Lawmakers aim to close jumbo jet-sized loophole in open records ruling

Jan 02, 2017
Republican state Rep. Giovanni Capriglione says the Texas Supreme Court ruling set an awful precedent.

The size of the city of McAllen’s check to Latin pop star Enrique Iglesias; the number of people Houston has permitted to drive for ride-hailing companies, such as Uber; the amount a public hospital spent to search for a new CEO — they all seem like things the public has a right to know.

But thanks to a 2015 Texas Supreme Court ruling, they’ve effectively become government secrets. Now, companies and local and state agencies are allowed to block the release of any information by claiming it could put them at a competitive disadvantage.

“The Texas state Supreme Court ruling set an awful precedent, one in which the public’s right to know is going to take a backseat to business interests,” said state Rep. Giovanni Capriglione, R-Keller, who is co-sponsoring legislation with state Sen. Kirk Watson, D-Austin, the city’s former mayor. “That term, ‘competitive disadvantage,’ is so broad you could fly a 747 through it.”

Their bill, Capriglione said, would restore the previous standard, which required that businesses prove the information was proprietary or a trade secret before it would be exempt from release to the public.

They also plan to introduce a second bill that would make it easier to track government money being spent by private entities, after a separate state Supreme Court ruling that exempted a Houston nonprofit from the state’s open records laws.

Both bills will be rolled out at a news conference Tuesday.

“These two are pretty egregious examples of creating loopholes in the Public Information Act,” Watson said. “The way we’re trying to do this is to reaffirm the concept of open government.

“If we’re going to err, it ought to be on the side of open government and people having a right to know.”

It is unclear where the business community stands on the issue. The Texas Association of Business, the largest business lobbying group at the Capitol, was not able to provide someone to comment because of the holidays, spokesman Robert Wood said.

The Texas Public Information Act, passed in the wake of the Sharpstown stock fraud scandal that shook the Capitol in the early 1970s, gives the public and news organizations the ability to compel government agencies to produce records, databases and other documents. The information gleaned from those documents can provide important insight into how government functions — or doesn’t function — and often serves as the backbone for investigative reporting.

Until the Texas Supreme Court’s 2015 ruling, obtaining government contracts or information provided by companies to government agencies was often routine. Now, public records advocates say that unless the Legislature intervenes, all of that information could be sealed off under this new corporate protection.

“We’re really glad there is bipartisan interest in the Legislature,” said Kelley Shannon, a former longtime Associated Press reporter, who is now executive director of the Freedom of Information Foundation of Texas. “It’s all about transparency of government and the public being able to see how taxpayer money is spent.

“It’s a basic foundation of our democracy that the people are able to watch and understand what their government is doing.”

Since the ruling:

• McAllen has blocked the release of the contract it signed to have Iglesias perform at its December 2015 pre-holiday parade concert, The McAllen Monitor reported. The city argued that disclosing the details would harm its ability to negotiate with other artists and compete with venues in neighboring cities.

• The search firm hired to find a CEO for El Paso’s public hospital, University Medical Center, blocked the release of its contract, the El Paso Times reported, claiming that would allow competitors to undercut it.

Ride-hailing firm Uber blocked Houston from releasing details about its background check process — such as the number of drivers approved — even as it complained that the city’s regulations were hampering its operations, the Houston Chronicle reported.

• City-regulated Yellow Cab blocked Austin from releasing ridership data that had been routinely made public in the past, citing competition from ride-hailing services such as Uber, the American-Statesman reported.

The enlarged exemption arose from — and is nicknamed for — a lawsuit filed by aerospace giant Boeing. The defense contractor and airplane builder was fighting to block the release of details about its lease and operations in San Antonio at the former Kelly Air Force Base, now known as Port San Antonio.

Boeing argued that, if disclosed, the information would “put (it) at a competitive disadvantage when bidding on future large government contracts,” the Texas Supreme Court summarized in its sweeping February 2015 decision siding with the company.

The opinion, written by Justice John Devine, allowed companies to block the release of information they provided to government authorities if they could show its release could provide competitors with “an advantage,” not “whether it would be a decisive advantage.”

“Boeing’s concern is that the disclosure of the additional details in the lease … will enable other military-service contractors to reverse engineer Boeing’s own bid, the better to undercut it,” Devine wrote.

It was a dramatic expansion from past interpretations, which had limited the exemption to protecting a company’s trade secrets and proprietary information.

The ruling also made it easier for local governments and state agencies to block release of documents, if it would put them at a disadvantage as they seek future contracts for services — or attempt to lure companies with incentives.

“This is the taxpayers’ money,” Capriglione said. “The taxpayer has a right to know how the money is being spent. Period. End of story.”