TRANSPARENCY TUESDAY: Follow the money? When services are privatized, sometimes you can't.



A Minnesota court is poised to decide how much information the public can demand from construction companies that take on eight-figure government contracts but decline to abide by the same disclosure requirements that apply to government agencies.

The Timberjay, a weekly newspaper in northern Minnesota, is fighting to prove that a construction management firm and its subcontractors must honor requests under Minnesota's Government Data Practices Act for details about schools they are building at the public's expense.

Typically, private companies are not within the reach of state open-records laws, which entitle the public to review and copy documents that are in the custody of state, county or city agencies.

But lawyers for The Timberjay say this situation isn't typical. By assuming management of a $78 million package of school district construction projects, a private vendor, Johnson Controls Inc., also assumed the disclosure responsibilities that go along with that authority, they argue.

Attorneys for the company argue that, in addition to expanding the law beyond its literal terms, a ruling in favor of the newspaper would discourage firms from seeking government work for fear of giving away sensitive internal information to competitors.

The ruling will apply only in Minnesota, but it will be watched throughout the country, with governments increasingly "privatizing" what used to be public services performed by public employees.

Variations of the issue are recurring across the country. The South Carolina Supreme Court will decide whether a state association of school administrators is so entangled with government -- through taxpayer funding, through the receipt of fringe benefits normally reserved for public employees and through exercise of legislatively assigned duties -- that it should be forced to obey South Carolina's open-records act.

In Minnesota, the state Court of Appeals heard arguments last week in the Timberjay case, testing whether a private company can be brought within the coverage of the Data Practices Act when it performs a governmental function.

And that question -- how "governmental" is the job of constructing school buildings -- may be decisive.

Often, the information that journalists need about private contractors' performance is available through the government agencies involved in the contract. But the Minnesota newspapers have been told that the documents they want -- documents about how a $78 million school district construction project is being managed -- are available only from Johnson Controls or its corporate partners. Thus, if private corporations are exempt from the public-records act, the documents are off-limits.

An initial ruling from a state information officer sided with the journalists. But a state administrative judge sided with Johnson Controls, ruling that The Timberjay was entitled only to the limited information that Johnson was contractually required to provide to the school district. The judge held that designing a school building was not a traditional governmental function, so it fell outside the coverage of the public-records law.

Attorneys for Johnson Controls liken what their company is doing to the role of a textbook printing company. Even though textbooks are important for the operation of schools, that isn't enough to entitle the public to peek inside the printer's operations to see how much they are paying their employees or what manufacturing methods they use.

But there is precedent in Minnesota for expansively reading the open-records act to reach non-governmental entities.

In 2003, the Minnesota Court of Appeals decided that an architectural firm overseeing the design and construction of a jail was performing a "governmental" function and was obligated to comply with a Data Practices Act request seeking information about how the firm developed the standards for bidding a construction job.

In that case, WDSI, Inc. v. County of Steele, the Court of Appeals decided that the architect's work crossed the line from merely selling a product to performing a governmental function, because the architect was carrying out a responsibility "conferred by statute upon local agencies" to provide a service that "promoted the general public welfare." A decisive factor is that the architect was not merely providing a discrete piece of work, but was actually overseeing decisions -- such as the choice of construction contractor -- normally made by government employees.

By that legal standard, it is difficult to see how the management of a school construction project can be viewed any differently.

For journalists, the lesson is that, where a contract is not merely for the purchase of canned beans but for the purchase of management services on an ongoing basis, there is ample reason to believe that freedom-of-information laws entitle the public to know how the contractor is performing. And there is every reason to make the attempt.

Tagged: public records, Transparency Tuesday