Applicability of Trade Secrets Act to Intra-Governmental

Exchange of Regulatory Information

The disclosure to certain federal financial regulatory agencies of propriety inform ation o f the Office 

o f Federal H ousing Enterprise Oversight obtained from the finance institutions it regulates would 

be “ authorized by law ” within the m eaning of the Trade Secrets Act and therefore would not 

violate that A ct’s prohibitions against unauthorized agency disclosures of trade secrets or other 

confidential business inform ation.

April 5, 1999

M e m o r a n d u m O p i n i o n f o r t h e G e n e r a l C o u n s e l

O f f i c e o f F e d e r a l H o u s i n g E n t e r p r i s e O v e r s ig h t

This responds to your request for our opinion regarding the applicability of 

the Trade Secrets Act, 18 U.S.C. § 1905 (Supp. II 1996) (“ TSA” ), to the Office 

of Federal Housing Enterprise Oversight’s (“ OFHEO” ) proposed provision to 

other federal agencies of certain proprietary information that it receives in carrying 

out its statutory responsibilities.1 For reasons set forth below, we conclude that 

the TSA does not prohibit the inter-agency, official purpose disclosures outlined 

in your request.

I.

OFHEO is a federal agency, within the Department of Housing and Urban 

Development, created by the Federal Housing Enterprises Financial Safety and 

Soundness Act of 1992, Pub. L. No. 102-550, 106 Stat. 3941, 3944, (codified 

at 12 U.S.C. §§ 4501-4641 (1994)) (“ FHE Act” or “ Act” ). Its purpose is, inter 

alia, to ensure that the Federal National Mortgage Association (Fannie Mae) and 

the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, “ the 

Enterprises” ) “ are adequately capitalized and operating safely” in accordance 

with governing legislation. See 12 U.S.C. § 4513(a). The Enterprises are the 

nation’s largest housing finance institutions. OFHEO’s oversight and regulatory 

responsibilities with respect to them are similar to those exercised over banks 

and financial institutions by agencies such as the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. See OFHEO Letter 

at 1.

In carrying out its responsibilities under the Act, OFHEO from time to time 

requires the Enterprises to submit various reports on their financial condition and

1 See Letter for Lee J. Radek, Chief, Public Integrity Section, Criminal Division, Department of Justice from 

Anne E. Dewey, General Counsel, Office of Federal Housing Enterprise Oversight (June 5, 1998) (“ OFHEO Letter” ). 

The Attorney General has delegated her authority to provide legal opinions for departments and agencies of the 

executive branch to this Office and, accordingly, your request has been forwarded to us for disposition. See 28 

U.S C §§510-513 (1994), 28 C.F.R. §0.25(a) (1997).

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Applicability o f Trade Secrets Act to Intra-Governmental Exchange o f Regulatory Information

operations. See 12 U.S.C. §4514. These reports, as well as other regulatory 

information obtained from the Enterprises by OFHEO in performing its duties, 

sometimes include sensitive proprietary information. OFHEO Letter at 2.

As explained in your letter, OFHEO desires to exchange regulatory information 

obtained from the Enterprises (including some proprietary information) with certain other federal financial regulators in order to facilitate “ fulfilling its safety 

and soundness mission.” Id. at 2. For purposes of this opinion, therefore, we 

assume that these arrangements will materially enhance OFHEO’s performance 

of its statutory responsibilities. If such disclosures do take place, we are advised 

that the governmental recipients of the information would be required to maintain 

its confidentiality and would, of course, be subject to the provisions of the TSA 

in their own handling and maintenance of that information. See id. at 2.

The TSA prohibits officers and employees of federal agencies from publishing 

or disclosing trade secrets and other confidential business information “ to any 

extent not authorized by law.” 18 U.S.C. § 1905.2 Because some of the proprietary 

information OFHEO wishes to share with other federal financial regulators would 

be of the type otherwise covered by the TSA, you seek the Department’s legal 

opinion whether the proposed provision of such information to other federal agencies under the circumstances outlined in your letter would violate the TSA.

n.

