FREEDOM OF INFORMATION COMMISSION
OF THE STATE OF CONNECTICUT

In the Matter of a Complaint by

REVISED FINAL DECISION

Paul Bass and New Haven Advocate,

 

Complainants

 

 

against

 Docket #FIC1999-257

Executive Director, New Haven Development
Corporation, Connecticut Community Investment
Corporation, Technology Investment Fund,
Incorporated, New Haven Enterprise Development
Corporation; and John DeStefano, Mayor, City of
New Haven,

 

 

Respondents

July 11, 2001

 

 

 

 

The above-captioned matter was heard as a contested case on November 29 and December 7, 1999, at which times the complainants and the respondents appeared, stipulated to certain facts and presented testimony, exhibits and argument on the complaint. During the November 29, 1999, hearing in this matter, the respondent executive director informed the Commission that the entity formerly known as the New Haven Community Investment Corporation is now known as the Connecticut Community Investment Corporation, and that the entity formerly known as the Technology Investment Fund and/or the New Haven Technology Investment Fund is now known as Technology Investment Fund, Incorporated. Accordingly, the case caption has been amended to reflect the current names of those entities. For purposes of hearing, this case was consolidated with Docket #FIC1999-396; Christopher Hoffman and New Haven Register v. Executive Director, New Haven Enterprise Development Corporation; and New Haven Enterprise Development Corporation.

 

After reconsideration of the entire record, the following facts are found and conclusions of law are reached:

 

            1. The respondent mayor is a public agency within the meaning of §1-200(1), G.S., (formerly §1-18a(1), G.S.).

 

2. The Commission takes administrative notice of the Final Decision in Docket #FIC1998-380; Paul Bass and New Haven Advocate v. Director Office of Business Development, City of New Haven; New Haven Community Investment Corporation; Technology Investment Fund; New Haven Enterprise Corporation; and New Haven Investment Corporation (July 28, 1998) as reconsidered on July 11, 2001, wherein the Commission concluded that the Connecticut Community Investment Corporation [designated therein as New Haven Community Investment Corporation and hereinafter as "CIC"] and Technology Investment Fund, Incorporated [designated therein as Technology Investment Fund and hereinafter as "TIF"] were for limited programs and limited time the functional ­equivalents of public agencies within the meaning of §1-200(1), G.S., (formerly §1-18a(1), G.S.). The Commission also takes administrative notice of the fact that such final decision is the subject of a pending appeal in Superior Court, which appeal is to be withdrawn based on the Revised Final Decision issued by the Commission contemporaneously herewith. During the November 29, 1999, hearing in these matters, the parties in Docket #FIC1999-257 stipulated that the decision from such Superior Court will govern the issue of the public agency status of CIC and TIF. For purposes of its decision in this matter, the Commission continues to conclude that CIC and TIF are the functional equivalents of public agencies.

 

3. By letter dated April 26, 1999, the complainants requested that the respondent executive director, in his capacity as executive director of CIC, TIF, and the New Haven Development Corporation [hereinafter "NHDC"], provide access to the following records:

 

a) with respect to NHDC: records of "all loans and all government grants handled or in the process of being approved to be handled by this corporation, including state grants to the Shubert theater and the committee headed by Richard Grossi doing a local arts feasibility study." The complainant Bass stated that he would be open to discussing the redaction of exempt information contained in such records. Additionally, the complainants requested that the respondent executive director make available all records of expense reimbursements for staff and attorneys of NHDC, since January 1, 1994.

 

b) with respect to CIC and TIF: all records of "expense reimbursements for staff and attorneys of NHDC [sic]...since Jan. 1, 1994. " [At the hearing in this matter, the complainants clarified that the records they were seeking and which are some of the records now at issue in this complaint, as described in paragraph 6, below, relate to the staff and attorneys of CIC and TIF. Since the respondents did not dispute this fact at the hearing in this matter and since all parties appeared to be in agreement with respect to such issue at such times, it is found that the request herein described was a request for the expense reimbursements paid to CIC and TIF staff and attorneys.]

