A bipartisan bill introduced in the United States Congress would void the confidentiality agreements that have allowed local governments to negotiate artificial intelligence data centre deals in private. The proposal arrives in the same month that Virginia banned such agreements by executive order and Pennsylvania reported that nearly half of its fast-track data centre municipalities had signed them. The fight is no longer only about electricity, water, or land. It is about who is permitted to know what is being decided, and who is deliberately kept outside the room.
Featured image: an Amazon Web Services data centre visible on 22 August 2024 in Boardman, Oregon. Image credit: AP via PolitiFact, used to illustrate the facilities at the centre of this debate.
What the original report says
Newsweek reports that Representatives Greg Landsman of Ohio, Tom Barrett of Michigan and Jamie Raskin of Maryland have introduced the “No Secrets for Data Centers Act.” The bill would void non-disclosure agreements signed by government officials that conceal details of data centre projects, and would block companies from receiving public subsidies tied to keeping those details confidential, except where genuine trade secrets are involved. Newsweek notes that Arizona, Indiana, Louisiana, Pennsylvania, Tennessee, Virginia and Wisconsin are among the states where confidentiality agreements have been tied to prospective data centre developments, and cites a 2025 Virginia review that found agreements in 25 of 31 localities with existing or proposed data centres.
THE SCENARIO: A county council sits down to approve a data centre that will draw more power than every home in the district combined. Sixty days earlier, each member signed a confidentiality agreement with a company whose name appears nowhere in the public file. The application uses a code name. The council cannot discuss the water draw, the tax abatement, or the identity of the end user, because the document they signed forbids it. Residents arrive expecting a debate. There is nothing to debate, because the information was withheld before the hearing was scheduled. The vote passes. The contract is binding. The record is empty.
The Question
What happens to institutional sovereignty when the information required to govern is contractually withheld from the people elected to govern?
This is a different question from the ones usually asked about AI infrastructure. Most of the debate concerns capacity: how much compute a country owns, how much power a facility consumes, whether the grid can carry the load. Those are material questions, and they matter. But they all presuppose that decision-makers have enough information to make a judgement in the first place.
The question is not whether data centres should be built. The question is whether the public bodies asked to approve them are operating as sovereign authorities or as signature-collection points for agreements already settled elsewhere. An elected body that cannot disclose the terms of a project to its own constituents has lost the practical capacity to refuse it. Consent becomes procedural rather than substantive.
That matters because the mechanism is not incidental. The confidentiality agreement is the instrument through which a private negotiation becomes a public fait accompli. It is signed before the public knows a project exists, and it binds the very officials whose job is to represent the public’s interest. By the time a hearing takes place, the meaningful decisions have been made and the community is being asked to ratify, not to choose.
The sovereignty test is therefore not whether the facility gets built. It is whether the authority that approves it still holds the information, the discretion and the record needed to say no. On the evidence now accumulating across several American states, the answer has been drifting in the wrong direction — not because communities lack power in law, but because the information asymmetry was engineered first.
What Happened and Why It Matters
On 28 September 2026, PolitiFact published an explanatory report by Maria Briceño examining why technology companies request non-disclosure agreements for data centre projects and what a local moratorium actually does. The report opens with the city of Salem, Oregon, where officials had met privately with a California-based company, Verrus, for more than a year before the public learned of a proposed facility. One resident described the agreement as a “definitive blow to our trust.” Salem’s city council subsequently banned the use of such agreements and approved a four-month pause on data centre development.
PolitiFact documents the pattern nationally. In Louisiana, Meta and the state’s largest energy company used confidentiality agreements with the governor and state and local officials, working on the deal for nine months before the community learned of it. Amazon, Google and xAI have signed similar agreements with local governments in Virginia, Arizona and Tennessee. Researchers cited in the report found that 25 of 31 local and county governments surveyed had signed agreements tied to data centre work. Some agreements require local governments to find legal routes to block public record requests, forcing residents into court to obtain information about projects in their own districts.
The industry’s defence is procedural. Jon Hukill of the Data Center Coalition told PolitiFact that without confidentiality agreements, competitive companies may be reluctant to share proprietary information with localities. Hannah Wiseman of Penn State University pointed to the more likely motive: avoidance of opposition, in an environment where a University of Pennsylvania Annenberg Public Policy Center survey of 1,320 people found a majority somewhat or strongly opposed to a new data centre in their area.
On 4 September 2026, The Center Square reported through the Lewistown Sentinel that public records requests to 30 Pennsylvania municipalities found four of the nine data centre proposals in Governor Josh Shapiro’s “fast track” permitting programme had involved signed confidentiality agreements, with a fifth municipality ceasing to respond to requests entirely. In Lower Mount Bethel Township, eight separate elected officials or staff each signed a “mutual confidentiality agreement” with Talen Energy Supply. In Shippingport, a borough secretary signed an agreement with Oracle America. In one case the agreement did not name the project sponsor at all, but the other signatory was an attorney who has represented Amazon.
