ment by the submitter.

Rather than subject the Government to

this possibility, the interested party should be given the opportunity to establish that reproduction would violate the copyright laws. They are in the best position to supply the information necessary for this determination.

The Weisberg decision illustrates the burden which is placed on the Government in order to comply with a FOIA request for copyright material. Under existing law, a Government agency must resolve complicated legal issues involving copyright protection in connection with a FOIA request. Such decisions detract from the performance of the agency's principal function and misallocate the taxpayers' dollars. Yet, if this information is made freely available, the FOIA may be utilized as a vehicle to deny an owner the degree of protection afforded by the statute. In this event, the agency may incur liability for release of the copyright material.

Even if the Copyright Act is designated as an exemption 3 statute, however, an agency presumably still will be required to release material which constitutes a "fair use" of the material. This requirement does not alleviate all the problems set forth in the foregoing paragraph. By requiring an agency to identify only the existence of copyright material and its owner to a requester, however, it could be left to the parties involved to determine contractually or through litigation the proper scope, if any, of the use of such material, and its market price. More important, the Government would thereby be relieved of expending precious tax dollars and manpower resources on brokerage activities which it was never intended, and is ill-equipped, to fulfill.

4.

The Privacy Act of 1974, 5 U.S.C. $552a (1976 & Supp. 1979). Pursuant to the above-referenced statute, an agency head may, by rules promulgated pursuant to 5 U.S.C. $553 (1976 & Supp. 1979) ▼ exempt from access certain systems of records set forth at $552a(j) and (k). The permissible statutory basis upon which the agency head may promulgate an exempting rule, and the limited categories of records systems for which the statute permits an exemption, reinforces the view that Congress decided to allow particular types of matters to be exempted from public access under the Privacy Act.

This conclusion has, in fact, been reached by several Circuit Courts of Appeals. See Painter v. Federal Bureau of Investigation, 615 F.2d 689 (5th Cir. 1980); Duffin v. Carlson, 636 F.2d 709 (D.C. Cir. 1980); Terkel v. Kelly, 599 F.2d 214 (7th Cir. 1979). However, the language of the Privacy

Act itself also lends support to an argument that it was not intended to prevent disclosure of material that would be required to be disclosed under FOIA. 5 U.S.C. $552a (b) (2). This provision and its relationship to FOIA can fairly be characterized as unclear.

5. The Trade Secrets Act, 18 U.S.C. $1905 (1948).

Government contractors often make available certain confidential trade information to the Government in connection with their contracts. Such information is protected from mandatory disclosure by the (b) (4) exemption to the FOIA. Even where an exemption to FOIA does apply, however, courts have held that it only applies to permit, but not to require, the agency to withhold the information. Chrysler Corp. v. Brown, 99 S.Ct. 1705, 1713 (1979). As a result, many agencies have promulgated regulations permitting discretionary disclosure of information within the (b) (4) exemption.

Private parties have attempted to prevent discretionary disclosure under FOIA by instituting so-called "reverse-FOIA"

actions. One basis for bringing these actions has been $1905, which provides criminal penalties for Government employees who disclose information of the nature exempted from mandatory disclosure under FOIA pursuant to $552(b)(4), except where its disclosure is "authorized by law." Plaintiffs in "reverse-FOIA" suits contend that $1905 qualifies as a (b) (3) exemption statute and that, therefore, such information may not be released under FOIA. In response, parties seeking information have argued that even if $1905 is a (b) (3) statute, agency regulations authorizing discretionary disclosure under FOIA are sufficient authorization for purposes of $1905. In Chrysler v. Brown, supra, the court adopted the latter position as to all regulations promulgated pursuant to formal agency action under the Administrative Procedure Act. Id., at 1714-1717. By contrast, mere interpretative regulations or generalized statements of agency policy are not sufficient authorization to mandate disclosure of the types of information within the scope of $1905.

The purpose of the (b) (4) exemption and $1905, as made applicable through the (b) (3) exemption, is to assure private parties which provide confidential business information to the Government that such information will not be available to the general public. Of course, discretionary release of such information undermines this objective. As a result, private parties may be expected to cease making such information available or incur a financial risk associated with the possibility of its release. Accordingly, the Committee may wish to consider amending $1905 to expressly exclude release under FOIA from that "authorized by law."

In addition to the five statutes discussed in detail herein, it may be helpful for the Committee to take affirmative action to clarify whether the other statutes mentioned at the outset are intended by Congress to qualify as (b) (3) statutes. This would insure that information is protected where that is the Congressional purpose by removing from the courts the difficult task they now must undertake in construing the scope of the (b) (3) exemption.

I appreciate the opportunity to have been able to bring to your attention certain problems which the DOD has in administering the (b) (3) exemption under FOIA. My staff stands ready to assist the Committee in whatever way it can as this matter progresses.

Sincerely,

William H. Taft, IV

Senator HATCH. As I understand it, the proposers of the Freedom of Information Act and, I think, the Privacy Act indicated that the total costs of implementing these acts would be about $50,000 a year. Your story here is considerably different. You are saying that the costs just to DOD alone, not counting the hundreds if not thousands of other Government agencies, are almost $7 million a year, not counting indirect costs.