 

4. By letter dated April 26, 1999, the complainants requested that the respondent executive director of the New Haven Enterprise Development Corporation [hereinafter "NHEDC"] provide access to records of loans currently being handled by NHEDC, or entered into by NHEDC since January 1, 1994 and thereafter transferred to another entity. Additionally, the complainants requested access to records of expenses paid to NHEDC employees since January 1, 1994.

 

5. By letter dated May 5, 1999, the complainants requested that the respondent mayor provide access to the same records described in paragraph 4, above.

 

6. Having failed to receive access to the records requested in paragraphs 3, 4 and 5, above, the complainants, by letter dated May 24, l 999 and filed with the Commission on May 27, 1999, appealed to the Commission, alleging that the respondents violated the Freedom of Information [hereinafter "FOI"] Act by denying access to the records described in paragraphs 3, 4, and 5, above. At the hearing in this matter, the complainants modified their request insofar as it related to the expenses paid by CIC, TIF and NHDC. Specifically, the complainants now seek records indicating expenses paid by such corporations only to Salvatore Brancati, Mark Cousineau and any outside counsel. Accordingly, the Commission's decision will address the complainants’ modified records request.

 

7. Section 1-210(a), G. S. [formerly §1-l9(a), G. S.], provides in relevant part:

 

[e]xcept as otherwise provided by any federal law or state statute, all records maintained or kept on file by any public agency. . . shall be public records and every person shall have the right to inspect such records promptly during regular office hours ....

 

8. The respondent executive director first contends that NHDC is not a public agency subject to the FOI Act.

 

9. Section 1-200(1), G.S. [formerly §1-18a(1), G.S.], defines a "public agency" or "agency" to mean:

 

…any executive, administrative or legislative office of. . . any political subdivision of the state and any state or town agency, any department, institution, bureau, board, commission, authority or official of... any city, town, borough, municipal corporation, school district, regional district or other district or other political subdivision of the state, including any committee of, or created by, any such office, subdivision, agency, department, institution, bureau, board, commission, authority or official ....

 

            10. In Board of Trustees of Woodstock Academy v. FOI Commission, 181 Conn. 544, 554 (1980) ("Woodstock"), the Supreme Court adopted the "functional equivalent" test to determine whether an entity is a public agency within the meaning of §1-200(1), G.S. [formerly § 1-18a(1), G.S.] The test for functional equivalence to a public agency consists of the following four criteria: (1) whether the entity performs a governmental function; (2) the level of government funding; (3) the extent of government involvement or regulation; and (4) whether the entity was created by government.

 

11. Subsequently, in Connecticut Humane Society v. FOI Commission, 218 Conn. 757, 761 (1991) ("Humane Society"), the Supreme Court elaborated that all four factors set forth in Woodstock are not necessary for a finding of functional equivalence, but rather that "all relevant factors are to be considered cumulatively, with no single factor being essential or conclusive. "

 

12. In 1998, the Appellate Court, in Domestic Violence Services of Greater New Haven Inc. v. FOI Commission, 47 Conn. App. 466, 475, 477, 478 (1998) ("Domestic Violence"), added:

 

[t]he key to determining whether an entity is a government agency or merely a contractor with the government is whether the government is really involved in the core of the program. . . [the exercise of] direct, pervasive or continuous regulatory control .... [and] government's control of the detailed physical performance... [internal punctuation omitted]

 

13. With respect to the first criterion of the functional equivalent test (whether the entity performs a governmental function), it is found that the NHDC, as stated in its amended and restated certificate of incorporation, is organized exclusively for charitable, educational, and scientific purposes; that the NHDC exists to lessen the burdens of government, to combat community deterioration and to promote the social welfare of New Haven citizens by aiding and assisting the expansion of existing industry and commerce in New Haven, and the development of new industry and commerce in such city, as well as to increase the tax revenues for such city. Additionally, it is found that the NHDC as stated in its amended and restated certificate of incorporation functions to promote the development of local entrepreneurship through the rendering of consultative, technical, educational and financial assistance, and the seeking of qualified applicants for loans and other assistance from government and private agencies. It is further found that NHDC is organized as an IRS 501(c)(3) not for profit corporation. Lastly, it is found that NHDC is not required to undertake any of these purposes by statute.