There is significant precedential support for the view that the kind of disclosures 

described in your letter would not violate the TSA. A number of federal court 

opinions have expressed the view that the TSA applies only to the public disclosure of covered information and does not apply to official intra-govemmental 

disclosures of such information. Additionally, two opinions of this Office have 

concluded that the TSA does not prohibit the exchange of trade secret or proprietary information between federal agencies for lawful governmental purposes — 

at least where such disclosures are authorized by the Paperwork Reduction Act

2 The TSA provides in pertinent part as followsWhoever, being an officer or employee of the United States or of any department or agency thereof, 

any person acting on behalf o f the Office o f Federal Housing Enterprise Oversight, . publishes, divulges, 

discloses, or makes known in any manner or to any extent not authonzed by law any information coming 

to him in the course of his employment or official duties or by reason of any examination or investigation 

made by, or return, report or record made to or filed with, such department or agency or officer or employee 

thereof, which information concerns or relates to the trade secrets, processes, operations, style of work, 

or apparatus, or to the identity, confidential stausucal data, amount or source of any income, profits, losses, 

or expenditures of any person, firm, partnership, corporation, or association,

shall be fined under this title or imprisoned not more than one year, or both, and shall be removed 

from office or employment.

18 U S C § 1905 (emphasis added) The underscored phrase, extending the TSA to cover disclosures by “ person[s] 

acting on behalf of the [OFHEO],” was added by Pub L No. 102-550, tit XIII, § 1353, 106 Stat at 3970 As 

shown by the Senate Report on a contemporaneous bill of the same Congress containing the exact same provision, 

the apparent purpose of this addition to the statute was simply to “ subjectU any consultant to the [OFHEOl to 

the same criminal penalties for release of confidential information as government employees ” S. Rep. No. 102— 

282, at 53 (1992).

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Opinions o f the Office o f Legal Counsel in Volume 23

of 1980, Pub. L. No. 96-511, 94 Stat. 2812 ( “ PRA” ), see 44 U.S.C. § 3510(a) 

(Supp. I 1995), or by any other federal statute, either explicitly or implicitly. An 

additional opinion of this Office, moreover, emphasizes the broader principle — 

grounded on the President’s executive powers set forth in Article II of the Constitution — that the exchange of commercial regulatory information among federal 

government agencies for legitimate government purposes is presumptively lawful, 

and that only explicit statutory language prohibiting such disclosure can overcome 

that presumption.3 These opinions would suggest the conclusion that the TSA does 

not apply to any authorized inter-agency disclosures. It is not necessary, however, 

for us to reach that issue, because we conclude that the disclosures at issue here 

would be “ authorized by law” within the meaning of the TSA itself. At a minimum, the precedents call for a generous reading of statutes that may implicitly 

authorize inter-agency disclosures such as those in question, and we thus read 

the FHE Act as providing such authority here, as we discuss in Part II.C, below.

A.

In Emerson Elec. Co. v. Schlesinger, 609 F.2d 898 (8th Cir. 1979), the Eighth 

Circuit considered whether the Equal Employment Opportunity Commission and 

the Department of Labor’s Office of Federal Contract Compliance could lawfully 

exchange certain information and records that those agencies had gathered from 

regulated companies reflecting the companies’ compliance with federal employment discrimination laws. The court assumed arguendo that the information in 

question was of the type protected by the TSA. Based upon the pertinent 

“ pronouncements of Congress, the President and the agencies” — notably, certain 

statutory provisions authorizing inter-agency cooperation, see 42 U.S.C. § 2000e4(g)(1) (1994) — the court first concluded that the particular exchanges of 

information proposed would be “ authorized by law” within the meaning of the 

TSA even if that act were otherwise applicable to the inter-agency exchanges. 

609 F.2d at 907. The court then proceeded to elaborate upon the proper relationship between inter-governmental information exchanges and the TSA.

It is again worth emphasizing that the disclosure contemplated 

. . . is between two agencies, both of which are charged with the 

task of eliminating employment discrimination. We seriously doubt

whether § 1905 was intended to prohibit any interagency information transfers. Since the Federal Reports Act, 44 U.S.C. §§3501-

3512, directly controls exchanges between agencies, it appears that

3 An example of such an explicit statutory provision is contained in the Privacy Act. See 5 U S C §552a(b) 

(1994) (providing that “ [n]o agency shall disclose . . . to another agency” personal records covered by the Privacy 

Act, subject to listed exceptions). The category of sensitive personal records protected by the Privacy Act is not 

implicated by the disclosure of commercial regulatory information proposed here

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Applicability o f Trade Secrets Act to Intra-Governmental Exchange o f Regulatory Information

§ 1905 was designed to apply only to public disclosures of trade

secret material.

