Justices hear open meetings arguments

CARSON CITY -- A deputy attorney general told state Supreme Court justices on Tuesday that they will render the open meeting law meaningless if they allow state agencies to deliberate and vote on matters behind closed doors.

"How can government be for the people when citizens can't find out what happened?" Keith Marcher asked.

But state Tax Commission lawyer Thomas "Spike" Wilson countered that it is "nonsense" to think the state agency he represents could deliberate and vote in public to give a company a tax refund without mentioning confidential information about the business.

Wilson defended the Tax Commission's May 2005 decision to discuss and then vote behind closed doors to give Southern California Edison a $40 million tax rebate.

He told the Supreme Court during a half-hour hearing Tuesday that the Tax Commission could not have discussed openly why the refund should be given without mentioning private information about the company that had been revealed earlier during a closed hearing.

"If a hearing is open, then it is open," Wilson said. "If it is closed, it is closed."

He maintained that when the Tax Commission decides to close a hearing to receive confidential information about the company, the deliberations and vote are part of that closed hearing.

The state's open meeting law, passed in 1983, requires open meetings but allows businesses to ask the Tax Commission to close hearings if they believe they need to discuss proprietary information such as financial records and trade secrets.

Then state Attorney General George Chanos filed a lawsuit in July 2005 that challenged the Tax Commission's actions in the Southern California Edison case. He contended the open meeting law allowed the Tax Commission to close the hearing to receive proprietary information but deliberations and the vote had to be done in public.

The Tax Commission, which normally uses the attorney general's office as its legal adviser, objected to Chanos' position. Wilson's private Reno law firm was hired to represent the commission against the attorney general's office. Wilson is a former state senator.

Carson City District Judge Michael Griffin upheld the commission's position in 2006. The attorney general's office appealed to the Supreme Court. Wilson's firm has been paid $450,000 by the state to represent the Tax Commission.

The decision to grant Southern California Edison the large rebate on the operations of its Mohave Generating Station in Laughlin came at a time when energy rates were skyrocketing. It was met with public disfavor.

Also, Clark County and the city of Henderson asked the courts to review the decision and reject the rebate.

Marcher told the court that other state agencies, including the Gaming Control Board, have been able to hold discussions in public about businesses without mentioning propriety information.

"How is it that every other public body in the state can do it?" Marcher asked. "They do it all the time. They are all subject to the same law."

All members of the Tax Commission or other public bodies must do is "watch what they say" so no confidential information is released, he added.

While not making an immediate decision, four of the seven justices questioned Marcher's arguments.

Justice Jim Hardesty noted a U.S. Supreme Court decision that described the deliberation process as including the discussion of all relevant facts. As a private attorney, Hardesty represented the Reno Gazette-Journal in open meeting law cases.

Justice Nancy Saitta added it was "overly simplistic" to believe a public body could discuss a company "without letting confidential stuff out."

"This isn't like a jury deliberating," Marcher responded. "Every other public body in the state can do it."

In response to the Southern California Edison decision, the 2007 Legislature toughened the open meeting law. Now public agencies cannot routinely go into closed session to discuss matters about companies without first determining whether the information that will be mentioned is actually confidential or propriety information.

But Wilson maintained during the hearing that the Legislature did not change the substance of the law and that the Tax Commission still can deliberate and vote on matters behind closed doors when confidential information is discussed.

In a telephone interview later Tuesday, Assembly Speaker Barbara Buckley, D-Las Vegas, said that under the new law, public bodies still may go into a closed session to discuss a company's trade secrets and other propriety information, but then it is clear they must reopen the hearing, deliberate and vote in public. She was the primary sponsor of the new law, Assembly Bill 433.

If a public body believes it cannot hold "meaningful deliberations" in public without revealing confidential information, then Buckley said the new law permits it to hold an additional closed hearing, deliberate and make a decision.

But the public body must prepare an abstract that describes the general nature of the closed hearing and what actions were taken, she said.

"No longer can they hide what they have done," Buckley said.

The state Supreme Court is expected to make its decision in the next few months.