Confidential Information, Trade Secrets and The “Use” of Non-Disclosure Agreements

Posted on August 16, 2016


Last week was very interesting – okay, every week is interesting – but last week in particular.

On three separate instances I was made aware of attempts to circumvent the Freedom Of Information Act under the auspices of protecting proprietary information or trade secrets, the possible release of confidential information, and the frustration of sources who want to speak out, but are muted by non-disclosure agreements.

The concern I have with the above examples, which are probably the tip of a very large iceberg, centers around the question; is the public’s right to know being trumped by the self-serving interests of a select few?

“A consent decree the British firm reached in 2011 settled civil claims over violations of U.S. arms export control laws and regulations. The $69 million civil settlement followed a criminal guilty plea from the company the preceding year, resulting in a fine of $400 million.” – BAE Systems moves to enter State Department FOIA fight By 08/11/16

Take Josh Gerstein’s article regarding BAE Systems’ efforts to limit the Associated Press’ access to documents surrounding both the civil and criminal cases against British Aerospace.

As Gerstein reports, BAE Systems plc, a British company, and BAE Systems Inc., its U.S.-based affiliate, who are “successor firms” to British Aerospace, filed a motion in Federal Court this past Thursday. In it they claimed that the publication of the details of a settlement between the company and the State Department would result in their suffering “harm from the public release of their proprietary information.”

As further justification for their motion, the companies presented the argument that preventing AP from gaining access to this information, “would ensure the continued integrity of the regulatory process which relies upon the free, open, and voluntary transmission of sensitive information between the regulator and regulated entities.” Conversely, the failure of their motion to prevent the AP from obtaining and publicizing said information, could “discourage businesses from entering into settlement talks in similar cases.”

In short, if the companies are forced to turn over the requested information, it would hinder their ability to be open and transparent with the government in the future. Alternatively, if the companies’ motion is granted, they don’t have to be open with the public. Either way, getting to the truth is a complex and burdensome undertaking.

This raises an interesting question . . . why would or should the public care about the BAE case? After all, how does this case – and cases like it, have a direct impact on our lives.

For what it’s worth, my answer to that question goes beyond simply exercising our right to know.

Edmund Burke coined the phrase “The only thing necessary for the triumph of evil is for good men to do nothing.” The problem is this . . . you can’t act if you don’t know.

In other words, it is the act of not knowing, of not asking the questions that need to be asked, that pose the greatest risks. When transparency and the access to information is compromised or restricted, you are left in the dark. This leaves you potentially vulnerable, in that what happened to someone else, could also happen to you.

Consider the following example from the world of procurement, and the NIGP #CodeGate story.

Let’s say the story of what happened in Missouri never came out? What if the actions of the NIGP and Periscope went unchecked and unchallenged? At the time, it may have only mattered to Missouri and perhaps the winning vendor – Perfect Commerce. But here is the thing, if there hadn’t been a disclosure at that critical juncture, and things were allowed to progress as they could have, how many other states (and municipalities) might have been subjected to a similar experience? At best, and under this scenario, the process of selecting and awarding a contract to a competing service provider would have possibly become a litigious battle of wills. At worst Periscope – with the assistance of the NIGP – would have cornered the public sector market through their control of the NIGP taxonomy.

The NIGP’s continuing refusal to release the findings of an internal audit that came about as a result of the #CodeGate story, only fuels speculation that something is seriously amiss at the non-profit organization. Otherwise, why not provide the media with a copy of the audit?

This is what makes our right to know a NEED TO KNOW, and why we need to challenge any efforts to conceal the truth regardless of where and when it happens.


Anyway, that’s my take, what is yours?

By the way, why should BAE’s predecessor company’s export control violations matter to you? Have a read of the following 2015 U.S. Department of Commerce paper titled “Don’t Let This Happen To You.”


Posted in: Commentary