Finance

Advocacy groups push for ban on NDAs tied to government subsidies

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A coalition of advocacy groups on Thursday launched a campaign to stop corporations from using nondisclosure agreements (NDAs) to hide the details of taxpayer-funded economic development deals from the public. 

The campaign, dubbed Ban Secret Deals, says that Amazon, Google and other corporate giants regularly persuade state and local governments into signing NDAs that prevent the public from seeing how much money they’re receiving in government subsidies.

Advocates point to a bill recently signed into law in Kansas that provides an estimated $1.2 billion to an unnamed corporation to bring a new manufacturing plant to the state. Kansas lawmakers admitted they had to sign NDAs to learn the identity of the company.

“Corporations, with the consent of state and local officials, use economic development deals to extract resources from local communities, harm local businesses, and then hide their actions from the public by using NDAs,” Pat Garofalo, director of state and local policy at the American Economic Liberties Project, one of several anti-monopoly groups leading the campaign, said in a statement.

“It’s time to ban these secret deals and help bring increased transparency and accountability to state and local government.”

The campaign has documented 20 recent economic development deals that involved NDAs, including a $16 million tax break for Amazon approved by Fort Wayne, Ind., officials last year. The city’s lawmakers weren’t allowed to name the company until the deal was approved, effectively limiting the value of public input on the issue. 

An analysis from the Mercatus Center found that corporations receive an estimated $95 billion in subsidies and tax incentives every year. Advocates say that states and localities are engaging in a race to the bottom that reduces investment in infrastructure and education and hurts the nation’s economic growth in the long run. 

Anti-monopoly groups are pushing state legislatures to ban the practice. This year, lawmakers in New York, Illinois, Florida and Michigan have introduced bills to do just that.

—Updated at 4:32 p.m.

Tags Amazon Google NDA non-disclosure agreement subsidies
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