Governor Shapiro signed Executive Order 2026-05 on 18 August 2026, which removed data centre proposals from the fast track programme and stated that the use of non-disclosure agreements with data centre projects is not permissible for agencies under the governor’s jurisdiction. The order also directs the Department of Environmental Protection to withhold permit review until local approvals are secured, and requires binding commitments on energy affordability, water use and community engagement. Reporting by The Center Square found that this applies to state agencies, leaving a live question about the municipal agreements already signed.
Virginia went further and faster. On 18 September 2026, Governor Abigail Spanberger signed Executive Order 22, which immediately bars executive branch agencies from entering confidentiality agreements that prevent disclosure of material information about proposed commercial data centres, including incentives, resource demands and community impacts. Governor Spanberger described it plainly: “Virginia is putting a stop to the secrecy this industry so often relies on.” The order also removed projects above 25 megawatts from expedited permitting and from the Virginia Business Ready Sites Program, ended by-right approval for large projects, and created the state’s first AI Task Force covering workforce displacement, data privacy and cybersecurity.
At federal level, the “No Secrets for Data Centers Act” would void official confidentiality agreements and prevent companies receiving public subsidies tied to concealment, with a carve-out for genuine trade secrets. It carries three sponsors from two parties, which is itself a signal: this is no longer a partisan issue. Tracking in Indiana by the Arnolt Center for Investigative Journalism and the Limestone Post found agreements in seven of 46 identified projects, including with New Carlisle officials over an $11 billion Amazon campus. Microsoft announced in March 2026 that it was discontinuing the practice.
That matters because the sequence is consistent. A developer approaches a small municipality. The municipality signs an agreement in exchange for the prospect of investment. The agreement constrains what officials may say. The public discovers the project late, organises, and either loses the vote or wins a moratorium that arrives after the deal is signed. Trust erodes, and the next project arrives into a more hostile environment. The pattern manufactures the opposition that the agreements were designed to avoid.
The Sovereignty Risk
The sovereignty risk here is informational before it is physical. A public authority holds three things that make it sovereign: the ability to know, the ability to decide, and the ability to account. Confidentiality agreements attack the first in order to neutralise the second and hollow out the third. Once knowledge is contractually restricted, discretion narrows to a binary of approval or rejection on incomplete terms, and accountability becomes impossible because there is no public record to hold anyone to.
Note who holds the pen. The agreement is drafted by the party with the legal resources to construct it, and signed by a party with none. Its breadth, its duration and its definition of confidential information are all set by the developer. The result is not a balanced commercial arrangement but a transfer of governance capability — the ability to see, to weigh, to negotiate — from a public body to a private one. That is a power shift, and it is executed through paperwork rather than infrastructure.
The dependency follows the secrecy. A community that cannot see the terms cannot price the risks it is accepting, cannot compare this project against alternative uses of its grid, and cannot negotiate benefit provisions from an informed position. When the facility is operational and the water draw is real and the ratepayer bill has arrived, the authority that approved it has no leverage left, because the approvals were granted under conditions it was forbidden to examine.
There is also an institutional capability loss that outlasts any single project. Officials who operate for years inside confidentiality constraints build habits of discretion that are difficult to reverse. Planning departments lose the analytical muscle of independent assessment. The default becomes deference to the developer’s own numbers, which is precisely the outcome the arrangement was designed to produce. Institutional capability erodes quietly, and by the time the pattern is recognised, the staff who might have pushed back have either left or learned not to.
For leaders, the practical issue is the record. A decision that cannot be documented cannot be audited, reviewed, or reversed. Where AI infrastructure is concerned, the costs are long-term and the corporate counterparties are global. Consider the asymmetry in resources: Meta and Oracle negotiate agreements with a township of a few thousand residents. That disparity is not a reason to refuse development. It is the reason transparency must be a precondition rather than a courtesy.
The TEE Method Response
The TEE Method treats sovereignty as a capability to be built across three connected domains: Talent, Enterprise and Ecosystem. Applied to the secrecy problem, each domain asks a specific question about whether an institution can govern what it is being asked to approve.
Talent is the capacity of people inside the institution to interrogate a proposal. A council cannot negotiate a 300-megawatt interconnection agreement if no one on staff can read a load forecast. The talent move is not simply hiring; it is building a shared analytical baseline so that planning officials, finance officers and legal counsel can evaluate the same project on the same terms. Where that capability exists, confidentiality agreements become far less attractive, because the institution has something to negotiate with.
