HARRISBURG -- Pennsylvania's student-loan agency is seeking the state Commonwealth Court's stamp of approval in withholding information about expenditures at a retreat it held at a posh resort earlier this summer, saying the documents are legislative records and contain "trade secrets."
In the lawsuit filed Tuesday, the Pennsylvania Higher Education Assistance Agency named as respondents three reporters who recently filed requests under the state Right-to-Know Law. The suit asks the court to explicitly allow the agency to refuse to release the requested documents or to black out any information that it deems confidential.
The reporters work for The Associated Press, The Patriot-News in Harrisburg and WTAE-TV in Pittsburgh.
Two of the requests seek receipts and similar documents from the three-day June retreat at Nemacolin Woodlands Resort in Fayette County and similar gatherings PHEAA has sponsored in recent years. The Patriot-News reported in July that PHEAA has spent about $885,000 since 2000 on retreats as far away as California's Napa Valley. The most recent event cost nearly $136,000.
The other request seeks documents that detail expenditures for travel by PHEAA employees and board members, payments for training and employee-recognition programs and the use of agency credit cards.
PHEAA, a nonprofit corporation created and largely controlled by the Legislature, is the state's largest source of students loans, grants and loan forgiveness programs. It manages nearly $57 billion in assets and will receive $428 million in state tax money this year for grants and other direct aid to students.
In the lawsuit, the Reading law firm that represents PHEAA claims the requested documents are legislative records -- exempt from the Right-to-Know Law -- because 16 of the 20 members of the agency's board are lawmakers appointed by legislative leaders.
"When legislative appointees to PHEAA's board discharge their duties as board members, they act as legislators," the suit says.
The lawsuit also says the records should be exempt from the Right-to-Know Law because they contain "confidential competitive information," such as the dates, locations and purposes of meetings between PHEAA officials and their business associates.
PHEAA's lawyers argue that the release of such information would violate the state Uniform Trade Secrets Act, which took effect last year, making it illegal for a business competitor to obtain, use or disclose another competitor's trade secrets.
Sharing such information with student-loan giant Sallie Mae, which launched an unsuccessful $1 billion bid to take over PHEAA last year, would hurt PHEAA's competitive position and cause it to lose money, the lawsuit contends.
PHEAA also argues that it should be allowed to redact information whose release agency officials believe would violate the privacy rights of private citizens, including telephone or Social Security numbers.
Dave Tomlin, assistant general counsel at the AP's New York headquarters, called the lawsuit "a cynical attempt to use the courts to help PHEAA cover up facts the public has a right and need to know."
David Newhouse, executive editor of The Patriot-News, called PHEAA's decision to sue individual reporters, rather than the news organizations they work for, an attempt at "sheer intimidation" that will not succeed.
"I think it is outrageous that PHEAA is using the hard-earned loan payments of Pennsylvania's students to bring a lawsuit against reporters who are trying to hold the agency accountable for how it spends those loan payments," Newhouse said.
Said Bob Longo, news director at WTAE-TV: "PHEAA is throwing more public funds down the drain by covering up their spending practices and fighting this request in court."
Teri Henning, a lawyer with the Pennsylvania Newspaper Association, said PHEAA is a public agency subject to the Right-to-Know Law, adding that the types of records the law covers are "precisely what is being requested here."
"None of the arguments that they have advanced would protect these documents from disclosure," she said.
