April 14, 1997

In re: Representative Robert R. Damron/Finance and Administration Cabinet

Open Records Decision

The issue presented in this appeal is whether the Finance and Administration Cabinet violated the Open Records Law in denying Representative Robert R. Damron’s February 21, 1997, request for the names of the private entities with whom the Cabinet was then negotiating for the financing, construction, and operation of a parking structure at Commonwealth Convention Center. The Cabinet released the names of the private entities after Representative Damron initiated this appeal, but before the Attorney General issued a decision in the appeal. Although the Attorney General may, in such cases, decline to issue a decision, we proceed to an adjudication of this appeal because of the important issues it raises which were not resolved by release of the information requested. 40 KAR 1:030 Section 6. It is the opinion of this office that the Finance and Administration Cabinet improperly withheld the names of the private entities with which it was negotiating, and that the Cabinet erred in originally denying Representative Damron’s request.

During its second special session in 1995, the General Assembly passed House Bill 3, approving the $50,000,000 Commonwealth Convention Center expansion as a state capital project, and authorizing $25,000,000 in funding from state bond funds. The General Assembly did not approve the construction of a parking facility as part of the expansion. In the fall of 1996, the Finance and Administration Cabinet and the Kentucky State Fair Board, acting under authority of KRS 56.515, began negotiating with Towne Park, Inc., a Maryland corporation, for the private financing of a parking facility at the Convention Center. The parking facility was to be built with private funds through a leaseback agreement with a private company. To finance the facility, Towne Park enlisted a second Maryland corporation, CarrPark, Inc., which attempted to secure additional financing through "several other unnamed sources." CarrPark requested that its identity not be disclosed during negotiations, and documents drafted in anticipation of an agreement did not identify the corporation.

In February 1997, Representative Damron, chairman of the General Assembly’s Capital Projects and Bond Oversight Committee, was directed by the committee to submit an open records request to obtain the names of the private entities with which the Cabinet was negotiating. On behalf of the Cabinet, Karen A. Powell, general counsel, denied Representative Damron’s request. She relied on three exceptions to the Open Records Law to support her position. Citing KRS 61.878(1)(i), she explained that because "all documentation relating to the parking garage is still preliminary, and any correspondence related to the documentation is to private individuals," this exception applied to his request. Ms. Powell also invoked KRS 61.878(1)(l), arguing that the records were properly excludable as attorney work product, and that they were shielded from disclosure by the attorney client privilege. Finally, she cited KRS 61.878(1)(j), asserting that the "documents in the custody of the Fair Board and the Finance Cabinet that relate to the proposed parking structure are all preliminary and involve policy discussions or opinions about a possible parking garage." This appeal was filed on February 27, 1997. On March 3, negotiations for the privately funded parking facility fell through, and the names were released to Representative Damron.

As chairman of the Capital Projects and Bond Oversight Committee, Representative Damron argues that the Cabinet’s reliance on KRS 61.878(1)(i), (j), and (l) was misplaced. In support of his position, he cites 93-ORD-113 and 94-ORD-102. In 93-ORD-113, the Attorney General held that the Kentucky Department of Insurance improperly denied a request for the identities of bidders for Kentucky Central Life Insurance. At page 9 of that decision, the Attorney General observed:

The identities of the bidders cannot properly be characterized as "preliminary drafts, notes, correspondence with private individuals, other than correspondence which is intended to give notice of final action of a public agency." The fact that these corporations or individuals have submitted bids, as evidenced in any of the bid documents . . . , cannot be said to fall within the parameters of that exception.

We concluded that although the records might contain excepted material, the Department was obligated to disclose them after redacting the excepted material, or, alternatively, to prepare a list of the bidders. We reaffirmed this view in 94-ORD-102 which involved a similar request to the Department of Insurance.

93-ORD-113 was appealed to the Franklin Circuit Court, which affirmed the Attorney General’s position, and then to the Kentucky Court of Appeals. In Kentucky Central Life Insurance Company v Park Broadcasting of Kentucky, Inc., Ky. App., 913 S.W.2d 330 (1996), the Court of Appeals reversed the circuit court judgment affirming 93-ORD-113. The court rejected the idea that records in the hands of the commissioner of the Department of Insurance, in his role as rehabilitator of the financially troubled insurance company, were public records for purposes of the Open Records Law, holding that "the commissioner as ‘rehabilitator’ occupies a legally separate role from that of his official capacity as regulator of the state’s insurance department." Kentucky Central at 334. Because the court concluded that the records were not public records, it did not reach the issue whether the records should be open for public inspection or were excluded from inspection by KRS 61.878(1)(i).