Enterprise is the set of internal governance rules that determine what an organisation may agree to. Every public body should have a written position on confidentiality before any developer arrives: what may be signed, by whom, with what expiry, and what categories of information are never eligible for restriction. Pennsylvania’s order draws the line at state agencies. Virginia’s draws it at the executive branch and carves out only extraordinary circumstances such as national security. That is an enterprise rule, not a one-off decision, and it is the difference between a policy and a precedent.
Ecosystem is the surrounding set of institutions that make secrecy costly. Disclosure registries, published aggregate energy and water metrics, community benefit agreements filed as public documents, and cross-jurisdiction information sharing all raise the price of concealment. The evidence supports this: where opposition formed fastest, it was process failure rather than resource conflict that drove it. An ecosystem that publishes the record removes the grievance at its source and shortens approval timelines rather than lengthening them.
Applied to the current news, the TEE response is straightforward. Federal legislation alone will not solve this, because the agreements are signed at municipal level. The durable fix is capability in towns and counties: staff who can evaluate, rules that constrain what may be signed, and a record that is public by default. Where those exist, developers comply, because the alternative is a stalled pipeline.
Sovereignty Test Matrix
The following matrix scores the five domains of sovereignty against the secrecy problem in AI infrastructure development. Each domain is assessed on whether the institution retains real agency or has surrendered it, with weak and stronger signals identified for practical diagnosis.
| Domain | Score (1-5) | Weak signal | Stronger signal |
|---|---|---|---|
| Political | 2 | Elected officials sign confidentiality agreements that prevent them informing constituents about projects they will vote on | Confidentiality agreements banned by statute or executive order, with a narrow national security carve-out and public reporting |
| Economic | 2 | Grid upgrade costs and tax abatements settled in private, then spread across ratepayers who were not party to the negotiation | Full cost allocation disclosed before approval; developer bears incremental interconnection cost; incentives tied to verified compliance |
| Cultural | 3 | Communities discover projects through rumour, code names and record requests, producing durable distrust of local institutions | Early consultation with published project identity, siting rationale and impact assessment before any commitment is signed |
| Intellectual | 2 | Officials lack independent analytical capacity and rely on developer-supplied figures for load, water and emissions | In-house or shared technical capability to verify developer claims, with independent review of energy and water modelling |
| Technological | 3 | Compute capacity consolidated in a few jurisdictions on terms those jurisdictions cannot inspect or revisit | Published aggregate metrics, public permitting maps, auditable reporting tied to tax exemption eligibility |
The scores are deliberately unflattering. Political and economic sovereignty sit low because the arrangements currently in force in many jurisdictions transfer decision rights before the public process begins. Intellectual sovereignty is the weakest domain and the most consequential, because it is the precondition for the other four. A body that cannot verify a developer’s numbers cannot protect its ratepayers, its water, or its voters.
Cultural and technological sovereignty score marginally higher, and the reason is instructive. Public backlash has itself become a corrective mechanism. Where communities organised early and demanded disclosure, they recovered a measure of agency. That is a real gain, but it is reactive. The stronger position is the one Pennsylvania and Virginia have now legislated toward: transparency as a condition of entry, before a single agreement is signed.
The test is simple to apply. Ask who holds the information, who holds the discretion, and who holds the record. Where those three are held by the same public body, sovereignty is intact. Where any one has been transferred by contract, the institution is administering a decision that was made by someone else.
What Leaders Should Do This Week
For boards, council members, permanent secretaries and institutional leaders facing AI infrastructure proposals, the actions below are specific enough to assign to a named team and to complete within a defined period. The sequencing matters: disclosure first, then analysis, then negotiation.
First, audit existing confidentiality agreements. Direct legal counsel to produce a register of every agreement signed with a data centre developer or its agents, listing the signatory, date, duration, breadth of restricted information and whether it names the ultimate end user. This audit is the single highest-value action available, because most institutions do not know the full scope of what they have already signed.
Second, adopt a written confidentiality standard before the next approach. Set a default position that project identity, resource demand, incentive value and community impact are never eligible for restriction. Permit narrower agreements only for verified trade secrets, with a fixed expiry and a named approver. Publish the standard.
Third, publish the permitting map. Pennsylvania’s Executive Order 2026-05 directs the Department of Environmental Protection to create a publicly accessible map of proposed data centre projects and their permitting status. Any jurisdiction can replicate this at low cost. Visibility is the cheapest sovereignty instrument available.
Fourth, build independent analytical capacity on load and water. Retain an engineering reviewer with no commercial relationship to the developer for every project above a defined threshold, and require the developer’s forecasts to be tested against grid operator data. Where the institution cannot fund this alone, pool the capability regionally.
Fifth, tie every incentive to verified disclosure. Sales tax exemptions, fast-track permitting and site readiness support should be conditional on annual reporting of energy consumption, peak demand, natural gas use, water consumption and maximum day demand, with the exemption revocable on non-compliance. This is the structure Pennsylvania built into its Computer Data Center Equipment Exemption Program.
