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May 25, 2001

FOIL-AO-12685

The staff of the Committee on Open Government is authorized to issue advisory opinions. The
ensuing staff advisory opinion is based solely upon the facts presented in your correspondence.

Dear

I have received your letter in which you questioned the status of what you characterized as
"shadow agencies", Health Research Inc. (HRI) and the SUNY Research Foundation (the
Foundation), under the Freedom of Information Law. You suggested that both are not-for-profit
corporations and that requests for records made to those entities were not answered.

From my perspective, based on the terms of the Freedom of the Information Law and judicial
decisions, the records of those entities fall within the coverage of that statute. In this regard, I offer
the following comments.

First, as you may be aware, the Freedom of Information Law is applicable to agency records,
and §86(3) defines the term "agency" to mean:

"any state or municipal department, board, bureau, division,
commission, committee, public authority, public corporation, council,
office or other governmental entity performing a governmental or
proprietary function for the state or any one or more municipalities
thereof, except the judiciary or the state legislature."

Although the definition of "agency" refers to "governmental" entities performing a governmental
function, the courts have considered the functions of not-for-profit corporations closely associated
with government and the extent to which there is governmental control over those corporations in
determining whether they are subject to the Freedom of Information Law.

I note, too, that both HRI and the Foundation are included within the definition of "state
agency" in §53-a of the State Finance Law. Subdivision (5) of that statute provides that:

"‘State agency' means (a) any state department, bureau, commission,
authority or division and shall include the state university;

(b) any institution or organization designated and authorized by law
to act as agent for the state, including Cornell University and Alfred
University as representatives of the state university board of trustees
for the administration of statutory or contract colleges at those
institutions;

(c) any public corporation or institution the governing board of which
consists of a majority of state officials serving ex-officio or has one
or more members appointed by the governor; and

(d) certain membership corporations closely affiliated with specific
state agencies and whose purposes are essentially to support,
supplement or extend the functions and programs of such state
agencies, specifically: Youth Research, Inc., The Research
Foundation for Mental Hygiene, Inc., Health Research Inc., The
Research Foundation of the State University of New York, and
Welfare Research, Inc."

In a decision in which the question was essentially the same as yours, it was held that a
community college foundation, also a not-for-profit corporation, and its records are subject to the
Freedom of Information Law in conjunction with the following:

"At issue is whether the Kingsborough Community College
Foundation, Inc (hereinafter 'Foundation') comes within the definition
of an 'agency' as defined in Public Officers Law §86(3) and whether
the Foundation's fund collection and expenditure records are 'records'
within the meaning and contemplation of Public Officers Law §86(4).

The Foundation is a not-for-profit corporation that was formed to
'promote interest in and support of the college in the local community
and among students, faculty and alumni of the college' (Respondent's
Vertified Answer at paragraph 17). These purposes are further
amplified in the statement of 'principal objectives' in the Foundation's
Certificate of Incorporation:

'1 To promote and encourage among members of the
local and college community and alumni or interest in
and support of Kingsborough Community College and
the various educational, cultural and social activities
conducted by it and serve as a medium for
encouraging fuller understanding of the aims and
functions of the college'.

Furthermore, the Board of Trustees of the City University, by resolution,
authorized the formation of the Foundation. The activities of the Foundation,
enumerated in the Verified Petition at paragraph 11, amply demonstrate that
the Foundation is providing services that are exclusively in the college's
interest and essentially in the name of the College. Indeed, the Foundation
would not exist but for its relationship with the College" (Eisenberg v.
Goldstein, Supreme Court, Kings County, February 26, 1988).

The SUNY Foundation that is the subject of your inquiry was chartered in 1951 by the Board
of Regents as a non-profit educational corporation. It is my understanding that the focal point of the
relationship between SUNY and the Foundation is an agreement between those institutions signed
in 1977 and approved by the Attorney General and the Comptroller. The agreement describes the
powers and duties of SUNY and its Board of Trustees and cites the purposes of the Foundation in
its charter as follows:

"a. To assist in developing and increasing the facilities of the State
University of New York to provide more extensive educational
opportunities for and service to its students, faculty, staff and alumni,
and to the people of the State of New York, by making and
encouraging gifts, grants, contributions and donations of real and
personal property to or for the benefit of State University of New
York;

b. To receive, hold and administer gifts or grants, and to act without
profit as trustee of educational or charitable trusts, of benefit to and
in keeping with the educational purposes and objects of State
University of New York; and

c. To finance the conduct of studies and research in any and all
fields of the arts and sciences, of benefit to and in keeping with the
educational purposes and objects of State University of New York..."

