Have there been similar resolutions of this type offered in Congress as a precedent for a Secretary of the Cabinet?

Mr. Moss. Indeed there has.

Mr. COLLINS. What is it, Mr. Chairman.

Mr. Moss. I have to go back a number of years. We had a couple of Secretaries during the Teapot Dome days who were found in contempt of Congress. It does not matter who the person is, the act of contempt has been committed.

The chairman, as a member of this committee, has voted for the citation of Sherman Adams for contempt of Congress and of Federal Communications Commission Chairman Rosel Hyde, for contempt of Congress.

It matters not who commits the contempt; the act, itself, is what the Chair finds to be offensive.

Mr. DEVINE. Mr. Chairman.

Mr. Moss. Mr. Devine.

Mr. DEVINE. I think the record should be quite clear.

I believe the Secretary in declining to honor the subpena did so on advice of counsel, not only counsel in the Department of Commerce where he then served, but also on the advice of the Attorney General of the United States who is the legal officer for Cabinet officers of the United States.

I think the record should be quite clear, that is the basis on which he declined to honor the subpena.

Mr. Moss. The record, of course, is abundantly clear on that point. There are some interesting Supreme Court cases to the contrary as to the value of such advice. At best, the Attorney General at this moment appears as a partisan advocate for the executive branch of Government and the Congress has to protect its own powers.

Mr. DEVINE. If the chairman will yield, I will admit there are contrary views, some by employed counsel for this committee, or consultants, and that is why I think that since there is a dispute between the various legal authorities, that the matter should ultimately be resolved in the courts rather than in the Congress.

Mr. Moss. Of course, the power of contempt, as the gentleman from Ohio is quite aware, is a power possessed by the Congress. The fuller details will be met head-on as we move along.

Is there further discussion?

Mr. STUCKEY. Mr. Chairman, I have one brief question I would like to ask of the Secretary.

Mr. Moss. Mr. Stuckey.

Mr. STUCKEY. You state that your failing to honor the subpena is based on advice of counsel and the Attorney General.

Is this the only area that you have been advised from not to honor the subpena?

Secretary MORTON. That is correct-no; I have been advised officially by them, but the decision was made. Congressman. as a result of discussions with many experts in the Department, as well as my legal counsel. In that sense, my counsel and I are not the only participants in the decision.

Mr. STUCKEY. Would the advice not to honor the subpena come from other than your Attorney General, your counsel, and the Department? Secretary MORTON. Other than that, no, sir; there has been no other advice from outside sources, if that is what you are saying.

You mean other than within the Department?

Mr. STUCKEY. Yes.

Secretary MORTON. Let me put it this way, Congressman Stuckey. We have not been counseled to take this position from any outside

sources.

Mr. STUCKEY. I think I used the word "advised."

Secretary MORTON. Advised to take this position.

However, since we have not been advised not to take this position. it is obvious that there has been some concurrence. I do not know what the limit of that concurrence is but I am sure others would have spoken up if they had disagreed with this position in the administration. Mr. Moss. Is there further discussion?

Mr. KRUEGER. Mr. Chairman.

Mr. Moss. Mr. Krueger.

Mr. KRUEGER. I am inclined to support the motion.

It seems to me that the legislative branch, when it asks the Executive to acquire information, does so with the assumption that the legislative branch will be allowed to use that information.

I should also point out that it is my judgment that the legislative branch, at the same time that we are moving to make all sorts of information public, should not go about asking for information the disclosure of which could then be very damaging and could seem to accuse companies, which might very well be innocent, of any accusations which might be brought to them.

It seems to me if we acquire information and the information is acquired from companies with the understanding that it be kept confidential, that it will, of course, be incumbent upon us to retain that information as being confidential if we receive it and that to avoid the same sort of charges of misusing the information we receive, we must be fully aware that the confidentiality must then remain with us.

I will vote to say that the legislative branch is indeed entitled to this information but I would simply like to go on record on that point that I think that it is incumbent on us now and it is incumbent on us in the future not to ask the executive branch to acquire information where there is then the danger of revealing it.

It seems to me there is a sort of conflict there between our intentions. Thank you, Mr. Chairman.

Mr. Moss. Is there further discussion?

Mr. MOFFETT. Most of us have not been through this process. Of course, the Secretary has not been through it in that role.

Am I correct in assuming that before this matter does go before the full committee, if he should change his mind and see the light

Mr. Moss. The Secretary will continue to be answerable to the subpena until the matter is disposed of.

There being no further discussion, the Chair will put the question. So many as favor the resolution will indicate "aye."

Those opposed will indicate the contrary.

