A group of organizations from across the political spectrum today applauded the introduction of the Honesty in Economic Development Act in Illinois (SB 3038) sponsored by Sen. Robert Peters and Rep. Will Guzzardi. The bill would ban non-disclosure agreements (NDA) in economic development deals, eliminating a tactic that allows businesses to hide their lobbying and muzzle politicians and government staffers as the firms extract public subsidies from the government without the knowledge or input of local residents.
States and localities spend tens of billions of dollars every year on ineffective and often-wasted economic development subsidies. Non-disclosure agreements help facilitate those subsidy deals by keeping key details, often including the identity of the business receiving taxpayer support, secret from the public, preventing any real civic engagement before the subsidies are formally approved.
Similar bills have also been introduced recently in New York and Florida.
“Non-disclosure agreements facilitate corrupt subsidy agreements between specific businesses and state and local governments,” said Pat Garofalo, director of state and local policy at the American Economic Liberties Project. “Eliminating them is a vital first step to bringing transparency and accountability to a public policy area desperately lacking both and ensuring that local communities have a say in local development. Sen. Peters and Rep. Guzzardi are showing real leadership with their proposed legislation.”
“Public money deserves public scrutiny,” said John Mozena, president of the Center for Economic Accountability. “Venture capitalists, hedge fund managers or bank loan officers wouldn’t invest without knowing who was getting the money, and American taxpayers deserve at least the same level of basic transparency from their economic development agencies.”
“Every incentive deal should be fully disclosed at least 90 days before it is approved,” said Greg LeRoy, executive director of Good Jobs First. “Tech giants, electric-vehicle makers, and micro-chip manufacturers alike should be held to public account.”
“Keeping economic incentive deals secret until they are approved allows states and localities to be played against one another in an often fake competition,” said C.J. Girod, Founder and Managing Principal of Responsible Incentives. “NDAs aid and abet the siphoning of public funds by big business for investments that by and large would occur with or without the incentives.”
Good Jobs First Contact: Greg LeRoy at [email protected]