March 7, 1977

Presidential Authority—Legality of Proposed

Executive Order Requiring Public Disclosure of

Employee Financial Statements—Freedom of

Information Act (5 U.S.C. § 522)—Privacy Act

(5 U.S.C. § 552a)

78-75 MEMORANDUM OPINION FOR THE COUNSEL

TO THE PRESIDENT

You have asked for our opinion on the question whether the President is 

prohibited from ordering the public disclosure of detailed financial statements 

filed by certain officers or employees of the Executive branch or of independent 

agencies. It is our conclusion that the President is prohibited from doing so 

without the consent of the persons involved.

I. Background

The Civil Service Commission was directed by § 403 of Executive Order 

11222, 3 CFR 306 (1965), issued May 8, 1965, to prescribe regulations for the 

submission of statements of financial interests by such employees as the 

Commission might designate. The Commission’s implementing regulations 

require statements to be filed by all employees paid at a level of the Executive 

Schedule, 5 U.S.C. §§ 5311 et seq. (1976); other employees classified at 

GS-13 or above pursuant to 5 U.S.C. § 5332 (1976), or those at a comparable 

pay level under other authority having procurement, grant, regulatory, or 

similar responsibilities; and certain employees classified below GS-13. 5 CFR 

735.403 (1977).

At a minimum, an employee required to file must disclose the identity of his 

creditors, his real property interests and those of his immediate household, as 

well as the identity of companies or organizations with which the employee or a 

member of his immediate household is affiliated as an officer or employee or in 

which he has a financial interest through the ownership of securities or 

participation in pension or similar plans. See 5 CFR 735.401 (1977); Federal 

Personnel Manual, Chapter 735, Appendix D. The amounts of income earned 

from outside employment and the value of assets need not be reported. Section

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405 of Executive Order 11222 expressly provides that the financial statements 

“ shall be held in confidence, and no information as to the contents thereof shall 

be disclosed except as the Chairman of the Civil Service Commission may 

determine for good cause shovyn.” See also 5 CFR 735.410 (1977).

We understand that consideration is being given to the issuance of an 

Executive order by the President that would revise the financial reporting 

provisions in Part IV of Executive Order 11222 in two principal respects.1 

First, the reports would be far more detailed than those presently filed. For 

example, employees would be required to report the value of their assets and 

liabilities, as well as those of their families; liabilities for mortgages and 

household expenses (which are presently omitted) would have to be included; 

and extensive reporting of the amounts of gifts, reimbursements, and outside 

income of the employee, his spouse, and minor children.2 Second, the order 

would require that the statements be made available for public inspection, 

either in the employing agency or at a central location under the supervision of 

the Civil Service Commission.

II. Application of the Privacy Act

We assume for the purposes of this opinion that an Executive order requiring 

public disclosure of financial statements would constitute a reasonable regulation for the conduct of employees and is therefore within the ambit of the 

President’s power under 5 U.S.C. § 7301 (1976).3 But the President’s broad 

power under § 7301 has been clearly circumscribed by the subsequent 

enactment of the Freedom of Information Act and the Privacy Act, which 

together govern access to records relating to most Federal employees.

Each financial statement would contain information pertaining to the 

employee and the employee’s spouse and minor children and would be 

retrievable, using the employee’s name, from either a central file maintained by 

the Civil Service Commission or a separate set of files maintained by the 

employing agency. It seems evident, then, that an employee’s financial statement 

would constitute a “ record” contained in a “ system of records” within the 

meaning of the Privacy Act. 5 U.S.C. §§ 552a(a)(4) and (5) (1976). Such a 

record may only be disclosed with the prior written consent of the individual to

'T he proposed order apparently would also rephrase the standard for determ ining who must file 

financial statements. U nder the order, filing would be required o f all persons classified at GS-16 or 

above or at a com parable pay level under other authority, and any other employee in a position 

where filing is necessary in order to protect the integrity o f the Governm ent and to avoid 

involvement in possible conflicts of interest. It is not clear w hether this standard is intended to bring 

more employees under the filing system or fewer.

2Assets, liabilities, and items of income would be reported within broad categories of value, 

rather than in specific dollar terms.

3We also assume that public disclosure would not im perm issibly infringe on whatever 

constitutionally based right of privacy there may be in o n e's financial affairs. See. e.g..

Montgomery County v. Walsh, 274 Md. 489, 336 A. (2d) 97 (1975), appeal dismissed. 424 U.S. 

901 (1976); Stein v. Howlett. 52 111. 2d 570, 289 N .E . (2d) 409 (1972), appeal dism issed. 412 

U.S. 925 (1973); Fritz v. Gorton, 83 W ash. 2d 275, 517 P. (2d) 9 1 1 (1974), appeal dism issed, 417 

U .S. 902 (1974).