Id. at 907 (emphasis added).

In her separate opinion in Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984), 

Justice O’Connor expressed a similar view, observing: “ The question of interagency use of trade secrets before 1972 is more difficult because the Trade Secrets

Act most likely does not extend to such uses." Id. at 1023 (O’Connor, J., concurring in part and dissenting in part) (emphasis added). Other courts have also 

expressed a restrictive interpretation of the TSA in this respect. See Tri-Bio Laboratories, Inc. v. United States, 836 F.2d 135, 141 n.7 (3d Cir. 1987) (“ Because

the Trade Secrets Act . . . prohibits only public disclosure of application data, 

it does not bar internal agency use of submitted data.” ) (emphasis added), cert,

denied, 488 U.S. 818 (1988); Interco, Inc. v. FTC, 490 F. Supp. 39, 40 (D.D.C. 

1979) (documents including trade secrets could be disclosed by FTC to State 

Attorneys General who provide reasonable assurances of confidentiality because 

such disclosure would be “ authorized by law” under a broad reading of section 

6(0 of the Federal Trade Commission Act). Cf. United States v. Wallington, 889 

F.2d 573, 579 (5th Cir. 1989) (in order to avoid arbitrary enforcement, court narrowly construed TSA to apply only to “ confidential” information and “ further 

defined ‘confidential’ to require at least that the government agency in question 

have an official policy that the information not be disclosed (or that nondisclosure 

be mandated by statute or regulation)” ).4

This Office invoked the above-quoted interpretation of the court in Emerson

Electric in reaching the conclusion that, in light of the Paperwork Reduction Act, 

the TSA did not prohibit the Department of Justice from sharing proprietary 

information obtained from companies under the National Cooperative Research 

and Production Act (“ NCRPA” ), 15 U.S.C. § 4305(d) (1994), with other federal 

departments and agencies. See Memorandum for Anne Bingaman, Assistant 

Attorney General, Antitrust Division, from Walter Dellinger, Assistant Attorney 

General, Office of Legal Counsel, Re: Sharing of Materials with other Federal

Agencies (May 31, 1994) (“ 1994 Opinion” ). As we noted in that opinion:

We have also considered whether provision of the information 

to other federal agencies might be prohibited by the Trade Secrets 

Act (TSA), 18 U.S.C. § 1905, which prohibits federal officials from

4 But see Shell Oil Co. v. Department o f Energy, A ll F. Supp 413. 419 (D Del 1979), a jfd , 631 F.2d 231 

(3d Cir. 1980), cert denied, 450 U S 1024 (1981), where the court assumed, without deciding, that the TSA applies 

to inter-agency disclosures, afier stating “ While a number of opinions of the Attorney General have suggested, 

largely based on practical considerations, that [the TSA] was not intended to apply to inter-agency transfers of 

proprietary information, no court appears to have so held ” The Shell Oil opimon was issued before the Eighth 

Circuit’s opinion in Emerson Electric In any event, the Shell Oil court went on to hold that the Department of 

Energy was “ authorized by law” to disclose the proprietary data in question to any federal agency with a legitimate 

need for such information pursuant to the Federal Energy Administration Act, 15 U S C §§761-790h (1994)

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Opinions o f the Office o f Legal Counsel in Volume 23

disclosing, “ in any manner or to any extent not authorized by law,” 

trade secrets or similar information in the possession of federal 

agencies. If the exchanges of information are not prohibited by the 

NCRPA or the [Hart-Scott-Rodino Antitrust Improvements Act], 

we believe they would be authorized by 44 U.S.C. §3510 (part 

of the Paperwork Reduction Act (PRA)), which provides that “ an 

agency may make available to another agency, information obtained 

pursuant to an information collection request if the disclosure is 

not inconsistent with any applicable law.” The Eighth Circuit held 

the TSA inapplicable to inter-agency information transfers in 

Emerson Electric Co. v. Schlesinger, 609 F.2d 898, 907 (1979), 

stating, “ Since the Federal Reports Act (since supplanted by the 

PRA, as quoted above) directly controls exchanges between agencies, it appears that § 1905 was designed to apply only to public 

disclosures of trade secret material.”

