Private gifts, public trust: Records law at center of press-gown kerfuffle

Vermont Senate tabled donor anonymity provision on Friday

A new bill that would create a special exemption in the public records law for private donors comes to the Vermont Senate for final passage this week on the cusp of the high holy days of the Fourth Estate – Sunshine Week — which begins March 14.

The festivities, such as they are, tend to revolve around the serious difficulty reporters often face retrieving public information from police logs, municipal meeting records and the state bureaucracy.

Dull stuff, until major news erupts into public view with a direct potential impact on taxpayers, as two stories recently did: the City of Burlington’s decision to loan $17 million to Burlington Telecom and Montpelier’s overpayment of nearly half a million dollars to Scott Construction. Suddenly, the public wants to know: Where was the Fourth Estate when we needed it?

In these cases, while the records happened to be hidden in plain sight, the news went unreported because local newspapers didn’t have the manpower to maintain regular coverage of two of the state’s major municipalities.

More typically, media organizations have had to fight public officials for information that should already be available in the public domain.

Sometimes those battles end up in court. The Burlington Free Press sued the University of Vermont for documents from a hockey hazing case that led to new legislation to protect college students from harassment; The Times Argus sued the Montpelier Police Department for access to daily police action logs.

In the last week, journalists and their cause célèbre – access to public records — have been front and center. The Vermont Press Association, which represents the state’s 10 daily and 48 weekly newspapers, is fighting a bill that would provide additional protections to individuals who wish to make anonymous donations to the University of Vermont, the state college system, which includes five regional hubs, and the Vermont Student Assistance Corporation.

The bill, H.331, would carve out a new exemption to the public records law, specifically for contributors who want to remain anonymous.

Under the new legislation, the educational institutions, led by UVM, want to assure donors that there’s no chance they could be sued to publicly disclose that information.

Currently, individuals’ identities are already exempt under the law, according to Secretary of State Deb Markowitz. Private donors can remain anonymous under policies set by college or university’s policy, she said.

Under the new legislation, the educational institutions, led by UVM, want to assure donors that there’s no chance they could be sued to publicly disclose that information.

The newspaper association objects to the exemption on the grounds that the entities lobbying for the loophole in the public records law are supported by taxpayer dollars. They argue there is no reason why individuals who give to public institutions should remain anonymous.

Mike Donoghue, executive director of the VPA, says the public likes to know where politicians get their money, so, “Why should UVM and others get a free pass on disclosing the roots of the money they accept?”

He pointed to schools in other states that have accepted large donations from anonymous individuals that have become subject to ethics probes. At UCLA, for example, students who were related to large donors to the university were admitted to the orthodontics school, which only has five to six openings a year, according to a report from the Daily Bruin, UCLA’s student newspaper.

When asked whether she thought such a situation could occur at UVM as a result of the exemption in the public records law, Karen Meyer, the school’s vice president for state and federal relations, flatly said: “No.”

Enrique Corredera, spokesman for the university, elaborated. “We take steps to ensure that the officials who are responsible for making admissions decisions are insulated from other types of university operations,” Corredera said. “They have no direct contact with the development office.”

Vermont’s 30 senators are expected to take up H.331 today (Tuesday) or tomorrow. The proposal, which was a “housekeeping” bill, started out as technical legislation for the archiving of public records. Thanks to an amendment lobbied for by the University of Vermont, the state colleges and the

Vermont Student Assistance Corporation, it morphed into a bill that shields private donors from the public domain unless they have conducted business worth more than $10,000 with the entities within a three-year period.

Journalists have long abhorred the state’s loopholes in the law; this additional affront has incited strong protests from editorial writers for the state’s major newspapers who say lawmakers are favoring a few private wealthy individuals over Vermonters’ rights to know where funding for the state’s public college system comes from.

The educational institutions argue that anonymity is crucial for donors who don’t want to be besieged by solicitations. Twenty-two states have passed similar legislation, and Corredera says that without such a law, Vermont’s universities won’t be able to compete with other public schools for contributions.

If the bill passes, it will be the 317th exemption from the public records law (some of which are redundant – the number varies from 231 to 317 depending on how you count). Journalists have long abhorred the state’s loopholes in the law; this additional affront has incited strong protests from editorial writers for the state’s major newspapers, including The Burlington Free Press and The Rutland Herald, who say lawmakers are favoring a few private wealthy individuals over Vermonters’ rights to know where funding for the state’s public college system comes from. Editorials blasting H.331 have run in eight newspapers around the state.

The bill

H.331 started life in the House last session. State Archivist Gregory Sanford helped shape the bill, which was designed to clarify record management law. Until the end of January, when it was sent to the Senate Government Operations Committee, it was a sleeper, attracting little attention.

