Michigan House Moves to Prohibit Non-Disclosure Agreements for Lawmakers
In a significant legislative move, the Michigan House has voted to prevent lawmakers from entering into non-disclosure agreements (NDAs). This decision comes amidst growing scrutiny over the use of NDAs in discussions related to economic development projects, such as the contentious General Motors battery plant that led to the establishment of the Strategic Outreach and Attraction Reserve (SOAR) Fund.
State Representative Steve Carra (R-Three Rivers) is a co-sponsor of the bipartisan legislation seeking to address this issue. Carra criticized the use of NDAs by public officials, especially in the context of business incentives. “They’re using tax dollars to fund these projects. And then the idea that we as legislators would be complicit in that process and signing secrecy pacts, saying we cannot disclose the conversations we’ve had is a reckless form of governance,” Carra stated.
The proposed bills target lawmakers and their staff when acting in their official capacities. Despite the push for transparency, the Michigan Economic Development Corporation (MEDC), which has been involved in discussions requiring NDAs, defended their usage. According to MEDC spokesperson Otie McKinley, NDAs are often requested by investors to protect sensitive financial and proprietary information. “Further, no decisions are made until an investment opportunity is voted on by the bipartisan and bicameral appointees of Michigan Strategic Fund board in a public setting,” McKinley added.
Some lawmakers opposed to the bills argue that NDAs are essential for maintaining Michigan’s competitive edge economically and preventing insider trading. Representative Phil Skaggs (D-East Grand Rapids) expressed his dissent, noting, “Non-disclosure agreements are critical for competitiveness, our ability to attract new jobs, cutting edge technology. And we should be involved in far more serious ethics issues than what I think here is largely a nothing burger.”
However, the argument that NDAs are vital for business attraction was countered by bill sponsors like Representative Dylan Wegela (D-Inkster). Wegela emphasized that if corporations seek public funding, their operations should be conducted openly. “I think if corporations want public tax dollars, they should do their business in public. And that should be part of the discussion. Right? We’re talking about hundreds of millions of dollars going to multi-million dollar and multibillion dollar corporations,” Wegela commented.
Both supporters and critics of the bills agree on the necessity for the House to consider Senate-passed legislation to broaden the scope of the Freedom of Information Act. However, Republican House Speaker Matt Hall (R-Richland Twp) has indicated that these bills are not a priority.
In a last-minute effort, Democratic lawmakers attempted to link the NDA legislation with the FOIA bills to ensure both would be enacted simultaneously, but this attempt failed. Despite these challenges, the NDA bills passed with substantial bipartisan support, with votes of 80-28 and 91-17, and are now set to be reviewed by the state Senate.
—
Read More Michigan News