1994 Opinion at 3 n.4.

We expressed similar views in a 1981 opinion concluding that confidential trade 

information obtained by the Secretary of Commerce pursuant to the Export 

Administration Act (“ EAA” ) may be lawfully released to federal law enforcement 

and intelligence agencies. See Disclosure o f Information Collected under the

Export Administration A ct, 5 Op. O.L.C. 255 (1981). Although that opinion primarily concerned interpretation of the EAA and the Paperwork Reduction Act, 

it also rejected the Commerce Department’s argument that inter-agency disclosure 

of the information would violate the TSA:

We do not agree with the Department of Commerce that 18 

U.S.C. § 1905, which prohibits the disclosure of confidential trade 

information unless authorized by law, would bar interagency disclosure because, assuming no other statutory prohibition against disclosure, §3510 of the Paperwork Reduction Act would authorize the 

disclosure. 44 U.S.C. §3510.

Id. at 261 n.3.5

Another opinion of this Office, although not directly addressing the TSA, lends 

further general support to the view that federal statutes prohibiting public disclosure of proprietary regulatory information do not prohibit the exchange of such 

information between federal agencies for legitimate government purposes. See

Inter-Departmental Disclosure o f Information Submitted Under the Shipping Act

5 The opinion further observed. “ The question whether 18 U.S C § 1905 applies to intra-govemmental transfers

. . has never been resolved.” Id at 262 n 6. Although it did not seek to resolve that question, the opinion did 

establish a framework for construing the TSA’s phrase “ authorized by law” that provides the basis for our analysis 

here. See Part II.C, infra.

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Applicability o f Trade Secrets Act to Intra-Govemmental Exchange o f Regulatory Information

of 1984, 9 Op. O.L.C. 48 (1985) (“ Shipping Act Opinion” ). There, we concluded 

that the confidentiality provisions of section 6(j) of the Shipping Act, 46 U.S.C. 

app. §§1701-1719 (Supp. II 1984),6 do not prohibit the Federal Maritime 

Commission from disclosing Shipping Act information to other federal government agencies. Id. at 48-49. In reaching that conclusion, we discussed the broader 

constitutional considerations that may be implicated by legislative restrictions on 

the disclosure of regulatory information between executive branch departments 

and agencies for official purposes. Referring to “ the general presumption that 

information obtained by one federal government agency is to be freely shared 

among federal government agencies,” and after noting that “ [i]t is axiomatic that 

all information and documents in the possession of Executive Branch agencies 

are within the control of the President as the head of the Executive Branch,” 

id. at 52-53, we continued:

We believe it follows from these general constitutional principles 

that a decision by Congress to restrict the flow of information 

among federal agencies when such information relates to the 

performance of the official duties of these agencies must be 

executed by legislation that leaves no doubt as to Congress’ intent. 

Particularly regarding the development by the President of his foreign policy, it would be untenable to read into the statute at issue 

here an implied intent to deny to those subordinates of the President 

charged with the formulation of foreign policy those documents and 

information deemed relevant to that formulation.

Id. at 53. We therefore concluded that section 6(j) of the Shipping Act, as its 

language indicates, prohibits only public disclosure of information obtained under 

that Act and that such information may be disclosed for official purposes to other 

federal agencies or executive branch departments.

The Trade Secrets Act would not appear to satisfy the standards of specificity 

and clarity described in our Shipping Act opinion — i.e., “ legislation that leaves 

no doubt as to Congress’ intent’ ’ — as necessary for legislation to prohibit the 

official exchange of commercial regulatory records between executive branch 

agencies.7 On the contrary, there is more than considerable doubt that Congress

6 Section 6(j) of ihe Shipping Act provides in relevant part.

Except for an agreement filed under section 1704 of this Appendix, information and documentary material 

filed with the Commission under section 1704 of this Appendix or this section is exempt from disclosure 

under section 552 of Utle 5 [United States Code the Freedom of Information Act] and may not be made

public except as may be relevant to an administrative or judicial action or proceeding This section does# 

not prevent disclosure to either body of Congress or to a duly authorized committee or subcommittee 

of Congress.

46 U.S C app. 1705(j) (emphasis added)

7 Earlier opinions of the Attorney General are also consistent with the conclusion we reach here In an opinion 

concluding that a predecessor trade secrets nondisclosure statute similar to the TSA (section 708 of the Act of

Continued

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intended the TSA to criminalize such intra-govemmental exchanges, which do 

not involve the kind of misuse or misappropriation of proprietary information 

which the TSA was intended to forestall. See Emerson Electric, 609 F.2d at 906.

