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Mr. STAATS. What does this represent? Out of total number of cases where our office was involveil in litigation where we did not have agreement ?

Mr. RYTER. Yes.

Mr. Staats. I haven't got it. Unless my colleagues have it, I would have to furnish it for the record.

Mr. RYTER. Yes.

Mr. DEMBLING. I might say the Justice Department does represent the Comptroller General in suits that are brought in many cases, and this involves transportation cases; it involves cases to obtain access to records, and that sort of thing.

Title I is limited only to where there is a disagreement between the Attorney General and the Comptroller General.

Mr. RYTER. I think it would be helpful for the record to show the distribution of how active the relationship is. I understand the principle that we are talking about. I think it would also be constructive for the chairman and the ranking member to understand how active the relationship between the GAO and the Attorney General has been, say, over the last 10 years. Mr. DEMBLING. We can supply that.

Senator METCALF. Would you supply that? I think it is a very important point. Maybe if we are only talking about half a dozen cases where you talked to the Attorney General, three would be important. But if we are talking about 50 or 100 cases, it seems to me three would be relatively insignificant.

Thank you very much for bringing up the other half of this issue. [The information referred to and subsequently supplied follows:]

DISPUTES WITH THE ATTORNEY GENERAL During the past twelve months GAO has referred 1318 debt claims and 27 transportation claims to the Attorney General for litigation. This period is typical of our experience during the past ten years. By and large we have an excellent working relationship with the Department of Justice regarding debt collection. The disputes which we have cited between the Comptroller General and the Attorney General a rose as a result of legal opinions rendered by the Comptroller General to the Congress or Executive agencies. These are usually brought to the Attorney General's attention by the Executive agency concerned—rather than by disallowance and referral to the Attorney General for litigation. While we do not know how many of the decisions of the Comptroller General which were brought to his attention the Attorney General disagreed with, in a recent review of unpublished Attorney General opinions since 1958. Department of Justice officials found only one which dealt with a decision of the Comptroller General. Of published opinions of the Attorney General during the same period, the only opinions which directly address decisions of the Comptroller General are those which we have cited as cases of disputes.

Mr. Staats. I would like to point out on page 5 on the last case we had that is referred to, it was a matter of great concern in the Congress. Note here the statements made by the President, President Nixon, when the Congress put on an amendment to appropriations bill which would have required the executive branch to comply with our opinion. These were statements which were occasioned by that action in the Senate.

There has been no action by the executive branch to date to change the position of the executive branch on the need for our office having this authority. As you know, we do have this authority in title X of the Congressional Budget and Impoundment Control Act. So I don't think I need to say anything further about title I unless you have questions.

Senator METCALF. Thank you very much. Thank you for being patient with the interruption.



Mr. STAATS. A second major objective of this bill is to obtain information from private sector organizations already subject to GAO audit by permitting the Comptroller General the use of subpenas.

More than 48 departments and agencies of the Federal Government now have authority to subpena records; however, this power has never been provided to the GAO. This authority would be used in those situations where it becomes difficult or impossible to obtain, otherwise, the necessary information from those doing business with the Government.

Section 201 would authorize the Comptroller General to sign and issue subpenas requiring the production of negotiated contract and subcontract records and records of other non-Federal persons or organizations to which he already has a right of access by law or agreement.

This authority includes books, accounts, and other records of contractors or subcontractors having negotiated Government contracts and of various other non-Federal persons or organizations, most of which have received Federal grants or other financial assistance.

Section 202 would provide that in case of disobedience to a subpena, the appropriate district court may issue an order requiring compliance with the subpena and any failure to obey such order shall be punished by the court as a contempt thereof.

The procurement statutes require negotiated Government contracts of over $2,500 to contain a clause by which the contractor agrees to allow the Comptroller General access to “any books, documents, papers, and records of the contractor, that directly pertain to, and involve transactions relating to the contract or subcontracts.”