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whom the record pertains, unless one of the exceptions from the consent 

requirement specifically identified in 5 U.S.C § 552a(b) (1976) is satisfied. Of 

the eleven conditions of disclosure, only two are even arguably relevant 

here—that which permits disclosures required to be made under the Freedom of 

Information Act, 5 U.S.C. § 552a(b)(2) (1976), and that which permits 

disclosure for a “ routine use” of the record which has been included in the 

agency’s published notice pertaining to that system of records, 5 U.S.C. § 

552a(b)(3) (1976). We do not believe that public disclosure of the financial 

statements would be permissible under either of these provisions.

A. Disclosures under the Freedom o f Information Act. Under the Freedom 

of Information Act, an agency must make an agency record available to “ any 

person,” 5 U.S.C. § 552(a)(3) (1976), unless it is specifically exempt from 

release under subsection (b). The relevant provision of subsection (b) is 

exemption 6, exempting from disclosure “ personnel and medical files and 

similar files the disclosure of which would constitute a clearly unwarranted 

invasion of personal privacy.” Thus, financial disclosure statements are not 

required to be made available to the public under the Freedom of Information 

Act— and therefore may not be disseminated under section (b)(2) of the Privacy 

Act— if to do so would constitute “ a clearly unwarranted invasion of personal 

privacy.”

As stated in the Senate report on the bill later enacted as the Freedom of 

Information Act, the phrase just quoted enunciates a policy that requires “ a 

balancing of interests between the protection of an individual’s private affairs 

from unnecessary public scrutiny, and the public’s right to government 

information.” S. Rept. No. 813, 89th Cong., 1st. sess. 9 (1965). See,

Department o f the Air Force v. Rose, 425 U.S. 352, 372-73, 380 (1976); Wine

Hobby USA, Inc. v. United States Internal Revenue Service, 502 F. (2d) 133 (3d 

Cir. 1974); Getman v. National Labor Relations Board, 450 F. (2d) 670 (D.C. 

Cir. 1971). This balancing process calls for a determination that privacy 

interests are implicated, identification of the public interest in release of the 

information, and a weighing of the public interest against the anticipated 

seriousness of the invasion of privacy.

Privacy interests protected by exemption 6 are unquestionably implicated in 

the release of information about an individual’s personal finances. In the 

Attorney General’s view,

[tjhe privacy interest does not extend only to types of information that 

people generally do not make public. Rather, in the present context it 

must be deemed generally to include information about an individual 

which he could reasonably assert an option to withhold from the 

public at large because of its intimacy or his family. [Attorney 

General’s Memorandum on the 1974 Amendments to the Freedom of 

Information Act 9-10 (1975).]

See, e.g., Wine Hobby, supra, at 136-137and n. \5 \G etm a n \. National Labor

Relations Board, supra, at 674-675. One’s family finances certainly constitute 

“ information that people generally do not make public” and about which an

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individual may reasonably “ assert an option to withhold from the public at 

large.”

The countervailing public interest in financial disclosure derives from the 

need to prevent real and apparent conflicts of interest among Government 

employees. Specifically, it appears that public disclosure is intended to permit 

the interested public to determine for itself whether, a given employee has a 

conflict of interest, rather than leaving this determination entirely to agency 

officials who may take a narrow view of what constitutes a conflict of interest. 

It might also be thought that disclosure of financial statements will enable the 

public to assess the performance of agency officials responsible for preventing 

conflicts of interest among their employees. The proposal may proceed on the 

additional premise that the mere possibility that his financial statement will be 

inspected by an enterprising press or interested party in a specific proceeding, 

and the prospect of public embarrassment that may result, will deter an 

employee from having any affiliations or interests that could even remotely 

give rise to an allegation that he has a real or apparent conflict of interest. 

Similarly, the prospect of public scrutiny may cause agency officials to 

examine financial statements more closely.

The typical exemption 6 case involves a specific request for a limited amount 

of information which may pertain to certain individuals, not a blanket request 

for release. In perhaps the leading court of appeals case applying the balancing 

test under exemption 6, the court held that in the context of a narrow request, a 

court may properly balance the particular privacy interest to be affected against 

the public interest in the specific disclosure. Getman v. National Labor

Relations Board, supra, at 674-677 and n. 10. Also under Getman, “ a court’s 

decision to grant disclosure under exemption (6) carries with it an implicit 

limitation that the information, once disclosed, be used only by the requesting 

party and for the public interest purpose upon which the balancing was based.” 

