FOI Advisory Council Opinion AO-01-14

AO-01-14

January 29 , 2014

Frederick Kunkle
The Washington Post
Washington, D.C.

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 letter dated December 13, 2013.

Dear Mr. Kunkle:

You have asked several questions regarding the denial of your request for records of the Virginia Economic Development Partnership (VEDP) under the Virginia Freedom of Information Act (FOIA). As background, you indicated you requested documents from VEDP concerning Governor Terence "Terry" McAuliffe, who was a candidate for Governor at the time of your initial request in April, 2013, and certain related businesses and projects.¹ You stated that VEDP denied your request and initially cited exemptions for economic development records,² working papers and correspondence,³ and contract negotiation records. ⁴ You then requested that VEDP reconsider its denial and "use its discretion to release some documents in part or with redactions." The response to this request for reconsideration was a second denial, which cited only the economic development records exemption. You stated that you renewed your request again after Governor McAuliffe's victory in the general election in November, but were again denied. That third denial stated that since the status of the project had not changed, the response was the same. You also indicated that various interviews with Mr. McAuliffe and others suggest there may have been some confusion regarding the underlying business transactions at issue. Further details will be set forth as needed below.

The general policy of FOIA is expressed in § 2.2-3701: The affairs of government are not intended to be conducted in an atmosphere of secrecy since at all times the public is to be the beneficiary of any action taken at any level of government....All public records and meetings shall be presumed open, unless an exemption is properly invoked. As a preliminary matter we must establish that VEDP is a public body and that the records you seek are public records. The definition of public body in § 2.2-3701 includes any legislative body, authority, board, bureau, commission, district or agency of the Commonwealth or of any political subdivision of the Commonwealth. There is no question that VEDP is a public body subject to the provisions of FOIA under this definition.⁵ The definition of public records includes all writings and recordings...regardless of physical form or characteristics, prepared or owned by, or in the possession of a public body or its officers, employees or agents in the transaction of public business. VEDP confirmed in its initial denial of your request that it was "working on an ongoing economic development project" involving two of the companies named in your request. That denial further described the documents being withheld as including

business plans, project plans, information gathered in written documents or powerpoint slides in preparation for confidential project meetings, prospect data sheets, notes from confidential project meetings, maps and other information regarding potential project sites, including utility infrastructure and environmental issues, internal and external emails regarding the status of the project and the company's plans for visiting certain project sites, drafts of incentive applications and incentive proposals, return on investment analyses, and drafts of unreleased news releases and internal and external emails concerning such news releases.

Based upon VEDP's characterization there is no question that the records you requested from VEDP are public records subject to FOIA, as they are records prepared, owned, or possessed by VEDP in the transaction of its public business.

In your inquiry it appears that you assert that the requested records should be disclosed on two separate grounds, one factual, and one based on the exercise of discretion. As to the factual matter, it appears that there may have been some confusing statements regarding the sale of a certain plant, which VEDP clarified in its second response by stating that the plant was never for sale. You stated that interviews with Mr. McAuliffe, his business partners, and public officials had suggested uncertainty about the issue and that there may have been records of inquiries about buying the plant. You then asserted that any communications regarding attempts to purchase the plant would not be subject to exemption, given the statement by VEDP that the plant was never for sale. However, you based this assertion on the language of the contract negotiation records exemption. That exemption allows [r]ecords relating to the negotiation and award of a specific contract where competition or bargaining is involved and where the release of such records would adversely affect the bargaining position or negotiating strategy of the public body to be withheld, but also states that [s]uch records shall not be withheld after the public body has made a decision to award or not to award the contract.⁶ Based on this language and VEDP's assertion that the plant was not for sale, you contend that any communications about purchasing the plant would be open, because such a purchase "had been ruled out." I would agree that if a contract had been under negotiation and a decision not to award had been made, then related records would not be subject to this exemption. However, note that the response to your renewed request did not say that a purchase had been "ruled out," it stated that the plant at issue was never for sale. In other words, it appears from the later clarification that there was in fact no contract being negotiated for the sale of the plant at any time.

