Data Center Secrets: NDAs and Insider Trading Rules
When massive infrastructure projects loom on the horizon, the promise of economic growth often comes wrapped in a thick layer of secrecy. But for communities eyeing the development of data centers, that promise is increasingly shadowed by legal agreements designed to keep the public in the dark, fueling a growing divide between local residents and their elected officials.
New research has brought this tension into sharp focus. Researchers from the University of Mary Washington in Virginia examined the landscape of data center development and found a striking pattern: out of 31 localities with existing, approved, or proposed data centers, 25 of them utilize non-disclosure agreements, or NDAs, that effectively prevent citizens from accessing crucial information about these massive projects.
This lack of transparency has created serious concerns. These agreements have left many residents feeling excluded from the decision-making process, significantly eroding their trust in local leadership regarding decisions that directly impact their communities.
The justification for this approach often rests on the argument that NDAs are standard practice for technology companies. Officials frequently defend these secrecy agreements, insisting that they are necessary to protect potential business and revenue streams. Louisiana Economic Development Secretary Susan Bourgeois, for example, maintained that NDAs are “fundamental for economic development”, enabling the state to compete effectively for major data center investment.
In this view, the rationale is that sharing proprietary information publicly would hinder the necessary discussions. As one official put it, the goal is not to obscure information, but to be more forthcoming, suggesting that the agreements allow the process to move forward without public distraction.
However, the debate extends far beyond Louisiana. NDAs are not isolated to one region. Reports indicate that other towns across the United States have signed similar secrecy agreements even before formal negotiations with potential data center developers begin. In Wisconsin, for instance, at least four municipalities reportedly signed NDAs with major tech companies like Microsoft and Meta while negotiating billion-dollar projects.
This dynamic raises a critical question: does the push for corporate confidentiality overshadow the community’s right to informed consent? The tension between corporate interest and public transparency has become a flashpoint, particularly when these agreements are seen as circumventing traditional community voting rights regarding massive developments.
Yet, not all perspectives agree on the necessity of these agreements. In a contrasting example, West Feliciana Parish President Kenny Havard argued that NDAs are unnecessary barriers to growth. Havard asserted that decisions affecting citizens, such as land sales and tax incentives, should be completely transparent and out in the open. He pointed to West Feliciana Parish as an example of success, noting that they secured a data center deal without the need for secrecy, demonstrating that large-scale projects can proceed without keeping the public in the dark.
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