Nondisclosure agreements bar Kansas lawmakers from publicly discussing details of the largest economic development deal in state history until 2024, according to records obtained by The Star.
Some details will remain secret indefinitely.
Democratic Gov. Laura Kelly announced last month that Panasonic had chosen De Soto as the location of its newest battery plant. The announcement appeared to end months of secrecy from Kelly’s administration and the Kansas Legislature.
State officials and lawmakers signed nondisclosure agreements agreeing not to reveal Panasonic’s plans as the Legislature approved the state’s largest economic incentive program to lure the Japanese electronics company.
According to a copy of the nondisclosure agreement provided to The Star by the Kansas Department of Commerce, state officials and lawmakers that signed the agreement are only permitted to discuss details that have already been publicly revealed. That agreement remains binding until three years after the agreement was signed. Any information deemed to be a “trade secret” will remain confidential indefinitely.
A breach of the agreement, it says, could cause “irreparable harm” to the company and explicitly mentions injunctive relief for any breaches.
Bob North, chief attorney for the Kansas Department of Commerce, told lawmakers in a July 20 email that “the NDA is still in force and binding on those who signed one.”
“The only information that should be disclosed is what has been made public at the announcement or is released by the company into the public domain,” North wrote.
The nondisclosure agreement specifically defines confidential information as any information provided by Panasonic that is identified as confidential or “reasonably should be considered confidential.”
According to Commerce, such limitations are standard because some details could create a competitive disadvantage for the company.
Though multiple lawmakers signed nondisclosure agreements, there was confusion about the terms.
Kansas House Minority Leader Tom Sawyer, a Wichita Democrat, said he learned the day of the announcement that he would remain under a nondisclosure agreement.
“Initially, I think I just made the assumption it would be done,” Sawyer said. “The day of the announcement the attorneys from Commerce told us that now it’s still three more years.”
Kansas Senate Minority Leader Dinah Sykes, however, said she believed she was no longer under a nondisclosure agreement after the announcement was made — a fact she had asked state officials about during a closed meeting of the State Finance Council last month.
“When I saw that email from Bob North, I had questions,” said Sykes, a Lenexa Democrat and one of Kelly’s closest legislative allies. “From what I knew in this, I don’t see anything that there should be secrets about.”
State Rep. Troy Waymaster, a Bunker Hill Republican, told reporters an hour before the announcement on July 13 that he would be released from the nondisclosure agreement “for most purposes” that afternoon.
But speaking to The Star Monday, Waymaster, who chairs the House Appropriations Committee, said he was aware the agreement would persist for other details.
“In some cases, yes, there are some items that still need to be held back. Obviously, when we’re in competition with the state of Oklahoma you definitely couldn’t say anything,” Waymaster said. “The public knows what the money is going to be used for and who it’s going to and bringing in jobs. I really don’t see an issue with still being under a nondisclosure agreement.”
Kansas Senate Majority Leader Larry Alley, a Winfield Republican, said he didn’t remember receiving North’s email and had been under the impression the NDA lifted. However, he said, all the information he was privy to had already been made public.
During his professional career Alley worked on the site acquisition committee for Spirit AeroSystems, he said he understood the need for secrecy.
“Sometimes the contractors are really where the rubber meets the road and I think some of those details in the contract may be still appropriate because they may be still working those out,” Alley said.
The agreement specifically references lawsuits as a remedy for violation of the nondisclosure agreement but it’s unclear if the company would pursue legal action against Kansas lawmakers, who approved nearly $830 million in incentives for the factory.
The Kansas Constitution grants lawmakers immunity from being questioned “for any speech, written document or debate in either house.”
Generally the clause is used to ensure lawmakers are able to speak freely about their work. However, it could be used to stop lawsuits against lawmakers in violation of the nondisclosure agreement.
John Mozena, president of the Center for Economic Accountability, a free market organization, said the longstanding NDA “serves no meaningful public policy purpose and makes it harder for Kansans to understand just what it is their elected leaders have done with their money.”
“The issue is that this creates a real chilling effect on discussion by the elected officials of this whole process,” Mozena said. “It makes the legislators sit there and start thinking, which numbers are public or not.”
The Center for Economic Accountability, is a member of Ban Secret Deals, a coalition that seeks to eliminate the use of NDAs in economic development deals.
Arlene Martinez, deputy executive director of Good Jobs First, a watchdog group that also belongs to the coalition and studies corporate subsidy projects across the country, said the NDAs should have been lifted and the public should have been able to review the deal before final approval.
“If Panasonic is bringing as much prosperity as it claims, it should be willing to release the full terms of the deal so the public can make that determination for themselves,” Martinez said. “Letting Panasonic continue to dictate the terms of the process is another bad decision in a process that’s been deeply flawed and that has stripped from the public any opportunity to meaningfully weigh in on a deal that involves them opening up their wallets and diverting hundreds of millions of dollars from schools, roads, healthcare, parks, emergency response, and other vital public services.”
The Star’s Daniel Desrochers contributed to this report.