, requiring the respondent Department to make a grant valued at between $50 and $80 million to CIGNA, and requiring CIGNA to retain certain jobs in Connecticut, to create certain new jobs in Connecticut, and to relocate its corporate headquarters from Philadelphia, PA to Bloomfield, CT.

     9.  It is also found that the respondents utilized a computer program developed by Regional Economic Models, Inc. (“REMI”) which is a mathematical model of the Connecticut economy. The REMI computer program analyzes various scenarios in order to ensure that, pursuant to a given assistance agreement, the State of Connecticut will receive more in taxes than it pays in incentives. The use of the REMI computer model is mandated by state statute for certain tax incentive programs and is used by the respondents for all large financial assistance agreements. The REMI computer model is also used by other states which compete vigorously with Connecticut for the best companies in both growth and stable industries. In economic development circles, this competition has been characterized as the “New War between the States”.

     10.  It is found that the respondents provided the complainants, following an earlier request, with the types of inputs (but not the dollar amounts for most inputs) for the REMI computer program (such as spending for computer equipment between 2011 and 2015, and reduction in CIGNA’s capital cost over ten years based on certain assumptions). The final agreement between the respondent Department and CIGNA is also made public. Using the REMI computer program, other states and private sector consultants who bargain with Connecticut can “reverse engineer” from the terms of the final agreement to an approximation of the inputs for the final agreement. Given that other states and consultants can already analyze the final agreement, this case concerns whether other states and consultants would derive “independent economic value” from being able to analyze the respondents’ decision-making process.

     11.  At the hearing, the respondents submitted ten records for an in camera inspection. Such records are hereby identified as IC-2011-544-1 through IC-2011-544-10. The in camera records contain redactions of inputs which were not the information requested in this case. On the record, the respondents described the records as ten “runs” of different scenarios of investments by CIGNA and incentives that the state might offer. With various different assumptions, different outputs resulted, none of which are based on the agreement that finally emerged. Each of the “runs” was created by Dr. Stanley McMillen, formerly the Managing Economist at the respondent Department, who personally delivered each record to Deputy Commissioner Ronald F. Angelo, Jr. It is found that the requested records and their outputs were disclosed only to the respondent Commissioner, Deputy Commissioner Angelo and their creator, Dr. Stanley McMillen.

     12.  It is found that, in general, the respondents inform business applicants, who want confidential discussions, that the REMI outputs are the proprietary information of the respondent Department. Deputy Commissioner Angelo testified that to his knowledge REMI outputs had never been disclosed for the respondent Department’s large financial assistance transactions. He distinguished the disclosure that did occur of such information for the Jackson Labs agreement, on the basis that the agreement was undertaken by Connecticut Innovations (not the respondent Department) and had an assistance package of $291 million (fourteen times larger than the CIGNA transaction) that required legislative approval. Deputy Commissioner Angelo also noted that REMI outputs had been made public for various proposed improvement projects to public infrastructure (such as Interstate 84 and Bradley Airport).

     13.  The complainants argued that taxpayers have a right to know that they are not paying more than necessary to create and retain jobs in Connecticut. They introduced into evidence a print-out of Rick Green’s blog commenting that $50 million for at least 200 jobs equaled a return of $250,000 per job. The complainants also argued that disclosure was necessary in order to prevent an appearance and the reality of corruption. They emphasized that the outputs would not have economic value after an agreement is finalized.

     14.  The respondents argued that consultants could bargain for a better deal for subsequent clients locating in Connecticut, costing Connecticut taxpayers more, if the requested records were disclosed. Deputy Commissioner Angelo testified that it would “harm Connecticut a great deal” if other states, especially New York and New Jersey, had access to the requested records and could make a reasonable assessment of the value of a given company to Connecticut. Conversely, if the respondents could get analogous information created by other state governments, the respondents would know which companies to target in those jurisdictions.

     15.  It is found that, by “reverse engineering” more than one set of REMI outputs over a period of time, consultants and other states would gain a clear picture of Connecticut’s economic development practices and business plan. With this information, consultants would get better deals for clients locating in Connecticut and other states would compete more effectively with Connecticut for companies in their states as well as companies already in Connecticut. This conclusion underscores the independent economic value of the REMI outputs for a given agreement, such as the requested records herein, even after the agreement is finalized.

     16.  It is found that the requested records contain information, including patterns, compilations, methods, techniques and processes, all of which derive independent economic value from not being generally known. It is also found such information is not readily ascertainable by proper means by other persons who could obtain economic value from its disclosure. Finally, it is found that the requested records are subject to efforts that are reasonable under the circumstances to maintain their secrecy.    

     17.  It is concluded that the requested records are “public records” within the meaning of §§1-200(5), 1-210(a), and 1-212(a), G.S.

     18.  It is also concluded that the requested records are exempt as trade secrets from mandatory public disclosure pursuant to §1-210(b)(5)(A), G.S. The respondents did not violate §1-210(a) and 1-212(a), G.S., when they declined to provide the requested records.

     The following orders by the Commission are hereby recommended on the basis of the record concerning the above-captioned complaint:

     1.  The complaint is hereby dismissed.

Approved by Order of the Freedom of Information Commission at its regular meeting of September 12, 2012.

__________________________
Cynthia A. Cannata
Acting Clerk of the Commission

PURSUANT TO SECTION 4-180(c), G.S., THE FOLLOWING ARE THE NAMES OF EACH PARTY AND THE MOST RECENT MAILING ADDRESS, PROVIDED TO THE FREEDOM OF INFORMATION COMMISSION, OF THE PARTIES OR THEIR AUTHORIZED REPRESENTATIVE.

THE PARTIES TO THIS CONTESTED CASE ARE:

Zachary Janowski and the Yankee Institute
for Public Policy
800 Connecticut Blvd.
Suite 302
East Hartford, CT  06108

Commissioner, State of Connecticut,
Department of Economic and Community
Development; and State of Connecticut,
Department of Economic and
Community Development
c/o Lorrie Lewis Adeyemi, Esq.
Assistant Attorney General
State of Connecticut,
Office of the Attorney General
55 Elm Street
P.O. Box 120
Hartford, CT  06141-0120

____________________________
Cynthia A. Cannata
Acting Clerk of the Commission

FIC/2011-544/FD/cac/9/12/2012