The agreement also states that "a major function of the Foundation has been to serve as the
fiscal administrator of funds awarded by the federal government and other authorized sources for the
conduct of sponsored programs at the State-operated institutions of the University." The agreement
refers to the fact that:

"most grants of such funds are initiated by proposals by faculty
members of the State-operated institutions of the University detailing
the scope, objectives, staffing, and budget of the proposed sponsored
program, which are then incorporated into formal applications to the
sponsor by the University and the Foundation, following, when
applicable, the filing of notice of such applications in accordance with
Section 53-a of the State Finance Law; such awards are made to the
Foundation for and in conjunction with the University subject to the
terms and conditions specified by the sponsors, including the ultimate
accountability to them for the proper management and use of such
grant awards...".

In addition, the agreement states that "the Foundation's sole purpose is to serve the
University", that the Foundation "shall assist the University in procurement of funds from the federal
government and other authorized sources to support such sponsored programs at the University as
the University shall request", that "All applications to prospective sponsors by faculty or staff
members at the State-operated institutions of the University seeking support for sponsored programs
shall be made by the University through the Foundation." Further, the agreement states that no
application shall be made by the Foundation "without prior written approval of the chief
administrative office of the college or other institution of the University where the sponsored
program is to be conducted, and the prior written approval of the Chancellor or his designee.

In view of the foregoing, the Foundation's purpose is "to serve the University", the
Foundation cannot carry out its duties without the approval of University officials, and it is an
"integral part" of the University. Moreover, the offices of the Foundation are located at SUNY
Plaza, and utilize SUNY space.

As in the case of the Foundation in Eisenberg, the Foundation, at issue here would not exist
but for its relationship with SUNY. Due to the similarity between the situation you have described
and that presented in Eisenberg, and in view of the essential purpose of the Foundation as described
in the State Finance Law, I believe that the Foundation is an agency subject to the Freedom of
Information Law. To suggest otherwise would, in my opinion, exalt form over substance.

HRI was created as a membership corporation in 1953 and later designated as a not-for-
profit corporation in 1973. Its purposes are similar to those of the Foundation, but they relate to the
State Department of Health. Specifically, the certificate of Incorporation states that the purposes of
HRI include:

"(a) To assist in developing and increasing the facilities of the New
York State Department of Health, the institutions and agencies within
such Department or associated therewith, and other departments of
health within the State, to provide more extensive conduct of studies
and research into the causes, nature and treatment of diseases,
disorders and defects of particular importance to the public health by
encouraging gifts, grants, bequests, devises, contributions and
donations of real and personal property to the corporation for such
purposes:

(b) To receive, hold and administer gifts or grants for the purposes of
the corporation and in keeping with the research, prevention and
treatment purposes and objectives of the New York State Department
of Health, the institutions, and agencies within such Department or
associated therewith; and other departments of health within the
State;

(c) To conduct and finance the conduction of studies and research
in any and all fields of the arts and sciences and in keeping with the
purposes and objectives of New York State Department of Health, the
institutions and agencies within such Department or associated
therewith; and other departments of health within the State..."

Based on the foregoing, as in the circumstance of the Foundation, HRI's essential purpose
is to enhance the functioning of a state agency, and it would not exist but for its relationship with that
agency.

There is precedent indicating in other instances that a not-for-profit corporation may indeed
be an "agency" required to comply with the Freedom of Information Law. In Westchester-Rockland
Newspapers v. Kimball [50 NY2d 575 (1980)], a case involving access to records relating to a
lottery conducted by a volunteer fire company, the Court of Appeals found that volunteer fire
companies, despite their status as not-for-profit corporations, are "agencies" subject to the Freedom
of Information Law. In so holding, the Court stated that:

"We begin by rejecting respondent's contention that, in applying the
Freedom of Information Law, a distinction is to be made between a
volunteer organization on which a local government relies for
performance of an essential public service, as is true of the fire
department here, and on the other hand, an organic arm of
government, when that is the channel through which such services are
delivered. Key is the Legislature's own unmistakably broad
declaration that, '[a]s state and local government services increase and
public problems become more sophisticated and complex and
therefore harder to solve, and with the resultant increase in revenues
and expenditures, it is incumbent upon the state and its localities to
extend public accountability wherever and whenever feasible'
(emphasis added; Public Officers Law, §84).

For the successful implementation of the policies motivating the
enactment of the Freedom of Information Law centers on goals as
broad as the achievement of a more informed electorate and a more
responsible and responsive officialdom. By their very nature such
objections cannot hope to be attained unless the measures taken to
bring them about permeate the body politic to a point where they
become the rule rather than the exception. The phrase 'public
accountability wherever and whenever feasible' therefore merely
punctuates with explicitness what in any event is implicit" (id. at
579].

