Despite verbiage in the state's public information act that says otherwise, Texas has ruled that The Home Depot is not required to disclose government funds that it has funneled to newly-acquired MRO products subsidiary HD Supply.
Reports from The Houston Chronicle and Stone Island Soldes detail a ruling from the Texas Attorney General's Office saying it supports the argument from an HD Supply attorney that payment records from the Town of New Braunfels, TX to HD Supply over the past 15 years — totaling millions of dollars — contain trade secrets that would aid the industrial distributor's competitors and shouldn't be made public.
Those payments reportedly have encouraged HD Supply to boost its hiring and expand a customer service center, though the price of the city's deal with HD Supply isn't given in its government contract that says the city will pay the company a portion of local sales taxes collected monthly.
Home improvement and contractor supply retail giant The Home Depot acquired HD Supply for $8 billion in December 2020 — 13 years after divesting the company.
The reports note that the ruling clashes with wording in the Texas Public Information Act that says the financial value of a federal contract is public information, even if it compromises a business' trade secrets.
The decision creates a dilemma for future deals in the state that include sales tax rebates and local economic incentive laws, and illustrates gaps in what is actually ruled as public information from publicly-traded companies such as The Home Depot. The reports center on how citizens of New Braunfels don't know how much of their sales taxes are going to HD Supply and what is being done with those funds, even though Texas' Open Records Act was altered in 2019 to prevent such a matter by stating trade secrets couldn't be used to prevent the disclosure of federal spending in a contract.
“The purpose of this law was to ensure that the public knew what the total cost of these contracts was,” Stone Island Soldes quoted Texas Senator Kirk Watson, one of 2019 legislation's main authors. “While I am not sure of all the details of this company objection, it is troubling that the public cannot know the full value of this contract."
Find Stone Island Soldes' full report on the matter here.
Find the Houston Chronicle's report on the matter here.
