In 1979, FBI Director Webster furnished about 125 actual illustrations, with names deleted, of refusals to provide information to the FBI by various persons, including a Federal judge, for fear of disclosure of the source's identity under FOIA or the Privacy Act. Again, while the actual risk of disclosing these sources may be small, the perception or fear of possible disclosure may result in silence. The result is less effective law enforcement.

Numerous draft amendments have been devised to reduce the impact of FOIA on criminal law enforcement. Some of these amendments are better than others in offering effective protection without ignoring other factors such as the public's interest in significant investigations like those of Alger Hiss and Julius and Ethel Rosenberg. Suffice it for today that there is a real need for careful legislative attention and appropriate action on FOIA's effects upon law enforcement.

BUSINESS INFORMATION

Three: The protectable interest in business confidentiality. There are many Federal functions and programs that bring business information into Federal files. These include a vast variety of civil and military procurements, and various kinds of safety and economic regulation involving labor, transportation, financing, and other aspects of the economy.

Both the private interests of the business firms which submit information and the public's interest in their cooperation with Government programs call for adequate protection for sensitive business information in the Government's records.

One step would be to provide legislative assurance of timely notice to a business submitter that information he may consider confidential has been sought or may be released under FOIA. Another would be to assure the submitter a more adequate opportunity to show the agency why the information should be protected. The third and perhaps most difficult step would be to provide substantive legislative standards that are clearer and better than some which today confuse this area, standards to determine two important questions: What kinds of business information in agency records are protectable, and what should be the limits on agency discretion to release protectable information.

On the question of what kinds of business information should be protectable, one approach might be a general standard of avoiding economic injury or risk, with various factors to consider in applying this standard, supplemented by special standards or special procedures for particular industries, particular Federal programs, or types of information that need special protection.

On the second question, agency discretion to release information from a business that will jeopardize the business should not exist unless release will advance a definite public interest in a way which outweighs the risk to the company. Even then, the submitter should be able to challenge the proposed release in court.

In approaching the whole vast area of business information, two further thoughts are worth considering. One is that some things like a government contract have a dual character. Such a contract is a business deal whose terms the company might prefer to dis

close only in part, but such a contract is also government action. The long history of recurrent corruption, favoritism, and waste at all levels of government in the letting of government contracts argues strongly against secrecy for commercial reasons as to the terms of such contracts.

The second thought is that protection under FOIA for business information should have some reasonable relation to protection for that other great private sector interest, individual privacy. The law must be able to withstand critical comparison of the way it protects business firms and the way it protects individuals. Protection should seldom be absolute if the public has a sufficiently strong justification for disclosure.

This is the law today as to individual privacy, where any public interest in disclosure must be balanced against the injury to the individual. No one today is suggesting that this balancing requirement be changed where individuals are concerned.

PERSONAL PRIVACY INFORMATION

Four: The protectable interest in personal privacy. Just in the past year, the Court of Appeals for the District of Columbia Circuit has rendered a series of surprising decisions, cutting back seriously on personal privacy under FOIA exemption 6. These decisions run counter to the previous understanding of the law by most courts and lawyers and counter to the intention of Congress in FOIA and the Privacy Act.

These decisions are based on a new interpretation of the phrase "similar files" in FOIA exemption 6. This new interpretation is that the phrase does not include personal information about specific individuals, the release of which might harm them, unless the information is "intimate" or "highly personal."

If the information is just "personal," it is not enough to qualify it even for consideration for possible protection, even if its release could result in adverse consequences to the individual including death.

Before this new interpretation, the statutory standard under FOIA exemption 6 was whether release of particular information about an individual would be a "clearly unwarranted invasion of personal privacy." However, this key question cannot now even be considered if the information is not part of a "similar file" as now interpreted in the District of Colurnbia Circuit.

The practical results thus far have been to preclude consideration of possible protection under exemption 6 for personal information relating to an individual's activities in his occupation on the theory that work is not "intimate" or "highly personal," and, in addition, to deny exemption 6 protection for personal history information which might expose individuals to foreign harassment or terrorism, and to deny such protection for information that certain individuals worked in a university on CIA projects, even though the individuals did not know that the work they were doing was being done for the CIA.

Congress, in passing the Privacy Act, was fully aware of FOIA, and relied on the then interpretation of FOIA exemption 6. Congress explicitly wrote into the Privacy Act's definition of records.

the concept that that act's protection should apply to "any item of information about an individual maintained by an agency, including, but not limited to, his education, financial, medical, criminal, or employment history that contains his name or other identifying particulars."

Since the practical effect of that language depends in large part on FOIA, with which the Privacy Act interrelates, the recent judicial changes in the meaning of FOIA exemption 6 also curtail the objectives sought by Congress in the Privacy Act.

The rejection of the District of Columbia Circuit's recent assault on FOIA's privacy exemption is especially important because personal privacy, although an interest of great importance with constitutional aspects, does not have effective support by strong organizations as do other major protectable interests. In addition, it is often impracticable for agencies to give notice to individuals before releasing information about them, like the notice usually given to business submitters, so that they may have an opportunity to object and to defend their interests.

FOIA TIME LIMITS

Five: FOIA procedures as to time limits. Let us be clear on what is right and what is wrong about the present time limits. These limits, as you know, are 10 working days or 2 weeks to act on FOIA requests, and 20 days or 4 weeks for appeals.

In normal circumstances, and for requests presenting no great difficulty, these are reasonable limits to protect requesters from excessive bureaucratic delays. Nevertheless, the present time limits merit legislative attention for two reasons: One, because they tend to indicate that FOIA work should always take precedence over other agency responsibilities, and, two, because they put Government agencies in an apparent position in the eyes of the public of violating the law even when large backlogs or large or difficult requests take more time.

