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Stenberg says Nebraska Investment Finance Authority is skirting state transparency law

March 10, 2017 GMT

LINCOLN — A dispute between two state officials exploded into the public eye at a legislative hearing Wednesday.

The argument concerns whether the Nebraska Investment Finance Authority must put information on a website maintained by State Treasurer Don Stenberg.

At the hearing, Stenberg accused NIFA’s executive director of covering up financial information and refusing to obey a state transparency law.

He compared the situation to recent scandals involving the state Tourism Commission and Brand Committee — two small agencies that operate under independent boards.

“In my opinion, when a government bureaucrat fights this hard to prevent the disclosure of financial information, he is hiding something,” Stenberg said.

Tim Kenny, NIFA’s executive director, responded that he has no objection to making NIFA financial information available to the public.

But he refuses to put the information on the StateSpending.Nebraska.gov website without being able to verify that the site is properly secured against cybercrime.

Ransomware, in particular, is a growing threat, with more than 4,000 incidents per day worldwide, he said. It is a type of malicious software that locks up a computer system until the owner pays money.

He said Stenberg has refused, over the past several months, to provide verification that the StateSpending site is secure.

“He wants to let robots and Estonians in,” Kenny said. “We don’t think we should be sending your data to China or Russia or Eastern Europe.”

But Stenberg countered that NIFA is unnecessarily concerned that a cybercrook could access the data and use it in a way that could result in some financial loss to somebody.

He said the website only provides what is public record and does not include personal information such as Social Security numbers.

“That’s a complete red herring,” Stenberg said. “There is no confidential information here.”

He said NIFA is the only one of roughly eight quasi-governmental agencies that hasn’t cooperated with a law that expanded the disclosure requirement last year.

Kenny raised the same kinds of concerns about cybersecurity when lawmakers considered the bill last year. He proposed making the information available through a link from the StateSpending site to the NIFA site, where it would be secure.

He said lawmakers assured him that such an arrangement would be possible under the new law.

But Wednesday he told members of the Government, Military and Veterans Affairs Committee that Stenberg had balked at such an arrangement.

To fix the problem, Kenny urged passage of Legislative Bill 437, which would authorize NIFA information to be made public through a link.

Kenny offered the only testimony in favor of the bill. Stenberg was the only opponent.

Stenberg urged the committee to change the law so that the governor, rather than the NIFA board, would appoint the NIFA director.

The treasurer said he plans to ask State Auditor Charlie Janssen to undertake a detailed audit of NIFA, including a review of the salaries paid to agency staff.

Stenberg said he also plans to file a public records request for NIFA financial information.

Kenny said he would welcome a state audit. He said NIFA is a regulated financial institution that reports to the federal Securities Exchange Commission, the Internal Revenue Service and the Nebraska Legislature.

He said the agency is audited every year and an independent audit committee of the board oversees financial records.

“A 30-year history of audited disclosure is a track record few, if any, Nebraska departments or instrumentalities can match,” Kenny said.

NIFA’s nine-member board includes representatives from banking, real estate, agriculture and the mortgage industry.

It also includes three state agency directors, from the departments of Economic Development and Agriculture and the Nebraska Investment Council.

martha.stoddard@owh.com, 402-473-9583

hendee@owh.com, 402-444-1127