UVM approached Jeannette White, a trustee of the university and chair of the committee, and told her there was a problem: donors were afraid that their names could become public under existing law.

It has long been the policy of the university to grant contributors anonymity, according to UVM’s Meyer. The existing public records law (Title 1 317c sections 7 and 10) includes exemptions for the privacy of individuals, but there were worries that identities could be obtained in a court challenge.

And so the committee, rather than create a separate bill, decided to carve out an exemption in the state’s public records law for private donors in an amendment to H.331. Allen Gilbert, executive director of the Vermont chapter of the American Civil Liberties Union; Michael Grady, a member of the legislative counsel; and representatives from UVM and the Vermont State Colleges drafted the amendment.

White and her colleagues took testimony from VSAC, the colleges and the University. At one point, when the press association’s Donoghue went to testify on behalf of the media, he said there were six highly-paid lawyers, chancellors and vice presidents present, lobbying for the public educational institutions at taxpayers’ expense. He calculated the people in the room together earned $750,000 to $1 million a year.

Donoghue, a 40-year veteran reporter for The Burlington Free Press, and John Mitchell, longtime publisher of The Rutland Herald and Times Argus, gave testimony to the committee.

On Feb. 4, the day after Donoghue testified, Tim Johnson, a Free Press reporter, filed public records requests with UVM, VSAC and the state colleges, asking the institutions for lists of all the donors who had made contributions in the last six years.

The proposed amendment to the H.331 (which passed last year) emerged from the Senate committee with little opposition and then it was sent back to the House Government Operations Committee, which is chaired by Donna Sweaney, also a UVM trustee. The language was changed to read more narrowly (it originally applied to all donors whether they wanted to be anonymous or not), and it passed in the House panel, 7-2-2.

Rep. Michel Consejo, D-Sheldon-Swanton, a member of the House committee, voted against it. He said UVM told the committee that 10-12 anonymous donors were responsible for contributing $45 million to the university, and they wanted to remain anonymous. Consejo said he could understand why people might feel threatened or exposed by the idea of revealing their identities.

“We didn’t realize this was going to become, next to Vermont Yankee, the most important thing in the state, at least in the press,” Sweaney said.

“That was an argument I could relate to. I can see that,” Consejo said. “However, when I put the two in the balance, the need for transparency and the protection of 10 to 12 donors, I voted for the people who elected me. Sorry.”

Consejo was going to fight H.331 on the floor of the House, but he missed his chance to scratch the exemption proposal. The House passed it on a voice vote just before the Town Meeting Day break.

Donoghue says he was taken aback by the bill’s “break-neck” passage; he said he expected House members to debate the bill on the floor. In the intervening week, he mobilized editorial writers. Ross Connelly, the editor of The Hardwick Gazette, widely circulated an editorial criticizing the law.

The outcry from journalists that ensued took Rep. Sweaney by surprise. “We didn’t realize this was going to become, next to Vermont Yankee, the most important thing in the state, at least in the press,” Sweaney said in an interview. “Had I known this is where we were going to go with this, I certainly would have made it a totally separate bill.”

The givers

Free Press reporter Johnson says UVM received 9,800 donations from 2005 to the present; 200 of those were anonymous. All of these donations were under $1 million, he says. When he asked about the 10-12 contributors who gave $45 million, Corredera told him they must have been from the first group of contributors who donated to UVM’s $250 million fund drive, which started in 2001. Johnson said he hasn’t had time (yet) to comb through the second set of documents he requested.

UVM sent out letters to donors, letting them know that the Free Press had the list, and donors starting calling the newspaper. Worried people were calling our editor about why we were asking for this info, Johnson said.

“People are worried about being outed,” Johnson said. “For whatever reason, they wanted to remain anonymous. They thought we might reveal who they were. I said, ‘I don’t have a list of who the people are.’ The question is, do we want to contest it? It would have to be something we’d go to court for. I don’t know if we’re in a position to do that, things being what they are.”

Donors increasingly want anonymity, according to a report from the Chronicle of Philanthropy, published last year. In the last six months of 2008 and the first four months of 2009, the percentage of anonymous gifts worth more than $1 million far exceeded “historic patterns,” according to data compiled by the Chronicle. Nineteen percent of 422 gifts made in that period were made anonymously, the report says. Of the total, 14 colleges reported receiving $74.5 million from a “mystery donor,” colleges headed by women who won’t share his or her name with the institutions, the Chronicle reported in April last year.

The reason? Contributors don’t want to be solicited by other charities, or they want to keep a gift secret from family or friends.

