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UConn-Webster Bank Sponsorship Deal Will Remain Secret

Published: July 9, 2013

Outlet: CTNewsJunkie.com

After an eight month battle, The Associated Press dropped its Freedom of Information request for the contract detailing the University of Connecticut’s new relationship with Webster Bank.

Despite attempts to the contrary, the complaint was dropped “with prejudice,” which means it’s unlikely the contract will ever see the light of day unless the legislature changes the law.

The AP and its attorney attempted to drop the case “without prejudice” — which would have left the case open for future appeals — after an initial hearing revealed the case was “far more factually complex than orginially anticipated.”

But the AP’s request wasn’t granted and on June 12 the Freedom of Information Commission dropped the case “with prejudice,” which closed the case indefinitely.

With the case in limbo, the financial terms of Webster’s relationship with UConn will remain secret, including any information detailing the benefits Webster is receiving from the deal.

Webster Bank signage and an ATM already are visible on campus, and the company’s logo is being included in sports posters and advertisements. The deal replaces a previous contract UConn had with People’s Bank.

However, the Webster contract is unique in that it was between Webster and IMG College, a company UConn contracted with in 2008 to take over the school’s sports marketing. This means the document lays out an agreement between the two private companies, even though it was done on UConn’s behalf. IMG College pays UConn more than $8 million a year to handle its sports marketing and promotion and up to $15 million in royalties. Click here and here to read that contract.

Webster has since announced it is now the “Official Bank of UConn,” and plans to open a branch on campus.

press release from the university announced that its relationship with Webster “spans all UConn constituencies including more than 200,000 alumni, 28,000 students, and all sports.”

Pat Eaton-Robb, an Associated Press reporter, filed the complaint with the Freedom of Information Commission after UConn failed to provide him with the document when he requested it back in August 2012.

According to an Oct. 17, 2012, letter written to Eaton-Robb by Rachel Krinsky Rudnick, assistant director of compliance and privacy at UConn, the university withheld the contract because the signees were private entities, and she denied that the school retained a final copy of the contract.

“In honor of our business partners who oppose the document’s release . . . because it contains proprietary information, UConn is taking the position, as is our right under the Connecticut Freedom of Information Act, that it is inappropriate for us to release the document at this time,” the letter reads.

A hearing was held by FOIC Commissioner Matthew Streeter on March 5, 2013, where Eaton-Robb represented the AP, Assistant Attorney General Holly Bray represented UConn, and Steven D. Ecker — an attorney of Cowdery, Ecker & Murphy, LLC — represented Webster and IMG as “intervening” parties. A final decision was set to be considered June 12, 2013.

In the withdrawal letter, AP attorney Karen Kaiser said the organization intended “to serve new, and considerably broader, FOI requests” and sought to drop the current claim because in “light of unforeseen developments, we believe that the factual record created at the hearing on March 5, 2013, does not provide a sufficient basis for the FOIC to make an informed decision in this appeal.”

Connecticut’s FOI laws require the release of “any recorded data or information relating to the conduct of the public’s business prepared, owned, used, received or retained by a public agency,” unless it is in the best interest of the public not to release the information.

Mike Enright, the university’s athletic department spokesman, said the department receives FOI requests daily and most of them are fulfilled immediately. However, the department decided to deny the request because it “saw it as being in the best interest of the University,” according to Enright.

Asked why it was in the best interest of the university, Enright refused to comment for this article.

Ecker, the attorney for IMG and Webster, concluded in February that the public interest “clearly favors nondisclosure” because disclosing information regarding the agreement between IMG and Webster would “negatively affect UConn’s ability to generate maximum revenue” from corporate sponsorships.

Ecker argued that if the university is unable to ensure confidentiality to its sponsors, prospective sponsors would be “sorely tempted” to contract with private universities instead.

Ecker also argued that the document detailed “trade secrets” of the university, as well as the private companies, which are exempt from disclosure under state FOI law. Ecker’s argument is backed by a 2011 state Supreme Court ruling, which ruled against former state Rep. Jonathan Pelto’s argument that public institutions cannot retain “trade secrets.”

