A contract between the state of Utah and Northrop Grumman to subsidize the military contractor’s new intercontinental ballistic missile (ICBM) plant redacts key information: the schedule of job creation and salaries the contractor must meet in order to receive state subsidies.
The contract, obtained by Inkstick Media from the Governor’s Office of Economic Opportunity, says the ICBM plant “anticipates bringing approximately 2,250 FTEs [full-time employees] with an annual average salary of $104,000” over 20 years. But later sections of the contract say the job creation required in order to claim state subsidies are detailed in an attachment. The office refused to release that attachment even after Inkstick Media successfully appealed to have several other redactions removed from an even more restricted version of the contract initially provided to the media outlet. (See the redacted contract provided to Inkstick here.)
In other economic development contracts, such tables have revealed that publicized jobs numbers are misleading or inflated, for reasons such as by including short-term construction jobs or defining a high level of jobs as “bonus.” For example, in Asheville, North Carolina, a proposal to subsidize a Raytheon plant was widely advertised as creating up to 800 jobs while the contract instead suggested the plant may eventually have a baseline employment level of 525. A report by the Asheville Citizen-Times in January showed the plant, which produces parts for both military and commercial aircraft, had missed its employment target and only had 150 jobs in a year when it projected 250.
In addition to employment numbers, the salary information included on the Utah-Northrop Grumman contract attachment could also inform the public about what sort of jobs they are getting in exchange for subsidizing the plant. Pat Garofalo, a researcher who’s studied economic development deals for 15 years, told Inkstick that publicizing just a project’s projected average salaries could be misleading because “it’s really easy to game your wage numbers” if top executives are included and their pay “drags the average wage up.”
Jim Grover, the state government’s managing director of incentives and grants, said that the information on the attachment “provides significant details” that go “far beyond that which is already in the public domain” and that releasing it could “threaten economic harm to Northrop Grumman.” Grover also said that the state’s annual audits of the company’s employment would not be available to the public.
Northrop Grumman celebrates the groundbreaking of a new facility it says will “serve as a future headquarters for its workforce and nationwide team supporting the Ground Based Strategic Deterrent (GBSD) program, with the opportunity to add 2,500 jobs in the state of Utah.”
Each year, state and local governments spend more than $90 billion to subsidize corporations that expand in or relocate to their districts. While politicians describe these deals as incentives that create jobs for locals, in recent years the practice has attracted a growing body of critics on the political left and right who oppose handouts to profitable firms and say the subsidies undermine free market principles and shift tax burdens to ordinary people and small businesses.
“Nobody who’s looked at them seriously thinks they work economically,” Garofalo, the director of state and local policy at the anti-monopoly American Economic Liberties Project, told Inkstick. “But it’s a really potent political tool for incumbent politicians to say, ‘Hey, we’re doing something. Look, we’re creating jobs.’”
NDA WITH NORTHROP GRUMMAN, NO OPPORTUNITY FOR PUBLIC COMMENT
The new ICBM is one of the most contentious weapons being purchased as part of the United States’ “nuclear modernization.” The latter refers to an estimated $1.7 trillion spending program in which the military will restock every part of its nuclear weapons arsenal – new bomber aircraft, new plutonium pits, new stealthy submarines, and more.
The ICBMs made in Utah will be loaded with warheads and sent to 400 silos across Montana, Wyoming, North Dakota, Colorado and Nebraska. There, as they have done for six decades, the ICBMs will be buried underground as nearby Air Force personnel known as missileers man subterranean capsules around the clock, waiting for orders from the president to launch those ICBMs in fiery arcs across the globe toward targets in Russia or China in about the time it takes to get a pizza delivered in America.
Inkstick Media requested a copy of that NDA, to which a spokesman responded that the office had not located its original confidentiality agreement with the company and therefore signed a new one. That document is dated Dec. 16, 2022 – 11 days after Inkstick made its first records request.
A diverse body of critics have lobbied against the weapon for reasons related both to its military usefulness and its cost. From a national security perspective, delivering warheads via ICBMs in silos is seen as antiquated and at greater risk for a hair-trigger launch in comparison to alternative weapons delivered by submarines and aircraft. It’s also riskier for the Americans who live among the ICBM fields, since their fixed locations across the American West stamp them with a “bomb me first” bullseye should Moscow, Beijing or another rival one day decide to attack the United States’ nuclear infrastructure.
From a financial perspective, the projected $100 billion price tag of the ICBMs raised alarm among military-industrial complex watchdogs because the contract to produce the missiles wasn’t competitive. Only a single company – Northrop Grumman – bid on the project. Its would-be competitor, Boeing, backed out after Northrop Grumman acquired a key company that produces solid-fuel rocket engines, which make the ICBMs lift off. Boeing complained that the process to bid on the new ICBM was unfair.
However, Grover, the Utah state subsidies administrator, told Inkstick that Northrop Grumman operates in “a competitive defense contractor industry” and that releasing information on its job creation could harm the company.
“Go Utah will not disclose sensitive economic information that will harm the economic interests of businesses that participate in the EDTIF [state subsidies] program,” Grover wrote in a four-page letter justifying the redactions to Inkstick. “[T]he private interest of Northrop Grumman outweighs any public interest in obtaining private speculative future employment or salary projections,” he wrote.
Garofalo, the economic development expert, called that claim “nonsense.”
“The literal amount of people who will be sitting in this facility doing jobs – that can’t possibly be a trade secret,” he said.
Another reason the government told Inkstick it couldn’t release the full contract is because it had signed a non-disclosure agreement (NDA) with Northrop Grumman. Inkstick Media requested a copy of that NDA, to which a spokesman responded that the office had not located its original confidentiality agreement with the company and therefore signed a new one. That document is dated Dec. 16, 2022 – 11 days after Inkstick made its first records request.
Edward Carter, a journalism professor at Brigham Young University and attorney with experience in public records law, called the government’s citation of the NDA “really problematic.”
“If government agencies and companies can just sign agreements whenever they want, determining what’s public and what’s not, then why do we have an open records law?” he said.
Spokespeople for Northrop Grumman did not respond to calls, voicemails, or emails from Inkstick requesting comment on the deal.
Per the contract, the military contractor can claim more than $59 million in state subsidies, provided via refundable tax credits called Economic Development Tax Increment Financing (EDTIF). Though the deal was announced in 2020, the contract provided to Inkstick was only signed in 2022.
Unlike some other states and localities, Utah does not require public comment before approving an EDTIF contract, Tony Young, the communications director at the Governor’s Office of Economic Opportunity, told Inkstick.
