A message to the Kentucky Retirement Systems, the Teachers Retirement System, and those who would rise to their defense in the face of incontrovertible evidence that they have — as Kentucky Auditor of Public Accounts Mike Harmon declared in his Aug. 27 special examination of system compliance with transparency legislation — “abdicated (their) responsibility to abide by the Open Records Act.”
Let’s begin with a simple premise: Free and open examination of public records is in the public interest even though such examination may cause inconvenience or embarrassment to public officials or others.
Let’s take it one step further: The 16 exceptions provided for by the open records law must be strictly construed.
Let’s conclude with the law’s fundamental mandate: The burden of proof in denying an open records request shall rest with the public agency.
These well-entrenched principles are found in statute and in caselaw. Thus:
“The open records law exhibits a general bias favoring disclosure. An agency which would withhold records bears the burden of proving their exempt status. The law’s ‘basic policy’ is to afford free and open examination of public records, and all exceptions must be strictly construed.”
The open records law does not exempt the Kentucky Retirement Systems or the Teachers Retirement System (except with respect to member account information).
There is, therefore, something colossally offensive about their resistance to the idea that they should not be held to the same standards of transparency and accountability as all other public agencies.
This is especially true in light of the fact that in 2017, lawmakers enacted SB 2 “to improve transparency regarding the administration of the retirement systems.”
In part, that law requires the retirement systems to post to their websites specific information, including “all contracts or offering documents for services, goods, or property purchased or utilized by the systems.”
The law is mandatory — not permissive. It imposes an additional layer of accountability on the retirement systems which, Harmon concluded, they “have fallen drastically short of” by permitting contract managers to decide what the public can and cannot know.
I take issue with one comment made by the Auditor in the August 27 press release announcing the examination. He states that the retirement systems “have failed to fully keep with the spirit of the law.”
In fact, they have failed to keep with the spirit *and* the letter of the law. SB 2 is *not* aspirational, it is a legal requirement.
I also take issue with his recommendation that the systems “request clarification by seeking an opinion from the Kentucky Attorney General to define what financial data should be proprietary or confidential in each contract. . . A ruling by the Kentucky Attorney General would help clarify what specific information should be redacted and what should be made available to the public.”
With respect to “clarification” on grey areas of law, the attorney general issues non-binding advisory opinions. As a matter of longstanding policy, he has declined to render advisory opinions on open records issues that may later come to him in an appeal of an open records dispute.
The attorney general issues “rulings” in open records disputes usually involving the denial of a records request. If not appealed to circuit court, the “rulings” — or open records decisions (ORDs) — have the “force and effect” of law.
Those “rulings” determine whether an agency violated the law by withholding disputed records. They do not determine if an agency violated the law by releasing records.
It is not incumbent on (or even prudent) for the attorney general to weigh in on these issues in advance. He should adjudicate each appeal based on its unique facts and decide if the systems met their burden of proving legal justification for withholding any information in a particular disputed contract.
It is, instead, incumbent on the retirement systems to critically evaluate each manager’s redactions and agree to only those redactions they believe they can prove to the attorney general or the court they were justified in making.
Despite their fear mongering, they are no different than any other public agency confronted with a difficult records access decision.
They cannot hide behind a 2016 open records decision declaring that the KRS *improperly* withheld an agree with KKR Prisma. That decision provides no cover whatsoever.
The attorney general’s staff concluded that although investment strategies detailed in the KKR Prisma agreement were confidential, “ KRS ha(d) not specified or made a case for any claimed categories of ‘other proprietary information.’”
The 2016 open records decision disfavors the retirement systems. It assigns no importance whatsoever to the existence of a confidentiality agreement between KKR Prisma and the retirement systems.
It most certainly does not suggest that the decision to release or withhold information maintained in public records is the exclusive domain of the investment manager.
Lest there be any doubt, KRS and KTRS are statutorily obligated to independently assess the managers’ claims of exemption and discharge their duty to disclose those portions of the contract that they cannot meet the burden of withholding. The exceptions relied upon must be strictly construed and any doubts resolved in favor of access.
Nothing permits them to surrender to the investment managers unreasonable “expectations of privacy“ in doing business with public agencies subject to the open records law and, after 2017, SB 2.
No doubt disclosure of information confirming excessive fees (or worse) may prove inconvenient or embarrassing, but let’s not forget that free and open examination of public records is in the public interest.
