Jennifer PeeblesTexas Watchdog5535 Memorial DriveSuite F, No. 601Houston, TX 77007July 22, 2009Office of the Texas Attorney GeneralOpen Records DivisionP.O. Box 12548Austin, Texas 78711-2548

Re: AG ID #351739: Texas Public Information Act request dated May 26, 2009, fromJennifer Peebles for information pertaining to the Houston Airport System and theHouston Airport System Development Corporation (also called HAS DevelopmentCorporation)

Dear General Abbott and staff:A hard copy of the following letter will be sent to your office, with all the exhibits and attachmentsreferenced herein, via U.S. Priority Mail, by Monday morning. Please note that the length of thisentire fax should be 8 pages, including this page. (And there may also be a cover sheet on it,too.)Thank you in advance for your consideration.Sincerely,Jennifer PeeblesPhone: (281) 656-1681Jennifer@texaswatchdog.org

Jennifer PeeblesTexas Watchdog5535 Memorial DriveSuite F, No. 601Houston, TX 77007July 22, 2009Office of the Texas Attorney GeneralOpen Records DivisionP.O. Box 12548Austin, Texas 78711-2548

Dear General Abbott and the staff of the Open Records Division:I am writing you today in regard to Public Information Act requests I have recently filed pertainingto a Texas-based nonprofit corporation called HAS Development Corporation, or HASDC,headquartered in Houston. In recent weeks, I have asked for records pertaining to the HASDevelopment Corporation from both the City of Houston and the corporation itself. Thecorporation, through its attorney, has argued to your office that is not a governmental agency and,therefore, is not covered by the Public Information Act.I am writing you today to argue that HAS Development Corp., often called HASDC, is indeed agovernmental agency and should be subject to the Texas Public Information Act.As you are aware, the U.S. Court of Appeals for the Fifth Circuit ruled in the 1988 case

Kneeland vs. National Collegiate Athletic Association

that there were "three distinct patterns of analysis"through which private entities in Texas can be deemed governmental agencies and be subject tothe state's open records laws. The HAS Development Corp. passes all three parts of the three-part test spelled out in the

Kneeland

decision. I will address each part individually.

I. The HAS Development Corporation has a relationship with the government that doesNOT impose "a specific and definite obligation . . . to provide a measurable amount ofservice in exchange for a certain amount of money as would be expected in a typical arms-length contract for services between a vendor and purchaser."

A. While it's true that HAS Development Corporation has a contract with the City of Houston, acloser examination of its relationship with the city shows that the corporation is receiving amultitude of financial and other benefits from the city government that are above and beyondwhat is spelled out in that contract. In short, HASDC receives "general support" and unrestrictedgrants from the city of Houston and the Houston Airport System, which is a division of citygovernment.The contract, formally titled a "technical services agreement," allows the corporation to effectivelyrent City of Houston employees' time and labor. But those workers perform this labor in officesowned by the city, using city resources in city offices and city facilities -- using city-fundedelectricity and other city resources.My review of former Airport System Director Richard Vacar's2008-09 personal calendar, which I viewed under the Texas Public Information Act, showed thatMr. Vacar held numerous meetings and conference calls at his office and in his conference roomat the airport system's administration building regarding HASDC-related business. Some of these

meetings lasted an entire work day, such as one in November 2008 in which he and other airportsystem and HASDC officials met with officials from Nicaragua pertaining to possible work byHASDC and its affiliated spinoff companies on a cargo airport there. (I am attaching a link to mystory on this topic:

http://tinyurl.com/lbsq97

).Other times, these employees are granted time off away from their city jobs to fly to Ecuador,Costa Rica and other nations to personally oversee HASDC's work in those countries. (Again,these trips were documented by me through a review of Mr. Vacar's personal calendar; see thelink above.)If the city airport system's director -- and sometimes its No. 2 and No. 3 officials as well -- areputting aside their city jobs for hours or days at a time to work on HASDC-related issues, usingCity of Houston facilities and resources or time off from their regular city duties, then HASDC isreceiving "general support" from the city.Indeed, the city says, according to the

Houston Chronicle

newspaper, that more than 300 cityemployees have put in more than 23,000 combined hours for HASDC over the past few years.While HASDC was, under contract, required to reimburse the city for these employees' time, theunstated cumulative impact of these employees' time and facilities usage certainly elevatesHASDC's relationship with the city beyond that of simple contractor and to one in which thenonprofit was receiving general support and unrestricted grants from the city.I refer you to Open Records Decision No. 228, written in 1979, which dealt with an issue verysimilar to this one. Then-Attorney General Mark White said that a private entity called the NorthTexas Commission was indeed subject to Texas' public records law. The commission had arguedthat it had a contract with various public entities but was nothing more than a contractor providinga finite, limited service to a government agency in return for a specified amount of money.General White wrote that the commission's contract with those public entities was not "a typicalarms-length contract for services between a vendor and purchaser."

"[The Commission] receives funds from several public entities and has entered into contracts with these entities which result in at least a portion of the public funds paid to the Commission being used for

general support

of the Commission rather than being attributable to specific payment for specific measurable services."

[Emphasis added.]I would also refer you back to Open Records Decision No. 621, written in 1993. In that case,then-Attorney General Dan Morales found that the Arlington Chamber of Commerce and therelated Arlington Economic Development Foundation were subject to the Texas public recordslaws:

While the city may be receiving valuable services in exchange for the public funds it provides the foundation, we find that the general provisions of the agreement fail to impose on the foundation a specific and definite obligation to provide a measurable amount of service in exchange for a certain amount of money, as one would expect to find in a typical arms-length contract. The agreement thus puts the city in the position of providing

general support

for the operation of the foundation.

[Emphasis added.]B. The highly unusual nature of the relationship between the city and HAS DevelopmentCorporation makes the corporation subject to the Texas Public Information Act.Let me put it this way: The Coca-Cola Company is a company that makes soft drinks. Microsoft isa company that makes computer software. The HAS Development Corporation is a corporationthat sells one thing: The expertise and labor of the employees of the Houston Airport System,who work for the corporation under a contract between it and the city.