110 the public of much worthwhile information, such as that contained in statistical microdata files. 58 As mentioned earlier, safeguards must be provided to ensure that information contained in administrative records is used solely for statistical purposes when it is transferred to another agency for such use. But, in the interest of encouraging necessary and valuable research activities, the Act should be amended to permit such disclosures when appropriate safeguards are provided. This could be effected by eliminating the requirement in subsection (b)(5), quoted above, that records to be used for such purposes "be transferred in a form that is not individually identifiable" and by enacting the necessary confidentiality and security safeguard provisions. Alternative methods of accomplishing this end are discussed in Section VI. Scope of the Act. There has been considerable confusion as to the extent of the Act's coverage. Even after OMB had issued clarifying guidelines, 59 some agencies, such as HEW, continued to take the position that contractors performing statistical surveys for them were not necessarily subject to the Act. The HEW General Counsel stated that agency's position: ... the requirements of the Privacy Act of 1974 are not applicable to HEW research and other contracts which call for the contractor merely to furnish to the HEW contracting agency statistical or other reports, even though it is necessary for the contractor to establish a system of records to perform the contract. 60 While HEW has encouraged its contract administrators to include Privacy Act protections in its contracts with private firms and other institutions, it has not required them to do so, nor has any other Federal agency. Requiring Federal contractors and grantees to be subject to the provisions of the Privacy Act would not seriously hamper the conduct of survey research and would be a positive step toward protecting the rights of human subjects in research projects and surveys. Other Legislation of General Applicability The Federal Reports Act permits the interagency transfer of some statistical data, but only in the form of "statistical totals or summaries." This provision is unduly restrictive and, as discussed more fully in Section II, imposes barriers to the optimum use of information which are no longer necessary or valid. The Freedom of Information Act, although containing no provisions specifically related to statistical data, is applicable to all information 58 Microdata are defined as statistical records which preserve individual responses or attributes, in contrast to aggregate data, which combine these attributes by some other unit, such as geography. Many microdata files are disclosed for public research use after identifying particulars have been removed. 59 OMB Guidelines, 40 F.R. 28947, July 9, 1975. 60 Quoted in ASA Report, n. 57, supra, p. 62. Original source is Memorandum of William H. Taft, General Counsel, to John Ottina, Assistant Secretary for Administration and Management, HEW. maintained for statistical purposes. That Act and the court decisions interpreting its disclosure provisions are consistent with and supportive of the goals of all statistical programs: to make available to the fullest extent possible the fruits of Government and Government-sponsored research activities. Opinions in cases such as Rose, Continental Oil, 62 and Pennzoil63 indicate that the courts will attempt to balance public and private interests in ordering the release of information by requiring, when necessary, the elimination of identifying particulars. Similarly, the policy requiring that agencies make available for public inspection and copying certain information of generat applicability to the public (the Act's (a)(2) provisions) would support a requirement that agencies engaged in statistical activities make the results of their activities available to the public without requiring persons to file specific requests for the data or to pay the fees imposed under the FOIA. There should, accordingly, be no conflict between the public disclosure policy of the FOIA and the confidentiality safeguards required in the collection and maintenance of data for statistical purposes. Nevertheless, in the absence of any specific exemption in that Act protecting the "privacy" of business entities and of any assurance that the courts will honor administrative pledges of confidentiality under the National Parks case test,64 such safeguards may have to be provided through legislation to ensure that the identities of data subjects (either individuals or legal persons) will not be revealed when statistical reports are publicly disclosed. In addition to the FOIA, the Privacy Act, and the Federal Reports Act, Congress has enacted many laws governing the use and dissemination of information related to various subject areas-e.g., education, health, international monetary policy. Many of these directly affect statistical and other research activities and some contain restrictive provisions which have sharply curtailed some interagency sharing activities.65 Foremost among specific laws relating to statistical programs is the Census Act. That Act has been cited as a model of confidentiality protection. Nevertheless, some agencies allege that its strict antidisclosure provisions preclude necessary but harmless interagency record transfers and result in considerable duplicative collection activities among Federal agencies. 