Id. at 677 n. 24. See also, Wine Hobby, supra, at 136-137. If the information is 

disclosed only to the requester, who will not in turn release it to the public at 

large in a manner that reveals the identity of the persons involved, the resulting 

invasion of privacy is far less than if the information is made available to any 

member of the public without regard to the uses to which it will be put.

However, the balancing test in this context cannot focus on the merits of a 

specific request for a given financial statement because the proposed revision of 

Executive Order No. 11222 contemplates wholesale release of financial 

statements without regard to the intentions of any particular requester. The 

invasion of privacy and the public interest in disclosure must therefore be 

considered in relation to the possible release of information to the public at 

large.

If financial statements are available to the public at large, it is our view that 

the potential invasion of privacy is significant. There can be no assurance that 

the information in the statements will not be used to solicit contributions or to 

promote commercial purposes, see. Wine Hobby, supra, or to identify likely 

targets for theft. Cf. H. Rept. No. 1497, at II. Perhaps more significantly, 

however, anyone who had the inclination— neighbors, coworkers— could

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obtain detailed information about how an individual managed his affairs. As 

Mr. Justice Powell pointed out in his concurring opinion in California Bankers

Association v. Shultz, 416 U.S. 21 (1974), upholding the constitutionality of a 

Federal statute and regulations requiring banks to report certain financial 

transactions of their customers:

In their full reach, the reports apparently authorized by the openended language of the Act touch upon intimate areas of an individual’s personal affairs. Financial transactions can reveal much about a 

person’s activities, associations and beliefs. At some point, governmental intrusion upon these areas would implicate legitimate expectations of privacy. Moreover, the potential for abuse is particularly 

acute where, as here, the legislative scheme permits access to this 

information without invocation of the judicial process. In such 

instances, the important responsibility for balancing societal and 

individual interests is left to unreviewed executive discretion, rather 

than the scrutiny of a neutral magistrate. [416 U.S. at 78.]

Aside from its mere exposure, public financial disclosure “ is almost certain 

invitation to demagogic political attack of one kind or another—upon the poor 

man as one who cannot manage even his own economic affairs, and upon the 

rich man as one who is privileged and has lost contact with the mass of the 

citizenry.” Association of the Bar of the City of New York, Conflict of Interest 

and Federal Service, at 255 (1960). Moreover, even where inspection takes 

place solely to uncover possible conflicts of interest, what constitutes a real or 

apparent conflict of interest would legitimately be the subject of public debate. 

Thus, even though agency officials responsible for determining what constitutes 

a conflict of interest under applicable statutes and regulations may have 

concluded that there was no legal prohibition against the holding of certain 

assets, the employee may nevertheless be subjected to criticism in the press and 

his community for owning them. Exemption 6 was intended to protect persons 

from such embarrassment and disgrace. Department o f the Air Force v. Rose,

425 U.S. 352, 377 (1976).

Of course, we cannot say that such uses and abuses of the financial 

statements will occur with regularity; but they are certainly more than “ mere 

possibilities,” Department o f the Air Force v. Rose, at 380-381 and n. 19, and 

there is no protection against them. We are not aware of any case requiring 

public release of personal information under exemption 6 where there would be 

anything approaching the degree of potential for abuse and harm involved here. 

Nor, in fact, are we aware of any case that has upheld the release of information 

concerning an individual in which the detail of disclosure and the degree of the 

resulting invasion of privacy is at all comparable to that contemplated here, 

even with protections against wider dissemination. Typically, when detailed 

facts are released, the individual’s name and other identifying characteristics 

are deleted. See, e.g., Department o f the Air Force v. Rose; Rural Housing

Alliance v. Department o f Agriculture, 498 F. (2d) 73, 78 (D.C. Cir. 1974). 

When the individual’s identity is disclosed, the invasion of privacy is ordinarily

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limited to the prospect of a single contact by an outside party, Getman v. 

National Labor Relations Board, supra, or relevation of an isolated fact that 

would not furnish insights into the person’s private life generally. Id.; Robles v. 

Environmental Protection Agency, 484 F. (2d) 843 (4th Cir. 1973).

Weighing against this potential invasion of privacy is the asserted public 

interest in preventing conflicts of interest and in reassuring the public regarding 

the integrity of the Government. Insofar as actually preventing conflicts of 

interest is concerned, public disclosure can accomplish this goal only indirectly. 

