Private agency, public dollars
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When government agencies outsource basic services to third-party contractors, one consequence is that the public may lose its access to information about the service that the public would have retained, had a government agency carried out the service directly.
A concern that previously public information will become privatized and inaccessible to the public when a government agency moves to contract out services to third-party vendors arises whether the third-party vendor is a non-profit organization or a for-profit organization. However, a number of key court cases in this area have arisen when non-profits have rebuffed requests for information under a state's right-to-know laws.
[edit] Court cases
[edit] Kristen v. Beaverfork
Kristen Investment Properties, LLC v. Beaverfork Volunteer Fire Department is a December 6, 2000 decision of the Arkansas Court of Appeals.
The plaintiff, a real estate development company, asked the defendant for records. The defendant said it didn't have to provide the records, because it was a private non-profit. A trial court ordered the fire department to provide the records on the grounds that the fire department, although private, was performing a public service. However, the trial court said that the fire department did not have the pay the plaintiff's legal fees.
The appellate court disagreed, and said that the defendant did have to pay those legal fees. Their decision included these findings:
- "The trial court's finding are clearly erroneous and that the trial court abused its discretion in not awarding attorney's fees."
- "Beaverfork's denial of appellant's FOIA request in the face of such knowledge regarding the source of its funding and in the face of the foregoing legal authorities constituted arbitrary conduct for which attorney's fees are authorized."
- The appellate court also said that the trial court should have considered how Beaverfork was funded, not just whether the services it performed were traditionally services performed by the government.[1]
[edit] Wisconsin v. Beaver Dam Development
In a 2008 ruling, State of Wisconsin v. Beaver Dam Area Development Corporation, the Wisconsin Supreme Court ruled that the nominally private defendant was subject to Wisconsin's FOIA.
In the decision, Wisconsin's justices said these factors were relevant in their decision:
- Whether the corporation was funded by a governement agency.
- Whether the corporation served a public function.
- Whether it appeared to be a public entity
- Whether or not the corporation was subject to some degree of control by a government body
- Whether or not a government body had access to the records of the corporation.
While the court emphasized the importance of economic development, it also stated: "We cannot countenance a government body circumventing the legislative directive for an open and transparent government by paying an entity to perform a governmental function."
[edit] Friends of Piedmont Park v. Piedmont Park Conservancy
The Piedmont Park Conservancy is a private non-profit that oversees and manages Piedmont Park. In 2007, when the organization moved forward with a plan to install a controversial parking structure, a group opposed to the plan--Friends of Piedmont Park--filed an open record request under the Georgia Open Records Act for records of the Conservancy. The request was declined, and the Friends group sued. On September 12, 2007, a Georgia judge ruled that the records must be made public.[2]
[edit] Times of Trenton v. Lafayette Yard CDC
In this case, the New Jersey Supreme Court unanimously ruled in 2005 that Lafayette Yard CDC, a private non-profit, was subject to the provisions of the New Jersey Open Public Records Act because it issued city-backed bonds and the majority of its board was appointed by the city council of Trenton. The litigation arose because the board of Lafayette Yard CDC kicked a reporter for the Trenton newspaper out of a meeting on the grounds that, as a private non-profit, they were not subject to open records or open meetings laws.[3]
[edit] Gannon and Nichols v. Iowa Board of Regents
In this 2005 case, the Iowa Supreme Court overturned a lower court and ruled that outsourcing a public function to a private board does not privatize the records of the private board. The court wrote, "In this appeal, we are asked to decide whether a government body may outsource one of its core functions to a private corporation, making that part of its operation nongovernmental and not subject to public scrutiny. We hold the Iowa State University Foundation, a recipient of such outsourcing, is performing a government function, and therefore its records are subject to disclosure."[4]
[edit] Tennessean v. Powers Management/Allen v. Day
(See also separate entry for The Tennessean v. Powers Management/Allen v. Day)
Fourteen cheerleaders sued Powers Management, a private company that ran a public stadium in Nashville, Tennessee, on the grounds that their privacy had been violated when they were videotaped without their permission in their dressing room. Powers Management reached an out-of-court settlement with the cheerleaders. The Tennessean asked for a copy of the settlement from Powers, on the grounds that Powers was functionally a government agency. In 2006, a Tennessee appeals court agreed with The Tennessean, ordering Powers to turn over a copy of the settlement to the newspaper.[5] The amount of the settlement was revealed in early 2007 as $762,500.[6]
[edit] Memphis Publishing Co. v. Cherokee
(See also separate entry for Memphis Publishing Co. v. Cherokee Children & Family Services) The Tennessee Supreme Court ruled in 2002 that private companies are subject to the state's public records law if they act as the "functional equivalent" of a government agency. [7]
[edit] Recent cases
[edit] Onondaga County, New York
In Onondaga County, New York, the Onondaga County Convention Center/War Memorial Complex Management Corp. oversees the Onondaga Convention Center (Oncenter), is paid millions of dollars a year, was created at the instigation of local government, and refuses to provide documents in response to New York Freedom of Information Law requests because it says it is a private organization.[8]
In November 2008, a local newspaper asked for payroll records, board meeting minutes and some contracts from the management group. Eric Schuster, its vice president of operations, denied the request, saying, "It is our position that the Oncenter is not an agency subject to FOIL and therefore your request is denied."