Mr. TAFT. That is correct, Senator. We are very sensitive, as you know, in the Defense Department to the charge of a cost overrun. With this act, one might have anticipated that the cost of compliance Government-wide would exceed $50,000. We try to administer it as economically as we can. I think we do a fairly good job of that. Senator HATCH. Would you say that some of these requests are filed by groups, entities, or persons whose interests are antithetical to those of the United States of America?

Mr. TAFT. Some requests have been submitted by foreign nationals of countries that are not allied with us and, indeed, that we would not have considered to be our friends.

Senator HATCH. Have you had to comply with any of those requests?

Mr. TAFT. We have indeed. Also, a request could be made by an American citizen on behalf of such an organization.

Senator HATCH. Sure. There are organizations in this country today which constitute legal entities but which are considered to be unsafe entities with regard to national security matters in this country, or at least antithetical to the interests of the United States. Is that correct?

Mr. TAFT. Let me say that there are persons in the United States whom we would not clear for access to certain information.

Senator HATCH. The reason you will not clear them is because they appear to have interests that are not in the best interests of the United States of America. Is that correct?

Mr. TAFT. I want to be clear here. We consider other factors in deciding whether to deny a clearance to a person.

Senator HATCH. No, but does that concern you?

Mr. TAFT. It would concern us if we were aware of a person who received a clearance and who had interests that were antithetical to those of the United States. We would certainly seek to deny such persons a clearance and we would be very concerned if such person received a clearance.

Senator HATCH. Are you concerned about certain groups or individuals in our own society who may be citizens and fit in that category?

Mr. TAFT. Yes, sir, we are concerned about it. The reason why I am being hesitant is that my comments reflect the concern primarily of the domestic law enforcement forces that we have. It is not a military concern.

Senator HATCH. There are some nonprofit entities in this country of extreme concern to the intelligence experts in this country who are willing to interfere with National Government secrets, intelligence, and top-secret information. Is that not correct?

Mr. TAFT. Yes, indeed, they are. We are very concerned about such entities receiving our information.

Senator HATCH. With the act as presently constituted, is it not so that you may have to give information to even these groups whose interests are certainly not in the best interests of this country?

Mr. TAFT. It is absolutely correct that the act makes no distinction as to different types of requesters. The motivation for the request or the identity of the requester is simply not an issue under the act.

Senator HATCH. You have indicated that the Freedom of Information Act requires the Department of Defense to extensively index personnel grievance cases, including opinions and orders that are not even relied upon as precedents in later cases. You have also indicated that this imposes an extremely time-consuming and costly burden on the agency. Are there other agencies with similar problems and how would you propose to alleviate this problem? Mr. TAFT. I would imagine that we have the largest number of problems of this sort. We have the largest number of Federal employees and we have a justice system inside our Department relating to those employees under the Uniform Code of Military Justice. I do not know that any other agency would have a specific similar situation that would be as serious as that.

From my experience at HEW, I cannot remember being required to maintain a system of records for this purpose that would be on the same scope as those which we are required to maintain in connection with article 138.

Senator HATCH. With regard to the second half of my question, we will leave that open. We will submit written questions to you to save some time here today. We we would appreciate your answers to those as soon as you can. We appreciate your efforts at the Department of Defense to work with us in trying to come up with a balanced bill that is in the best interests of all concerned.

Mr. TAFT. We would be delighted to do that. I will submit the answers to the questions that you provide us.

Senator HATCH. Thank you.

[Additional material follows:]

PROPOSED RESTRICTION ON DISCLOSURE

OF TECHNICAL DATA UNDER FOIA

New exemption (b) (11), set forth in section 12 of the bill, would exempt from disclosure technical data that cannot be exported under Federal export laws. The proposed legislation is designed to prevent unauthorized export of critical technology which presently can result from compulsory disclosure of unclassified technical information to members of the public under the Freedom of Information Act. Congress has sought to limit the export of unclassified critical technology which might be used for purposes contrary to American interest in the Arms Export Control Act, 22 U.S.C. §2751, et seq., and the Export Administration Act of 1979, 50 U.S.C. App. 82404. These laws impose controls on the export of technology which may be used for purposes contrary to American interests. Yet the intent of these laws is being circumvented by making such information available pursuant to the Freedom of Information Act, since once this information is released to the public it is impossible to control its subsequent dissemination.

As a

Concededly, the most effective way to protect sensitive technology would be to assign it a formal security classification, thereby extending it protection under the (b) (1) exemption. practical matter, however, the imposition of various safeguards, controls and procedures that would be entailed in classifying all sensitive technological information would impose a tremendous financial and administrative burden on the Department of Defense and private organizations working with such data, as well as make effective use of this data more difficult. Therefore, the Department of Defense currently imposes a wide range of protective measures short of formal classification to ensure protection of the technology. Procedures for the control, physical security, handling, storage, and transportation or communication of unclassified technology have been carefully designed in each instance to provide effective protection with the minimum possible interference with program activities. Since our informal procedures are not sufficient to protect this information under the Freedom of Information Act, the Department of Defense is now being forced to consider the classification option.

One specific example of the problem which would be remedied by enactment of the proposed 11th exemption concerns naval nuclear propulsion information. The national policy with respect to such information, in substantive part, is as follows: