Oregon officials face charges in data center-related financial scandal in Morrow County
A scandal involving Amazon's data centers in Morrow County, Oregon, has led to civil charges from the Oregon Department of Justice. Public officials, who owned a fiber-optic company providing services to Amazon, are accused of exploiting a nonprofit to gain millions while granting Amazon tax breaks and land deals. The state alleges the company was significantly undervalued during its sale by concealing its business with Amazon.
In Morrow County, Oregon, a significant data center-related scandal unfolded, leading to civil charges from the Oregon Department of Justice. The controversy centers on Amazon's substantial payments, exceeding $100 million, to a fiber-optic business named Windwave Communications for internet services to its growing cluster of data centers.
Around 2016, five members of Inland Development Corp.'s nonprofit board, which initially created Windwave, decided to purchase the for-profit entity for approximately $2.6 million. These buyers, who replaced themselves on the nonprofit's board, set their own price, claiming Windwave's revenues were unlikely to grow. Critically, during the state approval process for the sale, the buyers reportedly failed to disclose that Amazon was Windwave's largest customer, a fact that significantly boosted Windwave's value.
Further complicating the matter, four of Windwave's new owners were also public officials at the time of the purchase. These officials subsequently granted Amazon hundreds of millions of dollars in tax breaks and sold publicly owned land to facilitate the tech giant's data center expansion in Morrow County. The Oregonian/OregonLive investigation exposed this arrangement, which also included an agreement between buyers and sellers not to announce the deal.
Citing the Oregonian's reporting, the Oregon Department of Justice filed civil charges last year against the buyers and others involved in approving the deal, including an Oregon state legislator. The state alleges Windwave was worth at least three times what the insiders paid, contending that public officials exploited the nonprofit to profit from Amazon's data center expansion. Amazon has not been charged in the case and has not commented on its awareness of the Windwave deal during its negotiations for land and tax incentives.