There is apparently no plan to eliminate the review of financial statements by 

agency officials familiar with the employee’s work. That review of statements 

filed by officials familiar with the applicable statutes and regulations and nature 

of the work of the persons who file— as opposed to haphazard review by 

members of the press and public4— will continue to be the principal prophylaxis 

against conflicts of interest. Because of this existing and probably more reliable 

alternative, public disclosure cannot be thought to be essential to prevent 

conflicts of interest in most cases. Compare, Wine Hobby at 137 n. 17; Rural

Housing Alliance v. Department o f Agriculture, at 77-78. And even if public 

disclosure would result in the identification of a number of conflicts of interest 

that agency officials had overlooked, this would have been accomplished at the 

expense of invading the privacy of numerous employees about whom no 

question will be raised. In our view, the significant invasion of privacy entailed 

in order to accomplish this incremental result would be “ clearly unwarranted.” 

The more substantial argument for public disclosure appears to be that it is 

necessary to restore the public’s confidence in Government by exposing the 

holdings of employees and agency review of financial statements to public 

scrutiny. But the decision to further the public interest by purposefully 

sacrificing the privacy of personal information is fundamentally inconsistent 

with the thrust of exemption 6. The Senate report indicates that privacy 

interests were not to be wholly disregarded in this manner.

It is not an easy task to balance the opposing interests, but it is not an 

impossible one either. It is not necessary to conclude that to protect 

one of the interests, the other must, of necessity, either be abrogated 

or substantially subordinated. Success lies in providing a workable 

formula which encompasses, balances, and protects all interests, yet 

places emphasis on the fullest responsible disclosure. [S. Rept. No.

813, supra, at 3.]

As we have pointed out, the courts construing exemption 6 have adhered to this 

purpose and demonstrated a meticulous concern for personal privacy to the 

extent possible even when there is a legitimate public interest in disclosure. 

See, e.g., Department o f the Air F orce v. Rose, at 380-381. For this reason, we 

do not believe that the extraordinary invasion of privacy entailed in the release

■‘The fact that many statem ents will probably not be inspected by members of the public at all 

does not affect the invasion of privacy or the attendant anxieties in making a statement available for 

public inspection.

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of employees’ financial statements to the public is consistent with the spirit of 

exemption 6.

We recognize, of. course, that there has recently been rather broad-based 

support for some type of public financial disclosure by top-level Federal 

officials. Title 111 of S. 495, 94th Cong., 1st sess. (1975), which passed the 

Senate in July 1976 and appeared to have considerable support in the House, 

would have required detailed public financial disclosure by all officers or 

employees paid at the rate established for GS-16 or above, and comparable pay 

levels. President Ford proposed legislation closely paralleling S. 495 in this 

respect and, of course, President Carter supports public financial disclosure as 

well. In addition, public interest groups, such as Common Cause, continue to 

press for public disclosure, and a number of State and local governments have 

adopted financial disclosure requirements by legislative or executive action.5

Against this political climate, it might be argued that the public interest in 

financial disclosure now outweighs the substantial invasion of the privacy of 

the officials who would be affected by the proposed Executive order and that 

the release of financial statements would therefore not constitute a “ clearly 

unwarranted invasion of personal privacy.” But we are not concerned here with 

the current desirability of public financial disclosure as a matter of policy. The 

issue here is whether the balance must be struck in favor of public disclosure 

under a statutory standard adopted by Congress in 1966 to protect personal 

privacy. That standard is necessarily general in view of the wide range of 

situations in which it must be applied. But the generality of the invasion of 

privacy against the public interest in release on a case-by-case basis should not 

obscure the fact that exemption 6 was intended to draw a relatively fixed line 

between the types of information that, in general, have to be released and those 

that do not. In other words, we do not believe that exemption 6 was designed to 

cut agency officials and courts entirely free from all moorings and to permit 

them to apply their own conception of the proper balance between private and 

public interests at a given point in time. Viewed in this light, the case-by-case 

balancing required under exemption 6 is merely the sifting of the particular 

facts to determine how the relatively fixed standard under that exemption 

applies. Thus, to the degree that the recent sentiment in favor of public 

financial disclosure by Federal employees represents a shift in public thinking 

since the passage of the Freedom of Information Act in 1966 regarding the 

relative weight of the privacy interests of Government employees and the 

public interest in financial disclosure, that sentiment is largely beside the point 

here.6

5In 1978 Congress passed and President Carter signed the Governm ent in Ethics Act, Pub. L. 

95-521, 92 Stat. 1836, Title II of which provides for public disclosure of executive personnel 

financial reports.

