The Sale of Special Access to Confidential Information

A recent post on Philadelphia's Parents United for Public Education blog raises an issue that pulls together FOI and confidential information issues. Entitled "Is 'right to know' the new 'pay to play'?", the post is about Parents United's attempt to make public a report that contains a list of Philadelphia schools recommended for closure and the criteria used for developing the list. The failure of this attempt would mean special access to confidential information for those who partially funded the preparation of the report.

The criteria and list were put together by a contractor, the Boston Consulting Group (BCG), and the project was partially paid for by the William Penn Foundation. In turn, for this project, the foundation solicited donations from, among others, real estate developers and those promoting charter expansion, that is, from individuals and entities that stood to benefit from information about school closings as well as from the closings of particular schools.

Parents United sought to get a copy of BCG's report, but were told by the school board that the report was protected from disclosure as an "internal predecisional document." Parents United won the case before the Pennsylvania Office of Public Records, on the grounds that the document had been disclosed to the William Penn Foundation and the foundation was not "internal." The school board has filed suit in court to overturn the Office of Public Records decision.

In its brief (which is included in the blog post), the school board argues that the "William Penn Foundation’s role was that of a grantor who funded the second phase of BCG’s consultant services. As grantor, the philanthropic entity had the right – and indeed an affirmative duty – to know that BCG’s services were rendered and to review the work product prior to issuing payment to the consultant."

This sounds reasonable, but is it sufficient to allow special access to confidential information? Couldn't this review of the work product wait until the information has become public?

The most important question is, Should anyone who pays for government work be considered "internal" to the government and, therefore, have special access to the results of that work before the public, for which the work was done? If this were true, all an interested party would have to do is pay for part of a project (directly or indirectly) in order to get access to confidential information that could mean a huge advantage with respect to such things as purchasing government property or property nearby, getting a contract or grant or, in this case, opening a charter school. I say "directly or indirectly," because if the school board's argument is valid, then those who donated money to the foundation for the BCG report (or anyone who funded government work indirectly) would have the same valid argument for special access to the report, and it would be difficult for the foundation or other intermediary to withhold the report from them.

Beyond the possible misuse of confidential information, an official could use the ruling the school board is seeking as a tactic to engage in a sort of pay to play. The official could let it be known that if contractors, developers, and grantees want a special advantage with respect to government projects and benefits, they can put up money to help pay for government work, especially in the early stages, and get special access to valuable information that results from that work. This would be a way to effectively sell confidential information without violating ethics prohibitions against allowing its use for the benefit of anyone other than the government itself. Of course, there could also be related payments to the official for allowing this special access to valuable information, in the form of campaign contributions and other legal gifts (as well as illegal ones).

Thanks to Parents United to raising this issue.

Robert Wechsler
Director of Research-Retired, City Ethics

---