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Environmentalists argue for development agency to hold open meetings

A federal agency created to promote development in low- and middle-income countries is accused of operating in the shadows with no accountability.

WASHINGTON (CN) — Advocates for government transparency on environmental issues argued before a D.C. Circuit panel Thursday that a federal international development agency should not be exempt from the Sunshine Act. 

The environmental organizations that brought the case – the Center for Biological Diversity, Friends of the Earth and the Center for International Environmental Law – claim the U.S. International Development Finance Corporation, created through the 2018 Better Utilization of Investments Leading to Development Act, spends billions of taxpayer dollars with no accountability. 

The BUILD Act established the DFC "to mobilize private sector capital and skills to assist in the economic development of less developed countries," according to the government's brief to the D.C. Circuit. The agency combines two predecessor programs, the Overseas Private Investment Corporation and the United States Agency for International Development's Development Credit Authority.

The Government in the Sunshine Act, or Sunshine Act for short, was enacted in 1976 and states that "every portion of every meeting of an agency shall be open to public observation."

The environmental groups claim the DFC is illegally refusing to hold public meetings, including those about environmentally harmful projects, based on an exemption granted by the Trump administration in 2020.

A federal judge in Washington ruled last year that the while the groups had standing to sue, the DFC did not meet the Sunshine Act's definition of an agency subject to open meetings rules.

In order to qualify as an agency, the majority of board members must be by the president with the consent of the Senate. The DFC board consists of nine members – with only four appointed by the president, plus four from other federal agencies and an executive officer.

On appeal at the D.C. Circuit, an attorney for the environmental groups argued the makeup of the board means it is subject to transparency rules.

"This case is really about one person," said William John Snape III, senior counsel and D.C. director for the Center for Biological Diversity. "The executive director of the DFC must be counted as the fifth member of the board for purposes of Sunshine Act compliance." 

U.S. Circuit Judge Julianna Michelle Childs, an appointee of President Joe Biden, noted that language in the BUILD Act includes the executive director as a part of the agency but does not classify them as a board member.

Her colleague, U.S. Circuit Judge Cornelia T.L. Pillard, a Barack Obama appointee, noted the statute's language offers other means of public engagement as an alternative to the Sunshine Act's requirements.

"OPIC, the predecessor agency, had almost the same identical language in its organic statute, and it still complied with Sunshine Act," Snape told the three-judge panel. "This, I think, was Congress setting a floor." 

The BUILD Act requires the DFC and its board to develop "a publicly available policy with respect to consultations, hearings, and other forms of engagement in order to provide for meaningful public participation in the board's activities." 

Pillard said the term "public" means that Sunshine Act compliance is unnecessary. 

"That word 'public' would be doing no work if the Sunshine Act already applied," the judge said. 

Representing the government, Justice Department attorney Nicholas Crown agreed with Pillard that the BUILD Act comes with its own transparency provisions.

"Congress created an alternative scheme," Crown said. "I think I would describe it as 'Sunshine Act plus' because there is a carefully calibrated scheme that requires DFC to work with stakeholders." 

Snape countered that OPIC still complied with the Sunshine Act despite having similar provisions in its statute. 

"If Congress didn't want this agency for the first time ever to not comply with the Sunshine Act, then they would have said so explicitly," Snape said. 

U.S. Circuit Judge Patricia A. Millet, another Obama appointee, said that Congress made itself clear that the DFC isn't covered by the Sunshine Act.

"If the design of the entity doesn't trigger the Sunshine Act, it sounds like Congress doesn't feel obliged," Millet said. 

Millett said she was worried that should the court rule in the plaintiffs' favor, it would contradict the historical understanding of what a presidential appointment means. 

"I'm concerned about something that would say that when the president says I'm appointing you CEO, he's also appointing you to another position that separately requires Senate confirmation," the judge said.

Snape argued that since the CEO's job duty is to serve on the board, he is de facto an appointed board member, but Millett pushed back.

"Presidents don't appoint people to their job duties," she said. "They appoint them to the legislatively, constitutionally selected position, and then the job duties flow from it." 

Millett flipped the argument to Crown and asked the government's attorney whether someone appointed simultaneously to CEO and board member positions would count towards the majority needed for the Sunshine Act. 

"It may be true that you are appointed to a position, and there are other consequences or other positions they will also be serving in the government," Crown replied. "But statutorily, the appointment is to the position of the BUILD Act CEO." 

The judges did not indicate when they would issue a ruling.

Snape said in a phone interview after the hearing that since the BUILD Act explicitly bars the Federal Advisory Committee Act from applying to the DFC, Congress could have easily barred the Sunshine Act's application too.

"It knew it wanted to exempt the agency from FACA," he said. "If it wanted to do it with the Sunshine Act, it could have just added 'and the Sunshine Act.'"

Snape said the organizations he represents are concerned about how the DFC is using over $7 billion in taxes a year across the globe. He said by having the transparency provided through the Sunshine Act, the organizations can check that the DFC isn't violating environmental laws such as the Endangered Species Act. 

"Liquefied natural gas facilities or coal-burning power plants are very environmentally harmful," the attorney said. "If it's able to do everything behind closed doors, our influence basically goes down to zero."  

He said he was looking forward to the appeals court's decision. 

"These three judges seemed to have really read the briefs and are really digging into the details," Snape said. "I actually think that helps us, but you never know." 

Crown did not respond to a request for comment.

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