information, there is no overall coherent policy governing the confidentiality of information.

If confidentiality standards applicable to the information collected and maintained by the Federal Government are inconsistent and contradictory, the information management practices and policies of Federal agencies — including measures taken to safeguard the security of information are even more so. Aside from the Privacy Act, there has been little Federal regulation of how Federal agencies collect information, what information they collect, or how they maintain what they have collected. Federal legislation has focused, instead, on the dissemination of data and occasionally on its use (as, for example, provisions requiring interagency sharing, as in the Federal Reports Act, the Atomic Energy Act, the Internal Revenue Code, and the Census Act).

There is no doubt that the confusion and inconsistencies reflected in Federal laws, policies, and practices regarding confidentiality have had a direct impact on Federal reporting requirements. The present patchwork system of laws and policies not only inhibits the optimum utilization of information by the Federal Government but, in many instances (as evidenced, for example, by the Commission's Equal Employment Opportunity, Energy, and Welfare Reports), seriously interferes with the administration of Federal programs. Reporting entities - whether individuals, business organizations, or others— are confused by the different confidentiality guarantees given by diverse Federal agencies for basically identical data as well as being burdened by the need to submit substantially the same information to several agencies.

Several steps are needed to remedy the current situation:

a clear enunciation of Federal policy favoring the greatest feasible disclosure of information maintained by Federal agencies, with exceptions to this policy being statutorily based and narrowly drawn;

where exceptions are necessary, the adoption of clear and consistent disclosure restrictions based on the characteristics of the information to be protected;

legislation to regulate the collection, management, and utilization, as well as the disclosure, of all information maintained by the Federal Government and its contractors and grantees; and

the establishment of administrative machinery to coordinate the information management activities of the Federal Government, to monitor agency compliance with information laws, to furnish expertise and guidance, and to act as a focal unit in overseeing the recommendations contained in this and other reports on Federal information policy. Concerted action will be required to accomplish these ends strong Presidential direction, administrative response to this leadership, congressional action, and input from the private sector and State and local governments. For the immediate future, however, executive action alone can be effective in initiating much-needed 140 changes. Accordingly, some of the recommendations proposed in

this section are addressed solely to the executive branch while others urge congressional or joint congressional and executive action. Most could and should be undertaken immediately.

A Call for Presidential Leadership

One dominant theme of this report is that the free and open disclosure of government-held information, subject only to narrowly drawn exceptions necessary to protect certain private rights and national interests, is sound public policy. Such a policy serves several ends: it makes for a better informed electorate; it makes for a responsive, and responsible, Federal Government; and it makes for increased cooperation in the collection and use of public information.

Despite the clear enunciation of this policy in the amended FOIA,
however, and despite the consistently broad judicial construction of
that Act's disclosure provisions, several factors detailed in preced-
ing sections of this report have served to undermine the principle of
free and open disclosure:

Bureaucratic behavior patterns, reflecting reluctance or
outright resistance to disclosure of agency data, have been
slow to change, particularly in those agencies where no
affirmative action has been taken to foster new attitudes.
Many agencies, oriented toward a policy of secrecy rather
than openness, have been all too willing to grant confiden-
tiality pledges to the sources of the information they collect.
Until recently, such pledges had often been upheld by the
courts and served to bar disclosure of information.

A large body of laws enacted over the years exempts a
sizable amount of information from public disclosure under
the (b)(3) exemption of the FOIA.

Executive action alone cannot eradicate all these factors but it must play the predominant role in doing so. Some steps have already been taken. The Attorney General's letter of May 5, 1977, notifying all departments and agencies that the Department of Justice will defend agency withholding of information in FOIA suits - only when disclosure would be "demonstrably harmful" to "legitimate public or private interests" is evidence of administration support of the policy of more open disclosure. Whether this will have a marked effect on the attitudes of other agencies has yet to be seen. Yet, even if it does, this will hardly accomplish the goal, as stated in the Attorney General's letter, of ". . . impress[ing] upon all levels of government the requirements, and the spirit, of the Freedom of Information Act." Nor does the Attorney General's memorandum address the problem of interagency disclosures or of agency action in granting pledges of confidentiality.

Clearly, more comprehensive action is needed and, to ensure its effectiveness, such executive branch action should originate with the President himself. A presidential directive could have significant substantive as well as symbolic effects. It could create an atmosphere conducive not only to greater public disclosure but also to increased interagency cooperation in the collection and utilization

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of information. It could bring about more consistent public disclosure policies among the Federal agencies, in accordance with Attorney General Bell's policy statement. Moreover, a directive from the White House, followed by the promulgation of agency rules and procedures, could be effective in initiating changes within Federal agencies, at all staff levels.

Recommendation No. 1

The President should promptly issue a directive to the heads of all executive branch departments and agencies reaffirming the public disclosure policy of the Freedom of Information Act and the need for fuller disclosure not only to the public but among Federal agencies as well. The President should instruct all departments and agencies to adopt rules and procedures to ensure that agency policy in compliance with the directive is effectively communicated to all agency personnel and that effective measures are instituted to discipline employees who ignore or violate such rules.

