any income return, or any part thereof or source of income, profits, losses, or expenditures appearing in any income return; [Emphasis supplied.] Subsequent to 1913 then, section 3167, Revised Statutes, and its successor, section 216 of title 18, United States Code, performed a dual function. They continued to prohibit disclosure of the operations, style of work, or apparatus of any business, as had been the law since 1864; in addition a new prohibition was added against the disclosure of the amount or source of income, profits, losses, or expenditures which might be set forth in, disclosed in, or appearing in, any income return. Actually, there was no appreciable difference between the prohibition against disclosure by Federal employees of the "amount or source of income, profits, losses, or expenditures *** set forth or disclosed in any income return" and making it unlawful for any person "to print or publish * * * any income return, or any part thereof or source of income, profits, losses, or expenditures appearing in any income return." After it was decided, sometime between February 15, 1945 (House Rept. No. 152) and July 9, 1946 (House Rept. No. 152, pt. 2), to delete from title 18 the proposed chapter 115 covering crimes involving taxation, there was no valid reason for including in title 18 any part of the existing section 216 which prohibited disclosure of information contained in income returns. This appears to have been recognized, in part at least, by the revisers, since their notes to section 1905 in House Report No. 304 state: "The provisions of section 216 of title 18, United States Code, 1940 edition, relating to publication of income tax data by ‘any person', were omitted as covered by section 55(f) (1) of title 26, United States Code, 1940 edition, Internal Revenue Code." We believe that the failure to omit that portion of section 216, which was practically identical to the portion omitted as covered by the Internal Revenue Code, was due to inadvertence or oversight on the part of the revisers. As a matter of fact, the present Internal Revenue Code still contains the identical prohibitions against disclosure of income tax return data as were contained in section 216, title 18, United States Code, 1940 edition. Section 7213(a) (1), title 26 (which is the successor to section 55 (f) (1) of title 26 referred to in the reviser's notes), 1958 edition, Internal Revenue Code (68A Stat. 855), is a complete duplication of all three parts of old section 216, title 18, which dealt with information contained in income returns. It is our position, in view of the expressions in the legislative history of section 1905 that no substantial change in existing law was intended, that the section should not be construed to prohibit disclosure of the "amount or source of income, profits, losses, or expenditures" unless such data are derived from income tax returns. In this connection, the only recorded case involving the statute or its predecessor statutes is United States ex rel. Norwegian Nitrogen Products Co., Inc. v. United States Tariff Commission (App. D.C. 1925 (6 Fed. 2d 491)). The prohibition there involved was that contained in section 1335, title 19, United States Code (1940 ed.), which was consolidated into the present section 1905. The court stated (p. 495): "Costs of production, of and by themselves, are simply matters of business privacy, the disclosure of which is not forbidden by section 708 of the act of 1916." Section 216 of title 18 was considered by the Attorney General in an opinion rendered March 8, 1937 (39 Ops. Atty. Gen. 1). The question involved was whether or not the Social Security Board was prohibited by section 216 from disclosing to State unemployment compensation authorities the "business name and address of present employer" of applicants for social security account numbers. The Attorney General said that section 3167, Revised Statutes (which was the same as sec. 216, title 18, United States Code, 1940 ed.), related only to income tax returns. He stated: **** Moreover, it is a penal statute and must be construed strictly. Its evident purpose is to prohibit the divulging of information connected with a taxpayer's private business and affairs ***. It is true that form SS-5 gives a source of the employee's income ***. It can hardly be contended, however, that the divulging of information obtained from sources other than an income tax return and which is already generally known *** would be a violation of the criminal provisions of the statute, even though such information might also be contained in an income tax return." It is clear that the provisions of section 1905 as now drafted would, if literally read, require an opposite conclusion on the part of the Attorney General on the situation presented to him in the preceding case. It is a rule of statutory construction that a statute incorporated into a code is presumed to be incorporated without change even though it is reworded and rephrased and in the organization of the code its original sections are separated. And the disclosure of an intent to change existing law must be clear. Sutherland, "Statutory Construction" (3d ed., secs. 3709, 3710). A cogent reason for this as stated by Sutherland (op. cit, supra, sec. 3705), is that "it is inevitable that the legislature cannot give the same detailed care to the consideration of a bill for a code that it can to an ordinary bill." We are told in the committee report accompanying the bill which resulted in enactment of title 18 as positive law that only “minor changes were made in translations and phraseology" from existing law. It is submitted that it is not a "minor" change to prohibit disclosure of the "identity, ** amount or source of any income, profits, losses, or expenditures" of any business entity, regardless of the manner in which such information was obtained, when prior law prohibited disclosure of such information only if it was obtained from an income tax return, and