Although the foregoing judicial and administrative precedents support the view 

that the proposed disclosure of proprietary information to other agencies is not 

the kind of disclosure that the TSA was intended to prohibit, we need not decide 

here whether the TSA is wholly inapplicable to authorized inter-agency disclosures. Taking into account the background of these precedents, we believe that 

the provisions of the Federal Housing Enterprises Act (together with OFHEO 

regulations recently promulgated thereunder, see Part II.D, infra) provide adequate 

authorization for such disclosures to fall within the “ authorized by law” exception 

to the TSA’s prohibitions.

B.

Before turning to the FHE Act, we first consider the availability of the Paperwork Reduction Act as a source of authority for the particular category of disclosures contemplated here. That statute warrants consideration because the abovequoted opinions of this Office emphasized that the inter-agency exchanges of 

information which they approved had been affirmatively authorized by the PRA 

and were therefore “ authorized by law” within the meaning of the TSA. See

1994 Opinion at 3 n.4; 5 Op. O.L.C. at 261 n.3. Similarly, the court in Emerson

Electric bolstered its conclusion that the TSA applies ‘ ‘only to public disclosures’ ’ 

by stressing that the Federal Reports Act (predecessor statute to the PRA) “ controls exchanges between agencies.” 609 F.2d at 907.

The PRA provides in relevant part:

(a) The Director [of the Office of Management and Budget] may 

direct an agency to make available to another agency, or an agency

may make available to another agency, information obtained by a

Sept 8, 1916, 39 Stat. 756, 798) did not prohibit the U S. Tariff Commission from providing the War Trade Board 

certain trade secrets obtained by the Commission in performing its regulatory duties, the Attorney General stated: 

It will be noted that the inhibition in the foregoing section is directed against the disclosure of trade 

secrets “ to any person ” It is a well-recognized rule of law that the sovereign power is not included

by the general terms o f a statute.

These considerations, it seems to me, are persuasive of an interpretation of section 708, which, m pursuance of the cooperation authorized by section 707, would not preclude the availability o f all the information

gathered by the Tariff Commission for any appropriate use by any Department or independent branch

o f the Government, including the War Trade Board 

Tariff Commission— Disclosure o f Trade Secrets, 31 Op. A tt’y Gen 541, 542-43 (1919) (emphasis added). See

also Authority o f Federal Communications Commission to Disclose Confidential Information to Senate Committee

on Interstate and Foreign Commerce, 41 Op. A tt’y Gen. 221 (1955). There, in concluding that the Federal Communications Commission’s disclosure of certain proprietary information to a Senate committee was “ authorized by 

law ” within the meaning of the TSA, the Attorney General opined that the statutory or other authorization for 

such intra-govemmental disclosure of such material may be “ reasonably implied rather than express.” Id at 228

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Applicability o f Trade Secrets Act to Intra-Govemmental Exchange o f Regulatory Information

collection of information if the disclosure is not inconsistent with 

applicable law.

44 U.S.C. § 3510(a) (emphasis added).

It does not appear, however, that the particular category of information referenced in your opinion request is the kind of information covered by the PRA — 

that is, information obtained by a “ collection of information,” see 44 U.S.C. 

§3502(3) (Supp. I 1995). In this regard, your letter refers to “ reports on [the] 

financial condition and operations” of the Enterprises required by OFHEO; other 

special reports submitted by the Enterprises that, in the judgment of the Director, 

are necessary to carry out the purposes of the 1992 Act; and other “ sensitive, 

proprietary data” received from the Enterprises by OFHEO “ [i]n carrying out 

its oversight authorities.” OFHEO Letter at 2.

Under the PRA, the term “ collection of information” is defined as

the obtaining, causing to be obtained, soliciting, or requiring the 

disclosure to third parties or the public, of facts or opinions by 

or for an agency, regardless of form or format, calling for either —

(i) answers to identical questions posed to, or identical reporting 

or recordkeeping requirements imposed on, ten or more persons,

other than agencies, instrumentalities, or employees o f the United

States', or

(ii) answers to questions posed to agencies, instrumentalities, or

employees of the United States which are to be used fo r general

statistical purposes', ....

44 U.S.C. § 3502(3)(A) (emphasis added).

The information obtained by OFHEO from the Enterprises does not appear to 

have been obtained by a “ collection of information” that conforms to the definition under either subparagraph (i) or (ii). Subparagraph (i) appears inapplicable 

because OFHEO’s collection efforts are not imposed on “ ten or more persons.” 