Robert Freeman, who works for the New York government in public information compliance, told the newspaper it is clear that the Oncenter's records and meetings should be open because all of its board members are appointed by government. Freeman commented, "When the government has the authority to designate the entirety of the membership of the board of directors of this entity, how can we say that it's not government?"
[edit] Jacksonville, Florida
Downtown Vision, a private non-profit that has a contractual agreement to promote travel and tourism for Jacksonville, Florida, agreed in September 2007 that it falls under the Florida Sunshine Law. Previously, the organization had stated that it was exempt because it is a private not-for-profit corporation.[9]
[edit] Kanawha County, West Virginia
The non-profit Charleston Area Alliance in West Virginia receives $100,000 annually from the Kanawha County Commission to provide economic development services to the county. However, the Charleston Area Alliance has refused to provide information about the salaries its officers receive, on the grounds that it is a private organization.[10]
[edit] Medicaid service non-profits in Connecticut
In Connecticut, the state Department of Social Services contracted with three for-profit companies and one non-profit company for Medicaid services. Each organization refused to respond to the Connecticut Freedom of Information Act requests for information about how much they were paying doctors under the plans. The Connecticut Attorney General and Connecticut Freedom of Information Coalition ruled that the documents must be made public.[11]
[edit] New Mexico State University Foundation
In New Mexico, the non-profit New Mexico State University Foundation is claiming that because it is private, it doesn't have to release the names of donors, even though the donors are partially funding the salaries of employees at New Mexico State University. Basketball coach Reggie Theus is one recipient of a salary partially funded by undisclosed private donors. Since Theus has spoken at a public governmental hearing in favor of a private real-estate development, questions have arisen about whether he is receiving part of his salary from those real estate developers.[12]
[edit] 2009 controversies
[edit] Blue Springs, Missouri
The Blue Springs Economic Development Corporation (BSEDC) is a private non-profit in Blue Springs, Missouri. 77% of its $465,000 annual budget comes from three different government sources: $300,000 from the City of Blue Springs, $30,000 from the Blue Springs School District and $30,000 from the Central Jackson County Fire Protection District. Blue Springs is in Jackson County.
Two members of the Blue Springs City Council want to see the books of the BSEDC, but it has declined, saying that it is "a non-city entity, a public/private partnership that contracts with the city and is not subject to the same public scrutiny as a city department."[13] A majority of the city council's members agree with the BSEDC's desire to keep its records secret. City Council member Sheila Solon, one of the city council members who thinks the public has a right to see the group's records because the city is paying for most of the group's budget, would also like to reduce the annual sum paid by the city to the group by 10%, consistent with budget cuts that other city departments are undergoing.
[edit] External links
- Private Organizations, Government Dollars from WikiFOIA.
- Privatization versus The Public's Right to Know from the Reporters Committee for Freedom of the Press.
- Privatization: Its Impact on Public Record Access from the National Freedom of Information Coalition.
[edit] References
- ↑ Text of Kristen v. Beaverfork
- ↑ The Piedmont Park controversy
- ↑ a-22-04.opn.html
- ↑ Supreme Court Opinion
- ↑ http://www.tsc.state.tn.us/OPINIONS/TCA/PDF/063/allenkOPN.pdf
- ↑ The Associated Press, Tenn. appeals court: Newspaper can see cheerleader settlement, Aug. 15, 2006
- ↑ Tennessee Supreme Court ruling: Memphis Publishing Co. v. Cherokee, Sept. 5, 2002
- ↑ The Post-Standard, "Oncenter spends public money in secrecy", December 12, 2008
- ↑ Jacksonville's Financial News and Daily Record
- ↑ http://sundaygazettemail.com/section/News/200705043
- ↑ Hartford Business
- ↑ Heath Haussamen on New Mexico Politics: Endorsement of developer's project raises further questions about how Aggie coach is being paid
- ↑ The Examiner, "Should public have open access to economic development records?", September 30, 2009
