Why is a law protecting seniors from scams keeping government disaster aid hidden?


AUSTIN (KXAN) – When natural disasters, like hurricanes, hit Texas, state and local governments often step in and provide money to victims. And as surely as disaster aid is distributed, there are scammers and grifters swooping in to score some for themselves.

In 2019, Rep. Joe Deshotel, D-Beaumont, sought to protect disaster aid recipients — namely seniors — from fraud. But a law he authored that year to shield those individuals from scams is having an unintended consequence.

Deshotel said the law’s purpose was to keep the identities of individuals that received disaster aid confidential. A list of people that got disaster aid could be used by “scam artists,” he said.

But government transparency experts are concerned about how the law is being applied.

Now, government bodies across the state are increasingly citing this law and successfully blocking the release of information that would identify businesses, including nonprofits, that receive taxpayer funded disaster aid.

He said the point of the bill “was not for a city to block news media from… getting use of funds and things like that. So, it’s been misused.”

‘Right to know’

Kelley Shannon, executive director of the nonprofit Freedom of Information Foundation of Texas, said she understands the goal of protecting personal information and preventing elderly people from being scammed. But there’s no reason to keep disaster aid for businesses and nonprofits secret, she said.

“Citizens have a right to know how their taxpayer dollars are used. The legislators involved may have had good intentions with these bills. And we will work with them to ensure individuals are protected while government transparency prevails,” Shannon said.

Citing a 2019 law, the City of Austin redacted nearly all the information that would identify the recipients of more than $24 million in COVID-19 disaster relief (KXAN)

Deshotel said the concept of the original legislation, which only protected individuals’ private information, grew from discussions with the Texas General Land Office.

GLO spokesperson Brittany Eck backed that up. She said the GLO does not lobby or advocate one way or the other. GLO provides information to legislators, and that’s what the agency did in this case, she said. The GLO oversees the administration of disaster aid, among other duties.

Eck said Deshotel’s bill addressed a concern that the private information of federal aid recipients was protected, but that safeguard didn’t extent to applicants of state programs.

“We did work with them on how that same protection would be extended to individuals who, say, apply to our homeowner Assistance Program,” Eck said.

She said the GLO is bound by law to release public records, and the agency can’t ask why the records are being requested. Someone asking for list of disaster aid recipients could support a “worthwhile cause,” or it “could be somebody with nefarious intent, wanting to get a hold of the list of people who accepted assistance, and then call them under the guise of offering additional assistance,” she said.

Before it passed, Deshotel amended his bill to include a provision that would stop the disclosure of businesses that receive disaster aid.

Deshotel said he made that amendment to the bill following discussions with a lobbyist associated with the Texas Back in Business Program, which was run by a private disaster relief company contracted by the Texas General Land Office, according to the program’s website.

Texas Back in Business Program administered a $100 million Hurricane Harvey relief fund for small businesses and distributed grants of $50,000 to $250,000, according to the website.

KXAN was unable to reach a representative of the private company behind Texas Back in Business. The former CEO, Dan Slane, died in 2020, according to his obituary.

Deshotel said the amendment addressed concerns that proprietary information, like a company’s financials, could be released in a public information request.

“When these small businesses make their applications to receive these funds, it includes a lot of information included in their business model that they have to share,” Deshotel said. “A belief was that… in response to an open records requests, it would include that proprietary information.”

Deshotel said he would be open to tightening up the law.

Eck said she was not sure what the intent of that amendment was.

“What I can say, on behalf of our agency, is we have no objection to releasing nonproprietary information about those businesses that received funding,” Eck said. “The intent from our side of this bill was to protect individuals who have their home rebuilt through the General Land Office, or receive a reimbursement.”

Law’s use on the rise

A KXAN analysis of Attorney General records found the law has been cited at least 26 times since November 2019 by cities seeking to block the release of information. In nine of those cases, the Attorney General’s Office said cities must keep the information hidden.

Documents kept secret include scoring sheets related to a notice of funding in Houston, the names of businesses awarded money through the City of Eagle Pass’ Business Assistance Grant Program, documents from Lubbock’s COVID-19 Financial Assistant Program, and businesses that applied for disaster recovery assistance in Palmview, Texas.

The City of Austin blocked KXAN’s request for the names of individuals and businesses that received over $24.5 million from the city’s COVID-19 Relief in a State of Emergency, or RISE, fund.

The public will not know where that money went or exactly how it was used. The only pieces of information KXAN could get were project dates and amounts of money distributed. All other information was redacted, including who received a single disbursement of more than $9.6 million, according to city records.

“Normally, City staff would promptly disclose information of this nature because it concerns the expenditure of public funds,” said a City of Austin spokesperson. “However, in 2019, the Texas Legislature passed a statute requiring government entities to withhold certain information related to disaster relief funds.”

The Austin American-Statesman also reported the City of Austin used this law and withheld the names of hundreds of nonprofits that received a total of $6 million from the city’s ANCHOR Fund, short for Austin Nonprofit and Civic Health Organizations Relief.

Additional legislation

State Rep. Ray Lopez, D-San Antonio, filed legislation this year that would expand the law to include protecting the disclosure of businesses and individuals receiving utility assistance payments. His bill would also remove a provision that allows for the disclosure of street names and census block groups of disaster aid recipients.

Lopez said the explicit purpose of his bill is to protect individuals’ information from getting on lists that scammers could exploit.

“The intent here is quite honestly, the most granular level is trying to protect the rights of a particular of senior citizens. That’s where the whole impetus for us even thinking about doing this,” Lopez said. “If this bill ever gets off the calendar and gets into a committee, we will have a level of dialogue and, you know, things could be carved out. And I’m certainly open to that because my intent is not to remove transparency.”

Copyright 2021 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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