 

            14. The parties stipulated at the hearing in this matter that NHDC has not made any loans since January 1, 1994. Further, it is found that NHDC applied for two state grants: one for an Arts Facility Study, which has been granted and which NHDC will administer, the other for the Shubert Theater, which grant agreement has not been signed but for which NHDC anticipates state approval and a designation that NHDC will administer such grant. It is found that NHDC administers the existing government grant and anticipates administering the second government grant by contract on a fee for services basis.

 

14A. Based on the law of Domestic Violence, Humane Society, Envirotest Systems Corporation v. FOI Commission, 59 Conn. App. 753 (2000) and Meri-Weather Incorporated v. FOI Commission, Docket CV 99‑0494415 S, it is concluded that NHDC is not performing a governmental function, within the meaning of Woodstock and its progeny.

 

15. With respect to the second criterion of the functional equivalent test (the level of government funding), it is found that NHDC generates revenue from interest earned and from service fees for administration of government grant programs. It is concluded that NHDC does not receive substantial government funding.

 

16. With respect to the third criterion of the functional equivalent test (the extent of government involvement or regulation), it is found that NHDC's former executive director, Salvatore Brancati, resigned from his NHDC position sometime after the filing of the complaint in this matter, but that he was executive director of NHDC at such time of filing but that NHDC had its own staff and offices, maintained its own records and did not have any reporting requirements to the Office of Business Development nor to the City of New Haven. It is further found that Mr. Brancati was a public official in the Office of Business Development, City of New Haven, and that he held such position during his tenure with NHDC. It is further found that, while Mr. Brancati had no authority to independently bind the board of directors of NHDC, he did have authority to sign NHDC checks up to minimal amounts. It is further found that two members of the NHDC eleven member Board of Directors are members of New Haven city government, one as an alderman, and one as a part time employee in the Office of Business Development, City of New Haven, although such directors assumed such positions with the city after their involvement with the NHDC began and their presence was not required as a precondition to any board action being taken. It is concluded that, at the time of the filing of the complaint in this matter, NHDC was not substantially involved with, nor regulated by, government.

 

            17. With respect to the fourth criterion of the functional equivalent test (whether the entity was created by government), it is found that NHDC was created as a non‑profit 501(c) corporation in 1973, and was not created by government.

 

            18. Based upon the law of Woodstock (the functional equivalent test), Humane Society (factors considered cumulatively and no single factor essential), and Domestic Violence (the key is government control), as well as the forgoing findings, it is concluded that NHDC is not the functional equivalent of a public agency within the meaning of § 1­200(1), G.S. [formerly §1-18a(1), G.S.]

 

19. With respect to the records described in paragraphs 3a and 6, above, it is concluded that such records are not public records, as defined in § 1-200(5), G. S. (formerly §1-18a(5), G. S.).

 

20. In Docket #FIC 1998-380, the Commission concluded that CIC was the functional equivalent of a public agency only during the time prior to Mr. Brancati’s August 21, 1999 resignation as an officer, member of the board and executive director and only as to those loan programs and activities for which CIC received federal loans, guarantees or grants and that the TIF was the functional equivalent of a public agency only during the time prior to Mr. Brancati’s August 21, 1999 resignation as an officer, member of the board and executive director and only as to those loans and investments made by TIF for which TIF received federal loans or grants.

 

21. The respondent executive director of CTCIC and of TIF contends that the grant and loan records described in paragraphs 3b and 6, above, are exempt from disclosure by analogy to §32-11a(k), G.S., and to §32‑40(c), G.S. In addition, the respondent executive director contends that such records are exempt from disclosure since information on loan applications if released would lead to an invasion of privacy, since disclosure of information therein would reveal trade secrets, and since information contained therein is exempt from disclosure under federal law. With respect to disclosure of expenses, the respondent executive director asserts the attorney‑client privilege.

