The Virginia Supreme Court heard oral arguments Wednesday in a closely-watched dispute over fundraising foundations established by public universities and whether they should be subject to freedom of information laws that govern the schools themselves.

The case hails from George Mason University, where a student group called Transparent GMU sued after the university’s foundation refused to turn over records of its agreements with private donors – a request sparked by questions about donations by conservative mega-donor Charles Koch and his family.

Documents subsequently released by the university (but not the foundation) prompted an admission last year by the school’s former president that some of its agreements with donors “fall short of the standards of academic independence.” This year, the Associated Press reported a $50 million gift was earmarked specifically to “promote the conservative principles of governance.”

A lawyer for Transparent GMU argued Wednesday that exempting the foundation from provisions of the state’s Freedom of Information Act allows public universities and other government entities to sidestep the act’s requirements “merely by outsourcing one of their essential functions to a private corporation.”

Lawyers for the foundation and George Mason University countered that, while the foundation was established by the university and is directed by a university employee, it is governed by a distinct board and therefore not under the control of the university itself for the purposes of the state’s public information laws.

A circuit court judge sided with George Mason University in a ruling last summer. On Wednesday, justices zeroed in on questions about just what lawmakers meant when they amended the state code in 2001 to specify that it applied not just to government committees and subcommittees but to any “other entity … created to perform delegated functions of the public body or to advise the public body.”

GMU and its foundation argue that the language was simply intended to make clear that no matter what nomenclature was used to describe a public bodies’ various committees and subcommittees, they are subject to the law.

Transparent GMU’s lawyer, Evan Johns, argued that if that was what lawmakers intended, they could have used more specific language.

But the justices wondered about the potential ramifications of accepting a broad interpretation of the law. Justice Stephen McCullough asked whether it would mean public records laws should also apply to janitorial firms and stadium snack bar vendors contracted by the school.

Justice William Mims noted snack bars, like university foundations, also raise money for schools. “I would need to know what the limiting principle is,” he said.

Johns countered that it should come down to whether an outside group is providing an essential function. A snack bar, he said, would not qualify.

The justices questioned GMU and its foundation about how it differentiates the work of the foundation from the work of the university when the foundation is led by a university employee.

“How do you determine what record she holds as a foundation employee and what role she holds as a university employee?” asked Mims.

GMU Foundation’s lawyer, Matthew Fitzgerald, said that while the two roles are related, they remain distinct. He argued it’s not uncommon for people to hold two jobs and keep them separate. GMU, represented by Virginia Solicitor General Toby Heytens, said that when a record of the foundation does make its way to the university, then it becomes a public record.

Heytens said the question at the core of the case should be answered by lawmakers with new legislation, not the court.

The outcome of the case could have ramifications for public universities around the state, all of which rely on private foundations to raise money, sometimes from donors who demand anonymity. Meanwhile, lawmakers have been debating a potential legislative fix, including a proposal introduced earlier this year that would have required disclosure of any gifts that came with conditions attached.