A Presidential directive aimed at fostering more open and more consistent agency disclosure policies must address other issues as well. Even if bureaucratic attitudes and certain agency practices were changed, agency policies would still be determined largely by the laws applicable to agency information activities. As long as these laws remain inconsistent so will agency disclosure policies. This Commission's study uncovered more than 200 separate program laws containing some type of restriction on disclosure of information. Although the Commission's review of these laws was not sufficiently comprehensive to permit us to evaluate all the kinds of information covered by this legislation, we do know that, in many instances, confidentiality standards are determined solely on the basis of the agency collecting or maintaining the information rather than on any need for protecting a certain kind of information. As a result, as several of this Commission's studies show (the Energy Report is an excellent example), different agencies collecting substantially identical data from the same source and for the same general purpose are often subject to different confidentiality standards. Such inconsistencies inhibit interagency sharing of information, necessitate duplicative reporting requests, and cause confusion and resentment on the part of the reporting public. Equally significant, these laws may operate to deprive the public, and other Federal agencies, of a large body of information which might otherwise be disclosed were it not for exemption (b)(3) of the FOIA.

Because of the Commission's view that exemptions from disclosure should be narrowly drawn and should be based solely on the characteristics of the information that warrants protection, the Commission will recommend that the appropriate committees of the Congress give prompt attention to repealing subsection (b)(3) of the Freedom of Information Act. In this connection, we will also recommend that the Congress undertake a comprehensive review of the laws falling within this exemption. The Commission believes, however, that the executive branch should play a leading role in 142 reviewing these laws. The agencies operating under this legislation

are, in fact, best able to determine, at least in the first instance, the need for existing disclosure restrictions and the effect of such restrictions on their own information policies and practices.

Accordingly, the Commission believes that each Federal department and agency should be directed to undertake a comprehensive review of its confidentiality laws, regulations, policies, and practices and to report to the President on the legal justification and need for continued disclosure restrictions. Such a review and assessment would serve two purposes. It would stimulate agencies to reexamine their own confidentiality policies and to focus on the need for continued disclosure restrictions. It would also lay the foundation for Presidential initiative in recommending legislation to correct inconsistencies in existing laws.

In the course of this review, agencies should be specifically directed to reexamine their policies of granting promises of confidential treatment for the information they collect. In the past, many agencies have been rather free in granting such pledges even in the absence of statutory authority for restricting disclosure of data. Although the courts, for many years, honored such agreements, recent cases indicate that they will no longer do so. As a result, there has been much confusion, among agency administrators as well as among members of the reporting public, as to what, in fact, constitutes "confidential" information. The business community, particularly, has complained that information submitted "in confidence" has often later been released to the public either voluntarily or in response to FOIA requests.

Several factors, already referred to in this report, have recently accentuated this problem for the business community. The more open disclosure policies of many of the independent regulatory agencies, the increasing use of the FOIA by business entities to obtain information about their competitors, and the more liberal court interpretations of the FOIA's disclosure provisions have all resulted in greater disclosure of information which the business community has long considered "confidential." To the extent that this information is "of public interest", the Commission strongly endorses the fuller disclosure of such data.

The Commission believes, however, that business entities, like
private individuals, should be able to rely on their reasonable
expectations of confidentiality when information is submitted to the
Federal Government. Accordingly, the Commission will propose, in
Recommendation No. 5, that legislation be enacted to regulate the
collection activities of Federal agencies and to require fuller agency
disclosure of information uses and confidentiality policies. In the
interim, in the interests of fairness and to retain the confidence and
trust of the business community, two steps should be taken at the
administrative level:

Agencies without statutory authority to withhold information
from public disclosure should discontinue the practice of
issuing pledges of confidentiality and should so notify their
sources of information.

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Agencies should issue regulations requiring agency notification to any person who has previously submitted information under a pledge of confidentiality whenever the agency receives a FOIA request for such information or plans to make a voluntary public disclosure of the data; agency notification should be made upon receipt of a FOIA request or at least ten days prior to the contemplated disclosure. The first step is based on the principle that citizen confidence and trust in the Government are essential to sound public administration. Agencies should be candid and forthright with members of the reporting public; in short, they should refrain from making promises they will be unable to keep. Accordingly, where no statutory authority exists for withholding information from the public, agencies should immediately discontinue issuing such pledges.

Even after the discontinuance of confidentiality pledges, many agencies will continue to hold a great deal of business information previously submitted "in confidence". In addition, regardless of confidentiality pledges, other information collected and maintained by Federal agencies may well be "confidential" within the meaning of exemption (b)(4) of the FOIA because its release would be likely to cause substantial competitive injury to the reporting entity under the National Parks test.' As already mentioned, some of this information is now being disclosed either voluntarily or in response to FOIA requests.

There is no doubt that the FOIA is increasingly being used to serve private interests — in many instances by members of the business community to obtain information about their competitors. Often the agency which has collected the information or is maintaining it has little interest in resisting its disclosure and may even initiate disclosure in the absence of a FOIA request. The company or other reporting unit, rather than the agency receiving the FOIA request, is the real "party in interest" and certainly is in a much better position to explain the significance of the information and the effect which its disclosure might have on its competitive position. Yet, in the absence of an agency requirement to notify the source of the data, the latter may be unaware of the requested or contemplated disclosure of the information until after the data have been released. Some agencies now provide, by regulation, for mandatory notification, or notification and an opportunity for consultation, to all persons who have submitted information in confidence whenever a FOIA request for such data is made. In the interests of fairness, the Commission believes that all agencies should be required, at a minimum, to notify those who have submitted information pursuant to a confidentiality pledge prior to agency disclosure of such data. Because of the strict time limitations in the amended FOIA requiring, in most instances, an agency response within ten days following receipt of the request, agencies should be required to

'National Parks and Conservation Ass'n. v. Morton, 498 F. 2d 765 (D.C. Cir., 1974); National Parks and Conservation Ass'n. v. Kleppe, 547 F. 2d 673 (D.C. Cir., 1976).