 

22. Section 32-11a(k), G.S., provides in relevant part that:

 

[a]11 information contained in any application for financial assistance submitted to the [Connecticut Development] authority or the department [of Economic and Community Development], and all information obtained by the authority or the department with respect to any person or project, including all financial, credit and proprietary information, shall be exempt from the provisions of subsection (a) of section 1-210 [formerly § 1-19(a), G. S.]...

 

23. Section 32-40(c), G.S., provides in relevant part that:

 

[a]11 financial and credit information and all trade secrets contained in any application for financial aid submitted to . . . [Connecticut Innovations, Incorporated] or obtained by the corporation concerning any applicant, project, activity product or invention shall be exempt from the provisions of subsection (a) of section 1-210.

 

24. The parties have agreed that as to CIC and TIF only that §32-11a(k), G.S., and §32-40(c), G.S., by analogy exempt from mandatory disclosure the grant and loan records described in paragraphs 3b and 6, above, except as set forth in Paragraph 25 below.

 

25.  CIC and TIF have offered to produce the following documents: For each loan made by CIC from January 1, 1994 until Mr. Brancati resigned, CIC has offered to provide SBA Form 1429 - Use of Proceeds as to each SBA 504 loan and SBA Microloan Portfolio Identification Report (redacting the SSN, EIN & size in revenue information) and for each loan or investment made by TIF during the same period, TIF has offered to provide the EDA Part IV: Portfolio Loan List (redacting the Loan Status and Repayment Status information). It is found that these documents if they had been provided would have been sufficient disclosures under §32-1la(k), G.S. and §32-40(c). As to expenses, in #FIC 1998-380, the Commission found that during the same period, only those CIC activities reimbursed with federal funds were found to be a part of CIC activities as a functional equivalent of a public agency. CIC has offered to disclose the records submitted in support of its claim for federal reimbursement (limiting the personnel records to the employee's name, hours reimbursed and the aggregate total amount of the reimbursement for personnel). It is found that these documents, if they had been provided, would have been sufficient. As to TIF, in #FIC 1998-380 only the lending/investment activity of TIF was included in its being the functional equivalent of a public agency and therefore no internal records are subject to the FOI Act. It is therefore concluded that the above recited records for the period from January 1, 1994 to the date Mr. Brancati resigned as an officer, member of the board and executive director August 21, 1999, of CIC and of TIF, are not exempt from mandatory disclosure under the FOI Act and that CIC's and TIF's executive director violated §1-210(a), G.S. [formerly §1-l9(a), G.S.], by denying the complainants access to the records identified in this paragraph. Copies of SBA Form 1429, SBA Microloan Indemnification Report, EDA Part IV: Portfolio Loan List and SBA Request for Advance or Reimbursement are attached hereto and made a part of this decision.

 

26. The exemption for attorney-client privileged communications contained in § 1-­210(b)(10), G.S. [formerly §1-19(b)(10), G.S.], is limited to the following circumstances in accordance with established Connecticut law:

 

Where legal advice of any kind is sought from a professional legal adviser in his capacity as such, the communications relating to that purpose, made in confidence by the client, are at his instance permanently protected from disclosure by himself or by the legal adviser, except the protection may be waived.

 

Lafaive v. DiLoreto, 2 Conn. App. 58, 65 cert. denied, 194 Conn. 801 (1984).

 

27. The attorney-client privilege protects communications between client and attorney, when made in confidence for the purpose of seeking or giving legal advice. Ullmann v. State, 230 Conn. 698, 711 (1994). It is strictly construed because it "tends to prevent a full disclosure of the truth ...." Id. at 710.

 

28. It is found that the respondents failed to prove that the requested records as described in paragraphs 3a and 6, above, contain confidential communications within the meaning of the attorney-client privilege exemption set forth in §l -210(b)(10), G. S. [formerly §l-l9(b)(10), G. S.]. The executive director of CIC and TIF stipulate that none of the records set forth to be disclosed in paragraph 25 involve attorney-client privilege and they have withdrawn this defense. Consequently this issue is moot in this proceeding.

 

29. It is found that, the board of directors of NHEDC voted to cease operations of such corporation in 1996, and that, at the time of the filing of the complaint in this matter, the activities of NHEDC were limited to collecting outstanding debts and winding up operations.

