Is the Delaware Prosperity Partnership, the state's economic-development nonprofit, subject to FOIA?
Official title
20-IB01 1/3/2020 FOIA Opinion Letter to Rep. John Kowalko re: FOIA Complaint Concerning the Delaware Prosperity Partnership
Plain-English summary
In 2017 the Delaware General Assembly restructured the State's economic-development apparatus. The Delaware Economic Development Office was eliminated, replaced by a Division of Small Business inside the Department of State. Alongside that, a new Public/Private Partnership was authorized to attract large employers, innovative enterprises, and international business opportunities. The enabling statute specifically defines this partnership as "a nonprofit corporation that is not established by the General Assembly."
Pursuant to that statute, the Delaware Prosperity Partnership was established as a nonprofit corporation in August 2017. The Governor and legislative leadership appoint the entire board. DPP received $2 million in State funding through the FY2020 Bond Bill.
State Rep. John Kowalko sent DPP two FOIA requests for treasurer reports and 2020 budget materials. DPP responded that it is not a public body and the records are not subject to FOIA, while pointing to publicly-available materials. Kowalko petitioned, asserting DPP is a public body.
The AG sided with DPP. FOIA's two-part public-body test asks (1) whether the entity is a regulatory, administrative, advisory, executive, appointive, or legislative body of the State, including bodies "established by an act of the General Assembly," and (2) whether the entity is supported by public funds, expends public funds, or is charged to advise or report. The first prong fails: the General Assembly's own enabling language declares DPP "not established by the General Assembly." That phrasing was deliberate; the AG also notes legislative-history evidence that during floor debate, a Deputy Attorney General confirmed the bill rendered DPP outside FOIA's public-body definition, and the bill passed both chambers without amendment.
Adding force to the textual reading: the same statute (§ 8706A) makes three categories of DPP records subject to FOIA: IRS Form 990 returns, audited financial reports, and conflict, audit, and expense policies. That list would be surplusage if all DPP records were already subject to FOIA. Under Keeler v. Harford Mutual, statutes are read to give effect to every part. The express FOIA-subject-records carve-out makes sense only if the rest of DPP is outside FOIA.
The AG distinguished AG Opinion 18-IB35, where the Wilmington Housing Partnership was held a public body. WHP was undisputedly established by the City of Wilmington (itself a public body); DPP is undisputedly not so established.
Currency note
This opinion was issued in 2020. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Common questions
Is DPP entirely outside FOIA, or just partly?
Partly. The enabling statute makes three specific record categories subject to FOIA: IRS Form 990 returns, audited financial reports, and conflict/audit/expense policies. Other DPP records (board minutes, treasurer reports, budgets, contracts) are not FOIA-accessible.
Why does it matter that the General Assembly said DPP is "not established by the General Assembly"?
That language tracks FOIA's public-body definition word for word. § 10002(h) reaches entities "established by an act of the General Assembly." The drafters used identical language in DPP's enabling statute to opt out of that hook.
Does receiving $2 million in state funding make DPP a public body?
No, not on its own. The two-part test requires the entity to first satisfy prong one (be a regulatory, administrative, etc. body of the State or an entity established by an act of the General Assembly). Receiving public funds, by itself, does not turn a private nonprofit into a public body.
What about the Governor's appointment power?
The opinion notes that the Governor selects board members "either directly or from recommendations provided by non-governmental entities." That alone does not satisfy the public-body test in the face of the statute's explicit "not established by the General Assembly" language. Legislative intent prevailed.
Could the General Assembly change this and bring DPP fully within FOIA?
Yes, by amending either the FOIA definition or the DPP statute. The AG opinion is interpreting the existing statutes; it does not preclude legislative change. Compare 11 Del. C. § 4113 (SLEAF Committee declared a public body explicitly) and 14 Del. C. §§ 503, 513 (charter school boards declared public bodies).
Background and statutory framework
The 2017 restructure (HB 226) created a hybrid public-private model for Delaware economic development. The Division of Small Business handles state-government functions; DPP, the nonprofit, handles outreach, recruitment, and partnership-building. The model attracts criticism precisely because the nonprofit form keeps activities outside FOIA.
29 Del. C. § 8706A spells out DPP's responsibilities (working with Division of Small Business, assisting startup grants, recruiting employers, marketing, research, international business expansion). It also specifies which DPP records the General Assembly chose to subject to FOIA: IRS 990s, audited financials, conflict/audit/expense policies.
