Senate OKs bill to exempt companies from disclosure laws

jbrammer@herald-leader.comMarch 22, 2012 

FRANKFORT — The Kentucky Senate gave final approval on Thursday to a bill designed to protect companies that compete for state contracts from disclosing how they spend public money.

The bill now goes to Gov. Steve Beshear.

Currently, any organization that gets at least 25 percent of its revenue from local or state government must share some records under the state Open Records Act, which is meant to bring transparency to public spending.

House Bill 496 would exempt from the 25 percent requirement any money awarded to organizations through a competitive and public procurement process.

The bill would specifically help Utility Management Group, which is paid more than $11.6 million a year to manage Pike County's water and sewer systems.

The Pike County Fiscal Court asked for financial information from UMG in response to repeated concerns about the financial health of the water and sewer district. The attorney general's office ruled in September that UMG is a public entity under the Open Records Act and must disclose spending information. UMG is appealing in Pike Circuit Court to keep its spending records confidential.

UMG lawyers, in a motion filed last week, asked a judge to delay deciding their appeal of the attorney general's ruling until after the 2012 General Assembly, saying that HB 496 was likely to become law and would effect the company's appeal.

The sponsor of the bill, Rep. Johnny Bell, D-Glasgow, said the public still would have access to state government records on contracts awarded, but not the financial records of the private companies that get much of their revenues from government.

David Thompson, executive director of the Kentucky Press Association, said the Kentucky Open Records Act was "never intended to go after" private companies.

The KPA does not oppose the bill.

During discussions on the measure in the House, Bell told lawmakers the change was needed because someone recently started sending "shotgun letters" to private companies that do business with the state, such as highway contractors, citing the Open Records Act and demanding to see their financial records.

Such an interpretation of the act is "overly broad" and burdens private companies to respond, said Bell. As a rule, he said, open records requests are submitted to the government that gives money to private companies, not to the companies.

Later, Bell said he could not name any companies that have been ordered by the attorney general or a court to release records because of the recent letters.

Bell told reporters that Glasgow lawyer John Rogers was sending the "shotgun letters," but he didn't know why.

One of the companies that Rogers has asked for records, Hinkle Contracting Co. of Paris, has alleged in a letter to Attorney General Jack Conway that Rogers is working on behalf of UMG.

Jack Brammer: (502) 227-1198. Twitter: @BGPolitics. Blog:

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