 

30. With respect to the first criterion of the functional equivalent test described in paragraph 10, above, (whether the entity performs a governmental function), it is found that the NHEDC, as stated in its certificate of incorporation, is organized exclusively for charitable and educational purposes; that the NHEDC exists to lessen the burdens of government, to combat community deterioration and to promote the social welfare of New Haven citizens by aiding and assisting the expansion of existing industry and the development of new industry and commerce owned by minority and disadvantaged persons, to the end that employment opportunities, particularly for those who are underemployed and unemployed, will be stabilized, increased and diversified and tax revenues for the city of New Haven will be increased. It is also found that New Haven city government performed the functions of NHEDC immediately preceding the creation of NHEDC in 1989. It is further found that despite the establishment of fixed asset and working capital loan programs for small businesses, the City did not establish a loan program specifically targeted to minority and disadvantaged business owners during the time prior to NHEDC ceasing to do business and liquidating. It is further found that promoting economic development through loans to minority and disadvantaged business owners is a governmental function and that NHEDC performed that function for the City of New Haven.

 

            31. With respect to the second criterion of the functional equivalent test (the level of government funding), it is found that by contract NHEDC received staffing and office space from the city of New Haven until 1997, and operated out of City Hall until such time. Under the terms of the contract NHEDC received this support at no cost and reported the City's contribution as the majority of its public support in NHEDC's Form

 

 

990 annual reports. Accordingly, it is concluded that NHEDC received substantial government funding.

 

32. With respect to the third criterion of the functional equivalent test (the extent of government involvement or regulation), it is found that NHEDC's former executive director, Salvatore Brancati, resigned from his NHEDC position sometime prior to the filing of the complaint in this matter. It is further found Mr. Brancati was a public official in the Office of Business Development, City of New Haven, and that he held such position during his tenure with NHEDC. It is further found that, while the NHEDC was in full operation, it was completely staffed by city employees and that the board of directors of the NHEDC was appointed by the mayor of New Haven, pursuant to the NHEDC certificate of incorporation. It is found that the executive director of the NHEDC had no authority to independently bind the board of directors of NHEDC; however, he did have some authority to sign NHEDC checks up to minimal amounts. It is further found that although NHEDC had adopted its own loan guidelines, that there was evidence of the independence of NHEDC's loan review committee and that several loan requests were denied, there was no evidence that any loan application was ever presented to NHEDC unless and until the City staff support determined to do so. It is concluded that, during its period of full operations, the NHEDC was substantially involved with, and regulated by, government.

 

33. With respect to the fourth criterion of the functional equivalent test (whether the entity was created by government), it is found that NHEDC was created as a nonprofit 501 (c) corporation in 1989, largely at the initiation of city officials, who desired to delegate the activities which the city had previously been performing, as described in paragraph 30, above. It is further found that there is no mention of NHEDC in either the City Charter, the City Code or City ordinances or resolution except for the resolution authorizing the staffing agreement. Accordingly, it is concluded that NHEDC was created with the direct participation and support of the City.

 

34. Based upon the law of Woodstock (the functional equivalent test), Humane Society (factors considered cumulatively and no single factor essential), and Domestic Violence (the key is government control), as well as the forgoing findings, it is concluded that NHEDC is the functional equivalent of a public agency within the meaning of §1-200(1), G.S. [formerly §1-18a(1), G.S.]

 

35. With respect to the records described in paragraph 4, above, it is concluded that such records are public records, as defined in §1-200(5), G. S. (formerly §1-18a(5), G.S.).

 

            36. The representative of NHEDC contends that the loan records described in paragraph 4, above, are exempt from disclosure by analogy to §32-1la(k) G.S., and to §32-40(c), G.S. In addition, the respondent executive director contends that such records are exempt from disclosure since information on loan applications if released would constitute an invasion of privacy, since disclosure of information therein would reveal trade secrets and commercial or financial information given in confidence, and since information contained therein is exempt from disclosure under federal law, 12 U.S.C. §3401.