§ 8706A(f) carves out personal financial-disclosure forms of board members who are not "public officers" otherwise subject to disclosure rules; those forms are explicitly not subject to FOIA.
The statutory-construction rule from Keeler v. Harford Mutual (Del. 1996), "give effect to the whole statute and leave no part superfluous", is doing significant work here. The General Assembly named the FOIA-subject records explicitly, which would be unnecessary if all DPP records were already public.
Citations
- 29 Del. C. §§ 10001-10007 (Delaware FOIA)
- 29 Del. C. § 10002(h), § 10002(k)
- 29 Del. C. § 10005(e)
- 29 Del. C. § 8701A (legislative findings)
- 29 Del. C. § 8702A(6) (DPP definition)
- 29 Del. C. § 8706A (DPP responsibilities)
- 11 Del. C. § 4113 (SLEAF Committee)
- 14 Del. C. §§ 503, 513 (charter schools)
- Keeler v. Harford Mutual Ins. Co., 672 A.2d 1012 (Del. 1996)
- State ex rel. Biden v. Camden-Wyoming Sewer and Water Authority, 2012 WL 5431035 (Del. Super. Nov. 7, 2012)
- Del. Op. Att'y Gen. 18-IB28, 2018 WL 2994706 (Jun. 1, 2018)
- Del. Op. Att'y Gen. 18-IB35, 2018 WL 3947263 (Aug. 7, 2018)
Source
- Landing page: https://attorneygeneral.delaware.gov/2020/01/03/20-ib01-1-3-2020-foia-opinion-letter-to-rep-john-kowalko-re-foia-complaint-concerning-the-delaware-prosperity-partnership/
- Original PDF: https://attorneygeneral.delaware.gov/wp-content/uploads/sites/50/2020/01/Attorney-General-Opinion-No.-20-IB01.pdf
Original opinion text
PRINT VERSION: Attorney General Opinion No. 20-IB01
OFFICE OF THE ATTORNEY GENERAL OF THE STATE OF DELAWARE
Attorney General Opinion No. 20-IB01
January 3, 2020
VIA EMAIL
The Honorable John Kowalko
State Representative, 25 th District
RE: FOIA Petition Regarding the Delaware Prosperity Partnership
Dear Representative Kowalko:
We write in response to your correspondence alleging that the Delaware Prosperity Partnership ("DPP") violated the Delaware Freedom of Information Act, 29 Del. C. §§ 10001-10007 ("FOIA"). We treat your correspondence as a Petition for a determination pursuant to 29 Del. C. § 10005(e) regarding whether a violation of FOIA has occurred or is about to occur. As set forth below, we conclude that DPP is not a public body and is not required to respond to your FOIA request.
BACKGROUND
In 2017, the General Assembly enacted legislation adopting significant revisions to the structure of the State's economic development initiatives. The revisions included the elimination of the Delaware Economic Development Office and the establishment of an economic development division under the Department of State, designated as the Division of Small Business. In this legislation, the General Assembly also created a Public/Private Partnership for economic development purposes, expressly stating:
The General Assembly further finds and declares that the creation of a Public/Private Partnership to attract large employers, innovative enterprises and international business opportunities while transferring duties formerly performed by the Delaware Economic Development Office to a division within the Department of State is in the best interest of the State to foster development in an increasingly competitive economy.
The "Public/Private Partnership" is defined in the Code specifically as a nonprofit corporation that is "not established by the General Assembly." The Delaware Code further states that "the Public/Private Partnership shall be governed by a board of directors." The board of directors must contain at least 15 members, as follows: 1) Governor as co-chair; 2) a co-chair selected by the Governor from a list of recommendations; 2) two members (one from each majority and minority party) from the Senate appointed by the President Pro Tempore ; 3) two members (one from each majority and minority party) from the House of Representatives appointed by the Speaker of the House; and 4) at least nine additional members appointed by the Governor, five of which are also selected from a list of recommendations. The Governor may appoint additional members as necessary. In summary, the Governor, President Pro Tempore and Speaker of the House appoint every member of the board of directors, other than the co-chair position reserved for the Governor.
