SIX POINTS THAT EVERY BUSINESSMAN I. What is FOIA? FOIA is an "open-records" law, and is the chief federal law on access to government-held information. (Other federal "openness in government" laws are the Sunshine Act, which gives the public the right to attend most meetings of multi-member agencies; the Privacy Act, which gives individuals access to many records about themselves; and the Federal Advisory Committee Act, which opens most meetings of these committees. Each of these openness laws has a list of exceptions similar to those in FOIA.) - Passed in 1966 and strengthened in 1974, FOIA provides that "any person" is entitled to access to all "agency records" generally, any record, including those in computers, in the possession of any federal agency except to the extent that the record, or part of it, is "exempt." FOIA is thus of very broad scope, has generated numerous disputes which have produced over 1,000 court decisions, and has resulted in a much more open government. There are 9 exemptions in the FOIA covering roughly the following matters: 1. 2. properly "classified" defense and foreign relations information; very limited kinds of purely internal matters; 3. matter exempted by various other statutes; 4. 5. trade secrets and certain other commercial or financial information obtained by an agency from a business firm, chiefly that likely to cause competitive injury if released; certain internal governmental communications, chiefly memoranda prepared to help in decision-making; 6. information the disclosure of which would be a "clearly unwarranted invasion" of individual privacy; 1. 8. investigatory law enforcement records but only if one six specified types of harm would result from of release; bank examiner's records; -2 9. oil well and similar informat fon. Although records under any of these exemptions may contain information about business firms, sensitive business information is usually considered for protection under Exemption 4, and sometimes under Exemption 3, 8, and 9. FOIA exemptions are merely options to withhold, and agencies can make discretionary releases of exempt matter, except where some other law prohibits release, for example, that protecting income tax returns. If only part of a requested record is exempt and that part can be deleted, the rest of the record must be furnished. Discretionary releases of business information which an agency recognizes to be clearly covered by Exemption 4 are quite rare. III. What procedures must a requester follow? Every agency is required to publish regulations telling the public how to address written requests, what fees for searching and copying may be charged, etc. (These fees and the official procedures are sometimes waived for reasons of public interest, simplicity, or speed; thus, records sometimes are sent in response to phone requests.) The requester does not have to explain why he wants access, although this may be helpful if the records are "exempt" and he seeks a discretionary release, but his request should "reasonably describe" the records he wants, to enable the agency to decide where to search for them. There is no definite limit on the number of records that may be requested. IV. What procedures must the agency follow? The agency must send the requester a determination to grant or deny access within 10 working days after the request is received at the proper office. A reason (an exemption) must be given for any denial, and the requester must be informed of his rights to an appeal to a higher official in the agency, and to judicial review in case anything is denied on the appeal. Appeals must be acted on within 20 working days. Time extensions up to another 10 days are possible in defined special circumstances, and the requester can sue if the time limits are violated, but the court can grant an agency more time upon proof of "exceptional circumstances" and "due diligence." v. What will happen if the requester goes to court to upset an agency denial of access? The case is supposed to get expedited consideration. The agency has the burden of proving that the withheld records, or the deleted parts of them, are exempt. If the suit is for records containing business information, the business firm which submitted the information may wish to assist the agency in -3 proving the records are exempt, or may wish to intervene in the suit. The court may inspect the withheld material "in camera" (in chambers). The court may award the plaintiff attorney's fees, and may order the Merit Systems Protection Board to investigate and require the punishment of agency officials responsible for an arbitrary and capricious" withholding, but such disciplinary proceedings are very rare. IV. What will happen if the agency is hesitant or unwilling to protect business information which it obtained from a business firm that wants the information withheld? If the agency thinks that the business firm might object to the agency's granting a FOIA request for access to the information, but the agency thinks it may grant the request anyway, the agency usually will contact the firm to see if it objects, and if so may solicit facts that the agency needs to help show why the information is competitively sensitive and legally withholdable. If the agency finally determines to release the information over the business firm's objections, the actual transmission of the records to the requester will usually be delayed for 5 or 10 days after the agency has notified both the requester and the business firm of its determination to release. This delay gives the business firm a chance to file a "reverse FOIA" suit in federal court to restrain and then prohibit the disclosure. When such suits are filed, the government almost always consents to a temporary restraining order, giving both sides time to prepare their cases on the merits. The business firm can usually expect to win if it can show either that the information is covered by the Trade Secrets Act, whose meaning is in great dispute, or by Exemption 4 of FOIA unless the agency can justify a discretionary FOIA release. Sometimes, the business firm can delay release by a "reverse" suit until the information is no longer sensitive. The current law governing the rights of business