An adequate extension of time to fit a really large and complex request cannot be granted under the present law, except by a court, and, catch 22, there is no way the agency can ask a court for such an extension unless the requester chooses to file a suit for the records.

Two changes are needed. First, there should be a more realistic list of circumstances that warrant a time extension, including, for example, the need to obtain input from a private submitter of information. Second, an agency should be able, by notice to the requester, to extend the limits to a definite date because of circumstances listed in the statute, subject of course to the requester's right to file a suit challenging the time extension as unwarranted or excessive.

FOIA FEES

Six: FOIA procedures on fees. Total fees paid by FOIA requesters cover only a tiny fraction, perhaps only 2 percent or less, of the costs to taxpayers of handling their requests. However, the matter is not that simple. Fees naturally tend to discourage requests. If higher fees are charged, some information which would benefit the

public or would benefit a private citizen at little cost would not be furnished.

The study, which we completed in 1979, contained detailed recommendations on fees to achieve three general effects, which I still favor: First, that requests which are costly to process and are made for private rather than public benefit should be charged more nearly compensatory fees to reimburse the taxpayer for a large part of the cost; second, to provide minimum fees, or none at all, where the request will benefit the public and is not costly to handle; and, third, to provide in-between treatments for both of the types of in-between situations; namely, the costly but public benefit kind of request and the inexpensive but private benefit kind.

MAKING DELETIONS UNDER FOIA

Seven: FOIA procedures as to the reasonably segregable clause. In 1974, Congress inserted at the end of FOIA subsection (b) a clause requiring that an entire record not be withheld just because a portion of it is exempt. The principle is sound, but the provision as now worded has often generated problems in practice, causing additional work and uncertainty for agency personnel.

A further result is that requesters sometimes receive useless gibberish or, more rarely but more seriously, receive sensitive information, perhaps about an informant, which slipped through without deletion.

The problem is in applying the statutory word "reasonably," and the cure is to spell out more definite standards to indicate when the segregation and release of nonexempt parts of a record is reasonable and when it is not. The study completed in August 1979 contains such standards, and I believe they would represent a worthwhile improvement in the statute.

In conclusion, I hope I have shed some light on most of the main areas for legislative concern, although there are others mentioned in my prepared statement.

Thank you.

Mr. RADER. Thank you, Mr. Saloschin. The subcommittee deeply appreciates the expertise and experience which you bring to this subject.

Senator Hatch has informed me he will return from the floor just as soon as he possibly can. In the meantime, he has requested me to ask a couple of questions.

First, in your work at the Justice Department, you had a unique opportunity to see the actual costs involved in administering the Freedom of Information Act. You have discussed in your testimony the costs to Americans in general and the costs to the Government in a cost-benefit analysis context. In your opinion, what is the actual dollar cost to the American taxpayer of administering the Freedom of Information Act?

Mr. SALOSCHIN. That is an extremely difficult and comprehensive question. If I had to give you a three-word answer, after having made vigorous efforts to determine the cost, that three word answer would be I don't know. I could also say that I do not think anybody knows.

I was instructed to try to determine this as part of the study. We began at the beginning of January in 1979 to interrogate all the agencies and give them a uniform basis for constructing estimates of their costs for the year just completed, calendar 1978.

There was a great deal of objection by some agencies to any type of estimate structure or form that might perhaps suit other agencies, and particular objections to estimate forms which sought to search out costs of the type that are more difficult to find, for example the work done on FOIA by people who work on it parttime but whose regular job is in some other part or function of the agency.

We had to get on with the job and settle for a very simplified form which resulted in estimates of approximately $48 million for the calendar year 1978. We had this reviewed by an economist in the Justice Department. Of course, after having worked with all the agencies for about 10 or 12 years and having worked in the Government a long time, I had my own degree of skepticism about what information we actually extracted through these estimates. His opinion and mine, and I think the opinion of most people who have been deeply involved in the freedom of information field, is that the costs are considerably greater if you were to determine them by a rigorous and thorough collection of data such as you might do if you had available cost accountants and similarly qualified personnel. However, how many times greater it would be, I would rather not venture a guess today.

Mr. RADER. Thank you.

What was the figure you arrived at in that 1979 study?

Mr. SALOSCHIN. That was $48 million which we traced. In our newsletter, "FOIA Update," when we reported in a series of brief stories on the costs and benefits of FOIA, we did indicate that figure, but we also indicated that it could not be regarded as accurate or even approximately accurate.

Mr. RADER. In your statement, you focus the subcommittee's attention on exemption six, the personal privacy exemption. You have explained to us why perhaps it has not received more attention from other groups.

However, what specific recommendations might you make to correct the problems without endangering public interests with regard to the sixth exemption?

Mr. SALOSCHIN. I would not change the law at all with regard to public interest balancing where individual privacy is concerned. I think the phrase "clearly unwarranted invasion of personal privacy" in the law is sound. I think it should be the test.

First, you have to see whether the release of information about a named individual would be any kind of an invasion of privacy. If it is, you protect it only if there is no substantial public interest in disclosure, or if the public interest in disclosure is definitely less than the possible risk to the individual. That is the way it should go.

The change that I would make would be simply to restore the law to what it was understood to be before the decisions in the past year here in the D.C. Circuit, that the phrase "medical files, personnel files, and similar files," which Congress wrote way back in 1966, was simply, as most people understood it, the best way they