Instead, it appears from VEDP's response that there may be records related to repurposing the plant and that the release of those records would have "a deleterious impact on their current and ongoing discussions with financiers and off-take providers" and the company that owns the plant. If the deleterious impacts at issue were solely on the third party business entities, then the contract negotiation records exemption would not apply, as that exemption by its own terms is limited to records where release would "adversely affect the bargaining position or negotiating strategy of the public body." [Emphasis added.] However, VEDP specifically stated in this second denial that not only were the companies

competing for success in their markets, we are competing with other states to ensure that as much of their business as possible is developed in the Commonwealth....Disclosing our public records at this point would bring an unwelcome public light (and possible political frenzy) to their confidential negotiations and may cause them to take their business interests elsewhere or may cause them to be unable to execute their business plan. In these events, the financial interest of the Commonwealth would be adversely affected by the loss of the tax base, the employment base and the resulting indirect and spin-off opportunities for our business community.

Additionally, observe that VEDP cited only the economic development records exemption in its response to your request for reconsideration.⁷ That exemption addresses two different types of documents. The first part of the exemption allows a public body to withhold [c]onfidential proprietary records, voluntarily provided by private business pursuant to a promise of confidentiality from a public body, used by the public body for business, trade and tourism development or retention. Among other records, this part of the exemption would appear to apply to documents submitted to VEDP pursuant to a promise of confidentiality concerning the repurposing or proposed purchase of a plant where there may have been no contract under negotiation, but the records would be used by VEDP for business, trade and tourism development or retention. The second part of this exemption allows a public body to withhold memoranda, working papers or other records related to businesses that are considering locating or expanding in Virginia, prepared by a public body, where competition or bargaining is involved and where, if such records are made public, the financial interest of the public body would be adversely affected. This part of the exemption would appear to cover the relevant records prepared by VEDP concerning these transactions. Note that the language of VEDP's denial, as quoted above, clearly tracks the language of this part of the economic development exemption in asserting that competition is involved and that the financial interests of the Commonwealth would be adversely affected if the records were released. Therefore it appears based on the facts presented, including the denial by VEDP quoted above, that the economic development records exemption was relied upon in the response to your request for reconsideration. FOIA provides in subsection B of § 2.2-3700 that any exemption from public access shall be narrowly construed. Even applying this narrow construction rule, when the response is analyzed in the context of the two clauses of the economic development records exemption, it appears that the records at issue were properly withheld because the records as described fall within the terms of the exemption.

In your inquiry to this office, you also suggest that the denial by VEDP is overbroad, and that at least some portions of the records sought should be released because the exemptions cited by VEDP are discretionary. You are correct that each of the exemptions cited is discretionary, as each is preceded by the statement that [t]he following records are excluded from the provisions of this chapter but may be disclosed by the custodian in his discretion, except where such disclosure is prohibited by law.⁸ Therefore a custodian may choose to release records which are exempt from mandatory disclosure under FOIA, unless another law prohibits such release. If another law prohibits release, then the prohibition is controlling and there is no discretion to be exercised.⁹ Additionally, subdivision B 1 of § 2.2-3704 provides that if the custodian has exercised his discretion to withhold the records in their entirety, as was done in this instance, then the response shall identify with reasonable particularity the volume and subject matter of withheld records, and cite, as to each category of withheld records, the specific Code section that authorizes the withholding of the records.¹⁰ FOIA is a procedural law, and so long as the response follows the statutory procedure, nothing more than noted above is required under FOIA when a custodian exercises the discretion to withhold requested records in their entirety.

