FOI Advisory Council Opinion AO-09-09

AO-09-09
October 23, 2009

Michael Lam
Elkton, Virginia

The staff of the Freedom of Information Advisory Council is authorized to issue advisory opinions. The ensuing staff advisory opinion is based solely upon the information presented in your electronic mail of September 20, 2009.

Dear Mr. Lam:

You have asked whether the American Frontier Culture Foundation (the Foundation) is a public body subject to the requirements of the Virginia Freedom of Information Act (FOIA). You contend that the Foundation is a financial fundraising agent of the Virginia Frontier Culture Museum (the Museum) and therefore is a public body subject to FOIA. In support of this contention you cite § 23-298 of the Code of Virginia, which provides that the Board of Trustees of the Museum shall, among other things, (e)stablish a nonprofit corporation to develop and maintain public awareness of the [Museum] and [r]eceive and expend gifts, grants, and donation of any kind from whatever sources determined, including donations accepted by the [Foundation] on behalf of the Museum. As described on the Museum's website, the Foundation is a tax-exempt, 501(c)(3) organization, founded in 1982 to support the Frontier Culture Museum's educational mission.1 As further background, this inquiry stems from your request that the Museum provide you with a copy of the Foundation's by-laws. The Museum denied the request. The denial indicated that the Museum did not have custody of the Foundation's by-laws, and even if such a copy was physically on the premises, it would belong to the Foundation, not the Museum. The reply also provided contact information so you could direct your request to the Foundation.

In your inquiry you also referred to a prior opinion of this office, Freedom of Information Advisory Opinion 37 (2001). That opinion considered a situation where the Workers Compensation Commission (the Commission) was required by law to maintain certain records, but in fact contracted with a third party vendor to do so. In summary, the opinion concluded that because the Commission had a legal duty to maintain the records, and because the vendor was acting as the Commission's agent, the Commission was the legal custodian of the records even though the vendor had actual possession of them. The agency relationship was important in reference to the definition of public records, which includes all writings and recordings...prepared or owned by, or in the possession of a public body or its officers, employees or agents in the transaction of public business. [Emphasis added.] While addressing the custody and status of the records as public records, the opinion did not address the status of the vendor as a public body. That opinion does not support a contention that an entity such as the Foundation becomes a public body because it has an agency relationship with a public body such as the Museum. The existence of such a relationship would not be dispositive regarding the Foundation's status as a public body, although it could have bearing on the status of records as public records.2

However, the analysis is incomplete without also looking to the definition of public body. That definition includes, among other things, other organizations, corporations or agencies in the Commonwealth supported wholly or principally by public funds. This aspect of the definition may include nonprofit and other corporations where such entities are wholly or principally supported by public funds. Specific information regarding the Foundation's budget was not provided, so no conclusion may be reached in this instance regarding whether the Foundation is supported wholly or principally by public funds. However, nonprofit fundraising corporations such as the Foundation typically raise money from private sources, which are used both to support the operations of the nonprofit corporation and to provide support to a public body. In other words, such fundraising organizations do not receive public funds - they do the opposite, by collecting private donations and gifts and then passing them on to the public entities such as the Museum. Therefore, as a general rule, such fundraising organizations are not public bodies subject to FOIA.

To be thorough we must also consider the part of the definition of public body which includes any committee, subcommittee, or other entity however designated, of the public body created to perform delegated functions of the public body or to advise the public body. In this instance, it appears that the Board of the Museum established the Foundation following the statutory mandate of § 23-298 quoted above. However, it appears that once established, the Foundation is a corporate entity in its own right separate from the Museum and its Board. As stated by the Supreme Court of Virginia, a corporate entity cannot be disregarded unless it is proved that the corporation is "the alter ego, alias, stooge, or dummy of the individuals sought to be [held personally accountable] and that the corporation was a device or sham used to disguise wrongs, obscure fraud, or conceal crime."3 No facts have been presented that would require "piercing the corporate veil" in this instance. As a separate corporation, the Foundation is not a committee, subcommittee, or other entity however designated, of the Museum. It further appears that the function the Foundation performs is mandated by statute, not one delegated by the Board of the Museum. Finally, no evidence has been presented indicating that the Foundation advises the Board. Again, it appears that the Foundation does not fall within the definition of public body.

In summary, the Foundation is not supported wholly or principally by public funds, nor is it a committee, subcommittee, or other entity however designated, of the Museum. Therefore the Foundation is not a public body subject to FOIA. This office recognizes that some feel that a fundraising entity created by a government agency such as the Museum should itself be treated as a government agency for FOIA purposes. However, that is not the case under the current state of the law. Any change to current law that might bring such entities within the ambit of FOIA would require a policy decision and action by the General Assembly. However, I further note that as alluded to above, it is still possible that records generated by the Foundation might be public records. Particularly, if the Foundation is acting as agent on behalf of the Museum, or if Foundation records come to be possessed or owned by the Museum in the transaction of the Museum's public business, then those records would be public records. Addressing your specific request for the Foundation's by-laws, the Museum has already indicated that it does not have actual or legal custody of them. As such, it would appear the only way to obtain copies of the by-laws would be to ask the Foundation for them.

Thank you for contacting this office. I hope that I have been of assistance.

Sincerely,

Maria J.K. Everett
Executive Director

1. Quoted from http://www.frontier.virginia.gov/support.html (last accessed October 23, 2009). It appears that the Foundation does not maintain its own website, but is described as quoted on the Museum's website.

2. Note that the facts presented do not establish that an agency relationship between the Museum and the Foundation exists. Please see Freedom of Information Advisory Opinion 14 (2003) for a more detailed discussion of the elements of a principal-agent relationship.

3. RF&P Corp. v. Little, 247 Va. 309, 316, 440 S.E.2d 908, 913 (1994)(quoting Cheatle v. Rudd's Swimming Pool Supply Co., 234 Va. 207, 212, 360 S.E.2d 828, 831 (1987)).