firms to block agency releases of their business information is subject to many uncertainties; the federal courts have divided on some of the legal issues, and the Supreme Court has expressly left some legal issues undecided, but Congress may well change this situation. (For additional copies of this article and current information, contact the author at Lerch, Early & Roseman, Chartered, 7101 Wisconsin Avenue, Suite 1313, Bethesda, Maryland 20814-4892, (301) 986-1300.) Mr. RADER. With Senator Hatch due to return soon from the floor of the Senate where he has other important business, we would like to call our next witness, William Taft, General Counsel for the Department of Defense. Mr. Taft has worked in the Government for 7 years in addition to 4 years in private practice. He has served as General Counsel for the Department of Health, Education, and Welfare, as Principal Assistant to the Director of the Office of Management and Budget, and as Executive Assistant to the Secretary of Health, Education, and Welfare. Inasmuch as the Department of Defense has a reputation as one of the most efficient administrators of FOIA, we appreciate your participation today, Mr. Taft. STATEMENT OF WILLIAM TAFT, GENERAL COUNSEL, DEPARTMENT OF DEFENSE Mr. TAFT. Thank you. I appreciate this opportunity to appear before you today and to present the Department of Defense's views concerning our experience with the Freedom of Information Act, to which I will also refer as FOIA from time to time. At the outset of my statement, I think it is important to stress that the Department of Defense is strongly committed to the effective implementation of the act. Our record demonstrates our commitment to honor all requests for information by members of the public consistent with the national security and the protection of Government interests defined in the various exemptions to the act. The Department of Defense has given a high priority to development of an internal system for complying with a large volume of FOIA requests within the permitted time limits for response. The DOD handles all but a small percentage of the FOIA requests it receives annually within the statutory time period. Further, this processing of requests has been accomplished without disclosing classified national security information, which is of course contained within many of the requested documents but excised pursuant to an exemption of the act. It has been our experience that the principal burden of the act is the cost imposed on the taxpayer in order to comply with the act and protect our national security interests. This cost is imposed in terms of actual expenditures and diversion of manpower resources not directly dedicated to administration of the act. While of course we do not expect that the many substantial benefits of the act can be realized without incurring some costs, we believe that the act, in certain aspects, unnecessarily detracts from the efficiency of the DOD's decisionmaking and poses small but avoidable risks to national security. Accordingly, I am here today to describe for you the magnitude of such costs and to discuss other problems that the DOD has encountered in complying with the act. COMPLIANCE COSTS In calendar year 1980, 57,053 public requests were received under the FOIA by the Department. This caseload represents a 15-percent increase over the number of requests received in 1975 when the 1974 amendments to the act first became effective, but it represents a 5.5-percent increase over the number of requests received in 1979. Our experience, however, indicates that the number of documented requests is somewhat misleading in that, since 1975, the press and research and scientific journal authors and others have largely abandoned the use of the FOIA since they are encouraged to elicit information through informal channels and have found those channels to be satisfactory without resorting to use of the formal request. Only 2,829 of the 57,000 requests submitted in 1980 were denied, either in whole or in part, and those denials were of course based on the FOIA statutory exemptions. In calendar year 1980, the documented cost of handling these requests was $6.8 million in DOD. In 1979, the documented cost was $6 million. The 1980 expenditure represents almost a 45-percent increase from the $4.7 million expended in calendar year 1976 for the same purpose. This 45-percent increase, of course, does not include the cost of processing informal requests, which as I have just noted, have increased in addition to the formal requests. The largest single component of the documented expenditures is the manpower cost, including time spent in searching, review and deletion, coordination, approval, and correspondence concerning the items requested. Our experience indicates that in addition to passing through the freedom of information offices, a typical FOIA request will be reviewed by at least one middle-management level official having substantive expertise, and often will also require consultation with the Office of General Counsel. In some instances I have been familiar with, it has required consultation with more than one or two members of that office. Senator HATCH. May I interrupt you for one second? Mr. TAFT. Sure. Senator HATCH. When you indicate the manpower costs, would they be in addition to the $6.8 million? Mr. TAFT. What we have calculated, Mr. Chairman, are the direct costs of manpower dedicated to the FOIA requests and to the handling of them. The $6.8 includes those manpower costs and also copying costs that they incur and so forth. Senator HATCH. Those who are actually assigned to find the documents, go through them, et cetera? Mr. TAFT. That is correct. That is a considerable number of people in our case. In processing FOIA requests, the act provides only standard document search and duplication fees may be charged the requester. In 1980, the DOD collected fees in the sum of almost $250,000. This figure approximates the annual average of DOD receipts since 1975. By contrast, the actual cost to the DOD in 1980 for direct search and copying was approximately $800,000. The remaining $550,000 was waived because the release of the requested information was judged to be in the public interest. |