6We are not aware that Congress has given specific consideration to whether public disclosure of 

financial statements would be consistent with the spirit of exemption 6. But its views on this issue, 

some eleven years after the Act was passed, would not in any event be binding on a court or on the 

Executive branch in determ ining what the exemption requires. See. United Stares v. Southeastern

(Continued)

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The fact that Congress intended to adopt an identical standard in exemption 6 

emerges quite clearly from the legislative history of the provision. For 

example, the House report states:

The limitation of a “ clearly unwarranted invasion of personal 

privacy” provides a proper balance between the protection of an 

individual’s right of privacy and the preservation of the public’s right 

to Government information by excluding those kinds of files the 

disclosure of which might harm the individual. [H. Rept. No. 1497,

89th Cong., 2d sess. 11 (1966).]

The implication, of course, is that exemption 6 itself “ provides a proper 

balance,” which must be applied in particular cases, and that “ files the 

disclosure of which might harm the individual” are to be excluded from 

disclosure in all events.7

This view of exemption 6 also finds support in the treatment Congress 

expected to be accorded the kinds of files it specifically had in mind in enacting 

the exemption. The Senate report states:

Such agencies as the Veterans Administration, Department of Health, 

Education, and Welfare, Selective Service, etc., have great quantities of files, the confidentiality of which has been maintained by 

agency rule but without statutory authority. There is a consensus that

these files should not be opened to the public, and the committee 

decided upon a general exemption rather than a number of specific 

statutory authorizations for various agencies. It is believed that the 

scope of the exemption is held within bounds by the use of the 

limitation of a “ clearly unwarranted invasion of personal privacy.”

sfc $ sf:

. . . The application of this policy should lend itself particularly to 

those Government agencies where persons are required to submit vast 

amounts of personal data usually for limited purposes. For example,

(Continued)

Cable Co., 392 U .S. 157, 170(1968); Waterman S.S. Corp. v. United Slates. 381 U.S. 252, 269 

(1965); United States v. Philadelphia National Bank, 374 U .S. 321, 348-349 (1963). Thus, recent 

congressional action favoring public financial disclosure is not entitled to any particular weight in 

assessing the public interest factor under present law.

’Similarly, the Senate report indicates that the Freedom of Information Act as a whole, and the 

section dealing with personal privacy in particular, provides “ a workable formula which 

encompasses, balances, and protects all interests, yet places emphasis on the fullest responsible 

disclosure.” S. Rept. No. 813, supra, at 3 (1965). This too suggests that the "form ula” in 

exem ption 6 itself balances all interests, albeit in a general way.

It is true that in Department o f the Air Force v. Rose, supra, the Supreme Court, in holding that 

all “ personnel files” were not exempt from disclosure without regard to whether the release of 

certain information from those files would constitute a “ clearly unwarranted invasion of personal 

privacy," rejected the view that Congress had itself struck the balance as to "personnel files" and 

confined the courts to striking the balance only as to "sim ilar files” under exem ption 6. 425 U.S. 

at 352. But the fact that Congress has not struck a balance with respect to a whole category of files 

does not mean that Congress has not established a fixed standard for the courts to apply with respect 

to types of information in those files.

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health, welfare, and selective service records are highly personal to 

the person involved, yet facts concerning the award of a pension or 

benefit should be disclosed to the public. [S. Rept. No. 813, supra, at 

9 (emphasis added).]

From this passage, it seems clear that Congress intended that personal data 

compiled by agencies in order to determine a person’s eligibility for a pension 

or benefit were not to be made available to the public.8 This would be true, it 

seems to us, irrespective of any asserted public interest in the release of such 

information to enable the public to scrutinize the performance of its public 

officials in awarding pension and welfare benefits.

In our view, the distinction between the public availability of information 

regarding the payment of a benefit itself and the privacy of the underlying 

personal details supporting the award suggests that a similar distinction should 

be drawn between the facts surrounding a Federal employee’s position — his 

“ benefit” — and the underlying personal details which shed additional light on 

his fitness to perform his duties. And indeed such a distinction has been drawn 

as a matter of practice.

When the Freedom of Information Act was passed, the Civil Service 

Commission had adopted a policy, which Congress apparently approved, that 

the names, position titles, grades, salaries, and duty stations of Federal 

employees are public information. See H. Rept. No. 1497, at 6. See also

Attorney General’s Memorandum on the Public Information Section of the 

Administrative Procedure Act 37 (1967). This policy has remained in effect 

ever since and is embodied in the Commission’s regulations issued under the 

authority of the Freedom of Information Act. See 5 CFR Part 294, Subpart G. 