Rather, it appears that they are imposed only on the two Enterprises. Subparagraph

(ii) likewise appears inapplicable based upon both of its criteria. The Enterprises 

are both private entities, rather than agencies or instrumentalities of the United 

States. See 12 U.S.C. § 1716b (1994) (Fannie Mae re-established as “ a Government-sponsored private corporation” ); American Bankers Mortgage Corp. v. Federal Home Loan Mortgage Corp., 75 F.3d 1401, 1408 (9th Cir.) (Freddie Mac 

is not a government entity), cert, denied, 519 U.S. 812 (1996); Patriot, Inc. v. 

HUD, 963 F. Supp. 1, 7 (D.D.C. 1997) (“ Fannie Mae is a ‘private corporation,’ 

12 U.S.C. § 1716b, owned by its private shareholders, and as a private entity, 

it does not issue regulations.” ); Liberty Mortgage Banking, Ltd. v. Federal Home

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Loan M ortgage Corp., 822 F. Supp. 956, 958-60 (E.D.N.Y. 1993) (Freddie Mac 

is a private corporation rather than a government agency). Moreover, it does not 

readily appear that the information in question here is to be used for general statistical purposes. Rather, it is to be used for specific regulatory and oversight purposes bearing upon the Enterprises.

Because the information at issue does not appear to have been obtained through 

a “ collection of information” within the meaning of the PRA, we do not believe 

that the PRA’s authorization for inter-agency disclosures, see 44 U.S.C. § 3510(a), 

may be relied upon as affirmative authority for the disclosures proposed here. 

That raises the question whether the proposed inter-agency disclosure is otherwise 

“ authorized in a general way by law,” Liquidation o f Reconstruction Finance

Corporation — Disclosure o f Information, 41 Op. Att’y Gen. 166, 169 (1953). We 

believe that it is.

C.

This Office has previously considered whether certain information or records 

not covered by the express authorizations of the PRA (and also exempt from 

disclosure to the public under the FOLA, as in the case of trade secrets) may 

nonetheless be disclosed or provided by one federal agency to another for official 

agency purposes. See 5 Op. O.L.C. 255 (1981). As we framed the issue in that 

opinion:

The existence of an affirmative authorization in the Paperwork 

Reduction Act for certain information arguably implies that some 

authorization is required, whether by statute, either expressly or by 

necessary implication, or by substantive regulation. Moreover, it 

may be necessary to determine whether there is an authorization 

for disclosure to federal law enforcement and intelligence agencies 

to avoid the strictures of 18 U.S.C. § 1905.

Id. at 262. We then described the kind of authorization “ by law” that would 

satisfy this concern when the PRA is not apparently applicable:

The phrase “ authorized by law” does not mean that the authorization must be “ specifically authorized by law” ; it is sufficient that 

the disclosure is “ authorized in a general way by law.” 41 Op.

Att’y Gen. 166, 169 (1953).

Id. We then listed some examples of the kinds of authorizations that satisfy the 

foregoing standard, ranging from subpoenas and requests from congressional 

committees, to substantive agency regulations that expressly or implicitly authorize

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Applicability o f Trade Secrets Act to Intra-Govemmental Exchange o f Regulatory Information

the waiver of confidentiality, to authorizations that are based upon “ necessary 

statutory implication.” Id. at 263.8

Applying these standards to the matter presented here, we believe the legislation 

establishing the OFHEO and its powers and responsibilities (i.e., the FHE Act) 

contemplates a degree of inter-agency cooperation and interaction that reasonably 

implies authorization to exchange regulatory information obtained by OFHEO 

with cooperating federal agencies in furtherance of OFHEO’s statutory purposes. 