we do not believe the statute should be so interpreted, particularly when costs and related data under Federal con. tracts are concerned. Since the enactment of title 18 into positive law in 1948, there have been two rulings by the Attorney General as to the applicability of section 1905. The first was a ruling in 1953 (41 Ops. Atty. Gen. 166) that the Reconstruction Finance Corporation was not precluded thereby from making known to prospective purchasers the financial condition of property and interests in connection with the liquidation of the assets and winding up of the affairs of the Corporation. The Attorney General ruled that the law providing for liquidation of the assets of the RFC reasonably implied authorization to do whatever was reasonable and proper to accomplish the liquidation, including the making of disclosures as to the financial condition of the assets to be sold. The second case involved the authority of the Federal Communications Commission to furnish to a Senate committee information which the Commission had received on a confidential basis from various television stations and networks. This information included data as to the earnings, profits, and expenses of the stations. The Attorney General concluded that the Senate committee was authorized by section 134(a) of the Legislative Reorganization Act of 1946 (60 Stat. 831-832), to seek from the Commission matters of official record, and, consequently, that the Commission was not precluded by section 1905 from making disclosure. It should be noted that in neither of the two rulings above was the Attorney General confronted with the necessity for ruling upon the proper interpretation of section 1905, since in both cases he concluded that the disclosure in question came within the exception in that section. We believe that a decision of the Fifth Circuit Court of Appeals, Honea v. United States, decided April 28, 1965, is support for the interpretation of section 1905 as discussed above. Honea involved the interpretation of title 18 United States Code, section 912. Section 912 derived mainly from title 18, United States Code (1940 ed.), section7 6, which provided that "Whoever, with intent to defraud * * * shall falsely assume or pretend to be an officer or employee *** of the United States * ** and shall take upon himself to act as such, or shall in such pretended character demand or obtain any money, paper, document, or other valuable thing, shall be fined not more than $1,000 or imprisoned not more than 3 years or both." The section thus defined two offenses, (1) false personation and acting as such, and (2) false personation and demanding or obtaining property. In the revision and codification of title 18 the words "with intent to defraud” were omitted, according to the reviser's notes, "as meaningless in view of United States v. Lapowich (63 S. Ct. 914)." The court points out in Honea that the case of United States v. Lepowitch (318 U.S. 702), dealt only with the first offense covered by title 18, United States Code, section 76, and held that intent to have a person act on the basis of the false personation was sufficient intent to defraud to sustain a conviction of that offense. The court said: "This left the offense (2) subject to court interpretation as to the precise nature of the intent required. And as to that, what the Supreme Court hinted, and what was clearly required in the statute at that time, we now hold. An intent to defraud or an intent to wrongfully deprive another of property is an essential element for a prosecution under the part (2) of section 912. 48-132 0-65- -45 "To hold otherwise would be to attribute to Congress an intent to greatly expand the scope of the statute so as to include and subject to serious penalty (3 years and/or $1,000) a broad range of possible conduct which while blameworthy, would not ordinarily be regarded as having the major Government significance of actions violating part (1). * * *” It is to be noted that the reviser's notes to section 912 state that "Changes were made in phraseology," while his notes to section 1905 state that "Minor changes were made in translations and phraseology." [Emphasis supplied.] Thus, in the case of section 912 "changes," including the deliberate omission of "intent to defraud," were intended. Nevertheless, the court held in Honea that so far as the second part of the section is concerned the words "intent to defraud" must be read back into the section. In the case of section 1905 only "minor changes" were intended. We believe it quite possible that the omission in section 1905 of the words "set forth or disclosed in any income return" was inadvertent; and we believe that the Honea case is support for the position that those words should be read back into section 1905. APPENDIX 1D-DIRECTION TO GAO STAFF ON TREATMENT OF DATA RELATED TO 18 U.S.C. 1905 COMPTROLLER GENERAL OF THE UNITED STATES, Heads of Divisions and Offices: Washington, D.C., April 15, 1965. Title 18 U.S.C. 1905 provides as follows: "Whoever, being an officer or employee of the United States or of any department or agency thereof, publishes, divulges, discloses, or makes known in any manner or to any extent not authorized by law any information coming to him in the course of his employment or official duties or by reason of any examination or investigation made by, or return, report or record made to or filed with, such department or agency or officer or employee thereof, which information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of any person, firm, partnership, corporation, or association; or permits any income return or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person except as provided by law; shall be fined not more than $1,000, or imprisoned not more than 1 year, or both; and shall be removed from office or employment." In a letter to the attorneys for the Westinghouse Electric Corp. dated December 31, 1964, B-146733, B-146760, we expressed the view that while 