'Around the obstructionism'

Though contracting out may be the most difficult form of privatization to access in most places, there is another type that can prove problematic for reporters: the public-private agency.

These entities typically have aspects of both private corporations and public agencies. And since many public records and open meetings laws say that an entity defined as a public “agency” (or a similar term, such as a “public office”), they are often easier to get access to than a typical contractor.

That doesn’t mean they throw open their doors to reporters. Some statutes do not acknowledge quasi-public entities at all, while others provide only a vague description.

With unclear guidance — or none at all — about how the public records laws apply to these public-private organizations, the courts have typically established a procedure for finding out. (See related story)

However, it is tough to design a consistent test in the absence of clear legislative direction because there are so many types of public-private entities.

Some of these organizations are small nonprofit or for-profit companies established solely to execute a single contract — for instance, to run one hospital. Others receive significant taxpayer money but perform some duties that are not historically government responsibilities. Others do not receive direct public tax money but enjoy indirect benefits (such as the rent-free use of a public building) to perform duties that would be considered public services. Still others are for-profit companies created through government charters and have public officials as members of their boards.

The murkiness of the law means public-private agencies can put up a fight to ensure the press never attends their meetings or examines their books.

Take the Smithsonian Institution, which has been roiled by scandals that led Secretary Lawrence Small and other high-ranking officials to step down amid revelations of sky-high salaries and questionable perks.

The institution received $715 million in taxpayer money through appropriations, grants and contracts in the 2006 budget year. It was established by an act of Congress in 1846. Its board members include Chief Justice John Roberts, Vice President Dick Cheney and six members of Congress.

Other quasi-public agencies are subject to FOIA, largely because Congress revised the definition of an agency in 1974 to include entities such as the U.S. Postal Service and the Federal Deposit Insurance Corp.

But despite the Smithsonian’s close government ties, the institution does not consider itself subject to FOIA. In 1997, a three-judge panel of the federal appeals court in Washington, D.C., ruled that the institution was not bound by the federal Privacy Act. Since the act borrows its definition of an agency from FOIA, the Smithsonian presumably does not have to comply with FOIA as well.

That has made it more challenging for The Washington Post to break the stories of Small’s compensation and the institution’s other scandals.

Post investigative reporter James V. Grimaldi has said the Smithsonian has declined to give him documentation about Small’s expenses for years. Without full access to FOIA, the newspaper has had to rely on independent agencies, Congress, the Government Accountability Office and inside sources for its reporting.

“We’ve had to find our way around the obstructionism regarding FOIA,” Grimaldi said.

Originally, an independent accountant’s report detailing Small’s “lavish” and “extravagant” expenses — including thousands in unauthorized gifts and travel expenses such as a chartered $14,509 flight to attend a museum opening in Texas — was kept confidential. It was made public only after the Post obtained a copy and reported on it in February.

The ‘spirit’ of FOIA

In light of the recent scandals, Smithsonian officials have promised to increase accessibility to the institution’s records.

In a June letter, the Smithsonian governance committee said the institution “embraces the principles of disclosure reflected in the Freedom of Information Act” and “follows its spirit in considering public requests for information.”

Spokeswoman Linda St. Thomas said the institution plans to issue a formal FOIA policy soon.

A commission that conducted an independent review of the Smithsonian recommended as much. If the institution does not adopt policies about complying with FOIA, the Sunshine Act and other laws, the report says that “Congress should consider appropriate legislation.”

But even if the Smithsonian does adopt a new policy as planned, it would still likely be up to the institution — not the courts —
to ensure it is complying.

Now, Smithsonian officials say they voluntarily follow FOIA and only deny requests under valid FOIA exemptions. However, with a voluntary policy, there is no way to contest the institution’s reliance on these exemptions in the court short of challenging the Washington appeals court’s determination that the Smithsonian is not an “agency.”

With federal agencies and quasi-public agencies covered by FOIA, it is possible to directly challenge the use of an exemption. For instance, when Federal Deposit Insurance Corp. employee Terry Wayne Dean requested documents relating to an investigation of himself, the FDIC cited the FOIA privacy exemption, among other reasons, to deny Dean some of the documents. Dean sued, and a federal judge in Kentucky ruled in 2005 that the FDIC could not rely on the privacy exemption to withhold information about Dean himself.

“When the person identified in the document is the person requesting the document, the Court is unable to determine how any potential or realized ‘invasion of personal privacy’ could possibly be considered ‘unwarranted’ in this circumstance,” Senior Judge Karl Forester wrote.

By contrast, when the Smithsonian in 2002 refused to release medical records for the National Zoo’s animals to the Post, citing the privacy rights of animals, there was no legal recourse for the newspaper.

The Post eventually got those records through an unofficial method: public pressure. After Grimaldi wrote a column quoting legal scholars flabbergasted by the idea that animals have privacy rights, the Smithsonian gave the Post access to the records, though not in electronic form.

‘Restoring the public’s faith’

There are some signs that public access to records in the age of privatization may improve. Amey pointed to a bill signed into law in September that will create a searchable database of government contracts and grants.

“I think we’re starting to see the pendulum swing to add more transparency to the federal contracting system,” Amey said. “Nevertheless, it’s far from a perfect system.”

Amey would like to see a wide variety of contractor information posted online, including electronic versions of contracts, task and delivery orders, no-bid contracts and federal contractor misconduct data. Amey thinks that data should be available without having to use FOIA.

Making the information easily accessible “may have the impact of learning some horror stories,” Amey said, “but also of restoring the public’s faith in government and the integrity of the contracting system.”

Often, legislative action will not occur until a high-profile horror story about privatization emerges, said Charles Davis, a journalism professor at the University of Missouri at Columbia and director of the National Freedom of Information Council.

“The way legislative agendas are shaped are when it looks at an incident and says wow, it’s really bad we’re pulling people off the public grid,” he said.