The Michigan House voted Tuesday to keep lawmakers from signing non-disclosure agreements.
The practice has come under scrutiny in recent years as some lawmakers and state officials have signed NDAs as part of talks to bring some economic development projects. That includes for a General Motors battery plant that spurred the creation of the often-criticized Strategic Outreach and Attraction Reserve, or SOAR, Fund.
State Representative Steve Carra (R-Three Rivers) co-sponsored the bipartisan bills. He said public servants shouldn’t be signing NDAs, especially for 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."
The bills would apply to lawmakers and their staff acting in their official capacities.
Despite the criticism, the Michigan Economic Development Corporation, which took the lead in talks over some of the projects that have involved NDAs, defended the practice.
“It is important to note that in our experience, those seeking to make a significant investment are increasingly requiring NDAs, given the financial and proprietary information being shared. 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,” MEDC spokesperson Otie McKinley said in a written statement.
That feeling was shared by some of the lawmakers who voted against the bills.
Opponents to the bills argue NDAs are a tool that keeps Michigan competitive economically and that they stop lawmakers from insider trading when they know something is coming.
Representative Phil Skaggs (D-East Grand Rapids) was among the lawmakers who voted against the bills.
“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,” Skaggs said.
Sponsors of the bills, including Representative Dylan Wegela (D-Inkster) rejected the argument, however, that NDAs were necessary to bring business to Michigan.
“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 said.
Lawmakers on both sides of the argument, however, have said they want the House to take up Senate-passed bills that would expand the Freedom of Information Act. Republican House Speaker Matt Hall (R-Richland Twp) has said those bills aren’t a priority for him.
Ahead of voting in the House Tuesday, Democratic lawmakers unsuccessfully tried to tie the NDA legislation to the FOIA bills so one couldn’t become law without the other.
The NDA bills still passed with wide bipartisan support, by margins of 80-28 and 91-17.
The legislation now heads to the state Senate.
