We invited in several of the research companies to make a presentation to us at our September meeting, to let them tell us what they could do in terms of implementing the act.

We have evaluated their observations and recommendations and felt that for the present we should continue probing other dimensions. We have not been able to make a determination as yet.

Mr. SLACK. Then would it be fair to say that the $186,000 figure is really a "guesstimate" as of this time?

Mr. LINOWES. It is almost a balancing figure, sir, to be quite accurate. The only reason for that is, we project approximately 16 areas of investigation that we will have to look into. Any one of those 16 could be farmed out, whether by contractor or on a part-time assignment with appropriate individuals.

If we were to tally up the costs projected by the research organizations, our budget could not even begin to tackle the job that has been assigned to us.

On the other hand, we understand research organizations and how they function. We feel we have an excellent staff, highly competent, well qualified; nevertless limited.

We also are aware that we can properly identify the top competence in the country in these fields and we are convinced that they will be delighted to join us in whatever classification of effort the Commission might care to extend to them. So the current status, therefore, is as a matter of fact, we now have a list of some 12 or 15 people which was identified for us by staff to open discussions with, to examine the desirability of working with them.

Further, we have just taken aboard our final, top staff executive, a Director of Planning and Research Management, Prof. Louis Higgs, from Ohio State University, who headed up the Ohio State Research Foundation there. He comes very highly recommended. He begins work on Monday.

He also is very knowledgeable, has personal experience with contracting out this type of research effort.

We feel we are just now seeing the perspective of how to get the job done in the most economic and effective way.

REPORTS AND RECOMMENDATIONS

Mr. SLACK. The Privacy Act requires you to make reports and recommendations from time to time; does it not?

Mr. LINOWES. Yes, sir.

Mr SLACK. Would you care to elaborate on such requirements? Mr. LINOWES. Yes. Of course, the act spells out that at the end of the first year we make an interim report to Congress, and at the end of the second year a final report.

As we evolve different units of the required investigatory functions under this act, we expect to submit those reports to Congress and the President as required.

For example, the mailing list industry is the first one that we are investigating. We have had a rather effective briefing document prepared for us by staff, by the General Counsel, Ronald Plesser, Prof. Alan Westin, and other staff members.

I think it is a very effective document.

We will have our first hearings on November 12. We suspect that will not be sufficient. We may have to have at least a second day of hearings.

I would imagine within a few weeks after the second hearing-right now it appears that second hearing might be on December 1st because of space availability-within a couple of months after that we will be able to develop a report with recommendations on the mailing list industry.

If that is so, that report will then be submitted to Congress and to the President, yes, sir.

DURATION OF COMMISSION

Mr. SLACK. Do you view the Commission as a permanent commission?

Mr. LINOWES. No, sir, I would be shocked if it were to be.

I eagerly look forward to completing our work within 2 years and making a contribution to the Nation by virtue of the quality of the work, by virtue of the credibility, and the documentation. Even if we were to recommend that no action be taken, I would hope that the quality and the credibility that we would have established would be accepted at its face value.

Mr. SLACK. That is very commendable.
Mr. LINOWES. Thank you, sir.

AMOUNT OF AUTHORIZATION AND REQUEST

Mr. SLACK. How much is authorized for fiscal year 1976?

Mr. LINOWES. We have a limitation in the law not to expend more than $750,000 for the fiscal year. The total budget for 2 years is $1.5 million.

Mr. SLACK. You are requesting how much for the transition period? Mr. LINOWES. Well, of course it is a little awkward. Government counsel tells us that-unless we want to question that legal opinionit is being interpreted that 1 year means 15 months in the transition period. So this $748,000 is really a 15-month budget. We just arbitrarily set aside $200,000 of that for the transition period of 3 months.

Mr. SLACK. Of course, that 200,000 exceeds one-quarter of the authorization of the $750,000 ceiling as shown in section 5 of Public Law 93-579, does it not?

Mr. LINOWES. Yes; it does, sir, but as you would be aware, much of this has to be our best estimate at this time. By the time the transition period comes, we will be moving with full staff. This is still startup to some extent; so we feel that the highest rate of expenditure will take place during that latter part of the fiscal year.

Mr. SLACK. Mrs. Burke?

Mrs. BURKE. Yes, thank you,

Mr. Chairman.

CONTRACTUAL SERVICES

Will you be contracting with any governmental agencies for any portion of the contract work.

60-765 - 75 pt. 1 30

Mr. LINOWES. We had appear before us three commercial research organizations, Stanford Research, Mitre Corp., and Purdue University, which is setting up a privacy center. They made proposals.

Yesterday, at this meeting, we had a representative, Mr. Ernst, of Arthur D. Little, not to make a proposal but because of the work Arthur D. Little has been doing in related fields. He was gracious enough to come and share with us much of their findings.

Incidentally, we were very impressed with what he presented. We are carrying on discussions with the National Science Foundation, the National Academy of Sciences, with any agency of government which has expressed an interest, and in some cases we are finding a willingness, very frankly, an abundance of cooperation to assist us in any way possible.

We hope we will be able to take advantage of that kind of cooperative response.

IRS INFORATION

Mrs. BURKE. Do you have any plan left of how you will get the information in order to arrive at a determination on the subject of the Internal Revenue Service?

Mr. LINOWES. Yes.

Mrs. BURKE. Do you anticipate that being done in-house or by contract, or have you arrived at any conclusion?

Mr. LINOWES. I suspect that will be done in-house.

At our September meeting, we had Commissioner Donald Alexander appear, together with the IRS chief counsel, and three other members of his staff. They gave us some very valuable testimony.

A very competent research assistant, Susan Bennett, is working on that area presently. I have a suspicion that might not be one of those that we contract out. Do you not believe so?