In view of this contractual clause, it might be questioned that the Comptroller General needs subpena power. In the simplest terms, (1) the subpena would enable the Comptroller General to obtain much quicker resolution in the courts of any dispute over his authority; and (2) the power to issue a subpena would, by its very existence, eliminate many disputes which may be raised merely to create delays.

The Comptroller General from time to time has been denied access to records to which he was entitled by law or agreement to have access, and considerable delays have been encountered in resolving the issue. In one case which had to be litigated, 51/ years elapsed before a final judgment was obtained confirming the Comptroller General's authority under the access to records clause of the contract as it pertained to the specific records in question.

Through issuance of his own subpena, the Comptroller General could avoid the delays inherent in requesting another agency, the Department of Justice, to bring an action and relying on attorneys employed by the Department of Justice, as well as receive the expedited consideration the courts give to subpena enforcement proceedings.

Other cases of refusal could be cited which, although not pursued to judicial determinations, caused lengthy and unwarranted delays and otherwise caused adverse effects on GÃO audits. Other instances frequently occur when repeated delays are occasioned by slowdown tactics on the part of contractor personnel—not outright refusals of records, but obvious efforts to impede the audit.

There is presently no effective mechanism to respond to these delays, It is very likely that if the Comptroller General had subpena power available, many of these delays would not occur.

How frequently the Comptroller General would have to actually issue subpenas is a matter of conjecture at this time, of course. However, the ability to issue a subpena would be an effective tool in itself, and if the Comptroller General had subpena power, many of the access problems would not even arise.

Finally, I want to emphasize that title II relates only to records to which we otherwise have a right of access by law or agreement.

I would like to say here, Mr. Chairman, we had one case where there was no argument about our legal authority. We have been negotiating 3 years. These were negotiated contracts. We are asking for price and cost information. They simply wouldn't give it to us.

It is now going into the courts. But it is a long, long process. The problem is one that should be resolved quickly.

Mr. RYTER. Mr. Staats, would you comment on that in relationship to an investigation that is going on from another subcommittee here in the Government Operations Committee? The meat investigation and issuing subpenas

Mr. Staats. What investigation ?
Mr. RYTER. A meat investigation.
Mr. STAATS. The grain inspection?

Mr. RYTER. No; it is a meat inspection. It is a problem of spoiled meat and issuing subpenas to three or four meat companies in which they have been dragging their feet. I think this investigation is very relevant to that. It is being held in the Subcommittee on Federal Spending Practices, Efficiency, and Open Government.

Mr. KELLER. I think I can respond to that. I haven't followed it closely, but I know the subcommittee has had trouble in getting access to records of some of the packers.

Perhaps if we had subpena power we could follow through more rapidly. I understand there has been under consideration a subpena to be issued by the committee.

Mr. RYTER. I think it would be helpful for the record to insert at this point some duplication of the need. I think that meat case is very illustrative of your need for additional subpena power here, and possibly if you could appear before the subcommittee and illustrate

Mr. KELLER. We would be very happy to do that. I would like to elaborate on what Mr. Staats said.

I have worked in this area for some time. I am not sure just what happened in the meat case, but often the organization whose records you are trying to obtain-and you have a right to under the lawcan delay you for long periods of time. You never get an outright refusal.

To get into court you have to have the issue joined. The auditors tell me they attempt to get access to certain records of a company, and the company says, “You have to see John Smith and he won't be back until next week.'

That type of thing goes on. We think this would be quite helpful, as Mr. Staats said, if we had supena power. I don't think we would have to use it that much. It is a question of having it.

Mr. RYTER. As the chairman and the members of the committee will have to determine which elements of the bill go forward, I think it would be most helpful to provide for the chairman and, as we go forward, possibly to the full committee with a bill, these examples of Government operations investigations being frustrated by this lack of power you are requesting.

