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

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

The Iowa Supreme Court ruled inFebruary that the ISU Foundation—the fundraising arm of the universitythat denied Nichols an array of records—was performing a governmentfunction as a result of its contract with Iowa State University. The IowaFreedom of Information Act requires disclosure of government documents requestedby the public.

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

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

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

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

“I gotinvolved in this because most people were unhappy about the way the foundationwas doing business and we thought that the only way to correct that was throughlegal channels,” Nichols said.

Nichols and Gannon lost in the first tworounds of their fight, when both the trial court and court of appeals ruled infavor of the ISU Foundation, agreeing that it is a private branch of theuniversity.

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

The IowaSupreme Court faced the question of whether a “nominally privatefoundation with close ties to a university” is subject to thestate’s Freedom of Information Act.

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

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

ISU Foundation President Dan Saftig said in a statementthat the foundation is committed to protecting the confidentiality of donors andremaining accountable to its stakeholders.

“We remain resolute in ourbelief that upholding donor privacy is an ethical obligation, and we will worksteadfastly to continue to protect the personal and financial information theuniversity’s benefactors have entrusted to the ISU Foundation,”Saftig said. “We will continue to view all donor records as confidentialinformation.”

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