18 U.S.C. 1905 is a penal statute and, therefore, we could not say with finality as to what the courts might hold as to the applicability of the statute to disclosures of the types spelled out in the statute in reports of he Comproller General, we regarded such disclosures in reports to the Congress as within the meaning of the words "authorized by law" as used in 18 U.S.C. 1905, since such reports are made pursuant to our statutory responsibility, and the duty of reporting to the Congress matters relating to the "receipt, disbursement, and application of public funds." See 31 U.S.C. 53; id. 67. We believe our position is correct. However, in order to carry out the general purpose of the statute we should avoid to the extent possible disclosure of information of the type spelled out in the statute in any of our draft reports, final reports, decisions, or correspondence. Such information should not be included in any of the above documents unless the director of the cognizant division or the deputy director deems it necessary to a proper presentation of our finding or position. Further, if such information is to be included in a document to be furnished to anyone other than the source of the information or another Federal agency, the propriety of its disclosure should be cleared with the Office of the General Counsel. JOSEPH CAMPBELL, Comptroller General of the United States. APPENDIX 1E-MEMORANDUM ON REVIEW OF REPORTS BY OFFICE OF GENERAL COUNSEL, GAO U.S. GENERAL ACCOUNTING OFFICE, OFFICE OF GENERAL COUNSEL, Washington, D.C., December 21, 1959. Memorandum to all attorneys and reviewers: It is my understanding there is some question as to the areas to be covered in our reviews of draft audit reports. Our review should be directed primarily to two areas. They are legal matters and congressional matters. In addition, we should feel free to offer comments and suggestions on other matters with respect to which we think a change in the report will result in significant improvement. LEGAL MATTERS We have specific responsibility for examining all legal matters pertaining to the draft report. This responsibility includes consideration of the legal points covered in the report, as well as legal aspects not specifically covered. For example, if a draft report proposes only to criticize the method of contracting used and, upon review, we are of the opinion that improper payments have been made as a result of the method of contracting or for any other reason, we should so state in our comments on the draft report. CONGRESSIONAL MATTERS Review of draft reports should also include consideration of any congressional implications contained in the report. Attorneys who are assigned draft reports for review should take note of any congressional implications which may be involved and discuss the report with the appropriate staff member of the Office of Legislative Liaison. See Comptroller General Order 1.4, October 15, 1959, paragraph 11. Examples of the types of reports which should be discussed: 1. Reports which are being furnished upon request of a committee or a Member of Congress. 2. Reports which contain legislative recommendations. 3. Reports which contain references to committees or individual Members of Congress. 4. Reports in which the agency comments indicate that Congress has been made aware of a matter covered in the report. 5. Reports in which access to agency records is discussed. OTHER As indicated above, in our review of draft reports we should feel free to offer comments and suggestions on other matters with respect to which we think some appropriate change will result in significant improvement, even though the suggestions are in an area other than that in which we have a specific responsibility. Of course, responsibility for the acceptance or rejection of such suggestions rests with the Accounting and Auditing Divisions. In making such suggestions, be certain they are significant. Also, the suggestions should be identified separately in the memorandums to the Accounting and Auditing Divisions. ROBERT F. KELLER, General Counsel. APPENDIX 1F-TRANSMITTAL LETTER FROM GAO REPORT B-146718 In March 1964 we reported to the Congress that the Department of the Navy had contracted to pay Bethlehem Steel Company, Shipbuilding Division, Quincy, Massachusetts, about $5 million more for the construction of the nuclear frigate, U.S.S. BAINBRIDGE, than was warranted on the basis of available cost data and the circumstances existing at the time of negotiations. The circumstances follow. The U.S.S. BAINBRIDGE was started under a letter of intent to contract, commonly called a letter contract, which provided that construction work begin promptly but that the price be negotiated later. During the first three quarters of the construction period, the Navy made repeated attempts to negotiate a reasonable price including terms which would have protected Bethlehem against unexpected cost increases but would not have paid Bethlehem for such increases if they were not incurred. Bethlehem, however, rejected all offers by Navy contracting personnel. After about 75 percent of the construction work had been completed, negotiations culminated in the tentative acceptance of a price of $87 million by the Bureau of Ships. This agreement was tentative because all sizable Navy contracts must be approved by the Office of Naval Material before they become binding upon the Government. Accordingly, the Bureau of Ships recommended to the Office of Naval Material that it approve the contract at a fixed price of $87 million. Representatives of that Office reached the conclusion that the price was too high and suggested an alternative. However, the alternative was refused by Bethlehem which adamantly rejected any terms other than a fixed price of $87 million. The Office of Naval Material was unwilling to approve acceptance of this price and referred the matter for decision to Mr. Kenneth E. BeLieu, Assistant Secretary of the Navy (Installations |