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Last month, the New York State Senate unanimously approved a bill sponsored by Senate Deputy Leader Michael Gianaris that would ban nondisclosure agreements, NDAs for short, in corporate subsidy deals.
If it became law, it would eliminate a key tool that corporations use to keep their subsidy dealing secret: Having elected officials, such as mayors, governors, state legislators, and city council members, sign binding contracts that prevent them from revealing anything about subsidy negotiations, including the intended recipient, until the deal is announced.
New polling shows banning these NDAs, in addition to being right on the merits, is also very popular, as I’ll explain below.
NDAs were a key part of Amazon’s push for its subsidized HQ2, and have popped up in states all across the country, as detailed in this database. They’ve helped corporations and compliant lawmakers push through massive subsidy deals in states such as Kansas, Nevada, Tennessee, and Michigan, benefitting the likes of Facebook, Panasonic, Tesla, and General Motors. (You can read some of my previous NDA abuse coverage here, here, and here.)
In addition to New York’s bill, legislators introduced similar bans this year in Illinois, Pennsylvania, and Indiana. (Shoutout to sponsors Sen. Robert Peters, Sen. Katie Muth, and Rep. Robb Greene, respectively.) This is a good thing, because in my work on subsidy issues over the last several years, I’ve noticed an uptick in both the use of these NDAs and their effectiveness.
The point of nondisclosure agreements is to eliminate key stakeholders — such as local workers, small businesses, and community members — from the negotiations until the deal is essentially done, which dramatically lowers the chance those local stakeholders will be able to derail it, even if it would be very bad for them or for the general, taxpaying public.
And corporations admit this! For instance, when dealing with officials in San Jose, Google employees said the point of NDAs was to keep the local residents out of the negotiations so public perception wouldn’t affect them. It’s simply easier to spring a deal on a community and slam it through than it is to go through the often messy process of actually including the public.
Democracy? That’s for suckers.
(To be clear, banning nondisclosure agreements does not compel elected officials to disclose anything, and it certainly doesn’t force them to turn over specific application details or other proprietary corporate information, as opponents tend to claim. It merely means public officials can’t be contractually bound into lying to or obfuscating with constituents or the media about who they’re talking to and over what amount of money.)
The fact that public officials are allowed to sign binding nondisclosure agreements with specific corporations at all is generally surprising to people I’ve spoken to about it, and when they find out it happens, they aren’t fans. Some new polling by the advocacy organization Fight Corporate Monopolies (where I spend some of my work time) backs that general feeling up with real numbers.
In the March poll of 600 adults, nearly 60 percent said they favor banning nondisclosure agreements in corporate subsidy deals when presented with neutral language about what such a policy entails.
Even better than that number though, is some of the qualitative responses, where respondents were asked open-ended questions about the use of NDAs in corporate subsidy deals. Here are words that repeatedly came up:
- Unfair
- Sneaky
- Shady
- Corrupt
- Crooked
- Unethical
- Dishonest
Sounds about right! These agreements are indeed corrupt, greasing the skids for subsidy deals that corporations don’t want to defend in public. Here are some of my favorite, fuller comments:
- “It’s not being honest with the public” — White woman, 35-54, Independent, Rural, High school or less education
- “Public officials shouldn’t engage in private business with corporations” — Black man, 18-34, Democrat, Urban, Some college
- “If there are tax break deals made, the taxpayers should have a right to see the deals … after all, they are the ones having to make up for the loss of taxes being paid” — White man, 55+, Democrat, Rural, Some college
- “All aspects of these kind of deals should be public knowledge” — White man, 55+, Republican, Suburban, High school or less education
There’s more in the full polling memo here.
This lines up well with previous polling showing that 71 percent of voters are more likely to support a candidate who favors eliminating secret subsidy deals, a result which cut across all demographics, including partisanship, income, region, and urban/rural.
Numbers like these are important because they provide a countervailing weight to the studies and real-world experience showing that corporate subsidies, while not good at generating any economic benefits, are good at generating votes for incumbent politicians. Turning subsidy votes from an electoral help to a hindrance would obviously be very useful for those of us looking to change them.
At the very least, it’s helpful to have data showing that actively reining in corporate subsidies can potentially be politically useful, if a public official talks about it the right way.
Just a reminder: If you want to stay updated on the wider effort to ban secret subsidy deals, you can go here to sign the Ban Secret Deals coalition petition, peruse the database, read our guide to spotting and organizing against secret deals, or send us a note about shady dealmaking you’re seeing in your community.
This post initially appeared in a slightly different form on the author’s Substack, Boondoggle, on April 18, 2023.
Pat Garofalo is the author of The Billionaire Boondoggle: How Our Politicians Let Corporations and Bigwigs Steal Our Money and Jobs, the Boondoggle Newsletter, and the director of state and local policy at the American Economic Liberties Project.
