11/16/06

Court orders Pennsylvania loan agency to make public its spending records

By PETER JACKSON
Associated Press Writer

HARRISBURG, Pa. (AP) -- Pennsylvania's student-loan agency violated the state's Right-to-Know Law in withholding information about its spending on retreats for board members and other financial data, a state court has ruled.

In a 5-2 ruling Wednesday, a Commonwealth Court panel ordered the Pennsylvania Higher Education Assistance Authority to disclose a variety of records and pay a portion of the legal fees incurred by media organizations whose reporters sought the documents -- The Associated Press, The Patriot-News of Harrisburg and Pittsburgh television station WTAE.

"PHEAA failed to comply with its duty and responsibility under the Right-to-Know Law," Judge Doris A. Smith-Ribner wrote on behalf of the majority. "The Right-to-Know Law favors public access regarding any expenditure of public funds."

Sally Hale, the AP's Pennsylvania bureau chief in Philadelphia, called the decision "a small step forward for freedom of information in Pennsylvania."

Records sought by the news organizations include receipts and similar documents from board members' retreats at posh resorts in several states, as well as documents detailing agency credit-card spending and expenditures for official travel.

The court rejected PHEAA's argument that certain documents are "legislative records" exempt from the Right-to-Know Law because 16 of the 20 board members are legislators. The court also dismissed the agency's claim that the records are exempt from disclosure because they contain "trade secrets" that help it compete in the marketplace for student loans.

PHEAA did not immediately make the requested records available.

Its spokesman, Keith New, could not say whether PHEAA would appeal to the state Supreme Court or how soon it would release the documents. The court ordered both sides to file a joint status report within 30 days.

Agency officials are reviewing their options but were pleased that the court recognized the need for at least limited secrecy, he said.

The court said PHEAA may redact, or black out, information such as home addresses, phone numbers, Social Security numbers, credit card numbers and bank account numbers. It also may black out "limited information, such as reference to a product, which PHEAA is prepared to prove constitutes secret information that would be of competitive value to PHEAA."

PHEAA, which in 2004 was the target of an unsuccessful $1 billion takeover attempt by student-loan giant Sallie Mae, is one of the nation's largest financial-aid organizations with nearly $57 billion in assets.