The regulations state flatly that information other than that specifically 

authorized to be disclosed under the regulations “ is not available to the 

public,” 5 CFR 294.702(f)( 1977), without regard to any asserted public interest 

in the disclosure of other information in the files. It may be that a court would 

require the disclosure of some other, relatively harmless information from a 

personnel file, if the information was reasonably segregable or was released in 

a form that did not reveal the identity of the employee involved. But we are 

confident that a court would approve the essentials of the Commission’s policy 

of revealing only the specific facts directly relating to an employee’s position 

but not any underlying personal information, especially in view of Congress’ 

apparent approval of this policy. C f, Campbell v. Civil Service Commission,

539 F. (2d) 58 (10th Cir. 1976); but see, Columbia Packing Co. v. Department

“The Supreme Court appeared (o suggest that the passages in the Senate and House reports 

referring to files maintained by the Department of Health, Education, and W elfare, the Selective 

Service, and the Veterans Administration might permit disclosure of the facts concerning the award 

of a pension or benefit only if the recipient was not identified. Department o f the Air Force v. Rose,

supra, at 375-376. However, the exception may have been intended to permit the disclosure o f the 

identity of the recipient as well, as may be done under a special statute applicable to the Veterans 

Administration, 38 U .S.C . § 3301(6). See Hearings on H .R . 5012 before a Subcommittee o f the 

House Government Operations Com m ittee, 89th C ong., 1st sess. 262 (1965).

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o f Agriculture, 417 F. Supp. 651 (D. Mass. 1976).9 We are confident too that a 

court would maintain the basic privacy of information in personnel folders even 

against a claim that the public is entitled to receive that information in order to 

determine for itself whether the employee was qualified to be appointed to his 

position, just as it would reject a similar claim of a right of access to the files of 

recipients of welfare or veterans’ benefits.

The financial statements filed by Federal employees under Executive Order 

No. 11222 are not part of the employees’ personnel folders and would not be 

under the proposed revision of Part IV of that order. But the limitations on the 

disclosure of information from personnel folders are highly instructive regarding the protection given privacy interests of Federal employees under the 

Freedom of Information Act generally. The analogy to personnel information is 

especially apt here because the detailed financial reports filed under Executive 

Order No. 11222 are specifically intended to provide a basis for assessing the 

suitability of a person to hold office or participate in certain decisions, just as is 

information in a personnel folder. Thus, the legislative history of exemption 6 

furnishes additional support for the conclusion reached earlier in this opinion 

that information contained in financial statements filed pursuant to the proposed 

revision of Part IV of Executive Order No. 11222 is not the kind of information 

that Congress intended to be made available to the public under that exemption.10

B. Applicability o f 5 U.S.C. § 552a (b) (3): Disclosure as a “routine use.”

The other arguably permissible basis for release of employees’ financial 

statements without their consent might be the routine use exception in 

subsection (b)(3) of the Privacy Act, 5 U.S.C. § 552a(b)(3) (1976). A “ routine 

use” is defined in § 552a(a) as a use of a record “ for a purpose which is 

compatible with the purpose for which it was collected.” The argument would 

apparently be that if the information contained in a financial statement is 

collected for the purpose of making it available to the public, then making it 

available to the public is obviously compatible with the purpose for which it 

was collected. We do not believe that the Privacy Act permits this kind of 

bootstrapping.

’The Senate Report on the Privacy Act states that certain personal inform ation, such as names, 

salaries, and duty stations o f Federal em ployees, should continue to be made public. S. Rept. No. 

93-1183, 93d C ong., 2d sess. 13 (1974). This reflects continuing congressional approval of the 

Com m ission’s policy and, by negative implication, suggests that other information should not be 

made public.

l0The longstanding confidentiality o f financial statem ents filed pursuant to the present Part IV of 

Executive Order No. 11222 also supports the view that the President could not properly order such 

statements to be made public under the revised order. W e have been informally advised by the 

Office of the General Counsel o f the Civil Service Com mission that, insofar as that Office is aware, 

it is the uniform practice o f Federal agencies to deny requests for access to such statements, 

although the issue has apparently not arisen too often. It is true that Executive O rder No. 11222 

presently requires that financial statem ents be kept confidential, but a pledge o f confidentiality 

cannot in itself preclude the release of information that is not otherwise protected by exemption 6. 

See, Robles v. Environmental Protection Agency, 484 F. (2d) at 846-847; Ackerly v. Ley, 420 F. 

(2d) 1336, 1339-1340 n. 3 (D .C . Cir. 1969).

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As an initial matter, we have some doubt that making financial statements 

available to the public may properly be termed the “ purpose” for which such 

statements would be collected. The true purpose, it seems to us, is to discover 

and hopefully prevent possible conflicts of interest. Public disclosure is simply 

an additional means by which it is hoped this purpose will-be accomplished. 

Given the marked difference in terms of the values the Privacy Act was 

designed to protect between preventing conflicts of interest through confidential agency review of financial statements and preventing conflicts of interest 

through public inspection of those statements, we question whether public 

disclosure is “ compatible” with the purpose of preventing conflicts of interest.