The clerk will call the role.

The CLERK. Mr. Ottinger.
Mr. OTTINGER. Aye.
The CLERK. Mr. Krueger.
Mr. KRUEGER. Aye.
The CLERK. Mr. Moffett.
Mr. MOFFETT. Aye.

The CLERK. Mr. Santini.

Mr. Moss. Mr. Santini, "aye," by proxy.

The CLERK. Mr. Stuckey.

Mr. STUCKEY. Aye.
The CLERK, Mr. Scheuer.
Mr. SCHEUER. Aye.
The CLERK. Mr. Waxman.
Mr. WAXMAN. Aye.
The CLERK. Mr. Sharp.
Mr. SHARP. Aye.

The CLERK. Mr. Maguire.

Mr. Moss. Mr. Maguire, "aye," by proxy.

The CLERK. Mr. Collins.

Mr. COLLINS. No.

The CLERK. Mr. Lent.

Mr. LENT. No.

The CLERK. Mr. Madigan.

Mr. COLLINS. "No," by proxy.

The CLERK. Mr. Rinaldo.

Mr. COLLINS. "No," by proxy.

The CLERK. Mr. Staggers.
Mr. Devine.

Mr. DEVINE. No.

The CLERK. Chairman Moss.

Mr. Moss. Aye.

The CLERK. Mr. Chairman, the vote is 10 "aye." and 5 "nay."

Mr. Moss. Mr. Secretary, the Chair will at this point express his personal regret over the need to take this action. The refusal left him. responsibly with no alternative available.

The subcommittee will now bring the matter before the full Interstate and Foreign Commerce Committee and recommend the adoption of the resolution and its movement to the floor of the House of Representatives.

With that, the subcommittee will now stand adjourned, with the Chair cautioning that you remain subject to the subpena duces tecum issued on July 28.

[Whereupon, at 10:55 a.m., the subcommittee adjourned.]

APPENDIXES

APPENDIX A

HOUSE OF REPRESENTATIVES,

INTERSTATE AND FOREIGN COMMERCE COMMITTEE,

CHAIRMAN, OVERSIGHT AND INVESTIGATIONS SUBCOMMITTEE,
Washington, D.C., April 7, 1975.

Hon. RAY GARRETT, Jr.,

Chairman, Securities and Exchange Commission, Washington, D.C.

DEAR MR. GARRETT: Congressman Scheuer of New York has told me of his deep concern over what he describes as the repeated, serious and reliable reports of Arab boycotting and economic discrimination against Jewish and other members of the U.S. business community, both at home and abroad.

Congressman Scheuer was kind enough to furnish me with a copy of your letter to him of February 25 in this regard, a copy of which I am enclosing for your ready reference. I should deeply appreciate your furnishing me with a detailed, current report on this matter, making specific reference to whatever concrete action the National Association of Securities Dealers has taken with respect to the alleged Arab boycott.

It might also be helpful to learn what "authority under the Federal securities laws" the Commission does have "to control the composition of financing syndications" as such authority relates to any such boycott.

May I have your judgment on the adequacy of the NASD's action as well as any recommendations you may have for additional legislation? Please call Chief Counsel Michael R. Lemov, or Special Assistant Richard Falknor, at 225-4441, if you have any questions.

Sincerely,

Enclosure

JOHN E. Moss, Chairman, Oversight and Investigations Subcommittee.

SECURITIES AND EXCHANGE COMMISSION,

OFFICE OF THE CHAIRMAN, Washington, D.C., February 25, 1975.

Hon. JAMES H. SCHEUER,

U.S. House of Representatives,
Washington, D.O.

DEAR CONGRESSMAN SCHEUER: Pursuant to the discussion between Richard Falknor of your office and Andrew P. Steffan of our staff with regard to the alleged boycotting of certain investment bankers, I would like to report to you the following.

It is our impression from discussions with members of the financial community that, although in several financings managed by non-U.S. investment banks participating Arab institutions apparently have successfully sought the exclusion of firms which appear on an Arab "boycott list", there have been no cases where any U.S. firms have been excluded on such a basis from financing syndicates organized to offer securities registered with the Commission.

The Commission does not have explicit authority under the federal securities laws to control the composition of financing syndications. However, the Rules of Fair Practice of the National Association of Securities Dealers, Inc., which we oversee, do provide that its members observe just and equitable principles of trade in the conduct of their business. Article III, Sec. 1.02 specifically extends this provision to members' participation in the distribution of securities and it is possible that members' participation in an Arab boycott could violate this rule. I am enclosing a release from the N.A.S.D. announcing the investigation of this matter by one of its standing committees.