Texas lawmakers file bills to plug "loopholes" keeping government contracts secret

A pair of Texas lawmakers have filed legislation aiming to plug what they called major “loopholes” in public records law that have left taxpayers in the dark about key details of some contracts involving public funds.

“We are here today because I think some things have been broken – particularly in transparency and the Public Information Act,” state Rep. Giovanni Capriglione, R-Southlake, said at a press conference Tuesday.

He teamed up with state Sen. Kirk Watson, D-Austin, to file legislation — two bills in each chamber — pushing back against a pair of recent controversial Texas Supreme Court rulings that immediately made it easier for those involved with government contracts with private companies to shield parts of what those contracts say.

Following those 2015 rulings, government entities have withheld a wide range of information from government contracts that had long been considered public. Such secrets include how much the City of McAllen paid pop star Enrique Iglesias to sing at a holiday parade, how many driver permits Houston had issued to the ride-hailing giant Uber and details of a Kaufman County school district’s food service deal.

“Those were big steps away from that very important ideal that the public will have the information they need to hold government accountable,” Watson said of the Supreme Court rulings. “The public has the right to know what it’s paying.”

In June 2015, the justices ordered Texas Attorney General Ken Paxton to block the release of information in a lease between Boeing and the Port Authority of San Antonio because the aerospace manufacturer said making the details public could tip off its competitors.

That ruling expanded the secrecy of government contracts in two key ways, experts say: by broadening an exemption in public records law used to protect the government’s competitive interests and by affirming that businesses could invoke it, too.

Originally, lawmakers sought to prevent a bidder for government work from nabbing a competitor’s bids on a contract. And once that contract was finalized, it was considered public. But the Boeing v. Paxton decision lowered the threshold for what can be secret while affirming that private entities could invoke that protection when doing business with governments in Texas.

Since that ruling, Paxton’s office has been flooded by requests to shield the release of contract details — more than 300 have cited it, Watson said.

Denton’s municipal electric utility cited that ruling in a successful effort to block the release of its $265 million contract to build a new natural gas-fired power plant, said Bill Patterson, publisher of the Denton Record Chronicle, which had asked for the information.

“This project is the single largest capital purchase the city has made to date,” Patterson said, noting that electric ratepayers would be unable to watch for cost overruns or operational malfunctions.  

One of the new proposals (House Bill 792 and Senate Bill 407) would limit the competitive interest threshold that governments could use to withhold information and states that all finalized contracts would be released.

Another proposal (HB 793 and SB 408) would restore a legal test that made private entities subject to state open records law under certain circumstances — if they receive public funds to perform services traditionally regulated to government agencies, for instance. 

In March 2015, the Texas Supreme Court ruled that the Greater Houston Partnership, which received some public funds, could withhold details of contracts for economic services because it was not entirely dependent on public funds. In doing so, it narrowed the definition of groups subject to open records law.

The lawmakers said they had sought input from a variety of groups in crafting their legislation, including those who work on First Amendment issues, the Texas Municipal League and Texas Association of Counties.

Laura Prather, a First Amendment attorney and a Texas Freedom of Information Foundation board member, said her group was “pleased” with the new legislation.

“Texans need to know who the government is making deals with and how the money is being spent,” she said.

Capriglione suggested that people in government “generally behave better if they know some people could be watching.” He said he was worried that the Public Information Act could be rendered “effectively moot” in Texas if the Legislature did not act this session and the “loopholes” became more widely used.

He said he didn’t expect vocal opposition to the legislation, though that didn't necessarily mean they would pass without a fight.

“Whenever we try to broaden transparency, we've found that most of the people who battle it will do it in darkness,” Capriglione said.  

Read more about access to government information

• McAllen taxpayers cannot find out how much their city paid Enrique Iglesias to sing at a holiday concert, and that's just one example of the fallout from a Texas Supreme Court decision that is shielding many business secrets from the public.
• Trying to get beyond the rhetoric on border security or immigration at the state or federal level is often a fool's errand. Here are eight secrets in those often shadowy arenas.
• Health workers and first responders hoped Texas might be awarded $1 million to buy an anti-overdose drug, but state officials never submitted the grant application and have gone to unusual lengths to keep the public from seeing government records related to the grant.  

Disclosure: Boeing, the Greater Houston Partnership, the Texas Municipal League, the Texas Association of Counties and Uber have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.