October 2026
PROBLEM
Corporations are using the promise of economic development to force local officials to sign nondisclosure agreements (NDAs) to shield negotiations from the public and neighboring communities. This gives businesses a huge advantage as public officials, eager to support their communities, sign away the ability to consult with experts and get community feedback. Public officials may not even know who they are entering negotiations with before signing the NDA and may find out too late how unpopular the company or project is. The secrecy also allows companies to negotiate simultaneously with multiple local governments and know what each locality is offering, while preventing the local officials from collaborating or sharing information, placing residents and taxpayers at a huge disadvantage. These agreements also keep residents in the dark until permits are issued, denying them the right to voice their concerns and defeating sunshine laws.
IDEA
Limit the ability of local officials to enter into NDAs and ensure the community has a meaningful opportunity to participate. A successful solution includes:
- Time limiting NDAs by making sure they expire long before any permanent decisions are made. An NDA intended to protect very early discussions is not inherently bad, but when those limitations result in action without public input or become a tool to keep one side of a negotiation from doing sufficient research for the best deal, then they become destructive to public trust.
- Requiring public notice far before any decisions on permitting are finalized. Backroom deals that result in massive projects that impact traffic, water and air quality, and utility costs should be open for debate by the people affected. Giving the public notice about major projects that require special rules is the least a functioning government should provide.
- Easing the records request process, including making it simple and intuitive for the public to understand what records are available, how to get them, and what they mean. Many public records laws are out of date with paper systems and opaque rules. It is hard for an everyday citizen to understand what is available to them, let alone how to get it. State lawmakers can update their process to include simple to use instructions, examples of common requests and data, and do more to publish regularly requested documents automatically to make it easy for residents to understand what is happening in their communities. These simple changes can change the perception that information impacting decisions is being hidden.
- Publishing finalized public meeting agendas no less than 24 hours before the meeting and preventing any items not published from being discussed. Public trust is broken when shadow agendas are used to add last minute items that residents only learn about when it is too late. Many state laws have provisions that prevent government bodies from taking actions or discussing issues if the public isn’t given advanced notice to prevent “gotcha” decisions.
- Better defining what constitutes ‘the people’s business’ to include discussions of projects by less than a majority of the local officials when decisions are being made on government action in significant projects. Similar to the addition of last minute agenda items, sunshine rules can also be manipulated to allow small groups of decisionmakers to meet with staff or industry and make decisions away from public scrutiny and open records. By ensuring that some items of business that are extremely impactful must always be subject to these rules prevents any public dealings from being decided privately.
THE BIGGER PICTURE
Secrecy rarely enhances democracy. When Americans think that important decisions that impact them and their families are being made behind closed doors, it only increases their belief that our political system is one that serves other people’s interests, not their own. There’s a reason so many people have come to be skeptical of our political system, and to believe it caters to the wealthy and well-connected. Non-disclosure agreements entered into by governments and public agencies are a recipe for public doubt and suspicion. By limiting their use, states will show their residents not only that they take their concerns seriously, but also reiterate the importance of the democratic process.
EXPECTED OUTCOME
When communities aren’t forced to negotiate blindly, they can make better deals for their residents. From coal mines to modern day fracking, many communities with long histories of corporate exploitation are being targeted for data centers or large-scale energy development. In too many cases, these companies received public benefits and exploited natural resources while ultimately leaving residents with unemployment and pollution. In addition to strengthening the negotiating position of local communities, more and better information on expected outcomes, corporate responsibility, and public investment will lessen the opposition to growth and support economic development in the long run.
EVIDENCE
In Rosemount, Minnesota, public officials trapped by NDAs called a proposed Meta data center “Project Bigfoot” for over a year, approving rezoning and the data center development plan without ever disclosing to the public that the project was a data center. The public outcry has spurred efforts to make it easier for the public to determine whether public officials have signed NDAs and what types of projects they concern.
Other states are taking action to prevent similar problems with community trust. The Governors of Pennsylvania and Virginia have issued bans on nondisclosure agreements in the negotiations for data center siting by executive order. Legislation to do the same was introduced in Indiana, New York, and New Jersey. North Carolina law prohibits NDAs that impact records that would otherwise be public.
Public scrutiny matters in securing the best possible deal for residents in both quality of life and return on public investment. For data centers specifically, a study of 11 deals found an average cost of $1.95 million per job secured. Another study found that state economic development funding played an insignificant role in corporate decisions on siting development projects and rarely returned the promised economic benefits. The most reliable indicator of state economic development funding increases is whether there is a gubernatorial race. NDAs delay public disclosure of those projects and therefore cut off the ability of opposition to question the deal that communities, taxpayers, and local businesses have to live with.
In Frederick County, Maryland, the rumor mill began churning after Amazon officials started buying land, but local officials (likely bound by an NDA) refused to answer public questions. Community members petitioned the Open Meetings Compliance Board to investigate, resulting in reprimands at the city and county level for failing to disclose public information. The development was ultimately scrapped and since then, Governor Moore has banned state agencies from entering NDAs with data centers and several policies have been introduced to mandate the change at all levels of government.
CONSIDERATIONS
Many states have economic development exemptions that allow local officials to discuss possible building opportunities without automatic public input. Having some flexibility to speak at the initial stages of a project is important. However, those exemptions do not permit action without public input and do not prevent officials from conferring with experts and colleagues about potential community impacts.
This proposal does not inhibit sensitive discussions nor do they force publication of trade secrets; it merely prevents NDAs from blindfolding the public until it is too late to change the outcome.
POLLING
- The States Forum polling shows strong support for limiting or banning the use of NDAs for economic development projects. 69% of voters support banning the use of non-disclosure agreements in state and local economic development negotiations, compared to just 16% who oppose, And this proposal enjoys broad bipartisan agreement: 67% of Democrats, 69% of Independents, and 71% of Republicans favor banning NDAs in these negotiations
- 61% of voters oppose allowing public officials to sign NDAs that keep company negotiations over public land, water, or tax dollars hidden from residents (including 48% who strongly oppose). Opposition spans across the political spectrum, with 58% of Democrats, 70% of Independents, and 59% of Republicans opposing secret negotiations over public assets
- 81% of voters support making the terms of economic development deals public when tax breaks or public money are involved before those deals are finalized. And 91% of voters say it is important that new development deals are transparent from the very start
FAQ:
Who is likely to support this idea?
- Good government groups
- Community organizers
- Environmental action groups
Who is likely to oppose this idea?
- Large corporate interests