Iowa Supreme Court rules university foundation is public agency

IOWA — Arlen Nichols is elated. The 75-year-old retired Des Moines businessman became one step closer on Feb. 4 to winning a four-year battle against the Iowa State University Foundation to release foundation documents as public record.

The Iowa Supreme Court ruled that the ISU Foundation–the fundraising arm of the university–was performing a government function as a result of its contract with Iowa State University, and therefore the Iowa Freedom of Information Act requires disclosure of foundation documents requested by the public.

Because of this finding, the supreme court remanded the decision to the trial court, which will decide the case using the supreme court’s classification of the ISU Foundation and its documents.

“I couldn’t be happier,” said Nichols, who requested various documents because he was convinced the foundation mishandled university funds. “This has been four years. This has been a while. They fought to the nail, but we prevailed.”

In November 2001, a group of citizens, including Nichols and Mark Gannon, Iowa State’s former land manager, wrote the Iowa Board of Regents requesting access to all financial records of the ISU Foundation from 1990 to 2001. It also requested access to correspondence, memoranda, meeting minutes, director’s minutes and reports, and asked the foundation to provide an explanation if the requests were denied, according to court documents.

The Board of Regents and the ISU Foundation did deny the requests, responding that the foundation is a private organization.

Nichols and Gannon filed suit against the board and the foundation in August 2002 on the grounds that the foundation is in fact a public organization–or at least performs a government function. Therefore, under the Freedom of Information Act, Nichols and Gannon should have received the requested information, according to court documents.

Both the trial and court of appeals ruled in favor of the ISU Foundation, citing that it is a private branch of the university.

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

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.”

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.”

Nichols, who said he felt relatively confident throughout the four-year process that he would prevail, said the supreme court’s ruling is very significant for the state and his case.

“The Iowa courts never had guidelines, and now we have them,” he said. “Now, it’s just a matter of a rubber stamp, because in the [trial court judge’s decision], he said he didn’t have anything to hang his hat on, but now he does.”

–By Elisabeth Salemme

Read previous coverage
Court denies access to Iowa State foundation records News Flash, 9/17/2003