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Monday, April 10, 2000


Terms of UH
Rainbow credit
card kept secret

Efforts to find how much
MBNA is to contribute to
UH athletics are stymied

State, UH attorneys to meet over issue

By Ian Y. Lind


Jahan Byrne just wanted to know how much the University of Hawaii would receive if he signed up for a UH Rainbow credit card being advertised as "one of the easiest and most creative ways" to support the campus.

"We can't tell you that," Byrne recalls being told by a sales representative for MBNA America Bank. MBNA markets the credit card to UH alumni and students by promising a contribution to the university every time it is used.

When Byrne asked university officials for a copy of their contract with the bank, they also refused.

"Here's a case where UH starts what could be such a positive program but shoots itself in the foot by being unnecessarily secretive, so that people lose confidence in the program," said Byrne.

The simple quest for information has become a 15-month odyssey for Byrne, a UH graduate and former reporter for Ka Leo, the Manoa campus newspaper. He now lives on the West Coast and is manager of marketing communications for APL, a San Francisco-based shipping company.

The case illustrates the continuing bureaucratic roadblocks restricting public access to government information in Hawaii, and the ineffectiveness of the state Office of Information Practices, created more than a decade ago as a mechanism for solving openness issues.

The university's refusal to disclose the MBNA contract appears to run counter to a provision in state law requiring government contracts, bid results and other procurement-related records to be open to public inspection, with only limited exceptions.

A series of legal opinions by the Office of Information Practices dating back a decade makes clear that both state law and public policy require disclosure of the financial transactions of government agencies.

'Competitive harm' feared

But UH officials claim the MBNA contract contains "confidential commercial and financial information" that "may cause competitive harm" if made public.

"We do not believe we have an obligation to release it," Ruth Tsujimura, UH associate general counsel, told the Star-Bulletin.

Tsujimura says the contract is covered by an exemption that allows withholding of information that, if disclosed, would frustrate a legitimate government function.

This exemption is usually used to justify the temporary withholding of details about competing bids to avoid any harm to the competitive position of any party while the bids are being evaluated, but those details must generally be made public once the winning bidder is selected and the contract finalized.

Tsujimura declined to discuss how UH or the state might be harmed in any way by release of the MBNA contract.

The university has not responded to a request from the Star-Bulletin for a copy of the contract with any "confidential" information blacked out, and Byrne says his similar request made last year was ignored.

Income goes to athletics

An MBNA spokesman in the corporation's Delaware offices did not respond to several requests for comment. "They have a mind-set that it's none of the public's business," Byrne said.

The contract with MBNA was announced at a meeting of the UH Board of Regents in November 1998, records show. No specifics were made public at that time, although regents were told income from the program is earmarked for the Manoa athletics program, including student scholarships, minutes show.

At least $300,000 annually

Jim Donovan, UH associate athletic director, defended the contract as a good financial deal for the athletic program. "It is a five-year deal, with a $300,000 minimum annual guarantee," he said. "We receive a rebate when someone signs up for a new card, and a portion of the outstanding balances of all affinity cards."

Donovan said he could not reveal the specific amount of the new-member rebates or any other financial arrangements because they are covered by a confidentiality requirement written into the contract at MBNA's request.

"They (MBNA) are taking the stance that it's proprietary, and they want it protected unless it (nondisclosure) is a violation of state law," Donovan said. "I know MBNA will not be happy if it's released. They just reiterated that to me."

Byrne is not the only person to have questioned the credit card promotion. UH spokesman Jim Manke said the university has received calls "wanting to know who is getting the money and all that stuff."

The UH Foundation and UH Alumni Association have also received questions each time MBNA starts a new telemarketing campaign targeting alumni, another university official said.

'Donors in the dark'

Bennett Weiner, director of the Philanthropic Advisory Service, a project of the Council of Better Business Bureaus, said his agency recommends "disclosure in such promotions of the actual or anticipated portion of the sale or transaction amount that goes to the organization."

"The omission of that information places donors in the dark as to how the charity is benefiting," Weiner said. "If there isn't a disclosure, donors most often expect more is going to the charity than is actually the case. Disclosure avoids potential misperception as to how much the organization has been helped."

Weiner said his organization urges nonprofit groups to avoid contracts that prohibit disclosure. Banks, including MBNA, will allow public disclosure of the terms of their affinity card contracts if the organizations involved insist on it, Weiner said.

State information office to
meet with UH attorneys

By Ian Y. Lind


After asking the University of Hawaii for a copy of its affinity card contract with MBNA America Bank, Jahan Byrne has waited, and waited, and waited some more.

Byrne's initial request was made in early 1999 and acknowledged by the university on March 5, 1999.

On June 22, nearly four months later, Ruth Tsujimura, UH associate general counsel, asked Office of Information Practices Director Moya Gray for an opinion on whether UH must disclose the contract.

"We decided to defer to the OIP for their final interpretation," Tsujimura said recently.

It took another six months for OIP to reply. In a Dec. 16, 1999, memo, OIP staff attorney Carlotta M. Dias asked the university to provide evidence to support its continued withholding of the contract.

An OIP spokesman said on March 31 that the university had not responded, although Tsujimura says the additional information had already been submitted.

Gray now says her office is going to attempt "a quick processing of the issues."

Instead of further correspondence back and forth between the agencies, Gray says an informal hearing is being scheduled.

"Their attorneys will present a full and complete case to us at one time and give us an opportunity to question them on it. We're testing to see if this works as a way of expediting our opinions," Gray said.

There is no firm estimate of when an decision will be made, although Gray says it will be "soon" after the meeting with UH attorneys.

Gray said a set of rules setting up an appeals process to be followed in such cases, unveiled for public comment last summer, remains unfinished, a victim of OIP staff reductions and budget cuts.

UH student newspaper
Ka Leo O Hawaii

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