Matthew Scheffler v. Pension Reserves Investment Management Board (SPR 20240043)

The Commonwealth of Massachusetts William Francis Galvin, Secretary of the Commonwealth Public Records Division Manza Arthur Supervisor of Records January 22, 2024 SPR24/0043 John Fitzpatrick Records Access Officer Pension Reserves Investment Management Board 84 State Street, Suite 250 Boston, MA 02109 Dear Mr. Fitzpatrick: I have received the petition of Matthew Scheffler appealing the response of the Pension Reserves Investment Management Board (Board/PRIM) to a request for public records. See G. L. c. 66, § 10A; see also 950 C.M.R. 32.08(1). On September 20, 2023, Mr. Scheffler requested “executive summaries of [the] investments in Vista Equity Partners, Ares Management, Oak Hill, and Blue Owl.” On October 10, 2023, Mr. Scheffler requested “a list of all approved third- party reimbursements specifying the third-party who covered the reimbursement, the cost, and for which PRIM Board members, committee members, and employees dating back to 2010. [He] would also like the copy of the written disclosures of those third-party reimbursements as required by 930 CMR 5.08(2)(d)1 by the States Ethics Commission.” Previous Appeal This request was the subject of a previous appeal. See SPR23/2899 Determination of the Supervisor of Records (December 15, 2023). In my December 15th determination, I ordered the Board to clarify its claims under Exemption (a) and G. L. c. 32. § 23(6) for withholding responsive records, and I encouraged the parties to communicate to provide records more efficiently and affordably. Subsequently, the Board responded on January 2, 2024, providing responsive records in redacted form, and withholding others. Unsatisfied with the Board’s response, Mr. Scheffler further appealed, and this case was opened as a result. Subsequent to the opening of this appeal, the Board provided a supplemental response to Mr. Scheffler and this office on January 17, 2024. In an email to the Board and this office on the same day, Mr. Scheffler objected to the Board’s supplemental response. The Public Records Law The Public Records Law strongly favors disclosure by creating a presumption that all One Ashburton Place, Room 1719, Boston, Massachusetts 02108 • (617) 727-2832 • Fax: (617) 727-5914 sec.state.ma.us/pre • pre@sec.state.ma.us

John Fitzpatrick SPR24/0043 Page 2 January 22, 2024 governmental records are public records. G. L. c. 66, § 10A(d); 950 C.M.R. 32.03(4). “Public records” is broadly defined to include all documentary materials or data, regardless of physical form or characteristics, made or received by any officer or employee of any agency or municipality of the Commonwealth, unless falling within a statutory exemption. G. L. c. 4, § 7(26). It is the burden of the records custodian to demonstrate the application of an exemption in order to withhold a requested record. G. L. c. 66, § 10(b)(iv); 950 C.M.R. 32.06(3); see also Dist. Attorney for the Norfolk Dist. v. Flatley, 419 Mass. 507, 511 (1995) (custodian has the burden of establishing the applicability of an exemption). To meet the specificity requirement a custodian must not only cite an exemption, but must also state why the exemption applies to the withheld or redacted portion of the responsive record. If there are any fees associated with a response, a written good faith estimate must be provided. G. L. c. 66, § 10(b)(viii); see also 950 C.M.R. 32.07(2). Once fees are paid, a records custodian must provide the responsive records. Current Appeal In his January 4, 2024 appeal petition, Mr. Scheffler contends that “the Redacted Materials and the Due Diligence Reports do not contain trade secrets and confidential commercial and financial information, that qualify for exemption from disclosure under Exemption (a) and G. L. c. 32, § 23(6) because the information is required by law to be shared as mandated by G. L. c. 32, § 23(3) & (4).” Additionally, in his appeal petition, Mr. Scheffler refers to Exemption (g) of the Public Records Law, and in his January 17th email to this office, argues that the Board “fails to address and recognize the clear connection between G. L. c. 32, § 23(6) and Exemption (g) of Public Records Law through Mass PRIM’s assertion [of] Exemption (a).” Please note that where the Board has not claimed Exemption (g) for withholding or redacting any records, and specifically states in its January 17, 2024 letter to this office and Mr. Scheffler that it “did not assert that Exemption (g) applies,” I decline to address the applicability of Exemption (g) in this determination. The Board’s January 2nd Response In its January 2, 2024 response, the Board cites Exemption (a) of the Public Records Law, and G. L. c. 32, § 23(6) for redacting three investment summaries and withholding two due diligence reports. See G. L. c. 4, § 7(26)(a). Exemption (a) Exemption (a), known as the statutory exemption, permits the withholding of records that are:

