Jack D’Aurora is a retired business lawyer and regular contributor to The Dispatch.
Ohioans are not happy about data centers being built in their neighborhoods, especially when their public officials have been keeping them in the dark about the deals those officials are negotiating. This isn’t a new problem.
Ethical guidelines are needed. Before I get to that, let’s look at what’s at stake.
Data centers consume enormous quantities of electricity and, if they don’t use closed-loop systems, require vast amounts of water and, generally, require infrastructure improvements.
All these things weigh heavily on the minds of local citizens. Who will bear the costs associated with the data centers? What about damage to the environment and the tremendous noise
they generate?
Answers to these questions often fall into the realm of the unknown because local public officials frequently agree to nondisclosure agreements with the developers. And those NDAs keep secret much of the consequences that come with data centers. No surprise, the unknown generates fear.
Zach Schiller of Policy Matters Ohio put it this way: “Residents’ fears have been stoked by NDAs that have hidden projects from public view.” Officials in Wilmington “signed an NDA in January 2024 and withheld many project details for more than a year and a half while conducting secret negotiations with the company.” Even the name of the company involved was initially shielded.
Earlier this year, Mount Orab Village Council members and other public officials in Brown County agreed with contractors to keep discussions confidential through NDAs. The village council then voted to place a 180-day moratorium on any data center developments, apparently as the result of voters voicing their frustration at a village meeting.
This is déjà vu all over again
The response to NDAs has been House Bill 695, which would preclude a variety of public officials from entering into NDAs, but Schiller maintains the bill is not broad enough.
It should also cover officials responsible for economic development so that the public is fully informed and “can meaningfully participate before deals are made.”
One voter put it this way during a hearing conducted on June 1 by the Ohio House Joint Select Committee on Data Centers: “If transparency builds trust, why are the NDAs becoming such a common part of these projects in small-town Ohio?”
Government’s willingness to keep the public in the dark is déjà vu all over again. Not long after hydraulic fracturing, or fracking, started in Ohio some 15 years ago, state law required drilling companies to disclose the chemicals they were injecting into the ground, unless they were “trade secrets.”
As a consequence, an unknown number of undisclosed chemicals has been pumped underground. Evidence from the EPA suggests that many of these chemicals present health risks, as reported by the Partnership for Policy Integrity in 2019.
While the hazards that data centers and fracking present are significant, so too is the disconnect between public officials and their constituents. How is it that public officials have been able to enter into transactions and pass legislation that keeps their constituents in the dark about critical issues?
Ethical guidelines, both treatises and state laws, plainly state that public officials are obligated to put the public interest ahead of their own. Think of it as fidelity to one’s constituents.
Still, state law provides that information considered a trade secret made available to the director of development services or the Controlling Board is not to be considered “public records,” which protects that information from public disclosure under Ohio’s Public Records Act.
When public officials agree to NDAs that preclude them from discussing the terms of a contract with a private business or pass legislation that allows businesses to keep secret what they are doing to our land, officials create a chasm between themselves and their constituents.
The way to remedy that chasm is to mandate fidelity, and that comes through legislation. The Statehouse needs to pass a more comprehensive version of House Bill 695 and also pass House Bill 958, which obligates fracking companies to disclose all chemicals they use, without exception.
Jack D’Aurora is retired business lawyer and regular contributor to the Dispatch and produces the podcast, JUSTUS with Jack & Gonzo.
This article originally appeared on The Columbus Dispatch: Data center deals being made in dark all over Ohio. It's a dangerous déjà vu | Opinion