You contend that "where the records relate to a public-private development involving the governor-elect, the public interest in disclosure far outweighs whatever asserted harm would result from disclosure." While we do appreciate the public interest represented and the value of transparency in government, FOIA itself contains no such balancing test for exemptions. Instead, the General Assembly has set the default rule that all public records are subject to mandatory disclosure unless exempt or prohibited from release, and then chosen by statute which records are so exempt or prohibited from release. Once a record is determined to be exempt, it does not have to be disclosed, but it still may be disclosed in the discretion of the custodian, unless some other law prohibits its release. Assuming no such prohibition applies, FOIA does not set forth any standards or limitations guiding the use of discretion to disclose exempt records, nor does it establish what might constitute an abuse of that discretion.¹¹ The statutory remedy to a FOIA violation is to bring a petition for mandamus or injunction.¹² Among other provisions, subsection E of § 2.2-3714 states that the public body shall bear the burden of proof to establish an exemption by a preponderance of the evidence. However, the remedy provisions likewise do not address the use or abuse of discretion by a records custodian. Reading these provisions together, it appears that all that is required is for a public body to establish that an exemption applies and to so inform the requester in its response; no further justification or explanation is required. Therefore an argument balancing the public interest versus the harm in disclosure might help persuade a custodian to exercise his discretion to release exempt records, but it is not mandatory for a public body to engage in such a balancing test.

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

Sincerely,

Maria J.K. Everett
Executive Director

1. Governor McAuliffe won the November election and has since taken office.
2. Subdivision 3 of § 2.2-3705.6, which provides an exemption for [c]onfidential proprietary records, voluntarily provided by private business pursuant to a promise of confidentiality from a public body, used by the public body for business, trade and tourism development or retention; and memoranda, working papers or other records related to businesses that are considering locating or expanding in Virginia, prepared by a public body, where competition or bargaining is involved and where, if such records are made public, the financial interest of the public body would be adversely affected.
3. Subdivision 2 of § 2.2-3705.7, which provides an exemption for [w]orking papers and correspondence of the Office of the Governor; Lieutenant Governor; the Attorney General; the members of the General Assembly, the Division of Legislative Services, or the Clerks of the House of Delegates and the Senate of Virginia; the mayor or chief executive officer of any political subdivision of the Commonwealth; or the president or other chief executive officer of any public institution of higher education in Virginia. However, no record, which is otherwise open to inspection under this chapter, shall be deemed exempt by virtue of the fact that it has been attached to or incorporated within any working paper or correspondence.
4. Subdivision 12 of § 2.2-3705.1, which provides an exemption for [r]ecords relating to the negotiation and award of a specific contract where competition or bargaining is involved and where the release of such records would adversely affect the bargaining position or negotiating strategy of the public body. Such records shall not be withheld after the public body has made a decision to award or not to award the contract. In the case of procurement transactions conducted pursuant to the Virginia Public Procurement Act (§ 2.2-4300 et seq.), the provisions of this subdivision shall not apply, and any release of records relating to such transactions shall be governed by the Virginia Public Procurement Act.
5. See subsection C of § 2.2-2234 establishing the Virginia Economic Development Partnership Authority (there is created a political subdivision of the Commonwealth to be known as the Virginia Economic Development Partnership Authority).
6. Subdivision 12 of § 2.2-3705.1.
7. Note that VEDP did not disclaim or withdraw its earlier citations to the contract negotiations and working papers exemptions, but in its response to your request for reconsideration it only cited the economic development exemption. FOIA does not prohibit public bodies from citing multiple exemptions, nor does a public body waive an exemption even if it fails to specify it in its response. See Lawrence v. Jenkins, 258 Va. 598 (1999) (failure to cite a specific exemption within the five working day time limit did not violate requester's FOIA rights, because requester had no right to exempt records).
8. The same prefatory language concerning the discretion of the custodian is used repeatedly in §§ 2.2-3705.1 through 2.2-3705.7, and again in subdivision A 2 of § 2.2-3706.
9. Note that there is an exception to this general rule in the context of certain law-enforcement records not at issue here due to the conflict resolution provision in § 2.2-3706. See Freedom of Information Advisory Opinion 07 (2005).
10. Note that similar language concerning the exercise of discretion to withhold records is used in subdivision B 2 of the same section for responses that provide the requested records in part and withhold in part.
11. See Freedom of Information Advisory Opinions 9 (2008) and 26 (2004)("The question of whether the Board has abused its discretion is beyond the statutory authority of this office, as 'abuse of discretion' is a legal standard outside the scope of FOIA.").
12. §§ 2.2-3713 and 2.2-3714.