limited. Also, these frank statements of opinion, advice, and recommendation sometimes conflict with others, and not all of them are accepted at higher levels. In any event, if we should release them outside the executive branch of the Government, in the future it would only be natural for persons familiar with the facts to soften criticism, avoid doubtful matter, and generally to be more restrained. Self-improvement and reform within the executive branch would then become much more difficult, and the results would certainly be less in the public interest. We have, however, no desire to withhold any facts which you may require in this connection. A copy of the report in question, with recommendations, opinions, and conclusions omitted, was previously forwarded to you. Also, the General Counsel of the Navy stated at the meeting with you on October 17, that if there should be any additional factual material which you might desire in connection with the subject report, we should be happy to furnish it. Your letter now states that the material previously forwarded to you did not include certain specific data as to the scope of review, the nature of the problem areas covered, and certain other information. As a result, the General Counsel has again reviewed the report, and a copy of the report is handed you herewith which contains, I am confident, everything which you may desire with the exception of opinions, conclusions, recommendations, and other advisory matter. It presents a full factual picture of the MSTS operations described. Sincerely yours, EXHIBIT No. 19 THOMAS S. GATES. INTERNATIONAL COOPERATION ADMINISTRATION, Memorandum for the executive staff. Subject: Limited distribution of evaluation reports. June 18, 1957. The reports prepared in the Office of the Assistant to the Director for Evaluation will be given limited distribution for the reasons stated below: (a) The Assistant to the Director for Evaluation and the evaluation teams under his direction function as part of the immediate office of the Director and bear a special confidential relationship to the Director. Their reports are, in the first instance, in the nature of personal reports to the Director from his own immediate staff. (b) They are reports to the Director of the Agency containing not only highly classified information, but also opinions of the individuals who prepare the reports and a large number of recommendations on a wide variety of sensitive subjects. (c) The opinions and recommendations in the reports may well be at variance with U.S. Government policy in certain respects and, at the time the reports are issued, will not have been approved or disapproved by the Director of the Agency. (d) The reports are therefore preliminary and represent only the first step in a process designed to develop more effective programs and courses of action in the Agency. (e) As preliminary documents they will be put through the process of intraand inter-agency review under the general auspices of the regional director for the area in which the evaluated country is located. This review is designed to develop a program of action for recommendation to the Director. This program of action as finally approved may be different in many important respects from the recommendations of the evaluation report. (f) The members of the evaluation teams are requested to write their reports with complete forthrightness and candor, and to deal frankly with the most sensitive subjects if these are relevant to their evaluation. In order that there may be no damaging repercussions on them personally, they have been assured that the reports will be treated as privileged documents. Because of the above considerations, evaluation reports will be given limited distribution, within the executive branch, on a strict need-to-know basis, and only with the specific approval of the Director. However, consideration will be given to supplying copies of the action programs mentioned above, as finally approved by the Director, to Members of the Congress and to the General Accounting Office. JOHN B. HOLLISTER. EXHIBIT No. 20 The COMPTROLLER GENERAL OF THE UNITED STATES. APRIL 25, 1958. DEAR MR. CAMPBELL: Mr. John Murphy, the Controller of ICA, has brought to my attention the draft GAO Report on Taiwan in which the authors twice (pages 4b and 4c, 46 and 47) present arguments as to why GAO should be permitted to have access to ICA evaluation reports. I have reviewed the letter on this subject which you wrote to my predecessor, Mr. Hollister, on August 15, 1957, and his reply to you, dated August 30, 1957. I have reached the same conclusion he did-that these personal and confidential reports to the Director of ICA should be made available only to a restricted few in the executive branch. The facts and information they contain which would be relevant to your examination are already available to you in our files and audit reports, to which your staff is given full access. What they contain, in addition, consists of the personal opinions, observations, reactions, recommendations and conclusions of the two men who write the reports. This latter material is intended to stimulate thought and to suggest new ideas and ways of attacking some of our difficult problems. As such it has no standing except as the opinions of the two evaluation officers, and, in fact, many of the recommendations are rejected during the process of the careful review through which the reports are put. We could not properly ask these officers to express their personal views with such complete candor as we do if they were not assured that their reports would be held most closely and not be available outside the small circle of people in the executive branch who need to have access to them. Thus, if there were any likelihood that this protection would be withdrawn, we feel that the character of this work would change substantially and that we would defeat the basic objective of these studies. This would be truly unfortunate, since they are making it possible for us to improve our operations in important respects and are valuable in stimulating thought and action and in overcoming the tendency, always present in a large organization, to keep on doing things in the same old way because it is easier to do so than to make the effort to change. In view of these considerations, I could not follow any other course than that of refusing, on the ground that they are privileged documents, to make the evaluation reports available to your office. I hope you will agree with me, therefore, that it would serve no useful purpose but, on the contrary, would only stir up a fruitless controversy between the legislative and executive branches of the Government, to include the material to which I have referred in