When large gifts are made to public universities and colleges, however, issues around transparency, ethics and mission-drift can surface – whether the gifts are anonymous or not. Here are a few examples of corporate and private donor scenarios around the country:

In 2007, BP, the oil giant, gave UC Berkeley $500 million to start an Energy Research Institute for biofuel research; Phil Knight, CEO of Nike, recently contributed hundreds of millions of dollars to the University of Oregon for athletic facilities, one of which was built with no-bid contracts; Cal Polytechnic receives support from Raytheon, a weapons manufacturer, and an anonymous donor recently gave $60 million to
its architecture program; and UCLA advanced the relatives of donors into its exclusive orthodontics program in return for six-figure gifts to the School of Dentistry, according to the Daily Bruin.

“I think the scenario that some have painted, that we’re going to build a hockey rink and nobody’s going to know about it, is pretty implausible,” Meyer said.

Is any of this possible at UVM? Not likely, says UVM’s Karen Meyer.

“We are a public institution,” Meyer said. “Every expenditure over $1 million in our current policies, and our whole budget, is approved in public session by our trustees, which are dominated by public appointees and elected officials.

“I think the scenario that some have painted, that we’re going to build a hockey rink and nobody’s going to know about it, is pretty implausible,” Meyer said. “I mean I just can’t imagine it. We have a very public board — unusually so for an institution that receives such a low level of public support. I, just in my experience, can’t imagine that our board wouldn’t know what it was about and that it was in line with the institution.”

Meyer said the state auditor sits on the board of trustees, the university’s books are audited annually and UVM’s business is transacted publicly. The anonymity granted under H.331 applies only to individuals; it cannot be used by corporations or by “benefactors of grants or contracts to the institution for the performance of research.”

Donoghue argues that there wouldn’t be enough public scrutiny of the university under the new law. He says though UVM maintains there is never a connection between “big bucks” and admissions, he says he has talked with people who have worked in admissions on campuses, and there is often pressure to admit certain students, including children of donors.

He also questions whether UVM would be capable of self-policing when it comes to ensuring that contractors who work with the institution don’t end up on the anonymous donor list. “Who will ever know if there is a violation?”

Additionally, he wonders how anonymous donors will be screened and by whom. He asks, rhetorically, whether UVM would be willing to accept contributions from drug dealers or someone who has ripped off Wall Street.

A procedure is cited at the end of H.331 “to ensure compliance with the requirements” of the law, but there is no deadline, he says, for putting those procedures in place.

His fellow reporter at the Free Press agrees. “They claim to have contracts covered,” Johnson said. “You could make an issue that it’s not as transparent as they say it is. You’re kind of relying on their word to disclose this thing after three years. Who’s to say they really will?”

Is H.331 necessary?

It depends on whom you ask. Individuals who want to give anonymously can do so already by making a contribution through a private foundation or a third party.

So is it really necessary? Some say that personal information is vulnerable to public scrutiny, but under existing law, social security numbers and tax records are already protected under Title 1 of the public records law.

Meyer said the existing law isn’t specific enough.

“In looking at these other statutes and our statute and case law in Vermont, we were asked to consider meeting with legislators to see if they would be interested in helping us clarify that we can respect the privacy of donors who request anonymity and also personal financial records that are supplied to the university,” Meyer said. “If you were to give a donation as part of an estate mechanism, we may ask to see those. The personal records exemption in state law is not specific at all, and we wanted clarity on that as well.”

Donoghue says “good government is open government,” and every time another exemption is added to the pile, Vermont becomes even less transparent.

Allen Gilbert, who helped to write the amendment, says the ACLU was stuck between privacy law and the right of citizens to hold government officials accountable. “We think the exemption is unnecessary. We think current law allows the donor names to be kept confidential,” Gilbert said.

The university, however, wants to assure donors that their identities won’t be divulged, he said.

“We worked with the ACLU to find language that was a balance between openness and privacy,” Meyer said. “We feel that’s what the amendment does. That’s our position on it.”

Donoghue says “good government is open government,” and every time another exemption is added to the pile, Vermont becomes even less transparent.

In his testimony to the legislative committees, Donoghue described the difficulty the Free Press had in obtaining records that were withheld in a major hazing case involving men’s hockey. The newspaper spent more than $8,000 for the records. After the Free Press published stories about the case, the Vermont Attorney General filed criminal charges and the hockey season was suspended. The Legislature enacted a hazing law to protect students.

The Free Press was not able to recover its legal fees in Superior Court and took its case to the Vermont Supreme Court, where the judge sided with the earlier decision. By that time the newspaper had spent about $4,000 in additional unrecouped legal fees.

Donoghue wrote in an e-mail: “The bottom line is, Vermont public officials can – and do – often stonewall on public records. There is no incentive to disclose. The official with the public record can withhold records and pray that nobody sues. If somebody sues, they will need lots of money. Yet the public official doesn’t have a problem because the state will try to defend the employee at taxpayer expense.”