Because UConn is not a signee, IMG College must have been performing a “governmental function” in order to subject the contract to disclosure under FOI law.

The statutory definition of a governmental function is “the administration or management of a program of a public agency, which program has been authorized by law.”

According to a post-hearing brief filed by Ecker on April 19, 2013, the defendants argued that IMG College does not perform a “governmental function” because sports marketing is not a task that is either authorized by law or required of the government.

A bill proposed in February 2013 by state Sen. Martin Looney, S.B. 204, would have required the release of the document, but it never made it to the floor.

The bill would have amended the state’s FOI law to “require that any contract relating to a public institution of higher education becoming a marketing partner with an entity that is a party to such contract, whether or not such institution of higher education is a party to such contract, be subject to disclosure.”

Looney said he proposed the bill because he feared the contract would set a dangerous precedent, and the school would begin using private entities to contract on its behalf in areas beyond athletic marketing.

But, according to Looney, shortly after the bill was filed, university officials met with him and assured him they did not intend to use the practice in any other areas, so he backed off.

Asked if he thought the current deal UConn has with Webster Bank went beyond an athletic marketing deal, Looney said it was a concern.

“I’ll be watching,” he said in a phone interview last month. “It may be something we need to look into next session.”

FOIC Executive Director Colleen Murphy issued a statement in support of the bill, saying it “would close an unfortunate loophole” that shields such documents from public view.

“Currently, nothing requires that the terms of these contracts be disclosed to the public,” Murphy’s statement reads. “Although the contracts directly impact a public organization and were made on the public’s behalf, they are beyond the reach of the FOI Act.”

Ecker and Bray both pointed to Murphy’s statement as evidence that legislative action would be required to force the document’s release.

Kaiser, the AP’s attorney, argued that “based on my review of the available facts, it certainly appears that the University of Connecticut . . . has effectively outsourced an important government function to IMG.”

“The public has a legitimate interest in how IMG is performing that function for one of the leading public universities in the nation,” Kaiser’s April 19, 2013, letterreads.

But Kaiser’s involvement received pushback from the defense attorneys because Kaiser was a latecomer to the case.

“When our reporter filed this appeal, the case seemed straightforward and uncomplicated (which is why the reporter appeared personally before the FOIC),” Kaiser explained in a letter to the FOIC.

Kaiser’s absence from the case before the March 5 meeting was a fact Bray and Ecker pointed out in their successful effort to argue the AP’s withdrawal attempt was an unfair last-ditch effort to keep the case from being closed.

Ecker wrote to the FOI Commissioner on April 22, 2013, to oppose Kaiser’s involvement, insisting she was not permitted to practice law in Connecticut.

“The AP surely could have hired Connecticut counsel to appear on its behalf at the hearing on March 5, 2013 — as IMG and Webster Bank did. It is far too late in the day for the AP to attempt to ‘appear’ now and ask for a do-over because it does not like the record the reporter created,” Ecker’s letter reads.

The AP hired Connecticut counsel shortly after Kaiser filed the initial withdrawal letter. Initially, it was Daniel J. Klau of McElroy, Deutsch, Mulvaney & Carpenter, LLP. Klau wrote to the FOI Commission reiterating AP’s decision to withdraw on April 23. But Klau soon learned he couldn’t represent the AP because his firm had a conflict.

“My firm has a conflict, as it represents Webster Bank,” Klau’s letter reads. “Accordingly, it was improper for me to send the letter and I hereby withdraw both my appearance and the letter.”

On April 25, 2013, Cameron Stracher of Levine, Sullivan, Koch, & Schulz, LLP, sent another withdrawal letter on the AP’s behalf. In the letter, Stracher insists the AP sent the letter late in the process because “of the time it took to assess the issues and reach a decision on the proper course of action.”

Ecker and Bray both argued the attorneys representing IMG, Webster, and UConn “have done a great deal of work, at no small expense, and they are entitled to a ruling on the merits or a termination of this case with prejudice.”

The FOIC agreed and dropped the case with prejudice.