KU, student, teacher with Koch ties reach settlement in case over $1,800 records request

Art Hall, director of the Center for Applied Economics at Kansas University, testifies to the House Tax Committee in this file photo from January 2010.

Instead of going to trial, the case of Kansas University School of Business teacher Art Hall v. KU is being settled out of court.

As part of the agreement — between three parties: KU, Hall and student Schuyler Kraus — KU released a limited number of the documents it had been withholding to Kraus, president of a student group that filed a Kansas Open Records Act Request last year and paid $1,800 for KU to fulfill it.

KU publicly shared those newly released documents with a news release announcing the settlement Thursday. They include a KU Endowment funding agreement for the creation of KU’s Center for Applied Economics, plus correspondence between Hall and representatives of the Charles G. Koch Charitable Foundation discussing the use of Center funds provided by the Foundation.

Hall is a lecturer in the KU School of Business and director of the Center for Applied Economics, a public policy think-tank within the KU School of Business. Previously he was chief economist for the Public Sector Group of Koch Industries Inc.

Kraus is president of the group Students for a Sustainable Future, part of a network of groups nationwide investigating the influence that brothers Charles and David Koch, conservative activist billionaires who own Wichita-based Koch Industries, have on academia. Kraus has said her group’s efforts aren’t politically motivated but rather seek to promote transparency.

Kraus filed a records request last year and received some documents in November related to KU’s hiring of Hall and two business professors. KU had prepared the remainder of the records she requested — largely email correspondence by Hall — and was poised to release them when Hall sued, and a Douglas County District Court judge agreed to temporarily block KU from handing them over until the court could decide whether the Kansas Open Records Act should apply.

The case had been scheduled for trial in November.

Tim Caboni, KU vice chancellor for public affairs, said in Thursday’s news release that KU was pleased by the agreement because it would enable the university to avoid further litigation.

“The university strongly supports the First Amendment rights of faculty and the freedom of faculty to pursue the independent and uninhibited exchange of ideas,” Caboni said. “But at the same time, the university is a state agency, and the Kansas Open Records Act requires us to produce certain records and to act transparently. This is a difficult balancing act, as this case has demonstrated, and we are glad to have the matter resolved.”

Kraus did not respond to messages seeking comment Thursday afternoon.

Hall said he was content with the settlement.

He called the students’ original request overly broad and “clearly a fishing expedition.” Hall said there were “lots and lots” of documents that had been requested that KU did not release under the agreement.

“This small subset matches much more closely with what I would perceive to be public records, as opposed to my private correspondence,” he said.

Hall, as he did in previous court filings, contends that he wears “three hats” — a lecturer paid by the business school, a director of the privately funded center and a private individual. He said he believes the correspondence that KU did not release to be private, although he acknowledged that without a judge fully adjudicating the issue the line remains somewhat gray.

The new documents released by KU confirm, as previously reported, that money from the Koch Foundation created the KU Center for Applied Economics, according to a KU Endowment Fund Administration Agreement signed in 2004 by Endowment and Koch representatives. The document stipulates that the director reports ultimately to the dean of the School of Business.

Several letters and emails from Hall to Koch Foundation representatives, dated 2007 to 2013, discuss grants from the Koch Foundation to the Center.

But those documents don’t paint a complete picture of the center and its funding.

Hall elaborated in an interview Thursday with the Journal-World. He said Koch Foundation donated $500,000 in seed money to create the center, of which he has been director from the beginning.

Over the years, his salary and a number of center research projects — reports from which are posted on the center’s website, including the authors and their bios — were largely funded by Koch Foundation donations.

Hall said the Koch Foundation donations have primarily been open-ended and that he has the discretion to use funds as he likes, although the foundation is not the sole funder of the center. Other entities have given to the KU Endowment funds for it, as well. One fund is called the KU Center for Applied Economics Fund, and the other fund — primarily used for stipends given to other economists who prepare reports for the center — is called the Kansas Economic Reform Initiative Fund.

Hall is the center’s only employee, and paying him is its main expense, he said. Now, he said, most of his salary comes from KU for teaching classes.

According to KU’s fiscal year 2016 budget, Hall’s salary is $111,000, with $97,000 coming from KU and $14,000 from private funds. He also teaches in the summer, he said, and is paid separately for that.

Hall said the Koch Foundation was not influencing what he taught or the research he does for the center, though they share the same political views.

“I will tell you unabashedly, I believe markets work,” Hall said.

He said his managerial economics course doesn’t involve ideology, and he stressed that all reports prepared by and for the center are transparent.

“They follow the evidence, and anybody is free to create a report contradicting my report. This is the academic freedom part,” Hall said.

“They are out there for public consumption and anybody can engage them. I take my reputation very seriously, and I also take KU’s reputation very seriously.”