OpenAI and Georgia county leaders hit with Mafia-style RICO racketeering lawsuit over $30 billion AI data center

Residents of Effingham County, Georgia, just filed a RICO lawsuit against their county commissioners, county leaders, and OpenAI and its affiliates, alleging that they committed various offenses in a conspiracy to get OpenAI’s “Project Camellia” approved. According to the Effingham Herald, the plaintiffs — Dr. Michelle Finch-Mincey, Lehman Mincey Jr., and Raymond Carver — are seeking civil damages, saying that the project has harmed their property values and even pointing out that purchase offers for nearby residential properties have dropped or been withdrawn since the data center was announced.

The lawsuit names all Effingham County Commissioners — Chairperson Damon Rahn, Forrest Floyd, Roger Burdette, Jamie DeLoach, Elizabeth Helmly, and Phil Kieffer — as defendants, alongside County Manager Tim Callanan, Effingham County Industrial Development Authority (IDA) CEO Brandt Herndon, the IDA itself, OpenAI, Octans GA LLC, the entity operating the data center on behalf of OpenAI, and Savannah Industrial Development LLC, the agency involved in the sale of IDA property to Octans and OpenAI.

It’s alleged that the defendants committed fraud and concealment through non-disclosure agreements and misleading public statements so that residents remain unaware of the nature of the projects for as long as possible, and that there was a civil conspiracy “to advance Project Camellia through confidential negotiations and closed-door decisions.” They also claimed that the parties engaged in improper land transactions, zoning violations, and civil racketeering.w

Project Camellia is one of OpenAI’s biggest data center projects planned for construction in Effingham County. The site is expected to cost somewhere between $20 billion and $30 billion, to be built across five phases, with a planned compute capacity of 3.2 gigawatts. The company also promised that it will not affect the community’s utility costs, as it will pay for the full cost of all its required infrastructure upgrades, and that it will have minimal water use due to its closed-loop water system. Despite those promises, it seems that some people are opposing the project because of how the county had allegedly tried to secure the land, tax incentives, and zoning approvals without informing the residents until key decisions were finalized and contracts had been signed.

The RICO Act — or Racketeer Influenced and Corrupt Organizations Act — was originally conceived as a way to counter organized crime, particularly Mafia leadership, who often used low-level members to commit individual crimes and do the dirty work for them. However, Georgia’s RICO Act is less stringent than the federal version, which is why it’s been used multiple times for cases that seemingly had nothing to do with the Mafia. For example, it was in the 2023 election racketeering case against Donald Trump and 18 others in the attempt to overturn the 2020 U.S. presidential election results in the state, and it was also used in Young Thug’s trial after the rapper was accused of running YSL Records as a criminal street gang.

Critics say that Georgia’s version is way too encompassing, though, and that it was being used to squeeze defendants involved in more mundane or common felonies. “When you have a hammer, everything looks like a nail,” Georgia State University professor of criminal justice and criminology Volkan Topalli said in Atlanta Magazine.

The actions of both state officials, OpenAI, and its affiliates are not new, though. There have already been multiple complaints of data center developers and local governments using non-disclosure agreements (NDAs) while they negotiate terms for possible data center projects. Developers say they use this tool to avoid “running afoul of insider trading rules,” but people have pointed out that West Feliciana Parish in Louisiana was able to close a data center deal without resorting to one. An AWS data center in Gilroy, California, is also facing scrutiny after residents only discovered the nature of the project when construction began after a five-year permitting saga that relied on zoning rules that were set 45 years ago.

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