C f Interco, 490 F. Supp. at 44, 46 (construing section 6(f) of FTC Act to authorize 

“ non-public release” of trade secret material to State Attorneys General for law 

enforcement purposes, even while acknowledging that the “ statute does not on 

its face authorize [such] release” ); Shell Oil Co. v. DOE, A ll F. Supp. at 433.9

Initially, we note that the Director of OFHEO is broadly authorized to “ take 

such actions . . . as the Director determines necessary” regarding a broad range 

of matters, including “ examinations of the enterprises,” “ other matters relating 

to safety and soundness [of the enterprises],” and “ conducting research and financial analysis.” 12 U.S.C. §4513(b)(2), (5), and (10). In exercising this broad 

authority, the Director could reasonably conclude that appropriately controlled 

regulatory information exchanges with other federal financial regulators are 

needed to maintain the level of knowledge and understanding demanded in the 

highly complex and technical field of federal financial regulation. In this regard, 

we note that OFHEO’s letter to this Office asserts that the proposed exchanges 

of supervisory information would “ enable[] Federal agencies to proactively 

address regulatory compliance more effectively and efficiently.” OFHEO Letter 

at 3. OFHEO further stales that it seeks to exchange the information in question 

“ [i]n fulfilling its safety and soundness mission.” Id. at 2. In view of such representations, the proposed reciprocal inter-agency exchanges would appear to fall 

within the broad discretionary authority granted the Director under 12 U.S.C. 

§ 4513(b).

Additional, and more specific, grants of authority to the OFHEO Director under 

the FHE Act reinforce our conclusion that the statute taken as a whole provides 

adequate, albeit implicit, authorization for the proposed inter-agency disclosures.

8 In this regard, we believe that an application of the Paperwork Reduction Act that would effectively bar official 

purpose inter-agency disclosures by negative implication would be plainly inconsistent with lhat legislation’s stated 

objective “ to maximize the utility of information created, collected, maintained, used, shared and disseminated by 

or for the Federal Government ” 44 U S.C § 3501(2) (Supp. I 1995).

9 In holding that the Federal Energy Administration Act provided adequate authority for inter-agency disclosure 

of energy company financial and operational information that would otherwise be barred by the TSA, the court 

in the Shell Oil case stated.

Given the purpose of the National Energy Information System and the express declaration of a policy 

favonng agency cooperauon with respect to energy data, it is difficult to argue lhat Congress did not 

contemplate disclosure of energy information by the Administrator at least to those other federal agencies 

who are vested with policy making responsibility in the energy area 

477 F Supp at 433 The court went on to hold that the information could be disclosed to any other federal agency 

which had a legitimate need for that information. Id. at 433-35. See also Emerson Electric, 609 F.2d at 906, where 

the court, in referring to the provisions of the Federal Reports Act (the predecessor version of the PRA), stated 

“ the provisions of the Act are to be read with an eye toward encouraging interagency cooperation . .

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Opinions o f the Office o f Legal Counsel in Volume 23

For example, the Act provides: “ In carrying out the duties of the Office, the 

Director may use information, services, staff, and facilities of any executive 

agency, independent agency, or department on a reimbursable basis, with the consent of such agency or department.” 12 U.S.C. § 4 5 15(c). Additionally, 12 U.S.C. 

§4517(c) authorizes OFHEO, through the Director, to contract with other federal 

banking agencies (such as the Comptroller of the Currency, the FDIC, and the 

Office of Thrift Supervision) for the services of examiners to assist OFHEO in 

conducting examinations of the Enterprises required by the Act. The examiners 

appointed from other agencies “ shall have the same authority and . . . shall be 

subject to the same disclosures, prohibitions, obligations, and penalties as are 

applicable to examiners employed by the Federal Reserve banks.” Id. § 4517(d). 

In authorizing OFHEO to use the information, personnel, and services of other 

agencies in carrying out its statutory responsibilities, it is reasonable to assume 

that these provisions contemplate that OFHEO could disclose its regulatory 

information to those agencies insofar as necessary to obtain the authorized assistance or support.

In sum, we conclude that these and other provisions of the OFHEO legislation 

provide adequate “ general” authorization for OFHEO to disclose proprietary 

regulatory information to other federal agencies for the official purposes stated, 

and subject to appropriate controls to maintain confidentiality, without violating 

the TSA.10

D.

We note finally that, subsequent to the submission of the request for this 

opinion, OFHEO promulgated new regulations governing the release of its documents and information. See Releasing Information, 63 Fed. Reg. 70,998 (1998) 

(to be codified at 12 C.F.R. pt. 1710). Two of the new provisions appear pertinent 

to the issue of inter-agency disclosure presented here. The new “ General rule” 

in § 1710.6 provides:

Except as authorized by this part or as otherwise necessary in 

performing official duties, no employee shall in any manner disclose or permit disclosure of any document or information in the

10 As indicated in our Shipping Act Opinion (discussed infra pp 78-80), only a clear and specific legislative 

prohibition is sufficient to overcome “ the general presumption that information obtained by one federal government 

agency is to be freely shared among federal government agencies” when such information “ relates to the [official] 

performance of the official duties of these agencies ” 9 Op O L C at 52-53 That position could be said to rest 

on the more fundamental proposition that executive agencies have inherent authority to exchange such information 

for valid official purposes in the absence of specific legislation, or constitutional provision, prohibiting such exchange. 