John Fitzpatrick SPR24/0043 Page 3 January 22, 2024 specifically or by necessary implication exempted from disclosure by statute G. L. c. 4, § 7(26)(a). A governmental entity may use the statutory exemption as a basis for withholding requested materials where the language of the exempting statute relied upon expressly or necessarily implies that the public’s right to inspect records under the Public Records Law is restricted. See Att’y Gen. v. Collector of Lynn, 377 Mass. 151, 54 (1979); Ottaway Newspapers, Inc. v. Appeals Court, 372 Mass. 539, 545-46 (1977). This exemption creates two categories of exempt records. The first category includes records that are specifically exempt from disclosure by statute. Such statutes expressly state that such a record either “shall not be a public record,” “shall be kept confidential” or “shall not be subject to the disclosure provision of the Public Records Law.” The second category under the exemption includes records deemed exempt under statute by necessary implication. Such statutes expressly limit the dissemination of particular records to a defined group of individuals or entities. A statute is not a basis for exemption if it merely lists individuals or entities to whom the records are to be provided; the statute must expressly limit access to the listed individuals or entities. G. L. c. 32, § 23(6) In its January 2nd response, the Board cites G. L. c. 32, § 23(6), which provides in pertinent part: Confidentiality of certain records. Any documentary material or data made or received by a member of the PRIM board which consists of trade secrets or commercial or financial information that relates to the investment of public trust or retirement funds, shall not be disclosed to the public if disclosure is likely to impair the government’s ability to obtain such information in the future or is likely to cause substantial harm to the competitive position of the person or entity from whom the information was obtained. The provisions of the open meeting law shall not apply to the PRIM board when it is discussing the information described in this subdivision. This subdivision shall apply to any request for information covered by this subdivision for which no disclosure has been made by the effective date of this subdivision. G. L. c. 32, § 23(6). In its January 2nd response, under Exemption (a) and c. 32, § 23(6), with regard to the redacted investment summaries, the Board states that it “has determined these investment summaries may be disclosed with all confidential commercial and financial information and trade secrets redacted.” The Board argues the following for redacting the investment summaries:

John Fitzpatrick SPR24/0043 Page 4 January 22, 2024 The Redacted Material include the specifics of Blue Owl’s and Vista’s assets, strategies, and performance metrics. Disclosure of the Redacted Material is likely to impair PRIM’s ability to obtain such information from the specific Investment Firms, and other investments firms, in the future, as it would signal that PRIM is unable to honor its confidentiality agreements with investment firms. Additionally, disclosure of this information is likely to harm the competitive position of the Investment Firms, as competitors would have access to the Investment Firms’ investment strategies. Additionally, in its January 2nd response, the Board argues the following for withholding the due diligence reports: [T]he Reports contain trade secrets and confidential information from the Investment Firms, including investment strategies and tactics, asset allocation, fund characteristics, investment returns, and performance metrics, among others. The reports also contain confidential information from PRIM’s consultants. . . . Disclosure of the Due Diligence Reports is likely to impair PRIM’s ability to obtain confidential information from investment firms and consultants in the future. Investment firms provide PRIM confidential financial and commercial information expecting that PRIM will maintain the confidentiality of that information, and PRIM has entered into confidentiality agreements with both Blue Owl and Vista. If PRIM is unable to fulfill its obligations to maintain that confidentiality, it is likely that these Investment Firms – as well as others – will lose trust in PRIM and will be unlikely to provide this information to PRIM in the future. . . . Additionally, disclosure of the Due Diligence Reports is likely to cause substantial harm to the competitive position of the entities PRIM received the confidential information from: Blue Owl, Vista, and PRIM’s third-party consultants. Disclosure of Blue Owl’s and Vista’s confidential information and trade secrets would hinder their ability to compete for investors in future funds. It would also provide their competitors an unfair advantage, which would result in harm to the Investment Firms, and also to PRIM, as an investor. PRIM’s consultants use their own confidential information and trade secrets, such as certain modeling, fund rating methodologies, research, and data to make informed analyses and provide advisory opinions on various investment firms. Disclosure of their confidential information would prejudice their competitive position by revealing these tools to the public. Based on the Board’s January 2nd response, I find that the information redacted from the investment summaries and the withheld due diligence reports are the types of records contemplated under G. L. c. 32, § 23(6). Consequently, I find that the Board has met its burden to redact and withhold the records under Exemption (a) of the Public Records Law and the statute cited above.

John Fitzpatrick SPR24/0043 Page 5 January 22, 2024 Conclusion Accordingly, I will consider this administrative appeal closed. If Mr. Scheffler is not satisfied with the resolution of this administrative appeal, please be advised that this office shares jurisdiction with the Superior Court of the Commonwealth. See G. L. c. 66, §§ 10(b)(ix), 10A(c) (pursuing administrative appeal does not limit availability of judicial remedies). Sincerely, Manza Arthur Supervisor of Records cc: Matthew Scheffler Kevin C. Conroy, Esq.