We are spared debate on the threshold issue whether the disputed records in this appeal are public records under the Open Records Law. Clearly, they are. Hence, we are not bound by Kentucky Central Life Insurance Company v Park Broadcasting of Kentucky, Inc., above, the resolution of which turned on this issue. Resolution of Representative Damron’s appeal turns on whether records revealing the identities of private entities negotiating for the financing, construction, and operation of a parking facility at Commonwealth Convention Center are sufficiently similar to records revealing the identities of private bidders for Kentucky Central Life Insurance Company to warrant the same conclusion we reached in 93-ORD-113. We believe they are.

Like any other contractor, or prospective contractor, to a governmental entity, private corporations negotiating with the Cabinet "must accept certain necessary consequences of involvement in public affairs . . . , [including] the risk of closer public scrutiny than might otherwise be the case." OAG 90-7, p. 4. Such a corporation cannot reasonably expect to conduct the public’s business in the shadows. We fail to see why a corporation which wishes to participate in that business would be deterred simply because the public might learn its identity. OAG 91-105, p. 6. Thus, although the Cabinet attaches great weight to the corporation’s request for anonymity, we are foreclosed from honoring that request to the extent that it is inconsistent with the provisions of the Open Records Law. See, OAG 92-149, p. 7 ("an agency can promise confidentiality as far as the permissive exemptions permit and such a promise should be honored"); see also, OAG 83-256 and OAG 88-1.

In our view, neither KRS 61.878(1)(i), (j), nor (l) authorizes nondisclosure of the names of private entities negotiating with the Cabinet for the financing, construction, and operation of a parking facility at Commonwealth Convention Center. Just as in 93-ORD-113, the fact that the private entities are negotiating, as evidenced by correspondence, memoranda, or other documents relating to the negotiations, cannot be said to fall within the parameters of these exceptions. No doubt much, if not all, of the content of the correspondence, memoranda, and other documents, is shielded from disclosure as preliminary drafts and notes, attorney work product, and preliminary recommendations, but the names of the entities, whether in a list prepared by the Cabinet or in a redacted record revealing only those names, cannot be so characterized. 93-ORD-113. The identities of the private entities negotiating with the Cabinet became public when negotiations commenced, and not at some artificial date marked by the finalizing of the agreement or the beginning of construction.

This is a narrow holding. It should not be construed to apply to records generated in the course of negotiations and disclosing the substance of those negotiations. In 94-ORD-102, we expressed similar reluctance with respect to the contents of the bid documents, noting that the bids could be withheld if the Department of Insurance could justify their exclusion in terms of the requirements of the statute, namely, by reference to a specific statutory exception. Premature disclosure of records reflecting the negotiations between the Cabinet and the private entities could seriously compromise the project. Nondisclosure of those records prior to the finalization of an agreement promotes the purposes for which KRS 61.878(1)(i), (j), and (l) were enacted, and therefore cannot be said to violate the Open Records Law. We therefore conclude that the Finance and Administration Cabinet erred in its original denial of Representative Damron’s request for the names of the private entities with which it was negotiating before an agreement was reached, but this holding does not extend to records reflecting the substance of negotiations.

Although KRS 61.878(5) permits the discretionary sharing of otherwise exempt public records between agencies, it is apparent that the committee has another mechanism at its disposal by which it can compel disclosure of records "touching any matter which [it] is instructed to investigate, study or audit." KRS 7.110(1). The latter provision empowers the Legislative Research Commission, its co-chairmen or director, any other member of the General Assembly authorized by the director, or any employee authorized by the director, to subpoena records regarding "any matter under study." Persons refusing to furnish such records may be held in contempt. KRS 7.110(1). See also, Ky. Const. 39. "The statutory scheme creating the [commission] provides the means by which these documents can be utilized, and this is the method which should be utilized." Marina Management Services, Inc., v Commonwealth of Kentucky, Cabinet for Tourism, Ky., 906 S.W.2d 318, 320 (1995).

Had the requested records qualified for exemption in this case, the better course would have been for the committee to proceed under KRS 7.110(1), leaving nothing to the discretion of the Cabinet for Finance and Administration. Insofar as those records did not qualify for exemption, we see no need to address the application of KRS 61.878(5) to them.

A party aggrieved by this decision may appeal it by initiating action in the appropriate circuit court pursuant to KRS 61.880(5) and KRS 61.882. Pursuant to KRS 61.880(3), the Attorney General should be notified of any action in circuit court, but should not be named as a party in that action or in any subsequent proceeding.

A. B. Chandler III

Attorney General

Amye L. Bensenhaver

Assistant Attorney General



Distributed to:

Robert R. Damron

State Representative and Chairman,

Capital Projects and Bond Oversight Committee

Legislative Research Commission

State Capitol

Frankfort KY 40601

Karen A. Powell

General Counsel

Office of Legal and Legislative Services

Finance and Administration Cabinet

Capitol Annex

Frankfort KY 40601

Scott J. Varland, Counsel

Capital Projects and Bond Oversight Committee

Legislative Research Commission

Capitol Annex

Frankfort KY 40601