After 19-month fight, released records finally reveal PHEAA’s lavish life
Even heavily edited, the papers show the state agency’s exotic travel and luxurious spending.
By Martha Raffaele, Associated Press Writer, March 1, 2007
Last updated: Thursday, March 1, 2007 10:36 AM EST
HARRISBURG — The state’s student loan agency Wednesday released some of the expense records requested by three news organizations that sued for access, but the documents were stripped of critical information and randomly arranged.
After 19 months of fruitless efforts to block public access largely on grounds that the documents contain “trade secrets,” the Pennsylvania Higher Education Assistance Agency made available at its Harrisburg headquarters 13,470 pages of receipts and vouchers for airfare, hotel rooms, meals and other expenses incurred by PHEAA’s 2,700 employees between 2003 and 2005.
The news organizations — The Associated Press, The Patriot-News in Harrisburg and WTAE-TV in Pittsburgh — filed requests for various financial information under the state Right-to-Know Law in the summer of 2005, setting the stage for a court battle that the state Commonwealth Court decided in the news companies’ favor.
The state Supreme Court reaffirmed that decision in an order last week.
Analysis impractical
But the random arrangement of the documents and redaction of key information made meaningful analysis impractical, if not impossible.
Among the more notable expenses was a $27,000 bill for more than 20 rooms at the Renaissance Jaragua Hotel and Casino in the Dominican Republic capital of Santo Domingo during a five-day period in February 2003.
There was a bill for 29 rooms at the same facility for five days in June 2003, but the document appeared to be incomplete and did not reflect a total cost.
Agency spokesman Keith New said such events helped PHEAA establish itself in the Caribbean, where it is now the largest loan guarantor.
“That’s a growing area for us,” he said.
PHEAA pays its operating expenses, which totaled about $261 million last year, out of its own income.
But state taxpayers have an interest in its activities because the agency also receives around $500 million a year in state money that it doles out in grants and subsidies.
Craig Staudenmaier, a Harrisburg lawyer representing the news outlets, said he was pleased that PHEAA was beginning to grant access to the records, but “extremely disappointed” by the breadth of information that was withheld and the lack of organization.
“It appears as if PHEAA has continued to block out any information,” he said.
Guarding ‘trade secrets’
Thirty PHEAA lawyers were involved in redacting personal data and “trade secrets,” including out-of-town travel destinations that it says would reveal confidential business contacts, New said.
“When you’re in the business, you know that there’s only one potential client in that city,” New said. “That’s information that we don’t want our competitors to know.”
PHEAA’s chief competitor is Sallie Mae, the nation’s largest student loan lender, which unsuccessfully sought to take over PHEAA in 2004.
The documents released Wednesday constituted about half of the agency’s response to WTAE’s broad-ranging request, and another 13,000 pages were expected to be released soon.
They did not include records of retreats taken by PHEAA’s board, which are being sought by the AP and The Patriot-News. Of the 20 board members, 16 are elected state legislators.
Between 2000 and 2005, PHEAA spent about $900,000 on board trips to lavish resorts in California’s Napa Valley, Maryland’s Eastern Shore, Virginia and West Virginia.
PHEAA’s new board chairman, Rep. Bill Adolph, R-Delaware, has said that, although entertaining clients is a necessary part of PHEAA’s business, the agency should consider reducing those expenses.
Adolph said Tuesday the board is revising its travel policy and will consider changes at its March meeting.
“We are a public organization that has to be held to a higher standard,” Adolph said after a legislative hearing on PHEAA’s budget. “We are going to regulate travel expenses to ordinary and necessary travel in order to stay competitive.”
— Associated Press writer Peter Jackson contributed to this report.
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