your report to the Congress. I am eager to make clear to you why it would be harmful to the effectiveness of our program to make these reports available to your office, and would be glad to discuss the matter further with you personally. Sincerely yours, J. H. SMITH, Jr. EXHIBIT No. 21 COMPTROLLER GENERAL OF THE UNITED STATES, B-120810 Hon. JOHN B. HOLLISTER, Director, International Cooperation Administration. DEAR MR. HOLLISTER: It is understood that there have been several discussions between representatives of our respective staffs concerning the availability to the General Accounting Office of reports prepared by the Office of the Assistant Director for Evaluation, International Cooperation Administration. Also, we have been apprised of the memorandum for the executive staff dated June 18, 1957, stating the reasons for limited distribution of evaluation reports. Based on our examination of earlier evaluation reports, which were prepared within ICA before this function was assigned to the Assistant to the Director for Evaluation, it is our opinion that these reports are in a broad sense in the nature of, and supplementary to, internal audit reports and, therefore, should be available for examination by the General Accounting Office. Section 117(a) of the Budget and Accounting Procedures Act of 1950, provides: 40377 0-59-pt. 1-22 "Except as otherwise specifically provided by law, the financial transactions of each executive, legislative, and judicial agency, including but not limited to the accounts of accountable officers, shall be audited by the General Accounting Office in accordance with such principles and procedures and under such rules and regulations as may be prescribed by the Comptroller General of the United States. In the determination of auditing procedures to be followed and the extent of examination of vouchers and other documents, the Comptroller General shall give due regard to generally accepted principles of auditing, including consideration of the effectiveness of accounting organizations and systems, internal audit and control, and related administrative practices of the respective agencies." This authority for the Comptroller General to determine the scope and manner in which the audits will be conducted recognizes their comprehensive nature. It also imposes upon us a responsibility to conduct these audits in the best and most expeditious manner. You will note that we are specifically required, in determining our audit procedures, to consider among other things the "*** internal audit and control, and related administrative practice * * *" Section 313 of the Budget and Accounting Act of 1921 contains the legislative requirements for the departments and agencies to furnish information and grant access to their records as follows: "All departments and establishments shall furnish to the Comptroller General such information regarding the powers, duties, activities, organization, financial transactions, and methods of business of their respective offices as he may from time to time require of them; and the Comptroller General, or any of his assistants or employees, when duly authorized by him, shall, for the purpose of securing such information, have access to and a right to examine any books, documents, papers, or records of any such department or establishment * * *." The foregoing provisions and their legislative backgrounds clearly contemplate that the General Accounting Office shall conduct comprehensive audits and give consideration to agency internal audits and controls in making such audits. Also, that the Office shall have access to any information and records as may be required by the Comptroller General. We believe you will agree that the independent audit contemplated requires that all available information pertinent to any matter under study be considered. Such information is necessary to assure that our findings and reports will be as complete, accurate, and objective as possible and will thus be of maximum usefulness to interested officials and agencies concerned. As a practical matter, the lack of access to the ICA evaluation reports would probably mean that some of your most significant information would not be available to us, and that the lack of this information would preclude adequate recognition of your internal audit and review work when we are planning and carrying out our own audits. This would result in unnecessary duplication of audit effort and in some cases will impose a dual burden on your operating personnel in having to undergo similar reviews by two groups. Normally, we utilize your internal audit and review work as much as possible and supplement it only to the extent we consider necessary. With reference to the reasons stated in memorandum of June 18, 1957, concerning the limited distribution of the evaluation reports, the General Accounting Office has always recognized its responsibility to avoid improper release of information. As you know, draft copies of reports which result from our normal audit.activities have in the past been made available to the International Cooperation Administration for review and comment, prior to their release. This procedure has been found to be satisfactory by various officials of the International Cooperation Administration and has resulted in the expeditious consideration and adoption of many important recommendations. We expect to continue this process and it will afford ample opportunity to avoid inappropriate release of information. In view of the foregoing, it is requested that instructions be issued making reports prepared by the Assistant to the Director for Evaluation available to General Accounting Office personnel. Sincerely yours, JOSEPH CAMPBELL, Comptroller General of the United States. B-120810. EXHIBIT No. 22 INTERNATIONAL COOPERATION ADMINISTRATION, The COMPTROLLER GENERAL OF THE UNITED STATES. DEAR MR. CAMPBELL: I have your letter of August 15, 1957, requesting that the reports prepared by our Assistant to the Director for Evaluation be made available to General Accounting Office personnel. My decision that it is necessary to restrict distribution of the evaluation reports came before any of them were prepared and long before your request. I felt that I could not get the type of forthright study and candid comment on the validity and effectiveness of our aid program both military and economic as an instrument of our foreign policy absolutely necessary to the head of this agency without making this decision in advance and adhering to it. Your letter indicates that your request perhaps is based on a misconception of the nature of the reports. You refer to "earlier evaluation reports" supplementary to internal audit reports. The latter we make available to the GAO as a matter