HARRISBURG — When Talen Energy reached out to Anthony Township Supervisor Craig High about rezoning, he was surprised.
In his role, he’s occasionally contacted by companies planning to build within the township. But Montour County, where the small rural community is located, is responsible for major zoning decisions, not Anthony.
Still, High and the other supervisors were open to hearing more about what Talen planned to do in their district.
But once a date was set, Talen gave High and his colleagues another surprise: The company said the supervisors would need to sign a nondisclosure agreement to hold the meeting.
“On the surface, it seemed as though it’s all legitimate. But on the other hand … we’re elected public officials here,” High said. “The premise of saying, ‘Will you not tell your constituents what you’re about to do?’ left a major bad taste in my mouth.”
High refused to sign the agreement and did not meet with Talen in the end. But months after that interaction, he found out why the company had reached out: It was building a data center.
High isn’t the only elected official data center developers have approached with a nondisclosure agreement. Public records requests filed by Spotlight PA found at least eight NDAs signed by township, county, and Shapiro administration officials for data center projects. Why they signed and whether the NDA shaped an eventual deal isn’t always clear. Only two lawmakers who signed such agreements responded to the newsroom’s requests for comment.
Data center developers across the United States have increasingly turned to this tactic. They have secured NDAs with elected officials and economic development advisors, limiting what information about planned data centers can be shared with communities.
First Amendment scholars and lawyers who spoke with Spotlight PA said the practice runs counter to lawmakers’ obligations to constituents, especially when elected officials are deciding on zoning and permitting.
“Any time a private company tries to limit what a public official can say about public business, that’s a red flag,” said Melissa Melewsky, an attorney with the Pennsylvania NewsMedia Association, of which Spotlight PA is a member. “It is limiting the free flow of information from public officials about public business. It's not a private transaction.”
Pennsylvania lawmakers have taken notice, introducing bills that would prohibit or disincentivize the use of NDAs by data center developers. At least one such bill has passed the state House, but has yet to be considered by the Senate.
While tech titan Microsoft has pledged to stop using NDAs with local governments, other data center and business developers say these agreements are common in their industries.
Dan Diorio, vice president of state policy for the Data Center Coalition, told Spotlight PA he “understands the potential need for regulation here,” but noted that many large business projects, from restaurants to big box retailers, use NDAs to protect “competitive interest.”
“If your competitors know you're looking at a particular site, or others know that a certain company is looking at a site, it can affect land prices. It can affect development processes,” Diorio said. “It just gives an insight into ultimately what is your business plan.”
But High argued NDAs indicate a business “is not in the interest of the community.” He views them as an effort to “try to build an artificial momentum” with as little attention on the project as possible.
“By the time the people that care about [the project] find out, there will be such momentum and so many things will have taken place that it's essentially too late to stop it,” High said.
In Anthony Township, Talen pushed on with its plans but was met with fierce local resistance. Over the past year, county officials have repeatedly voted against rezoning the land for a data center.
Chilling effect
As data center plans have popped up across the state over the past year, Pennsylvanians have voiced growing resistance. A recent Quinnipiac poll found that nearly three-quarters of Pennsylvanians would oppose building data centers in their community.
One major concern for many residents is the secrecy surrounding the projects — they don’t know who will use the data centers planned for their neighborhoods.
That was the case when Larry Padora, chair of the Schuylkill County Board of Commissioners, was asked to sign an NDA.
Like High, Padora was asked to sign the document before meeting with the company. He agreed to it because his county solicitor told him and the company that the agreement would not be enforceable because the state’s transparency laws would make it public.
“Our solicitor advised them that the NDAs are subject to Right-to-Know requests. So, like, it's pointless for having us sign it,” Padora said.
He described the meeting as “a general introduction” intended to provide basic information about the project planned in Kline Township. The only confidential information he learned at the meeting, he said, was the planned end user for the data center — Amazon.
Padora defended his decision to sign the NDA, saying the confidentiality didn't affect his interactions with constituents. He spoke regularly about the proposal, he said.
“It didn’t change [my behavior] at all. We were talking about [the project,]” Pandora said. “Once they purchased the property and the deed was recorded, everybody knew it was Amazon anyway.”
But he noted he didn't disclose Amazon's role in the project until after the announcement.
As of mid-August, the project was under consideration by the township’s planning commission, but it has faced backlash from residents. If the plan is recommended by the commission, Kline Township supervisors will vote to approve or deny Amazon’s land development plan.
Deanna Noël, a deputy director at consumer advocacy group Public Citizen, argued that while NDA use can be “common practice” in some industries, public officials agreeing to sign them creates ethical concerns.
“When a corporation demands that elected officials sign these nondisclosure agreements as a condition of just learning what is being proposed in their community, it has inverted that relationship entirely,” Noël told Spotlight PA. “The official is suddenly accountable to the corporation and not to the voters and their constituents.”
While the use of NDAs is not new, she added, due to the rapid development of data centers and lack of state or federal regulations for them, such agreements allow deals to be pushed through without public input.