In another decision rendered by the Court of Appeals, Buffalo News v. Buffalo Enterprise
Development Corporation [84 NY 2d 488 (1994)], the Court found that a not-for-profit corporation,
based on its relationship to an agency, was itself an agency subject to the Freedom of Information
Law. The decision indicates that:

"The BEDC principally pegs its argument for nondisclosure on the
feature that an entity qualifies as an 'agency' only if there is
substantial governmental control over its daily operations (see, e.g.,
Irwin Mem. Blood Bank of San Francisco Med. Socy. v American
Natl. Red Cross, 640 F2d 1051; Rocap v Indiek, 519 F2d 174). The
Buffalo News counters by arguing that the City of Buffalo is
'inextricably involved in the core planning and execution of the
agency's [BEDC] program'; thus, the BEDC is a 'governmental entity'
performing a governmental function for the City of Buffalo, within
the statutory definition.

"The BEDC's purpose is undeniably governmental. It was created
exclusively by and for the City of Buffalo...In sum, the constricted
construction urged by appellant BEDC would contradict the
expansive public policy dictates underpinning FOIL. Thus, we reject
appellant's arguments," (id., 492-493).

As suggested earlier, neither of the entities in question would exist absent their relationships
with state agencies. They with carry out their functions, powers and duties for those agencies, and
§53-a of the State Finance Law treats them as "state agencies". In consideration of those factors,
I believe that a court would determine that they are "agencies" with a responsibility to comply with
the Freedom of Information Law.

Even if the entities in question are not "agencies", I believe that their records would fall
within the scope of the Freedom of Information Law due to their relationships with SUNY and the
State Department of Health, both of which clearly are agencies. As indicated at the outset, statute
pertains to agency records. Section 86(4) defines the term "record" expansively to include:

"any information kept, held, filed, produced, reproduced by, with or
for an agency or the state legislature, in any physical form whatsoever
including, but not limited to, reports, statements, examinations,
memoranda, opinions folders, files, books, manuals, pamphlets,
forms, papers, designs, drawings, maps, photos, letters, microfilms,
computer tapes or discs, rules, regulations or codes".

The Court of Appeals has construed the definition as broadly as its specific language
suggests. The first such decision that dealt squarely with the scope of the term "record" involved a
case cited earlier concerning documents pertaining to a lottery sponsored by a fire department.
Although the agency contended that the documents did not pertain to the performance of its official
duties, i.e., fighting fires, but rather to a "nongovernmental" activity, the Court rejected the claim of
a "governmental versus nongovernmental dichotomy" (see Westchester Rockland, supra, 581) and
found that the documents constituted "records" subject to rights of access granted by the Law.
Moreover, the Court determined that:

"The statutory definition of 'record' makes nothing turn on the
purpose for which it relates. This conclusion accords with the spirit
as well as the letter of the statute. For not only are the expanding
boundaries of governmental activity increasingly difficult to draw, but
in perception, if not in actuality, there is bound to be considerable
crossover between governmental and nongovernmental activities,
especially where both are carried on by the same person or persons"
(id.).

The point made in the final sentence of the passage quoted above appears to be especially relevant,
for there appears to be "considerable crossover" in the activities of SUNY and the Foundation, and
between HRI and the Department of Health.

Perhaps most pertinent is a determination rendered by the Court of Appeals in which it was
found that materials received by a corporation providing services by contract for a branch of the State
University were "kept" on behalf of the University, and, therefore, constituted "records" falling with
the coverage of the Freedom of Information Law. I point out that the Court rejected "SUNY's
contention that disclosure turns on whether the requested information is in the physical possession
of the agency", for such a view "ignores the plain language of the FOIL definition of 'records' as
information kept or held 'by, with or for an agency'" [see Encore College Bookstores, Inc. v.
Auxiliary Services Corporation of the State University of New York at Farmingdale, 87 NY 2d 410,
417 (1995)]. Therefore, if a document is produced for an agency, it constitutes an agency record,
even if it is not in the physical possession of the agency.

Lastly, as a general matter, the Freedom of Information Law is based upon a presumption of
access. Stated differently, all records of an agency are available, except to the extent that records or
portions thereof fall within one or more grounds for denial appearing in §87(2)(a) through (i) of the
Law. You wrote that your requests involved contracts between the entities in question and the State
of New York, and job titles used by these entities. If that is so, and in consideration of the preceding
commentary, I believe that the records sought should have been disclosed.

 

 

 

I hope that I have been of assistance.

Sincerely,

 

Robert J. Freeman
Executive Director

cc: Donald P. Berens
Wendy Kowalczyk