The more fundamental difficulty with the argument is that the routine use 

exception was never intended by Congress to be an independent vehicle for 

disclosing information to the public at large. Under the Privacy Act, public 

availability of personal information continues to be governed by the Freedom of 

Information Act; it was precisely for this reason that exception (b)(2), 

permitting disclosure without the consent of the subject if required under that 

Act, was included in the Privacy Act. The routine use exception was included 

because of the practical necessity of permitting agencies to make the myriad of 

conventional nonpublic transfers of records in the day-to-day operation of the 

Government without first obtaining the consent of the individual to whom the 

records pertain. To permit an agency to ignore the limitations on public 

dissemination of personal information contained in the remainder of the Privacy 

Act and in exemption 6 of the Freedom of Information Act simply by 

publishing a notice designating a certain public release as a routine use would, 

in our view, reduce the protection of the Privacy Act to an empty promise.

The rather limited scope of the routine use exception and its inapplicability in 

the present situation emerge quite clearly from the legislative history of the 

Privacy Act. The Senate bill, S. 3418, 93d Cong., 2d sess. (1974), did not 

contain a specific exception for routine uses as such. But §§ 202(a) and (b) 

provided that an agency could disseminate information to persons outside the 

agency only if the individual gave his consent, the recipient had adopted rules 

for maintaining the confidentiality of the information, and the information 

would be used by the sender or recipient only for purposes set forth in the 

published notice. See Source Book on Privacy, Legislative History of the 

Privacy Act of 1974, House and Senate Committees on Government Operations, 94th Cong., 2nd sess. 138 (Joint Comm. Print 1976) [hereafter Source 

Book]. The third requirement, of course, parallels the provision for publication 

of routine uses under the Act as passed. Obviously, mandatory public 

disclosure of financial statements would have been impermissible under this 

provision because of the requirements of consent and assurances of confidentiality.

Moreover, the Senate report makes clear that the power of agencies to make 

disseminations outside the agency, even with the subject’s consent, was not to 

be augmented by the bill:"

" In describing the section of the bill that would have required that em ployees refrain from disclosing personal data within the agency other than to persons who had a need for them in the course

(Continued)

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. . . [Including the three requirements noted above] prevents an 

agency from merely citing a notice of intended “ use” as a routine 

and easy means of justifying transfer or release of information. 

Administration spokesmen were concerned that this might expand 

interagency dataswapping. By allowing the agency to cite a “ use” 

disclosed by its published notice, the bill is not intended to broaden 

dissemination and interagency transfer where they must be pursuant 

to or are required or limited by over 150 Federal statutes. [S. Rept.

No. 93-1183, 93d Cong., 2d sess. 69 (1974).]

At the same time, the bill provided that disclosures made pursuant to the 

Freedom of Information Act were to be exempt from the requirements of 

consent, assurances of confidentiality, and conformity to published notices of 

use, as well as certain accounting provisions. § 202(c). This exception was 

included because of objections from the press that the restrictions might defeat 

the statutory right of access under the Freedom of Information Act. S. Rept. 

No. 92-1183, at 71. Senator Ervin, the sponsor and floor manager of the 

legislation, stated that the effect of these and other provisions in the Senate bill 

was to prevent agency employees “ from making [information] available 

outside the agency without the consent of the individual and proper guarantees 

for confidentiality, unless pursuant to open records laws or unless it is for 

certain law-enforcement or other purposes which are cited in the bill.” 120 

Cong. Rec. 36892 (1974). Because, as shown earlier in this opinion, public 

disclosure of financial statements is not permissible under the applicable “ open 

records law” — i.e., of the Freedom of Information Act— and because none 

of the other exceptions in the Senate bill would have applied, such disclosure 

could not have been accomplished under the Senate bill.

Unlike the Senate bill, the House bill, H.R. 16373, 93d Cong., 2d sess. 

(1974),- contained a special exception from the consent requirement for 

disclosures made for routine uses of information. Source Book, at 279. The 

House report states that the consent requirement was perhaps the most 

important provision. H.R. Rept. No. 93-1416, 93d Cong., 2d sess. 13 (1974). 

An exception from the consent requirement was believed to be necessary for 

routine transfers, however, so as not “ to impede the orderly conduct of 

government or delay services performed in the interests of the individual.” Id.

The importance given the consent requirement and the evidence just quoted 

suggest that the routine use exception was intended to apply to those types of 

disclosures of an unexceptional nature to which the individual would be 

unlikely to have any reason or basis to object.

