First Amendment Clinic Represents Vermont News Website to Obtain Public Records
A Vermont news organization is taking the state of Vermont to court with the assistance of the Cornell Law School First Amendment Clinic. This semester, a team of the clinic’s students, in conjunction with practicing attorneys, are representing VTDigger, one of the largest news websites in Vermont, seeking access to documents the state filed with the federal government. Officials have repeatedly refused to disclose the documents, which are expected to reveal information about state officials’ missteps surrounding a securities fraud scandal that implicates the misuse of foreign investment in several development projects in the state.
The scandal at issue concerns Ariel Quiros, the owner of the Jay Peak resort, and Bill Stenger, the resort’s CEO, who are accused of conducting a “Ponzi-like” securities fraud with over $200 million dollars of foreign investment funds. The funding stemmed from Vermont’s participation in the federal EB-5 Immigrant Investor Program, where foreign investors could contribute at least $500,000 dollars in exchange for permanent legal resident visas.
The EB-5 program, operated by the United States Customs and Immigration Services (“USCIS”), was aimed at promoting economic development projects in the Northeast Kingdom of Vermont, the state’s poorest area. The development projects were overseen by the Vermont EB-5 Regional Center, the entity through which Vermont state officials administered the program.
The federal government terminated Vermont’s participation in the EB-5 program after the state failed to address discrepancies between the information the Regional Center filed with the federal government and what the USCIS determined independently during the time the state was responsible for overseeing the Jay Peak development projects.
To gain insight into state officials’ potential missteps, on July 10, 2018, VTDigger filed a public records request under the Vermont Public Records Act, seeking access to all I-924 forms provided by the Vermont EB-5 Regional Center to the USCIS since 1997, when the Regional Center was first established. The I-924 forms contained information related to the development of new projects under the oversight of the Vermont EB-5 Regional Center during the same period Quiros and Stenger allegedly defrauded hundreds of foreign investors in the development of the Jay Peak Resort.
Despite multiple requests, the state denied VTDigger access to the I-924 forms, claiming that the forms are exempt from disclosure under § 317(c)(14) of the Vermont Public Records Act, which precludes the public’s access to documents “relevant” to ongoing litigation. The state claims this exemption because the forms are “relevant” to ongoing litigation that the state is party to: State v. Quiros and Sutton v. Department of Financial Regulation.
The implications of states denying access to public records such as the ones sought by VTDigger can lead to withholding information that belongs to the public and is pertinent to knowing about the conduct of government officials. In its role of representing the interests of journalists and the right to receive information under open records laws, the First Amendment Clinic is serving as co-counsel to represent VTDigger in its attempt to gain access to these documents under the Vermont Public Records Act.
Update: On March 8, the parties in this case reached a settlement, resulting in the production of documents for VTDigger.A summary of the development can be accessed here.