While the Blue Hills Civic Association (BHCA) received the majority of its funding from state grants, it is not the functional equivalent of a public agency and is not subject to the Freedom of Information Act (FOIA), according to a recent decision from the Freedom of Information Commission (FOIC).
In response to a complaint from CT Insider reporter Jacqueline Rabe Thomas, the FOIC found that, while the roughly 70 percent of funding BHCA received from legislative funds was a high enough level of funding to satisfy a prong in a test used to determine when private organizations are acting as the functional equivalent of a public agency and are subject to FOIA, other prongs of the test were not satisfied.
Thomas submitted a request seeking a variety of documents related to legal and political fallout after a $30,000 wire transfer sent from BHCA to another nonprofit was intercepted. After BHCA delayed reporting the theft, the Department of Economic and Community Development (DECD) held grant funds earmarked for the Hartf0rd-based nonprofit in escrow, leading BHCA to fire all its staff. A damning audit of BHCA revealed at least several hundred thousands of traceable dollars in state funding that BHCA disbursed to other nonprofits that had been mishandled, violated conflict of interest standards, or paid for services that were never performed, among other concerns.
Sen. Doug McCrory has come under scrutiny for the role he played in directing the allocation of funds to the Society for Human Engagement and Business Alignment (SHEBA), which is run by “close associate” Sonserae Cicero Hamlin. Both SHEBA and the BHCA are reportedly the focus of a federal grand jury investigation into Hartford-area nonprofits’ handling of state and federal grants.
BHCA denied Thomas’ FOIA request on the grounds it was not a public agency under the law’s definition, leading Thomas to appeal to the FOIC.
FOIA’s definition of a public agency includes executive, administrative and legislative offices of the state, a variety of state and town agencies and subdivisions, any “implementing agency,” and “the functional equivalent of a public agency.”
If a private organization is deemed to be the functional equivalent of a public agency, often because they receive public funding and perform public functions delegated to them by a public entity, they can be subject to FOIA. But not all private organizations who receive public funding or perform public functions meet this definition.
The test for determining whether a private organization rises to that level, known as the Woodstock Test, dates back to a Connecticut Supreme Court ruling from the 1980s. The case involved a FOIA request submitted to Woodstock Academy by a group of town residents, which was denied on the grounds that the school wasn’t a public agency.
The legislature granted Woodstock Academy a charter in the 1800s to serve as a secondary school since the town does not have a public high school. While the town designates other schools in the area for high school students to attend, most students attend Woodstock Academy. School tuition funding comes from municipalities who send students there.
The Connecticut Supreme Court’s ruling incorporated a test used by federal courts to determine when a private organization is behaving as the functional equivalent of a public agency.
In its ruling finding that Woodstock Academy was the functional equivalent of a public agency, the court looked at four elements:
- whether the organization performs a governmental function
- the level of government funding it is receiving
- the extent of government involvement or regulation
- and whether the organization was created by the government
The test is now the basis for determining whether a private organization is the functional equivalent of a public agency.
The FOIC did find that the level of funding BHCA received from legislative funds — roughly 70 percent of its total funding — did satisfy the prong of the Woodstock test that relates to the level of funding an organization receives. The FOIC’s finding was based not only on a $5.5 million grant, $4.4 million of which was a passthrough grant, BHCA received from the legislature, but on BHCA’s closure and firing of its staff once its state funding was frozen and ordered returned to the state.
However, satisfying one prong of the test is not enough to find a private organization is the functional equivalent of a public agency. All four prongs must be considered cumulatively, and the FOIC found that BHCA did not meet the test’s other three prongs.
The FOIC found that BHCA did not perform a governmental function, in part because it does not have any powers to make decisions that bind state or local government, and because its board of directors had sole responsibility for making decisions about their programs.
“It is further found that, although allegations exist that State Senator Douglas McCrory, who has never served on the Board, was involved in certain decisions regarding the passthrough grant and potential subgrantees, any such involvement was not officially authorized by, or specifically known, to the Board.” hearing officer Zack Hyde wrote in a decision adopted by the commission on May 13.
The FOIC further found that McCrory’s alleged involvement in directing funds to BHCA to distribute to other organizations did not prove that the goverment was involved in or regulated the day-to-day operations of BHCA.
“It is Found that, even if it is true that the Executive Director relied on State Senator McCrory to choose subgrantees and funding amounts for the passthrough grant, there is no evidence that State Senator McCrory was necessarily exercising government control over the Executive Director’s decisions.” Hyde wrote.
He further concluded that DECD hiring an outside firm to conduct a forensic audit of BHCA because the agency’s policies were not sufficient to monitor the irregularities or identify the irregularities demonstrated a lack of “direct, pervasive or continuous regulatory control” necessary to satisfy the third prong of the Woodstock Test.
Lastly, because BHCA is a non-profit, non-stock corporation, it was not created by the government and does not satisfy the fourth prong of the Woodstock test.
Because the test requires a cumulative consideration of the four prongs, and BHCA only met one of the prongs, the FOIC concluded BHCA is not the functional equivalent of a public agency and is not subject to FOIA.
While documents surrounding the theft of the $30,000 wire transfer have been released publicly through reporting BHCA did to various state agencies, as well as through the audit of BHCA, Thomas sought a variety of internal documents related to contracts BHCA had with subgrantees, records of communications with subgrantees and with BHCA staff, as well as policies and manuals, and records flagging issues with payments to subgrantees. She also sought an internal investigation completed by Crumbie Law Firm and communication between BHCA and McCrory.
Because many of those documents are internal or were not captured by BHCA’s interactions with public agencies that are subject to FOIA, there are limited means by which they might be disclosed.
Connecticut legislators recently passed a bill, sought initially by Gov. Ned Lamont, to require additional oversight of legislatively directed funds. This includes prohibiting state agencies from entering into agreements to provide legislatively directed funds to an organization outside of a specific appropriation passed by the legislature, which includes an awardee’s name, address, description of the intended use of the funds, and the same information for any intended subrecipients. It also requires the Office of Policy and Management to create policies for a uniform procedure for distributing funds and to regularly report on the status of legislatively directed funds.
Was this article helpful?
Republish our articles for free, online or in print, under a Creative Commons license.
