Iowa State University Foundation is public, Iowa's highest state court rules

IOWA — After a four-year battle against the Iowa State University Foundation, retired Des Moines businessman Arlen Nichols, 75, came one step closer to obtaining foundation documents that could prove his suspicion that university funds were mishandled.

The Iowa Supreme Court ruled in February that the ISU Foundation—the fundraising arm of the university that denied Nichols an array of records—was performing a government function as a result of its contract with Iowa State University. The Iowa Freedom of Information Act requires disclosure of government documents requested by the public.

Rather than order the foundation to hand over documents, the supreme court sent its ruling back to the trial court, where the case will be tried again based on the supreme court’s finding that the foundation is public.

“I couldn’t be happier,” said Nichols. “This has been four years. This has been a while. They fought to the nail, but we prevailed.”

The case began in November 2001, when a group of citizens, including Nichols and Mark Gannon, ISU’s former land manager, wrote the Iowa Board of Regents requesting access to all financial records, correspondences, memoranda, meeting minutes, director’s minutes and reports of the ISU Foundation from 1990 to 2001.

The Board of Regents and the ISU Foundation denied the requests, saying that the foundation is a private organization, so in August 2002 Nichols and Gannon filed suit against the board and foundation, arguing that the foundation is not private.

“I got involved in this because most people were unhappy about the way the foundation was doing business and we thought that the only way to correct that was through legal channels,” Nichols said.

Nichols and Gannon lost in the first two rounds of their fight, when both the trial court and court of appeals ruled in favor of the ISU Foundation, agreeing that it is a private branch of the university.

“This [supreme court] ruling is going to affect everything about privatizing or public records in Iowa,” Nichols said.

The Iowa Supreme Court faced the question of whether a “nominally private foundation with close ties to a university” is subject to the state’s Freedom of Information Act.

“We agree with the petitioners that the foundation is performing a government function,” the supreme court said in its opinion. “A government body may not outsource one or more of its functions to a private corporation and thereby secret its doings from the public.”

But ISU staunchly believes that that the foundation is a private institution and it should not be subject to state freedom of information laws. When the Iowa City Press-Citizen requested salary information from the ISU Foundation in March, the foundation denied the open-records request.

ISU Foundation President Dan Saftig said in a statement that the foundation is committed to protecting the confidentiality of donors and remaining accountable to its stakeholders.

“We remain resolute in our belief that upholding donor privacy is an ethical obligation, and we will work steadfastly to continue to protect the personal and financial information the university’s benefactors have entrusted to the ISU Foundation,” Saftig said. “We will continue to view all donor records as confidential information.”

CASE: Gannon v. Board of Regents, 692 N.W.2d 31 (Iowa 20050

reports, Spring 2005