 

 

 

37. The parties have agreed that §32-1la(k) G.S., and §32‑40(c), G.S., by analogy partially exempt from mandatory disclosure the loan records described in paragraph 4, above. Therefore, it is concluded that NHEDC disclose the information in its possession analogous to the information set forth in §32-1la(c) G.S., from January 1, 1994 through May 1, 1996 (the time NHEDC ceased doing business).

 

38. It is found that NHEDC made its loans with moneys raised through the issuance on nonsubsidized, private debentures, not guaranteed by government. Accordingly, the respondent executive director contends that information related to such loans should not be subject to disclosure pursuant to the FOI Act.

 

39. It is concluded, however, that the finding set forth in paragraph 38, above, does not articulate a federal law or state statute providing an exemption from disclosure within the meaning of § 1-210(a), G.S. [formerly § 1-l 9(a), G.S.] It is therefore further concluded that the records containing information analogous to the information set forth in §32-1la(c) G.S. from January 1, 1994 through May 1, 1996, are not exempt from mandatory disclosure under the FOI Act, and that the NHEDC violated §1-210(a), G.S. [formerly §1-l9(a), G.S.], by denying the complainants access to such records.

 

40. With respect to disclosure of expenses paid to NHEDC employees, it is found that NHEDC had no employees and that therefore no such records exist. Accordingly, it is concluded that the respondent executive director did not violate the FOI Act by failing to provide such records to the complainants.

 

41. It is further found that the respondent mayor does not maintain or keep on file the records requested as described in paragraph 5, above, within the meaning of §1-210(a), G.S. [formerly §1-l9(a), G.S.]. Accordingly, it is concluded that the respondent mayor did not violate the FOI Act by failing to provide such records to the complainants.

 

The following order by the Commission is hereby recommended on the basis of the record concerning the above-captioned complaint:

 

            1. The complaint against the respondent mayor is hereby dismissed. The complaint against the respondent executive director of NHDC and against NHDC is hereby dismissed.

 

2. The respondent executive director of CIC and TIF shall provide complainants with the records set forth in paragraph 25. NHEDC shall provide complainants with access to the records described in paragraph 37.

 

3. As Docket #FIC 1998‑380 determined that CIC and TIF were no longer functional equivalents of public agencies as of August 21, 1999, the date of Mr. Brancati’s resignation as officer, member of the board and executive director, the provisions of the FOI Act do not apply to any activities subsequent to that date. As it has been found that NHEDC ceased doing business as of May 1, 1996 and subsequently liquidated and therefore was no longer the functional equivalent of a public agency, the provisions of the FOI Act do not apply to any activity after NHEDC ceased doing business on May 1, 1996.

 

Approved by Order of the Freedom of Information Commission at its regular meeting of July 11, 2001.

 

 

 

 

____________________________

Petrea A. Jones

Acting Clerk of the Commission

 

 

 

 

 

PURSUANT TO SECTION 4‑180(c), G.S., THE FOLLOWING ARE THE NAMES OF EACH PARTY AND THE MOST RECENT MAILING ADDRESS, PROVIDED TO THE FREEDOM OF INFORMATION COMMISSION, OF THE PARTIES OR THEIR AUTHORIZED REPRESENTATIVE.

 

THE PARTIES TO THIS CONTESTED CASE ARE:

 

Paul Bass and New Haven Advocate

c/o James S. Rollins, Esq.

Bingham Dana LLP

One State Street, 21st floor

Hartford, CT 06103

 

Executive Director, New Haven Development

Corporation, Connecticut Community Investment

Corporation, Technology Investment Fund, Incorporated

c/o Joseph  L. Rini, Esq.

Hogan & Rini, PC

234  Church Street, Suite 803

New Haven, CT 06510-1804

 

Executive Director, New Haven Enterprise

Development Corporation

c/o Michael Koenigsberg, Esq.

20 Elmwood Road

New Haven, CT 06515-2242

 

John DeStefano, Mayor, City of New Haven

c/o Thayer Baldwin, Esq.

Office of Corporation Counsel

165 Church Street

New Haven, CT 06510

 

 

 

 

___________________________

Petrea A. Jones

Acting Clerk of the Commission

 

 

 

 

FIC/1999-257/RFD/paj/07/31/2001