61 Department of Air Force v. Rose, 425 U.S. 352 (1976). 62 Continental Oil Co. v. Federal Power Commission, 519 F.2d 31 (5th Cir., 1975), cert. den. sub. nom. Superior Oil Company v. Federal Power Commission, 425 U.S. 971 (1976). 63 Pennzoil Co. v. Federal Power Commission, n. 48, supra. 64 N. 30, supra. If the courts look to both the quality and quantity of the data 65 See Edward C. Bryant and Morris H. Hansen, "Invasion of Privacy and 111 112 One example used to support these allegations is the proposed interagency use of the Standard Statistical Establishment List (the "Industrial Directory"). This file, maintained by the Census Bureau, is a current list of all business establishments in the United States. It contains sufficient identifying information to provide a universal source for sampling industrial establishments.66 The Census law does not permit other agencies to obtain the names, addresses, size, and business activity codes of the Industrial Directory for sampling purposes. If other statistical agencies could use this list, they could reduce reporting burdens by employing smaller but more efficient samples. These same agencies might also be prohibited from maintaining their own similar lists. The concept might be expanded one step further, by making the Industrial Directory the central, standard, and authoritative listing available to all Federal agencies. The voluntary nature of the actual agency surveys would still be preserved and disclosure of the necessary information would contain no harmful commercial data. Of course, this kind of access to the Directory would require either its removal from the Census Bureau to another statistical agency with less restrictive confidentiality rules or an amendment to the Census Act. Other specific research programs, discussed below, draw on issues raised in other reports of this Commission. Energy Statistics The Commission has recommended that the Secretary of the new Department of Energy establish a National Energy Data Center for statistical energy data within the Energy Information Administration. Energy information is a vital part of the public debate on resource questions. Past references to the quality of such data have indicated that there is a great need to expand the scope of energy-related statistics, as well as to enhance their credibility.67 Accurate, timely, relevant, and sound statistics available to the public are necessary for informed decisions and public debate. A New National Energy Data Center. Under the current organization of the Federal Energy Administration, energy information is collected directly from a variety of respondents as well as indirectly from other agencies. Thus, both a data collection mission and a coordination-clearinghouse mission would be appropriate for the new National Energy Data Center (NEDC). The Commission envisions the NEDC as an agency responsible for the collection, maintenance, analysis, and dissemination of major energy statistics 66 An inventory of all the possible units in a population is called a "sampling frame." Ensuring that samples drawn from the frame are efficient and consistent is a standard statistical practice. Sampling from a known frame permits the collection of statistics with a known, high level of precision and a minimum reporting burden. Findings can be integrated more easily into other surveys when sampling from the same frame. 67 In October 1976, FEA initiated a project for the comprehensive review of all energy-related information activities in Federal agencies. The study is to be completed during 1978. By 1978, statistical programs in energy are expected to be funded at $146.2 million or 21% of the entire obligations for principal statistical programs generally. See n. 53, supra. on resource assessments, consumption, forecasting, reserves, and imports/exports. NEDC must be given statutory authority to consolidate the major statistical programs in the energy area and structure itself along the lines of a general purpose statistical agency. If high quality statistical information is to be the priority in such an agency, then it must enjoy a number of legal protections, including confidentiality safeguards. In other areas, and especially where new needs for information unfold, the agency should follow established practices by retaining the essentially voluntary character of surveys. These practices are particularly important for individual energy consumer and other household surveys. Confidentiality of NEDC's Data Sources. Ensuring the confidentiality of reports filed with the NEDC would not conflict with the public's "'right to know" if the agency were simultaneously charged with disseminating its statistical information to the maximum extent possible, Protection of individual records from disclosure or legal process would enhance the quality of information received and would not impose improper