FOIA issue arises when private entity becomes entwined with public agency
By Roy Ockert Jr.
Oct. 29, 2013
A knotty freedom of information question surfaced during the past few days, and it touches on a subject that needs a legislative review.
That would be the issue of whether a private company providing services to a public agency is subject to the Arkansas Freedom of Information Act and, if so, to what extent.
The subject came up when a Jonesboro Sun reporter on Friday asked Chad Niell, chief executive officer of Tiger Correctional Services, to provide information regarding its monthly sales and profits under a contract for jail commissary services with the Craighead County Sheriff’s Department.
“That’s none of your damn business,” responded Niell, who may still have a burr under his saddle over perceived ill treatment by the newspaper during his recent unsuccessful bid for the Republican nomination for state senator in District 21.
However, the question of whether Tiger must provide such documentation is not clear under the FOIA. The open records provision in the law defines public records as those kept “by a public official or employee, a governmental agency, or any other agency or improvement district that is wholly or partially supported by public funds or expending public funds.”
Note the use of the term “public funds” rather than “tax funds.” In this case Tiger’s revenue comes from jail inmates, not from the Sheriff’s Department, and, in fact, the company pays a sales commission of 30 percent to the department. That at least creates some room for argument, and Tiger’s attorney contends that the law doesn’t apply here.
Two state Supreme Court decisions and several attorney general’s opinion would seem to take the opposite view.
The first Supreme Court case involved The Sun, though it dealt with public meetings rather than records. The qualification in that provision is the same, though. The case was North Central Association of Colleges and Schools v. Troutt Brothers of 1977. The high court ruled that the private nonprofit organization’s meetings were subject to the FOIA because, among other things, it was supported wholly or in part by public funds.
A 1985 case, Rehab Hospital Services Corp. v. Delta Hills Health Systems Agency and Flener, said much the same thing, even though the funding involved came mostly from the federal government.
Both cases are used in several AG opinions, all of which indicate that a private entity that receives public funds and carries on public business may be subject to the FOIA, at least to some extent.
The key question, according to the Arkansas Freedom of Information Handbook, is whether “there is a symbiotic relationship between the private entity and the state or local government, such as when the private entity receives public funds for the general support of activities that are closely aligned with those of government.”
In this case Tiger has a contract to provide jail services that had previously been handled by the Sheriff’s Department.
The question would probably be moot if the department were receiving regular sales and profits reports because those records would clearly be subject to disclosure. But apparently jail administrators are satisfied with the monthly check they get for 30 percent of sales. Sheriff Marty Boyd told The Sun that he believes the jail is being paid fairly and that he could get more information if he asked. Any private entity doing business with the government should provide regular reports.
The need for legislative review is apparent because of the increasing number of private entities that are becoming entwined with government agencies. If Tiger’s attorney is correct that none of its records are subject to public review, that raises the question of how far that interpretation could be stretched. If, for example, a private agency were contracted to run the jail, would all jail records then be private?
In 2006 Arkansas State University entered a contract with a private search firm to take applications for its first Jonesboro campus chancellor. The plan was for the search firm to keep the names of all applicants secret until sorting them out and producing a list of finalists. That would circumvent the state law which requires disclosure of applicants’ names for such a public position.
Various news organizations, including The Sun, objected. The Arkansas Democrat-Gazette threatened a lawsuit, and the search firm pulled out.
This private-public question is not a new issue. For many years the state’s top universities have used private foundations to help fund athletic and academic functions. The foundation may provide funding to supplement a coach’s salary without any responsibility to disclose the terms or amounts, and sometimes the foundation is paying far more of the tab than the university.
That practice has become controversial in the University of Arkansas’ Advancement Division deficit and other troubles. The division regularly receives supplemental funding from the UA Foundation but got in trouble when it went $4 million in the hole over two years.
The budget of the Advancement Division is so intertwined with the private foundation that auditors have had trouble sorting out exactly what happened and who was responsible.
In a recent opinion piece for the Democrat-Gazette, John J. Watkins, emeritus professor of law at UA-Fayetteville, urged that the Legislature address the foundation-public interest issue. Watkins is the author of the definitive book on the Arkansas FOIA, and his work is cited often in court cases and other legal opinions.
The review should apply to all private entities doing business with public agencies.
Roy Ockert is editor emeritus of The Jonesboro Sun. He may be reached by e-mail at royo@suddenlink.net.