[The information requested and subsequently supplied follows:]



1. Access to records of meat contractors

On August 27, 1975, upon the request of a subcommittee of the Senate Government Operations Committee, GAO requested access to records for audit purposes of two jointly-owned companies that are major suppliers of meat to the military. GAO has a right of access to the records by both statute and agreement. GAO was unable to obtain access, and on September 17 the subcommittee issued a subpoena for production of the records. On October 8, a motion to quash the subpoena was filed with the subcommittee and is presently under consideration. 2. Major defense contractors

GAO frequently encounters protracted delays in obtaining records of major defense contractors. A recent example concerned the Boeing Aircraft Corporation. In May, 1975, four requests for cost and pricing data were submitted to Boeing. Responses were not received on two of the requests for two months and some records had not been obtained at all when the audit was later discontinued because of insufficient potential. Other recent problems with delays have involved the Minnesota Mining and Manufacturing Company, General Electric Company and Martin Marietta Aerospace Company. 3. National Park Service contractor

On August 9, 1974, a Senate committee requested that our Office review the awarding of a contract by the National Park Service to Park Reservations System, Inc. to establish a system for making advance reservations at national parks. On August 12 the firm denied GAO's request for access to its records. Although the records were eventually made available, we were unable to complete our review prior to hearings on this matter. 4. Records of drug firms

On August 26, 1974, GAO requested access to records of six drug firms pertinent to particular negotiated contracts. Four of the drug firms have filed civil actions seeking judgments declaring that GAO has no authority to examine the requested data. On May 22, 1975, GAO requested that the Department of Justice institute legal action against the fifth drug firm to enforce our access rights. In addition, we anticipate entering into litigation with the sixth firm regarding the question of GAO's right to access.

Mr. STAATS. It is a little bit like the discussion we were having a little while ago. The number of times where we would need authority to go into court on our own wouldn't be so important as the fact when it does happen, it is an important matter.

We think by and large we are getting good cooperation from the contractors on access to cost information. But in the immediate case, this involves the entire drug industry. It is very clear. They accepted the contract with a clause in it which gives the ĠAO access to records.

a But we just don't get them.

The litigation that we are going into now will be long. It will be costly. We need the information now, not in 1980. This is what we are talking about here.

Mr. TURNER. General Staats, on that point, the authority you are seeking or subpena power, would that be in your "independent" capacity as Comptroller General in the settlement accounts and accounting capacity?

Mr. STAATS. No. I would like for others to comment here. But my reaction, to answer your question, would be we would be doing it on behalf of Congress.

Now, one of the reasons that we are interested in the drug cost information, for example, is the work of the Senate Small Business Committee and the Senate Labor and Public Welfare Committee. They have both been anxious for us to get this kind of information.

We need to go into it also on the basis of our own independent auditing responsibility. So I guess I would have to say it is a combination.

But whether it is a combination of one or the other, we cannot really carry out our responsibility for auditing those costs wthout the information.

Mr. TURNER. You don't see any distinction between exercising a subpena power in your capacity as the Comptroller General and independent officer of the United States, and exercising a subpena power in your capacity as an agent of the Congress or at the request of some committee of Congress? You see no distinction there?

Mr. STAATS. I don't see the distinction.

Mr. KELLER. I don't see the distinction between the two. You really could use it in both areas.

Mr. DEMBLING. It should be pointed out, Mr. Turner, that usually when the Comptroller General is seeking information from the contractor, it is usually in an investigative role and usually on behalf of his legislative function and in response usually to a request from the Congress.

So more often it would be used in that role rather than in the executive function role. But as a legislative function of the Comptroller General or as an independent officer of the United States, I think it is not that much different.

Mr. STAATS. Ordinarily when we are functioning in what we have described as the executive-type activity, we are talking about actions against an agency of the Government, an agency that has made an illegal payment or about to make an illegal payment, or its accounting system is or is not in conformity with the principles and standards we are authorized to promulgate.

I would suggest, I would hazard a guess in most cases, if we would use the subpena, it would be on behalf of investigative activity or work

are doing pursuant to requests we get from committees of Congress.




Title III has to do with access to records of the Federal departments and agencies. A third major objective of the bill is to provide

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