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Time to end trade secret exemptions for state agencies

March 17, 2019

I would be remiss if I let Sunshine Week pass without calling for an end to one of the least transparent practices going: trade secret exemptions for state agencies.

Sunshine Week, which was this past week, is an annual celebration of Freedom of Information laws around the country. After all, the best disinfectant is a little sunshine.

But when government agencies claim trade exemptions, the intent is often secrecy for the sake of secrecy.

Connecticut’s FOI Act, like those in every state and at the federal level, includes exemptions that allow public agencies to withhold certain types of records.

These exemptions are often created with an intent to limit harm from disclosure — protecting the names of victims or witnesses in police records; allowing public agencies to withhold information when they are negotiating a land deal; or a test to balance the public interest in access to information with a public employees’ right to privacy.

One could easily argue that the exemption for trade secrets serves a similar purpose.

Companies in a range of industry work hard to keep their product designs secret and would be less inclined to do business with the government if it would result in disclosure.

But government is generally not in the business of creating products — not municipalities, not the state of Connecticut, and not quasi-public agencies.

Sure, they pay for the design and construction of schools and courthouses, roads and railways, even airports and event venues. But those are not inventions whose origins need to be withheld in order for their creators to thrive.

Government is not Coca Cola, which goes to tremendous lengths to limit access to its beverage formula and bounds a privileged few to secrecy by contract.

As David S. Levine, a professor at Elon University School of Law, so eloquently argues in “The People’s Trade Secrets,” such exemptions should be used to encourage companies to innovate and invent and then share their inventions with the public.

Government agencies, on the other hand, have typically used exemptions for trade secrets solely for the purpose of withholding information they don’t want to share.

In Connecticut, agencies are required to argue that they realize an economic benefit by withholding this information. This exemption has been used to shield information that includes University of Connecticut athletics season ticket holders and financial incentives pitched by the Department of Economic Development when offers fall short of a final deal.

But government is not a business — it is not beholden to shareholders or investors, and economic success shouldn’t be evaluated merely by bottom-line figures.

Take the Amazon H2Q process. The DECD was able to deny the Record-Journal’s request for the tax incentives offered as part of Connecticut’s bid, saying the information would give insight into DECD’s strategy and this constitutes a trade secret.

But look at what happened in New York, where protests by critics led to Amazon walking away from an agreement to build a headquarters in Long Island City.

Supporters of the deal touted plans to add 25,000 jobs with an average pay of $150,000, certainly a boon for any local economy.

But critics questioned giving $1.52 billion in incentives to one of the world’s most successful companies, run by the world’s wealthiest man. They also questioned how New York would help Long Island City residents, many of whom would likely be pushed out once housing prices rise.

These are all valid questions for public agencies to weigh — the role of the DECD isn’t just to score high profile victories; it also needs to foster economic development that helps residents at all skill levels or economic status.

Allowing government agencies to claim exemptions for trade secrets, however, prevents a broad discussion about DECD’s approach and strategy. We are left only to reflect on offers when a deal is reached, and look how that ended up in New York.

Mike Savino is president of the Connecticut Council on Freedom of Information. He is also local and state news editor at the Record-Journal in Meriden.