Dozens of Michigan lawmakers on both sides of the political aisle are pushing to end nondisclosure agreements that have shielded details on billions spent on business incentives in recent years.
Reps. Steve Carra, R-Three Rivers, and Dylan Wegela, D-Garden City, introduced a two-bill package at a press conference on Thursday where the duo said the legislation has drawn more than 20 co-sponsors.
“I think it’s just a common sense solution,” Carra, chair of the House Freedom Caucus, said during the press conference at his Lansing office.
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“It is fundamental to our democracy that lawmakers are free to communicate with their constituents,” Wegela said. “NDAs and the signing of them prevent that from happening.”
Gov. Gretchen Whitmer’s administration, the Michigan Economic Development Corporation, and select lawmakers have increasingly relied on NDAs to shield details of billion-dollar development deals from the public in recent years.
The secret spending has included some of the largest taxpayer-funded subsidies in the state’s history, with many aimed at supporting Whitmer’s forced transition to electric vehicles.
The most contentious involves a secret $715 million deal with Gotion Inc. to build an EV battery component factory near Big Rapids that has since stalled amid widespread national security concerns and public opposition. U.S. Rep. John Moolenaar, R-Midland, and others have repeatedly called on Whitmer to nix the deal with Gotion, citing the company’s strong ties to the Chinese Communist Party and recent incidents involving Chinese nationals spying and voting illegally in Michigan.
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The Gotion deal included NDAs for then U.S. Rep. Elissa Slotkin, D-Holly, and other top Democrats, an issue that played into the 2024 election. An investigation by The Detroit News in 2023 found one in five Michigan lawmakers have signed NDAs.
“Elected officials have a duty to be as open and transparent as possible,” Carra said in a joint statement. “Lawmakers should not trade their silence for information or proximity, using this underhanded tool for the practice of developing corporate welfare schemes. Corruption like this has a proven track record of failure, but the real insidiousness comes from the practice being set up to, primarily and directly, benefit the politically connected.”
MEDC officials told The Detroit News large companies seeking state subsidies “are increasingly requiring state and local officials to sign non-disclosure agreements to compete for significant investment opportunities due to the sensitive nature of financial and proprietary information involved.”
The first of the two-bill package introduced on Thursday, House Bill 4052, would ban legislators from the practice of agreeing to nondisclosure of information pertaining to their duties as legislators.
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The second bill, HB 4053, would define NDAs as “an agreement or contract that includes a provision or clause that provides that a party to the agreement or contract is prohibited from disclosing, discussing, describing, or commenting on the agreement or contract or any of the contract’s terms.”
“Members of both parties, in both chambers, have signed these agreements to keep the development of these projects secret,” Wegela said in the joint statement. “The signing of these NDAs has led to the transfer of billions of taxpayer dollars to corporations. Lawmakers learn about these agreements and regardless of whether or not they support the projects, it prevents them from speaking out against these deals.
“Legislators shouldn’t be handcuffed by NDAs preventing them from speaking out against deals that are bad for Michigan,” he said.
The legislation to ban NDAs follows about two weeks after The Detroit News revealed Whitmer’s administration has offered taxpayer-funded business incentive deals worth more than $1 billion to eight different companies since 2021.
Records obtained by the news site through “a protracted, 10-month public records process” revealed only two of the eight companies ultimately took the bait, while offers to the other five were either rejected or are still pending.
Both of the accepted $1 billion-plus deals are now in limbo, with a Ford battery plant in Marshall downsized and delayed, and the Gotion battery parts plant near Big Rapids tied up in litigation and public opposition over environmental concerns and links to the Chinese Communist Party.