The U.S. Supreme Court last month issued a 6-3 ruling that essentially creates a roadmap for companies that provide information to the government to conceal data from the public. The decision exempts commercial or financial business records that companies deem “confidential” from the Freedom of Information Act (FOIA). Overturning four decades of precedent promoting transparency among companies working with the government, this ruling will make it much harder for journalists and citizens to use FOIA to understand and uncover who is profiting from government policies and whether they are operating lawfully and ethically.
The Supreme Court’s June 24 decision in Food Marketing Institute v. Argus Leader Media comes as private companies account for a rapidly rising proportion of federal spending, and as Americans express horror at how the U.S. government and its contractors and suppliers are operating in situations such as the influx of migrants across the southern border. Companies have supported the government as it has pulled toddlers from their asylum-seeking guardians and denied children soap, blankets, and toothpaste, while holding them for days in frigid squalor. Under the Supreme Court ruling, Americans will be limited in their ability to probe such actions by the government and those working on its behalf. It now falls on Congress to explicitly expand FOIA to cover information that businesses provide to the government.
Background: The Case and the Precedent
The court case that ushered in this change was rooted in a journalist’s hunt for information on potential corporate misdeeds harming vulnerable populations. In 2010, when the financial crisis triggered a massive expansion of food stamps — known formally as the Supplemental Nutrition Assistance Program (SNAP) — companies accepting food stamps proliferated. Reporter Jonathan Ellis filed a FOIA request with the Department of Agriculture to track how much money was going to big box stores, gas stations, farmers markets, and other SNAP participants across the nation.
“The face of SNAP is usually the poor people who are on food stamps,” Ellis tweeted recently. “But behind them are big corporations that make billions every year, some of whom no doubt have employees on food stamps.”
The point of his FOIA request was to alert the public and policymakers if the data showed retailers were underpaying workers so severely that their own labor forces were using SNAP services even as those very companies received taxpayer dollars for participating in SNAP programs, or if retailers were taking larger quantities of federal payments than their surrounding populations would justify. Lawmakers then would have vital information to guide SNAP reforms that would better ensure that taxpayer money went to those in need, rather than into corporate pockets.
Ellis’ FOIA request received a partial response: The Department of Agriculture sent him a list of companies, but not the values they were receiving for participation in SNAP. He successfully sued the department for more detailed information.
The Department of Agriculture didn’t appeal, but an industry association did. Lobbying group Food Marketing Institute took up the case, despite being unnamed in the FOIA request. While FOIA has always provided an exemption for “trade secrets” or other “confidential business information,” that exemption (“Exemption 4”) was interpreted by lower courts to turn on the “substantial harm” a business would face in disclosure and whether the government would go to bat for the privacy of those parties. In other words, it wasn’t enough for the business information in the government’s possession to be marked “confidential”; public disclosure of the information would have had to cause concrete harm to the business.
Food Marketing Institute challenged that precedent, appealing directly to the courts to order the government not to release data. And it succeeded. In his majority opinion, Justice Neil Gorsuch created a new standard for “confidential” information, based merely on whether the information is “both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy.”
Now, the company need not demonstrate a commercial need for that confidentiality or a harm it will experience if disclosure occurs. Adam Marshall, a FOIA expert and litigator for the Reporters Committee for Freedom of the Press, describes this new standard as a complete redefinition of the “privacy” exemption, wiping out the emphasis on disclosure. At the very least, it will make it far easier for businesses to shield data from public scrutiny, even when they are required to share it with the government.
What Does This Have to Do With Kids in Cages?
Similarly to the way SNAP is a government program with significant involvement of private companies, immigration management has been increasingly outsourced to contractors. While the abuses exposed in Texas in late June were carried out by the Department of Homeland Security’s (DHS’s) Customs and Border Protection (CBP) unit, those agents are screened and vetted by private contractors. Since Trump’s inauguration, 13 agents have been arrested for drug trafficking and other charges, indicating those vetting practices have failed. Even the provision of CBP agents themselves has been partially ‘outsourced’ to a subsidiary of U.K.-based private security firm G4S, which not only provides security and transportation personnel, but has also built and staffed buses that it describes as “mobile detention centers” for CBP.
It doesn’t stop there. The largest immigrant child detention facility, in Homestead, Florida, is operated by a contractor. Homestead’s operator charges taxpayers $775 per day, per kid to detain immigrant children, most of whom have family in the United States who would host them. When a child detainee is transported to a different center (as those in Texas were, at least twice, in recent weeks), they’re transported by contractors with spotty records and strings of failed government contracts. When the children get sick, they receive poor, negligent, and often catastrophically delayed treatment from private contractors with healthcare records littered with wrongful death and neglect suits.
Private corporations also provide food services, money transfer services, commissary services, and phone services, as well as create notoriously flawed databases that track immigrants and label them as criminals, terrorists, and other types of removable aliens. One immigrant database resulted in the deportation of an estimated 3,600 U.S. citizens before its use was halted. CBP uses this same database, the DHS Automated Biometric Identification System (IDENT), to document child immigrant detainees, entering information via a portal called e3. The portal crashed in the middle of a May 2019 spot inspection by the DHS Office of Inspector General of a CBP facility that was holding 239 minors.
