Gannon and Nichols v. Iowa Board of Regents was a case before the Iowa Supreme Court in 2005 concerning the applicability of open records to private corporations functioning in a public capacity.
This case eliminated the requirement for malicious intent when applying the public records law to private corporations.
- The Iowa State College Foundation was incorporated in 1958 with the explicit permission of the Iowa Board of Regents and by the president of the University. Its stated goal is to invest money into the University and all of its assets revert to the state upon dissolution. The board of directors for the Foundation includes the president of the college and the president of the board of regents.
- In 1980 the College Foundation incorporated the Iowa State University Achievement Foundation, whose stated goal was to invest funds into the University of Iowa and develop and cultivate donors to the university. Its funds would also revert to the state if it were dissolved. In 1988 it changed its name to the Iowa State University Foundation (Foundation). Three members of the Foundation's board are also members of the board of regent and the President of the University.
- Prior to 2001 the Foundation was staffed by University employees and housed in University buildings. In October 2001, the University altered this policy, agreeing to lease employees to the Foundation until the Foundation could develop its own pay scale.
- On August 21, 2002, the University and the Foundation entered into an open ended vague service agreement wherein the Foundation would provide the University with its fund-raising expertise and the University would pay the foundation some non-specific amount of money. In 2002, the University agreed to pay $750,000 annually.
- Currently, the Foundation employees its own staff and has its own offices located off campus. It manages funds donated to the Foundation and funds granted to the Foundation by the University for investment purposes.
- The University, however, reserves the right to audit the Foundation once a year. The University also granted the Foundation access to all of its resources including benefits packages, legal support and its facilities. Employees of the foundation are granted all of the same benefits and perks as University employees. The Foundation is also granted access to sealed files and permitted to use the University's logo.
- In November 2001, Mark Gannon and Arlen Nichols submitted a request to the Iowa Board of Regents for access to all of their financial and meeting records since 1990.
- The board rejected the request claiming it was a private corporation not subject to the act.
- In May 2002, Gannon submitted a similar request to the Iowa State Foundation. THe foundation surrendered its tax forms for the past three years but withheld the remainder of the information, also claiming that it was a private corporation and not subject to the law.
- In August 2002, Gannon siled suit against both parties alleging that they were public bodies and that their records should be subject to the Iowa Open Records Law.
- The Trial Court ruled in favor of the University, permitting the documents to remain sealed.
Ruling of the court
The trial court determined that the Foundation did not qualify as a public body under the open records law. The court felt that the close ties to the University were not sufficient to render the Foundation a public body. The further supported this, claiming that obtaining donations and investing those funds is not a required function of the University and thus the University was not transferring its functions to an outside party. It went on to determine that the donations made directly to the foundation were not public records as they were donated to a private institution. The court did state that Gannon could gain access to the records of funds donated by the University with a simple records request from the University.
The Court of Appeals overturned the decision of the trial court, claiming that the Foundation clearly performs a government function based on the contract it entered into with the University and is thus subject to the Iowa Open Records Law. The court adopted a more expansive definition of functions for the University and included any function that may help accopmplish its stated goals of providing a high quality education. The Court also eliminated the need for an intent to conceal records in order for a private entity to be considered a public body. Thus, the court determined that the Foundation was in fact a public body and required the Foundation to release the records in question.