(Continued)

of their duties, the Senate report expressly stated that this was designed to cover “ reporting personal disclosures contained in personnel and medical records, including questionnaires containing

personal financial data filed under the ethical conduct programs o f the agency." S. Rept. No. 

93-1183, supra, at 51 (emphasis added). If the Senate com mittee was concerned about gratuitous 

disclosures o f this type within the agency, it seems reasonable to suppose that the com mittee 

would not have expected such information to be released outside o f the agency where there could 

be no assurances that it would be kept confidential.

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The House bill did not have a separate exception permitting disclosures 

required under the Freedom of Information Act. All individually identifiable 

information in Government files would therefore have been exempt from 

disclosure under that Act and could have been made available to the public only 

pursuant to agency rules. H.R. Rept. No. 93-1416, at 13. The committee report 

makes clear that agencies were authorized to “ allow by published rule only 

those [public] disclosures which would not violate the spirit of the Freedom of 

Information Act by constituting ‘clearly unwarranted invasions of personal 

privacy’ ” under exemption 6. Because public disclosure of financial statements “ would violate the spirit of the Freedom of Information,” such 

disclosure could not have been accomplished as a routine use of financial 

statements under the House bill.12

The compromise bill eventually enacted as the Privacy Act contains both the 

Senate’s express exception from the consent requirement for disclosures 

required by the Freedom of Information Act and the House’s express exception 

for routine uses. There is no indication in the brief debates on the compromise 

legislation that Congress intended to depart from the approach taken in the 

Senate and House bills in making public disclosures of private information to 

be governed exclusively by the Freedom of Information Act. To the contrary, 

the staff analysis of the compromise bill introduced in the Congressional 

Record by Senator Ervin and Representative Moorhead states that the 

exception for disclosures required under the Freedom of Information Act was 

intended to preserve the status quo with respect to the public disclosure of 

personal information under exemption 6 of that Act, and it describes the 

exception for routine uses in a way that does not seem to apply to public 

disclosures at all:

The compromise definition should serve as a caution to agencies to 

think out in advance what uses it will make of information. This act is 

not intended to impose undue burdens on the transfer of information 

to the Treasury Department to complete payroll checks, the receipt of 

information by the Social Security Administration to complete 

quarterly posting of accounts, or other such housekeeping measures 

and necessarily frequent interagency or intra-agency transfers of 

information. It is, however, intended to discourage the unnecessary 

exchange of information to another person or to agencies who may 

not be as sensitive to the collecting agency’s reasons for using and 

interpreting the material. [120 Cong. Rec. 40881 (1974); Id. at 

40406.]

l2It is also significant that aside from the reference to release under the Freedom o f Information 

Act, all other references to the routine use exception during consideration o f the House bill 

involved limited transfers to other Federal agencies. State and local governm ents, and private 

companies participating in the industrial security program. See e.g., 120 Cong. Rec. 36957, 

36967, 36645, 36655 (1974). This o f course reinforces the conclusion in the text that public 

disclosure under the routine use exception was to conform to the Freedom o f Information Act.

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The release of the financial statements of Federal employees to members of the 

public who may not be familiar with the meaning of applicable conflict of 

interest laws and regulations and without regard to the intended use of the 

statements would be contrary to the purpose of Congress, as stated in the 

analysis, “ to discourage the unnecessary exchange of information to other 

persons . . . who may not be as sensitive to the collecting agency’s reasons for 

using and interpreting the material.” 13

III. Conclusion

For the reasons given in Part A of this memorandum, we conclude that the 

public release of financial statements that would be filed under a proposed 

revision of Part IV of Executive Order No. 11222 is not “ required” under the 

Freedom of Information Act, and such release therefore may not be undertaken 

pursuant to 5 U.S.C. § 552a(b)(2) (1976). As explained in Part B, the 

exception for routine uses in 5 U.S.C. § 552a(b)(3) (1976) was not intended to 

be an independent means of making public disclosures of information, and that 

exception therefore cannot furnish the basis for public disclosure of employees’ 

financial statements.

J o h n M . H a r m o n

Acting Assistant Attorney General

Office o f Legal Counsel

l3Elsewhere, Representative M oorhead stated that while the routine exception was designed to 

permit ordinary and necessary transfers of inform ation, the bill was “ intended to prohibit 

gratuitous, and ad hoc dissem inations for private or otherwise irregular purposes.” 120 Cong. Rec. 

36967 (1974). Public disclosure o f financial statem ents is, in general, intended to further the public 

interest in preventing conflicts of interest, but of course any individual inspection of a statement is 

“ ad h o c,’’ and, because of the absence o f effective restrictions on use, may be for “ private or 

otherwise irregular purposes.”

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