Sixth, require cost allocation before approval, not after. Insist that the developer bear the incremental interconnection, transmission and distribution costs attributable to its load, and that this be established in a binding instrument. Forty-one states have already had to legislate on this question; the ones that did so early had more leverage than those that acted after construction began.
Seventh, set a public decision threshold. Define the capacity above which a project requires a discretionary public hearing with full disclosure, and refuse to process applications that arrive under code names or through agents who will not identify the end user. Virginia’s threshold is 25 megawatts. The number matters less than having one, and holding to it.
The Question Revisited
The question was what happens to institutional sovereignty when the information needed to govern is contractually withheld from those elected to govern. The evidence from Oregon, Louisiana, Pennsylvania, Virginia, Indiana and Ohio gives a clear answer: sovereignty does not disappear in a single act. It is transferred quietly, one agreement at a time, and the transfer is usually complete before anyone notices.
The mechanism is consistent across jurisdictions. Confidentiality is requested early, granted by a body that lacks the capacity to evaluate what it is giving up, and relied upon later to constrain the debate that the community assumed it would have. The facility may well be legitimate, well designed and economically valuable. That is not the point. The point is that the authority approving it has surrendered the ability to determine that for itself.
The TEE Method response reframes the problem as a capability gap rather than a legal loophole. Talent supplies the analytical capacity to interrogate a proposal. Enterprise supplies the internal rule that determines what may be signed and by whom. Ecosystem supplies the public record that makes concealment costly. Where all three are present, a jurisdiction negotiates from a position of informed authority. Where any is missing, the agreement gets signed and the vote becomes a formality.
For leaders, the practical issue is not whether AI infrastructure arrives in their jurisdiction. It will. The issue is whether it arrives on terms the institution can see, test and refuse. The three tests — who holds the information, who holds the discretion, who holds the record — take an afternoon to apply and reveal immediately whether an institution is governing or merely approving. Where leaders want to discuss how to build that capability in their own institution, the site’s advisory and contact links set out the options.
Editorial note: This is a news-led Sovereignty Briefing analysis produced with Hermes-assisted research and source checks.
Sources
PolitiFact, “AI data centers, explained: Why do tech companies request NDAs? What’s a moratorium?”, Maria Briceño, 28 September 2026. https://politifact.com/article/2026/sep/28/ai-data-centers-moratorium-nda-local-goverment/ (featured image source: “Amazon Web Services data center is visible on Aug. 22, 2024, in Boardman, Ore.” AP)
Newsweek, “Data Centers’ NDAs Would Be Banned Under New Bill.” https://www.newsweek.com/data-centers-ndas-would-be-banned-new-bill-12496278
The Center Square via Lewistown Sentinel, “Nearly half of Pennsylvania’s ‘fast track’ data center municipalities signed NDA’s”, Ford Turner, 4 September 2026. https://www.lewistownsentinel.com/news/pa-news-apwire/2026/09/nearly-half-of-pennsylvanias-fast-track-data-center-municipalities-signed-ndas/
Commonwealth of Pennsylvania, “Governor Shapiro Signs Executive Order on Data Center Development”, Executive Order 2026-05, 18 August 2026. https://www.pa.gov/governor/newsroom/2026-press-releases/governor-shapiro-signs-executive-order-on-data-center-developmen
Office of the Governor of Virginia, “Governor Spanberger Unveils Nation’s Most Comprehensive & Aggressive Data Center Accountability Standards”, Executive Order 22, 18 September 2026. https://www.governor.virginia.gov/newsroom/news-releases/2026/september-releases/name-1123705-en.html
TechTimes, “AI Data Centers Lose Right to Build in Virginia as Senate Stalls Ratepayer Bill”, Devin Culbertson, 28 September 2026. https://www.techtimes.com/articles/328039/20260928/ai-data-centers-lose-right-build-virginia-senate-stalls-ratepayer-bill.htm
NPR, “NDAs are hiding data center deals, drawing ire from locals”, 27 August 2026. https://www.npr.org/2026/08/27/nx-s1-5879528/data-center-nda-disclosure-louisiana
Indiana Public Media, “How NDAs are hiding data center details from the public”, 21 September 2026. https://www.ipm.org/news/2026-09-21/how-ndas-are-hiding-data-center-details-from-the-public
Geneva Solutions, “The energy problem of the AI data centre boom”, 28 September 2026. https://genevasolutions.news/climate-environment/the-energy-problem-of-the-ai-data-centre-boom-1
This article draws on the TEE Method™ framework from SOVEREIGN: Who Owns the Future? For the complete framework and further Sovereignty Briefings, see tonishatagoe.com.
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