The Code further specifies that the Public/Private Partnership formed "shall have the following responsibilities," which include working with the Division of Small Business to assist early stage technology enterprises and entrepreneurs in applying for grants and other financial incentives, recruiting employers, developing marketing strategies, establishing recruiting, providing guidance to start-up business, conducting research, expanding international business opportunities, in addition to other activities that encourage economic development of the State. Two explicit references to the FOIA statute appear in connection with records of the Public/Private Partnership. First, the Public/Private Partnership is tasked with submitting annual reports to the Governor and General Assembly, including the IRS Form 990 tax returns, audited financial reports, and conflict, audit, and expense policies; the statute specifically notes that these reports shall be subject to the FOIA statute. Second, any director of the Public/Private Partnership who is not a "public officer" subject to a financial information filing requirement must still submit his or her financial information to the Governor and General Assembly on a form similar to those required by the Public Integrity Commission, and the Code notes that these forms "shall not constitute public records subject to [the FOIA statute]."
Pursuant to these statutory provisions, the Delaware Prosperity Partnership was established on August 15, 2017 as a nonprofit nonstock corporation. DPP was granted two million dollars in State funding through the FY2020 Bond and Capital Improvements Act. On August 27, 2019, you submitted a request to DPP for "all treasurer reports that have been presented to the DPP Board of Directors" and "any documents related to the 2020 budget process and upcoming investor support efforts as presented to the DPP Board of Directors on May 13, 2019." DPP replied to this request by asking for an opportunity to meet with you. You reiterated a second request for this same information on September 16, 2019. DPP responded again, attempting to arrange a meeting. Another reply from DPP followed, explaining that DPP is not a public body and that the records you seek are not subject to FOIA; DPP pointed you to publicly available records that may be responsive to your request and again offered an opportunity to meet. Your Petition followed, asserting that DPP is a public body that must respond to your FOIA request.
On November 25, 2019, DPP submitted a response to this Petition, arguing it is not a public body ("Response"). DPP contends that it does not meet the two-part test for public bodies. DPP argues that it is a nonprofit corporation established and created "pursuant to the authority in the [Delaware General Corporation Law]." DPP argues that Delaware Code is clear that it was not intended to be treated as a public body, as the Code expressly states that DPP was not created by the General Assembly and DPP cites specific legislative testimony and debate purported to support this interpretation. DPP further asserts it is not a "municipality, political subdivision, instrumentality, regulatory, administrative, advisory, executive, or legislative body of the State or of any political subdivision of the State." In addition, DPP argues that the creation of DPP is not the result of an appointment by any body or public official of the State, acknowledging that the Governor merely "may select certain members of the DPP's board of directors either directly or from recommendations provided by non-governmental entities." DPP argues that the receipt of funds alone does not make an entity a public body under FOIA. Finally, DPP argues that the General Assembly intended to exclude all DPP documents not specifically mentioned in Code from the definition of "public record" under FOIA, noting "[h]ad the General Assembly intended to subject the DPP to the entirety of FOIA it would not have needed to specifically identify certain documents and records as all documents, records, etc. of the DPP would fall under the authority of FOIA."
DISCUSSION
FOIA's public records requirements only apply to public bodies. To determine if an entity is a "public body," a two-part analysis is required. The first inquiry is whether the entity is a "regulatory, administrative, advisory, executive, appointive or legislative body of the State, or of any political subdivision of the State," which includes a ". . . group, panel, council, or any other entity or body established by an act of the General Assembly of the State, or established by any body established by the General Assembly of the State, or appointed by any body or public official of the State or otherwise empowered by any state governmental entity." If the first part is met, we then must determine whether the entity is supported in whole or in part by any public funds, expends or disburses any public funds, or is impliedly or specifically charged to advise or to make reports, investigations, or recommendations. Public funds are defined as "those funds derived from the State or any political subdivision of the State."
Here, DPP's authorizing statute provides that it is a "nonprofit corporation not established by the General Assembly." FOIA's definition of public body expressly includes entities "established by an act of the General Assembly." As this language specifically addresses this aspect of FOIA's public body definition by stating DPP is "not established" by the General Assembly, this language evidences a legislative intent to exclude DPP from FOIA. As further evidence of this intent, the statute states three categories of records will be subject to FOIA, including the IRS Form 990 returns, audited financial reports, and the conflict, audit, and expense policies. Such a statement would be surplusage if the General Assembly intended all of DPP's records be subject to FOIA. We therefore conclude on the basis of this specific statutory language, and the clearly expressed intent of the General Assembly, that DPP is not a public body and not obligated to respond to your records requests.
CONCLUSION
For the reasons set forth herein, we conclude that DPP is not a public body and is therefore not legally obligated to respond to your FOIA requests.
Very truly yours,
/s/ Aaron R. Goldstein
Aaron R. Goldstein
State Solicitor
cc:
Elio Battista, Jr., Esquire
Attorney for Delaware Prosperity Partnership