The Kansas Bioscience Authority is under scrutiny for excessive spending by its leaders, but exemptions from scrutiny are built into the statute that created KBA.

The Kansas Bioscience Authority Act allows the KBA to close meetings to the public whenever its board decides disclosure of its deliberations “would be harmful to the competitive position of the Authority.”

KBA can also reject requests for records under the Kansas Open Records Act (KOMA) for the same reason.

The Kansas Open Meetings Act (KOMA) and Kansas Open Records Act provide for open meeting and public access to government records. The KOMA statute states, “In recognition of the fact that a representative government is dependent upon an informed electorate, it is declared to be the policy of this state that meetings for the conduct of governmental affairs and the transaction of governmental business be open to the public.”

The Kansas Open Records Act (KORA) likewise states, “It is declared to be the public policy of the state that public records shall be open for inspection by any person unless otherwise provided by this act, and this act shall be liberally construed and applied to promote such policy.”

KBA’s exemption is explicit in the 2004 statute that created the quasi-government organization, but other similar organizations also claim exemptions from KOMA and KORA for similar reasons.

Organizations created to spur economic development typically use taxpayer funds controlled by non-elected officials to entice businesses to come to or expand in Kansas communities. KBA uses tax dollars to underwrite investments in emerging biotech companies

KBA has drawn attention for paying 12 of 21 employees more than $100,000 a year and committing $40 million to venture capital interests outside of Kansas last year.

In 2010 KBA’s top executive, Tom Thornton, received a salary of $265,000 and a $100,000 bonus. Thornton resigned April 15 but gave no reason for his departure.

Sen. Susan Wagle, R-Wichita, has been a strong critic of KBA. The Wichita Eagle reported on April 2 that Wagle rejected calls by the chairman of KBA’s board, former Kansas Governor John Carlin, to examine the agency’s affairs in secret. “I will not go behind closed doors. These are public funds, the money invested in the Kansas Bioscience Authority belongs to Kansas taxpayers, and they should be transparent in their dealings.”

The KBA website says it is, “An independent entity of the state, the KBA is governed by an 11-person board of directors comprised of local and national leaders in industry and academia.”

KBA’s board has revealed that the organization, located in Olathe, is being investigated by the Johnson County district attorney’s office. KBA has also agreed to a separate audit, and chosen the auditor.

Kansas law says non-profit or quasi-government organizations using taxpayer funds are subject to transparency laws but it also says such organizations may be exempted from records requests by making an annual financial disclosure available to the public. The level of detail in those annual reports is not specified.

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Related

Eisenhower’s Other Warning (kanssawatchdog.org)

KS Bioscience hires forensic auditor (kansasreporter.org)

Kansas Bioscience exec resigns, critics want further probe (kansasreporter.org)

House moves to send Kansas Bioscience Authority funding directly to CIBOR, NIAR, other projects (kansas.com)

Wagle strongly critical of bioscience (kansas.com)

Kansas Open Records Act (sunshinereview.org)

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Example from KBA August 18, 2008, meeting minutes

Executive Session

Mr. Smilor stated that there were items to be discussed that would qualify for the attorney-client privilege, and that also pertain to the financial condition and financial operations of the Authority and how such financial information and records relate to the business and operational strategies of the Authority.

A motion was made by Mr. McKechnie to go into Executive Session at 12:10 PM (CDT) for a period of 30 minutes, concluding at 12:40 PM (CDT) to review, consider and discuss potential investment information of a propriety nature. Dr. Franz seconded the motion and it carried unanimously.

WHEREAS, the Investment Committee of the Kansas Bioscience Authority (the “Authority”) in this meeting of August 18, 2008 needs to review, consider, and discuss (i) financial and operational information and records related to the financial condition and financial operations of the Authority and how such financial information and records relate to the business and operational strategies of the Authority; (ii) operational information and records related to the marketing and operations of the Authority and how such information and records relate to the marketing, business, and operational strategies of the Authority; and (iii) matters with counsel for the Authority that would be subject to the attorney-client privilege; and

WHEREAS, pursuant to Kansas law, in particular the Kansas Bioscience Authority Act, as codified in K.S.A. §74-99b01 to §74-99b89 and elsewhere (the “Act”), the Authority may discuss and consider the following in executive session when, in the opinion of the Board, disclosure of such would be harmful to the competitive position of the Authority: (i) plans that could affect the value of property, real or personal, owned or desirable for ownership by the Authority; (ii) the condition, acquisition, use, or disposition of real or personal property, and (iii) contracts for bioscience research, bioscience product manufacturing or commercialization, construction and renovation of bioscience facilities, and marketing or operational strategies; and

WHEREAS, pursuant to the Act, records of the Authority shall not be subject to the provisions of the Kansas Open Records Act, when in the opinion of the Board, the disclosure of the information in the records would be harmful to the competitive position of the Authority, provided those records include, but are not limited to (i) proprietary information gathered by or in the possession of the Authority from third parties pursuant to a promise of confidentiality; (ii) contract cost estimates prepared for confidential use in awarding contracts for research development, construction, renovation, commercialization, or the purchase of goods or services; or (iii) data, records, or information of a proprietary nature produced or collected by or for the Authority, its employees, officers, or members of the board; financial statements not publicly available that may be filed with the Authority from third parties; the identity, accounts, or account status of any customer of the Authority; consulting or other reports paid for by the Authority to assist the Authority in connection with its strategic planning and goals; and the determination of marketing and operational strategies; and

WHEREAS, the Board believes that the disclosure of any such items and records would be harmful to the competitive position of the Authority; be it

RESOLVED, it is the opinion of the Board that the disclosure of such items would be harmful to the competitive position of the Authority, and therefore the Board declares that its review, consideration, and discussion of such financial and operational information and records at this Board meeting shall occur in executive session; and

FURTHER RESOLVED, it is the opinion of the Board that the disclosure of such records and information would be harmful to the competitive position of the Authority, and therefore, such records and information to be reviewed at this Board meeting shall not be subject to the provisions of the Kansas Open Records Act; and

FURTHER RESOLVED, that the following persons shall remain and participate in the executive session of the Board inasmuch as their involvement is important to the Board’s review, consideration, and discussion: Jan Katterhenry, Jim Mitchell, Tom Thornton and Doug Anning, Esq.

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