For the first time since a Texas Supreme Court ruling in 2015, two state legislators think they can shine some light on the millions of dollars in business that private companies do with governmental bodies.
Senate Bill 943 and an identical House version aim to peel back a blanket of secrecy on government contracts granted by the court in its ruling in Boeing v. Paxton. The decision in favor of the aeronautics corporation has allowed companies to keep secret the financial details of contracts with governments with the excuse that release of those details might give an advantage to competitors.
The ruling has been routinely abused by companies dealing with governments at all levels in the state, according to open-government experts. Dozens of companies used the Boeing decision to try to block the release of financial information to two University of Texas researchers studying the state’s Enterprise Fund, a taxpayer-underwritten multimillion-dollar program to assist start-up companies, The Texas Monitor recently reported.
The city of Harlingen, citing the ruling, refused to tell its taxpayers how much of their tax money would go to operate a new convention center, according to another Texas Monitor report. In January, Denton Municipal Electric refused to release details of a $265 million contract to build a new power plant. Notoriously, the city of McAllen tried to use the ruling to keep the public from knowing taxpayers were out almost $600,000 for hosting an Enrique Iglesias concert in 2015.
SB 943 and HB 2189 would restore the requirement that companies doing business with governments reveal the total cost of their projects. It prohibits companies from holding back information on some specific categories of expenses in those contracts. And it gives the state attorney general the authority to determine when costs can be shielded by an exception.
State Sen. Kirk Watson, D-Austin, who co-authored the bills with state Rep. Giovanni Capriglione, R-Southlake, told The Texas Monitor he believes the legislators have struck a balance between the public’s right to know how their money is being spent and a corporation’s imperative not to reveal details of a contract that would cede an advantage to a competitor.
“We spent a lot of time after last session talking to people in the business community, and I think we’ve come up with a very good bill that has a very good opportunity to pass,” Watson said. “Does it meet the concept of perfection? I don’t think I’ve ever been involved in a serious way with a bill that met that concept of perfection.”
What Watson and Capriglione want to rectify is a failure in the last session to pass a bill that essentially would have rolled back what has become known as the Boeing Exception. In 2015 attorneys for Boeing, in arguing for the company’s right to protect proprietary information and trade secrets, were successful in persuading the high court to protect all cost information tied to the contract.
Watson was able to get his rollback bill passed in the Senate in 2017, but it died in the House. Gary Elkins, then chairman of the House Government Transparency & Operations Committee, refused to allow a hearing for the bill.
“A lot of people happen to think the Supreme Court got it right,” Elkins said at the time. Elkins lost a bid for his 13th term in November.
This time, Watson said he and Capriglione were careful to build consensus, although the Texas Association of Business opposes the bill in its current form. And while it doesn’t offer as much of a reform as they would prefer, the bill has the support of the Texas Sunshine Coalition, a bipartisan group of political advocacy and open government organizations, including the Freedom of Information Foundation of Texas.
Kelley Shannon, executive director of the FOIFT, told The Texas Monitor she expects the bill to be massaged before it’s heard in either legislative chamber. While her organization intends to press for even more public disclosure, Shannon said, “Overall, the bill is on target, with all the important angles covered.”
Houston attorney Joe Larsen, a longtime member of the foundation and one of the foremost open-government experts in the state, said he intends to recommend changes that would force companies to disclose more to the public. Larsen counts the Boeing Exception as important to the erosion of the Texas Public Information Act.
The public would benefit from language that would require more detailed financial disclosure and require companies to prove, before withholding information, that such disclosure would put them at a “substantial” competitive disadvantage, he said.
Larsen told The Texas Monitor he has been asked to offer revisions that he says will tilt toward more corporate accountability.
“If you believe in limited government, you need to know what your government is doing with your money,” he said.
You also need to offer a bill with a realistic chance of passing into law, Watson said.
“It’s easy to say this bill sets a low bar, but right now we’re talking no bar at all,” he said. “We’ve taken a lot of input, we’ve come up with practical solutions and we’ve got a lot of support.”
Mark Lisheron can be reached at [email protected]