Is GAGE really a Private Entity and not subject to the Freedom of Information Act?

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From the Reporters Committee for Freedom of the Press:

Private and Quasi-Private Entities: Private entities are generally not subject to federal FOIA. A quasi-private entity is one that, while private, conducts government business. For example, in 2000, the Colorado Court of Appeals determined that a nonprofit corporation was subject to the state open records law in Denver Post Corp. v. Stapleton Development Corp. The company, while private, had been created by the city of Denver and tasked by to redevelop a former airport through the Denver Urban Renewal Authority. The court held the private corporation was subject to the state open records act because the project was of a public nature, on publicly owned land and because the city had significant control over the project and the corporation.”

“A federal court may also find private or quasi-private activities subject to FOIA if it is determined that the government retains custody and control of the records. No matter how much federal money an entity receives, the U.S. Supreme Court held in Forsham v. Harris that to determine whether an entity’s records are public is a question of control. It is not clear, however, how much control over an outside entity is needed to satisfy that test, as the Court in Forsham determined that a mere right to possess and control the records is not enough to subject the entity to FOIA. Records must “have been, in fact, obtained,” according to the Court.

States often follow similar rules as the federal government, but many tend to follow a “functional equivalent” test to determine if the records of private or quasi-private entity should be disclosable. That test involves determining whether the entity has become essentially a branch of the government either through financial support or whether the entity performs a task that is traditionally one conducted by government.

In Memorial Hospital-West Volusia, Inc. v. News-Journal Corp., a private company was found subject to the Florida open records act after the West Volusia Hospital Authority transferred to it its duties to operate and maintain local hospitals. “[I]n performing pursuant to the Agreement transferring the authorized function, West Volusia, Inc. was ‘acting on behalf of’ the Authority.”‘ When “acting on the behalf of” an agency, the Florida Supreme Court held that private entities are subject to the state open records act.

States use differing language and look to different factors, but the Florida case is relatively typical. West Volusia, Inc. was receiving benefits normally reserved for the government — it was able to exercise the government’s right to eminent domain and received tax money to fund its operations. In addition, the company was performing a function that had been previously tasked to a government authority. These factors added up, in the eyes of the court, to the company “acting on behalf of” the government and, therefore, subject to the open records law.

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13 COMMENTS

  1. I had a mix review of the CCO in the past but now i can honestly say that i’m proud of the excellent research you are doing on behalf of citizens of this community.

    Go get them “Freedom Fighter”!

  2. Dewey was surely “acting on behalf of” the City of Evansville and GAGE is “functionally equivalent” to government according to the definition. If the CCO files a complaint GAGE and the City will get their corporate veil of secrecy pierced forever.

  3. Good info. Do you know or have access to GAGE’s official business description? Why were they created? If they weren’t operational, would any other form of local government do what they do? What else do they work on? Just curious because I am pretty much in the dark on them, as I think a lot of people are.

    • GAGE was created when the Small Business Incubator went out of business and the building they were in was condemned so that the Lloyd Expressway could be improved. The Small Business Incubator was a dismal failure with one exception: They successfully helped a paper products supplier obtain a minority set-aside contract with Casino Aztar. The entrepreneur’s name? Wait for it…City Councilperson Connie Robinson. GAGE has the dubious distinction of being even less successful and effective than the Small Business Incubator, as GAGE has never had any success stories to brag about since its inception.

  4. Enough is Enough.

    It’s time for the City and County government to cut GAGES funding. Taxpayers dollars are being spent without any public accountability or oversight is unacceptable. The three elected officials serving on this board should hold there heads in shame. What happened to the good old days that our elected officials were “Good Stewards of the Public Trust”?

  5. If Indiana law will allow this sneaky tactic to stand the the state law needs to be changed. The last thing we need is for the law to help city governments to hide their spending schemes from the people.

    • Yes, much like the loophole that he EVSC used to get their building remodeled without requiring bids for the job.

  6. There is no doubt in my mind that a court will order GAGE to furnish the information requested by CCO in their FOIA request. They are acting as an agent of the City of Evansville.

    On another thread, it was mentioned that Mz. Dewey will not release her salary even to her board. If that is true, she needs to be removed from her position immediately. If the board would ask her and she would refuse, that would be blatant insubordination, which I suspect would be in direct violation of her employment contract.

    CCO, why not ask the Mayor or Commissioner on that board whether that is true.

  7. Readers should ask the Editor – Mr Joe Wallace as he was one of the creators of GAGE – for the answers to some of these questions. He should know, right? He led that org for a few years.

    • When I headed GAGE the city and county contracts with GAGE amounted to a total of $375,000 per year in a budget of over $1M. GAGE was designed to be an incubator of small businesses, to run a business retention and expansion program, a tech transfer program, and we graded tax phase-in applications for the city and county. We also brought the former Downtown Evansville Inc. in to promote downtown development and run events. There was no business attraction component. At that time with that complement of services and budget we were under the impression that we were not subject to FOIA.

      GAGE seems focussed on attraction now. The GAGE that I was a part of would have never have been in the middle of any effort to make recommedations with respect to a $4.8 Million loan made by the City Council to a start-up business. GAGE has changed its focus and may very well be subject to open door laws now. I am not aware of what percentage of GAGE’s budget comes from public sources or how much of their efforts serve the public. The Indiana law seems to have supported both yes and no with respect to organizations like GAGE and open door laws. The answer to your question is that it depends on some things that I do not know about the day to day operation of the GAGE of 2012.

      I do know that I believe that the deliberations regarding $4.8M of public funds should be subject to open door laws. If there is indeed a loophole in Indiana law that allows secret meetings to occur “on behalf of the City” yet outside of the City and not subject to open door laws, then those laws need to be changed.

      Ask yourself this. If the meeting to take away the Homestead Tax Credit would have been held by GAGE on behalf of the City would it have been okay? I was there at the time of that secret meeting and I assure you nothing like that would have happened.

      • You are right about that. Giving out a loan of $4.8 Million without anyone including the city council knowing why is just stupid. It oughta be made public. That dirty deal to pay Barnett extra money happened when you were heading GAGE Joe. I remember seeing the contract online and you did not sign it. Why not? Weinzapfel signed it for GAGE. Tell us about that sneaky deal.

        • You are correct that the double paycheck deal for Tom Barnett happened when I was at GAGE. You are also correct that I did not sign it. That should tell you something. There are a host of things that went on in 2009 at GAGE that I did not sign.

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