of course. The reports now in question are of a different nature and for a different purpose and are not intended to be supplementary to the internal audit reports. The evaluation reports cover basic overall ICA program objectives and content and seek to answer the fundamental question, "Do ICA programs effectively carry out U.S. foreign policy objectives in the particular country?" They do not directly concern financial operations and transactions. We have provided separate and distinct mechanisms and procedures for this latter purpose and such reports are available to you. It is my belief that the statutory provisions you cite are not directed at reports which essentially concern foreign policy and the basic means of implementing it, but relate rather to materials concerning financial transactions and business methods. As stated in 31 U.S.C. 65 (d), the General Accounting Office, as an agent of Congress, is entitled to information "directed at determining the extent to which accounting and related financial reporting fulfill the purposes specified, financial transactions have been consummated in accordance with laws, regulations, or other legal requirements, and adequate internal financial control over operations is exercised, and afford an effective basis for the settlement of accounts of accountable officers." I do not believe that the evaluation reports fall within the reach of this provision. You have recently indicated your agreement with this view in testimony concerning the ICA program in Korea before the House Foreign Affairs Committee (hearings before the House Foreign Affairs Committee on the Executive Branch Proposed Draft Bill To Amend the Mutual Security Act of 1954, part VI, p. 1144) : "We would stress the point that our examination was directed to a critical analysis of the financial management of selected segments of the program. "Since the objectives of the program are predominantly military and political in character, it is not within our province to evaluate the accomplishments of the program in terms of these objectives." There are repeated statements to this effect from you and other representatives of the General Accounting Office at other points in these hearings. See, for example, pages 16-17, 20, 109, 1159, 1162. I believe that it is in the public interest to keep the distribution of these reports limited to certain specific officers within the executive branch. They are reports to me from personnel in my immediate office. They contain confidential opinions and tentative recommendations on a wide variety of matters affecting foreign policy. They are in no way definitive or final statements or decisions of this Agency or the U.S. Government. That the Congress itself recognized the sensitive nature of mutual security operations and the undesirability of a mandatory requirement to turn over all documents of every nature to that body was indicated during the debates on the Mutual Security Act of 1956, when a provision making such requirements was debated and defeated by a substantial margin (see debates on the Hardy amendment, vol. 102, part 7, Congressional Record, 84th Cong., 2d sess., pp. 9906–9910, June 8, 1956). I think you know that during my term as Director of ICA, and, indeed, from the viewpoint of a former Member of Congress, it has been my firm policy to keep the Congress and General Accounting Office fully informed, and that I have given access to your office to all of our operating files for your immediate use in the course of GAO audits. However, this is one of those few rare cases where I believe I should exercise the executive privilege of withholding a report. I believe it is essential to do so in order to assure myself that I will obtain the type of report necessary to guide me in carrying out my responsibility to the President and to the Secretary of State in formulating basic policy for ICA. The Department of State fully concurs with this decision. Yours very sincerely, EXHIBIT No. 23 JOHN B. HOLLISTER. COMPTROLLER GENERAL OF THE UNITED STATES, B-107366 The Honorable the SECRETARY OF DEFENSE. DEAR MR. SECRETARY: For a period of several months discussions have been carried on between representatives of the Department of Defense and representatives of the General Accounting Office concerning proposed directives to be issued by the Department of Defense dealing with access to defense information by the General Accounting Office. Our respective representatives reached an understanding on March 7, 1958, and by letter dated March 14, 1958, the Assistant Secretary of Defense (Comptroller) sent to us drafts of the proposed directives requesting our comments or concurrence. By letter dated March 21, 1958, we advised the Assistant Secretary that except for a technical change the proposed directives were satisfactory, it being understood that should any situation arise in the future which would make the proposed revised procedures unworkable, in that the General Accounting Office would be impeded in carrying out its duties and responsibilities, we would have to insist that the procedures be reconsidered. The directives were not issued and on June 5 and June 17, 1958, representatives of the Department of Defense discussed with us further changes in the directive dealing with access to information generally. At these meetings, the Department representatives were advised that the changes proposed were not satisfactory to the General Accounting Office. The changes in question are in paragraph III.B.3. concerning the availability of reports of the Inspector General in the internal audit, inspection, examination, and survey areas, and in paragraph III B.4. relating to the furnishing of information which would raise a question as to whether the information may be furnished to a member or a committee of the Congress. We wish to make it clear that our letter of March 21, 1958, to the Assistant Secretary of Defense (Comptroller) concerning the prior proposed directives is not to be construed in any way as an approval or concurrence in the changes recently discussed with us. While we understand that the changes have not been finally adopted by the Department of Defense, we believe that if the directive is issued with the changes included it will seriously impede the work of the General Accounting Office. Sincerely yours, JOSEPH CAMPBELL, Comptroller General of the United States. EXHIBIT No. 24 COMPTROLLER GENERAL OF THE UNITED STATES, Washington, March 21, 1958. B-107366 Hon. W. J. MCNEIL, Assistant Secretary of Defense (Comptroller), DEAR MR. MCNEIL: Reference is made to your letter dated March 14, 1958, enclosing a draft of a proposed new directive dealing with unclassified information, and proposed amendments to Department of Defense Directive 5200.1 |