FOIA requests have exposed many of these failures, pressing the U.S. government to do better. For example, a FOIA request found that the above mentioned e3 portal was also how CBP schedules showers (or fails to assure showers) for detainees. Another FOIA release exposed that CBP is holding so many immigrants because DHS’s Immigration and Customs Enforcement (ICE) unit declares it has no room to take detainees in some locations or simply refuses to take them in others.
Consequently, roughly 70 percent of ICE detainees are held by private companies. Ultimately, private contractors have helped to create the bottleneck that triggered the border crisis. And because contractors are not technically part of the federal government, they are not generally subject to FOIA even when, as here, they are performing government functions. That’s why Exemption 4 is so important in this context—and why the Supreme Court’s decision in Food Marketing Institute is so troubling.
What’s at Stake
It is important for citizens to be able to conduct oversight of contractors and other private businesses working with the government, particularly as the government is outsourcing a rapidly growing number of its responsibilities to private, for-profit companies. Today, more than $1 of every $7 of federal spending is paid in contracts, the highest that ratio has ever been. The department facing the most opacity in the wake of this ruling is the one overseeing immigration enforcement: DHS allocated a third of its budget to contractors in 2018.
Under this new Supreme Court ruling, those contractors can easily escape the accountability of FOIA for the information they provide to the government. To see just how swiftly this could draw the curtains on oversight of the current immigration crackdown, consider another recent case. The specific contractor receiving the majority of immigrant detainees (and the most federal dollars) is GEO Group.
Just eight months before the June 24 ruling, GEO Group tried and failed to convince the Supreme Court to hear its appeal of a FOIA request that sought disclosure from ICE of how much GEO was paid per detainee, according to a “tiered pricing” system that incentivized meeting quotas. GEO also wanted ICE to withhold documents indicating the number of detention staff that contractors employ to carry out their obligations as a condition of their contracts with the government.
Two nonprofit respondents, Detention Watch Network and the Center for Constitutional Rights, successfully argued in the lower courts that while GEO certainly had an “interest” in withholding these documents, it had failed to establish “injury” or harm, and so lacked standing to appeal when the government declined to do so.
Back in 2017, the Supreme Court apparently agreed, declining to review the lower court’s decision. Yet, the Supreme Court’s ruling in Food Marketing Institute suggests that, if GEO had just “treated” this information as private before the FOIA request, as it did, GEO Group would have prevailed, and this crucial information would have remained behind closed doors. GEO didn’t meet the pre-Food Marketing Institute standard, because the government (and GEO) could not demonstrate that the bed rates were “confidential,” a term defined in the courts to indicate that its publication would cause “substantial harm” to GEO’s competitive position. As the appeals judge wrote, “Merely showing that competition exists or that contractors may face greater competition is inadequate to show that the information is confidential.” In the post-Food Marketing Institute era, that narrow interpretation of exemptions is gone, and ‘confidentiality’ is in the eye of the company.
What Congress Needs to Do
After the June 24 ruling came down, U.S. Senator Chuck Grassley spoke forcefully about the importance of FOIA and the threats it is facing as the process of approving (or rejecting) FOIA requests is politicized. In addition to the Supreme Court ruling, Senator Grassley mentioned new rules at the Department of Interior and Environmental Protection Agency that give political appointees oversight over FOIA and allow appointees to reject any FOIA requests they deem “unduly burdensome.”
The public does not have a lot of levers of power when the executive branch flexes its muscles. But one of the very few tools that citizens have is the right to demand accountability from their leaders and government institutions. In Grassley’s words, “the public’s work ought to be public.”
As reports of abuses proliferate at immigration detention centers, it is critically important that journalists and advocates have the ability to access documentation of the government’s actions and decisions. This is how Americans can press Congress to write new laws to better protect their rights to life, liberty, and the pursuit of happiness.
Current proposals to improve FOIA focus on the need to distance FOIA fulfillment processes from political jockeying. Legislators are paying additional attention to funding and staffing shortfalls in FOIA offices. Such changes would help shield FOIA offices from political manipulation, ensuring that they have the personnel needed to respond to requests in a timely fashion. This is important but insufficient.
As long as outsourcing and other types of work with private companies can shield an opaque executive branch from scrutiny, accountability will suffer. In addition to the changes already in discussion, Congress should explicitly clarify the scope of FOIA to cover information that the government requires from for-profit and non-profit entities working with the government. This would rebalance the interests of private companies’ privacy rights with the democratic right of citizens to participate in and be informed about their government.
IMAGE: Hundreds of people gather in lower Manhattan in New York City on July 12, 2019 for a “Lights for Liberty” protest against migrant detention camps and impending raids by Immigration and Customs Enforcement (ICE) scheduled for that weekend in various cities. (Photo by Spencer Platt/Getty Images)