MS. PARSONS. Yes. I would say it is a bit up in the air at the moment because, while there is a considerable accumulation of information that the Commission can draw on, on the Federal taxpayer information exchange question, as a consequence of the hearings now going on in the Congress, there is less known about the disposition of Federal taxpayer information shared with the States.

I am not sure yet exactly what will be involved in getting all the information we will need to make recommendations and the statute does require us to comment not only on the Federal exchange, but also on the disposition of the taxpayer information when it is shared with the States.

It may be that we will need some small contract work in order to establish what in fact all the State practices are.

PUBLIC HEARINGS

Mrs. BURKE. When you have the public hearings, will they relate to an individual subject at a time, or will they cover all of the subjects of a charge?

Mr. LINOWES. As I mentioned, the first hearing addresses itself solely to the mailing list industry on November 12. We consider that a pilot. We will be much better equipped to discuss the dimensions and the scope of the succeeding hearings from there.

I suspect, for what it is worth, that we will limit ourselves to subject types of hearings, with this exception: We are giving serious consideration to having at least one hearing for perhaps several days, just an open-door hearing, in effect inviting anyone to come in and testify after being screened by the Commission, who might feel he has something to contribute to the deliberations of the Commission in the privacy field.

That approach has been recommended to us by people familiar with the privacy question, and I think I am accurate in saying that the Commission leans rather favorably toward at least one such open-door hearing.

STATEMENTS FROM INDIVIDUALS

Mrs. BURKE. Will there also be an opportunity for individuals who have complaints to submit a statement or is there going to be a staff person who will be able to take individual interviews from aggrieved parties?

Mr. LINOWES. One of the very important dimensions is that we hope to invite in just such individuals and aggrieved parties. Fortunately, we are beginning to get correspondence and communications from individuals all over the country expressing concern and being aggrieved with their privacy problems.

We received one this morning concerned with the social security number as a universal identifier, another with a credit card company which denied an individual credit. As we get visibility-and to some extent that has been a little bit of our problem, we have not had visibility-we expect to receive many communications.

Our Public Affairs Office is purposely low-keyed. We do not want any flamboyance. On the other hand, we do need some visibility, so that the man in the street, the public, knows that there is an institution established that welcomes this kind of communication.

Mrs. BURKE. Thank you very much.
Mr. EARLY. Thank you, Mr. Chairman.

STATUS OF PERSONNEL

Mr. Linowes, is there any reason why, if this is a temporary commission that expires on July 10, 1977, we are retaining permanent positions?

Mr. LINOWES. Any reason for it to be a permanent commission? Is that the question?

Mr. EARLY. Why do we retain permanent personnel?

Mr. LINOWES. All of these people are temporary and go out of business when we go out of business.

Mr. EARLY. They are aware of that?

Mr. LINOWES. Yes.

We are not subject to the rules of the Civil Service Commission, although we try to conform to the general board outline.

For example, we classify our personnel in the GS-18, GS-17, et cetera, categories using the civil service symbols, but we are not subject to civil service requirements.

Mr. EARLY. I would just comment that you have made a fine presentation and I wish you the very best of luck.

Mr. LINOWES. Thank you very much, sir.
Mr. SLACK. Mr. Miller?

REPAYMENT TO PRESIDENT'S FUND FOR UNANTICIPATED NEEDS

Mr. MILLER. Mr. Chairman, a few minutes ago our committee chairman had mentioned to you the statement where you say you must repay the $131,300 loan by the President on August 23 from the President's fund for unanticipated needs. That is the first time that I have seen this in any testimony that the funds that the President has for unanticipated needs would be repaid.

If you repay it and if it is not used at the end of the year, it would revert back. Therefore, I am wondering why the need to repay?

Mr. LINOWES. They are the instructions, as I understood them I don't know if I brought along a copy of the President's letter spelling out this requirement-do you have a copy of that letter, Mr. Sasser, from the President in which the President made available those funds to us? Mr. Miller, I have a letter here dated August 23, 1975, written by the President and signed by him addressed to me as chairman of the Privacy Protection Commission, and it is just four short paragraphs,

about a sentence each:

Pursuant to the authority in the Treasury, Postal Service, and General Government Appropriation Act 1976, Public Law No. 94-91, I hereby allocate from the appropriation "Unanticipated needs": Privacy Protection Study Commission, amount $131.300, for necessary expenses for initial operation of the Privacy Protection Study Commission established by Public Law No. 93-579.

These funds allocated shall be reimbursed to the "Unanticipated needs" appropriation by the Commission.

I hereby determine that this allocation is to meet unanticipated needs for an emergency affecting the national interest.

(Signed) GERALD R. FORD.

Mr. MILLER. That is good you have it in the record. I believe we will need a clarification because I have not seen it in the testimony before. Is it a matter of when the President does not use the fund for an unanticipated emergency, the funds would revert back. The committee will, I am sure, be able to get clarification.

MANDATE OF THE COMMISSION

In the rest of your testimony, I notice where you have marked study of data banks. I cannot see the project that you have taken on being completed in 2 year's time.

When it goes into standards and procedures now enforced for the protection of personal information, including the standards and criteria governing programs, policy, practices, relating to the collection, soliciting, processing, and use, access, integration, dissemination, and transmission of personal information, that looks like 20 years instead of 2 years.

However, my question concerns computers in the Federal Government. Business operates today relying on computers for information. It is possible to have a terminal where we could pull information from business computers. It is possible for business to have a terminal where they could pull information from the Federal computers.

Now, that could be a complete mailing list. That could be information that might be detrimental to an individual. Are you working in this area to cover this particular field? Let me go one step beyond that if I may. I was at a subcommittee meeting about 12 years ago, and I