A public university system sets up a fundraising arm to collect donations, entirely staffed by public employees and operated out of a government office building.
If you don’t see how that fundraising unit can be exempt from the disclosure laws that apply to government agencies, you’re not alone.
Neither did the attorney general of North Dakota,Wayne Stenehjem, who told the North Dakota University System that the records of money collected and spent by the North Dakota University System Foundation are a matter of public record and must be disclosed on request.
In a ruling issued June 25, Stenehjem explained that there is essentially no separation between the university system and the privately incorporated “foundation” that the university system established in 1991 as a vehicle for receiving donations.
The analysis was pretty much of a no-brainer, since the foundation has no staff or offices of its own, is run by board members who overlap with the State Board of Higher Education, and exists almost exclusively for the purpose of providing a vehicle to reimburse university system officials for expenses beyond what state law allows. (Hmm, now we really want to see those expense records.)
The ruling relied on two earlier (and for journalists, perhaps more significant) rulings. One ruling in 2009 directed the University of North Dakota’s alumni association and foundation to honor requests for public records, minus identifying information about donors that is statutorily deemed confidential. An earlier ruling in 2006 likewise directed the North Dakota State University Research Foundation to turn over copies of contracts requested under the Open Records Act.
Key to these rulings was the fact that, while separately incorporated from their host institutions, these auxiliary corporations existed solely to carry out state business in support of state agencies. In other words, substance beats form: what matters is not the corporate structure but the function the corporation is performing. If the state delegates its authority to a private third party, that corporation becomes subject to open-records requests just as the state itself is.
Although state attorney general opinions do not carry the force of a court ruling, they are highly influential and normally are followed (in fact, the North Dakota foundation has already complied and fulfilled, belatedly, the request for its records.)
Attorney General Stenehjem’s ruling is part of a welcome trend toward openness in nominally private corporate entities that are created by, and exist exclusively to serve, public universities.
In 2011, California became the fourth state to explicitly apply its open-records law to university foundations by statute. Foundation records are accessible in eight other states by court ruling.
Whether separate incorporation exempts a foundation from complying with public disclosure laws is among the issues that a state appeals court in Louisiana will be asked to resolve later this year, in deciding the appeal of a case involving the closed-door search for a president at Louisiana State University. Among several justifications, LSU claims that records of the search were lawfully concealed because the search was conducted by the university’s private foundation.
For a complete rundown of the right to obtain public records from, and attend the board meetings of, university foundations, see the SPLC’s guide, “Access to university foundation records”