Posted on Jun 24, 2021 in Formal Opinions

Opinion Ltr. No. F21-02
June 24, 2021
ERS Investment Report Including Total
Distribution Data for Private Equity Funds

The Employees’ Retirement System (ERS) posted on its website a public version of a consultant-prepared report on ERS’s then-current investments, which left out some measures of performance of ERS’s investment in private equity funds, including the column of total distribution data found in the full version of the report.  A requester asked ERS to disclose the total distribution data for private equity funds ERS invests in, and when ERS denied her request, appealed that denial to OIP.  The requester noted that total distribution data had previously been published on the ERS website since 2012 and had been provided to her business, upon request, since 2011.

OIP initially considered whether to modify its approach to determining when information was confidential commercial or financial information that could be withheld under the UIPA’s frustration exception to public disclosure, based on the United States Supreme Court’s 2019 decision in Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356, which affected the analysis of confidential commercial or financial information under the federal Freedom of Information Act (FOIA).  OIP concluded that given the significant statutory differences between the UIPA and FOIA, the analysis used in OIP’s previous opinions on the subject was more consistent with the UIPA’s frustration exception than the test now used for FOIA’s exemption for confidential commercial or financial information.  OIP therefore did not modify its existing analytical approach.

Applying that approach to the information at issue, OIP then concluded that ERS properly withheld total distribution data from public disclosure under the UIPA on the basis that it was confidential commercial and financial information whose disclosure would frustrate a legitimate government function.  ERS established that the Consultant Report and similar reports were financial information with commercial value.  ERS further established that disclosure of the total distribution data would cause substantial competitive harm to Consultant and would impair ERS’s own ability to obtain such information in the future.

OIP went on to address whether ERS’s past disclosure of total distribution data for prior years acted as a waiver or showed that no real harm would result from disclosure and thus even if the information was confidential commercial or financial information, no ERS function would be frustrated by its disclosure.  OIP found that ERS had provided evidence showing that its prior disclosures of the same type of information for previous years had resulted in ERS’s partial or complete exclusion from some investment opportunities, thus frustrating its legitimate function of investing the funds entrusted to it.  Based on that, OIP further concluded that ERS had established that disclosure would in fact frustrate a legitimate government function, so ERS properly withheld the information under section 92F-13(3), HRS.  HRS § 92F-13(3) (2012).

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