“We're seeing the use of NDAs really become an abuse of the NDA with the amount of really transformative data center deals that are getting negotiated behind closed doors with elected officials,” Noël said.
Dave Cuillier, director of the Brechner Freedom of Information Project, added that the popularization of NDAs could have a chilling effect on future projects.
“Before you know it, we have local and state governments who are making really important decisions for the public on behalf of the public, without including the public, and that's when bad things happen,” Cuillier told Spotlight PA.
Through public records requests, Spotlight PA found that township supervisors, county commissioners, and a state cabinet secretary had signed NDAs with developers such as Amazon Web Services, Vantage Data Centers Management Company, and Quality Technology Services.
The NDAs barred officials from sharing “proprietary” and “confidential” information, but most did not specify what exactly fell under that category.
In an NDA signed between Department of Community and Economic Development Secretary Rick Siger and Amazon, “confidential information” refers to anything that is “clearly marked on its face as ‘confidential,’” or “reasonably should be considered as confidential.”
Nebulous language, Melewsky said, “makes compliance difficult,” as lawmakers may not know what information they’re agreeing to withhold.
She added that while the state’s open records law presumes that documents are public, NDAs are not the same.
“It's more of a cover-all-your-bases type of concept. Like nothing is public unless we tell you it's okay,” Melewsky said.
Legislative efforts
Two lawmakers have proposed bills that would discourage or bar the use of NDAs for data center projects.
State Sen. Tracy Pennycuick (R., Montgomery) proposed banning public agencies from signing NDAs with data center developers. A representative for a data center in her district has been “hiding behind the NDA,” she said.
In Limerick Township, which she represents, a proposed 1.4 million square foot data center has been going through the rezoning process. However, the lawyer representing the project, Ed Campbell, has told township supervisors that he is “not at liberty to disclose” the potential end users of the facility.
Campbell told Spotlight PA it’s “not uncommon” for a landowner or developer to finalize zoning before revealing the end user.
“There are multiple end users who have interest in this site. And if we're fortunate enough to get through conditional use, we'll be partnering with one of them and move forward,” Campbell told the township supervisors at a public meeting last month.
Campbell has not said if an NDA is what makes him unable to disclose that information, and did not reply to Spotlight PA outreach asking him to comment on Pennycuick’s allegation.
Pennycuick said that as a lawmaker, she finds this use of NDAs alarming.
“If you’re a good actor, why wouldn’t you want to say ‘I’m with Amazon,’ or ‘I’m with Truist Bank,’” Pennycuick told Spotlight PA. “I don't understand why that would need to be kept secret.”
Signing an NDA is “totally counterintuitive to being a public servant,” she said.
“Categorically I would never sign an NDA. It's just dumb. You're totally bypassing the biggest part of your job,” Pennycuick said.
Diorio, with the data center trade group, called a “blanket prohibition” of NDAs a “slippery slope.” He proposed changes like limiting the duration of the agreements, or focusing them on specific topics.
“I think there are good conversations to be had about how we structure this in a way that allows for protection of proprietary, really confidential information, while also just being more upfront about like, ‘Hey, we've decided to move forward with this process,’” Diorio told Spotlight PA.
Pennycuick’s bill is currently with the state Senate Communications and Technology Committee, which she chairs. It has not been brought up for a vote, but she hopes to advance it in September, when lawmakers return to Harrisburg.
State Rep. Joe Ciresi (D., Montgomery) represents parts of the same area and noticed the same problem. He introduced a bill that would amend a tax exemption to only apply to data centers that pledge not to use NDAs.
Lawmakers in the state House voted to repeal that tax exemption and amend it in other ways during budget negotiations this summer, but nothing has made it through the Senate.
“What I'm pushing for is not saying you can't build these facilities,” Ciresi said. “It is that the community is to decide whether you're going to build it, and the community is going to have all the information that they can have.”
Ciresi’s bill was passed by the state House with huge bipartisan support, 171- 31. Now it’s with the Senate Finance Committee.
Both Ciresi and Pennycuick told Spotlight PA they are willing to collaborate or amend their legislation to get the bill to the governor’s desk. They hope the legislature will pass the measure when it reconvenes this fall.
Diorio said the Data Center Coalition does not have an official position on either bill, but cautioned that a “one-size-fits-all” approach to NDAs would harm development.
“We always want to make sure that policies are crafted tight enough so that there aren't bad actors out there, but flexible enough so that whether it be local governments or others have the ability to tailor things appropriately,” Diorio said.
Back in Anthony Township, Supervisor High said he wasn’t sure if state government involvement is for the best. Lawmakers should “let the local voter decide what is and is not appropriate,” High said, and “get the state out of giving incentives for anything.”
Still, he cautioned against lawmakers signing NDA agreements. Lawmakers who break an NDA could face civil action. At the same time, they’re legally responsible to divulge the information they’ve learned.
“You basically put yourself in a corner where you can get sued on either side,” High said.