Because we conclude that the provisions of the legislation establishing OFHEO adequately authorize the disclosures 

in question by statutory implication, and because the information at issue here is proprietary in nature and thus 

raises special considerations, we need not base our conclusion on an assertion of such inherent authority.

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Applicability o f Trade Secrets Act to Intra-Govemmental Exchange o f Regulatory Information

possession of OFHEO that is confidential or otherwise of a nonpublic nature, including that regarding OFHEO or [the Enterprises].

12 C.F.R. § 1710.6. Further, with respect to OFHEO’s reports of examinations 

of the Enterprises, which may include confidential financial information of the 

type otherwise covered by the TSA, the new regulations provide: “ The Director 

may make available reports of examination for the confidential use of Federal 

agencies responsible for investigating or enforcing applicable Federal laws.” Id.

§ 1710.8(c).

These new regulations provide further support for our conclusion. As recognized 

in our 1981 opinion, duly promulgated agency regulations based on valid statutory 

authority provide a lawful source of disclosure authority for purposes of the TSA’s 

“ authorized by law” exception. See 5 Op. O.L.C. at 262 (stating that agency 

regulations may provide the requisite authorization by law, “ provided that the 

authority on which the regulation is based includes, either expressly or by necessary implication, the power to waive the confidentiality of the information” ). 

Courts have held to the same effect. See, e.g., CNA Fin. Corp. v. Donovan, 830 

F.2d 1132, 1138 (D.C. Cir. 1987), cert, denied, 485 U.S. 977 (1988); Doctors

Hosp. of Sarasota, Inc. v. Califano, 455 F. Supp. 476, 481 (M.D. Fla. 1978) 

( “ information disclosure pursuant to a validly enacted agency regulation is authorized by law for purposes of 18 U.S.C. § 1905” ). Here, OFHEO expressly invoked 

the provisions of 12 U.S.C. §4513 (discussed above) as well as other provisions 

of the FHE Act as providing authority for the regulations in question. Thus, these 

regulations fortify our conclusion that disclosures of confidential information made 

pursuant to them would be “ authorized by law” and thus outside the prohibitions 

of the TSA. For example, 12 C.F.R. § 1710.8(c) authorizes the Director to make 

available reports of examinations of the Enterprises “ for the confidential use of 

Federal agencies responsible for investigating or enforcing applicable Federal 

laws.” We understand that these reports may include the kind of confidential or 

proprietary business information otherwise covered by the TSA. This regulation 

would authorize disclosures of such information to other financial regulatory agencies, provided that the agencies in question have some federal investigatory or 

enforcement authority.11

11 It should be recognized that OFHEO’s disclosures of confidential or proprietary information must comply with 

its own regulations even if such disclosures are not prohibited by the TSA. Thus, new § 1710 6 of the regulations 

specifically provides that OFHEO employees may disclose confidential information in possession of OFHEO only 

if the disclosure is authorized by part 1710 or is otherwise “ necessary in performing official duties ” Apart from 

§1710.6 itself and §1710 8 (governing inter-agency disclosure of reports of examinations of the Enterprises), we 

have not identified any other provision of part 1710 that authonzes disclosure of confidential or proprietary information to other federal agencies. Consequently, § 1710 6 appears to limit OFHEO’s disclosures of confidential information to other agencies (other than that covered by § 1710 8) to situations where the disclosure is considered “ necessary 

in performing official duties ” We believe that the Director would have considerable discretion, however, in determining whether particular disclosures are “ necessary” within the meaning of the regulation

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Opinions o f the Office o f Legal Counsel in Volume 23

Conclusion

For all the foregoing reasons, we conclude that the type of inter-agency, official 

purpose disclosures set forth in your letter would be “ authorized by law” within 

the meaning of the Trade Secrets Act and therefore would not violate that act.

WILLIAM MICHAEL TREANOR 

Deputy Assistant Attorney General

Office o f Legal Counsel

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