barriers against sharing because the NEDC would be the focal point for all energy statistics. Some commentators have argued that discrete industry data should be made available to the public in the interest of knowledge about company reserves, pricing, and other attributes. The NEDC, as a statistical agency, should not, however, be placed in the position of having to disclose such data. Such a practice defeats the high priority of quality of information and serves no statistical purpose. If, in furtherance of the public interest, other units of the new Department, charged directly with regulatory or compliance functions, need to collect data, that information should be collected administratively by those units and later transferred to NEDC for statistical purposes. Such information would, of course, be available for public disclosure under FOIA unless exempt under subsections (b)(4) and (b)(9). At the same time, in addition to a strong general dissemination function, NEDC should be required to release its statistics promptly and on a predesignated basis so as to avoid secrecy for political purposes. No advance notice of any statistical results should be disclosed to anyone prior to these scheduled official releases. Health Statistics A second program area in which this Commission has made recommendations affecting statistical data is in the health programs, specifically in the Cooperative Health Statistics System (CHSS), maintained by the National Center for Health Statistics (NCHS). This program is designed to coordinate health statistics acquisition and use among Federal agencies, health care providers, State and local governments, and the public. Data are routinely gathered in such areas as vital statistics, health manpower, health facilities, and hospital care. The Commission on Federal Paperwork has endorsed the CHSS and has recommended its extension to all fifty States. Certain aspects of confidentiality must be addressed, however, if privacy protection is to be maintained while the efficiency of health statistics is simultaneously enhanced. 113 114 NCHS itself has devoted much attention to the problems of individual privacy and the confidentiality of records obtained through CHSS.68 There is still considerable policy to be formulated to separate and track the interlocking paths of both users and providers of data in this system. In order to safeguard personal information in the CHSS system, NCHS has recommended the adoption of appropriate State legislation. The Commission believes, however, that Federal controls are necessary and appropriate to ensure the confidentiality of medical records held in this system as the system is national in scope and is supported by Federal funds. The major problem with CHSS is not the consolidation of information in NCHS itself; the agency already has a confidentiality statute protecting statistical information in its possession.69 The problem is, rather, that a large group of independent parties is involved in reporting to and using the resources of the system. The reporting units in CHSS consist of individuals, physicians, hospitals, other health care providers, State and local governments, and Federal agencies transferring information to NCHS. The users of the statistics generated by this impressive data stream include the same persons. With so many users, and with decentralized controls, the possibilities of confidentiality violations increase. This Commission believes that confidentiality policy, regulation, and safeguards should be centralized in NCHS to the extent that the Center acts as a filter through which individually identifiable information is collected and from which statistical information is disclosed. Participants in CHSS should be subject to the same principles outlined for similar Federal statistical activities, their sharing arrangements, and public disclosure rules. Line of Business Statistics In its Report on Segmented Financial Reporting, the CFP has recommended: . . .that in any future modifications of the line of business program, the FTC should continue its development of guidelines concerning the types of data generally entitled to confidential treatment, in consultation with other agencies and interested parties, including notice and an opportunity for comment. The Federal Trade Commission (FTC) has a broad mandate to collect and to publish information which sheds light on market operations and concentrations, pricing practices, and so on. In collecting information on Line of Business (LB), Corporate Patterns (CP), and Quarterly Financial Reports (QFR), but especially in connection with its LB inquiry, the FTC has encountered resistance 68 See, for example, NCHS, Proceedings of the Workshop on Privacy and Confidentiality, March 3-5, 1976, Atlanta, Georgia; Walt R. Simmons, "Issues Regarding Confidentiality of Data in the Cooperative Health Statistics System," Final Report to NCHS, HRA 106-74-25, 25 May 1976. 69 Data collected and held by the National Center for Health Statistics (NCHS) are protected from disclosure by a provision of the Health Services Research, Health Statistics, and Medical Libraries Act of 1974,. 42 U.S.C. §242 m. |