b'(Slip Opinion)\n\nApplicability of Section 410 of the Amtrak\nReform and Accountability Act of 1997 to the\nGateway Development Commission\nNew Jersey\xe2\x80\x99s proposed diversion of a portion of its annual payment to Amtrak to a bridge\nproject subject to the authority of the Gateway Development Commission, an interstate\nentity established by New York and New Jersey, would violate section 410 of the\nAmtrak Reform and Accountability Act of 1997, which prohibits States from carrying\nout an interstate compact by using state or federal funds made available for Amtrak.\nFebruary 13, 2020\n\nMEMORANDUM OPINION FOR THE GENERAL COUNSEL\nDEPARTMENT OF TRANSPORTATION\nYou have asked whether the interstate compact provision in the Amtrak\nReform and Accountability Act of 1997, Pub. L. No. 105-134, \xc2\xa7 410, 111\nStat. 2570, 2587\xe2\x80\x9388 (\xe2\x80\x9cAmtrak Reform Act\xe2\x80\x9d), would prohibit New Jersey\nfrom diverting a portion of its annual payment to Amtrak to a bridge\nproject subject to the authority of the Gateway Development Commission\n(\xe2\x80\x9cGDC\xe2\x80\x9d or \xe2\x80\x9cCommission\xe2\x80\x9d), which is an entity established by New York\nand New Jersey. This memorandum memorializes our prior conclusion\nthat the proposed redirection of funds would have violated the terms of\nthe Amtrak Reform Act. Section 410 of the Act prohibits States from\ncarrying out an interstate compact by using state or federal funds made\navailable for Amtrak. We concluded that the two States entered into an\ninterstate compact to form the GDC and that the proposed diversion was\ntherefore subject to the limitations of the Amtrak Reform Act.\nNew York and New Jersey created the GDC by passing reciprocal legislation last year. See Gateway Development Commission Act, 2019 N.J.\nSess. Law Serv. ch. 195 (West) (July 22, 2019) (\xe2\x80\x9cN.J. Act\xe2\x80\x9d); Gateway\nDevelopment Commission Act, 2019 N.Y. Sess. Laws ch. 108 (McKinney\xe2\x80\x99s) (July 22, 2019) (\xe2\x80\x9cN.Y. Act\xe2\x80\x9d). The States established the GDC to\n\xe2\x80\x9cfacilitate\xe2\x80\x9d the expansion and renovation of rail lines in the Northeast\nCorridor (\xe2\x80\x9cNEC\xe2\x80\x9d), the rail system running from the District of Columbia\nthrough Massachusetts. See N.J. Act \xc2\xa7\xc2\xa7 2, 4(a); N.Y. Act \xc2\xa7 2, \xc2\xb6 1; 49\nU.S.C. \xc2\xa7 24905(a), (c)(1). In so doing, the States empowered the GDC to\nexert control over the use of funds committed to projects it is authorized\n\n1\n\n\x0cOpinions of the Office of Legal Counsel in Volume 44\n\nto facilitate. 1 See N.J. Act \xc2\xa7 4; N.Y. Act \xc2\xa7 3. Each State conditioned its\nlegislation on the other State\xe2\x80\x99s enactment of legislation with \xe2\x80\x9cidentical\neffect.\xe2\x80\x9d See N.J. Act \xc2\xa7 30(a); N.Y. Act \xc2\xa7 10(a). Both laws further provided that each State must receive the \xe2\x80\x9cconcurre[nce]\xe2\x80\x9d of the other State to\namend or repeal its laws. N.J. Act \xc2\xa7 25; N.Y. Act \xc2\xa7 8. Under the terms of\nthat legislation, each State has three representatives on the Commission;\nAmtrak also holds one seat.\nIn 2019, New Jersey Transit (\xe2\x80\x9cNJT\xe2\x80\x9d), the State\xe2\x80\x99s public transportation\nagency, requested a variance that would have allowed it to meet its financial obligations to an NEC bridge project subject to the GDC\xe2\x80\x99s authority\nby diverting a portion of the annual baseline capital charge payments that\nNJT otherwise would have owed to Amtrak. 2 See Letter for Steven A.\nEngel, Assistant Attorney General, Office of Legal Counsel, from Steven\nG. Bradbury, General Counsel, U.S. Department of Transportation at 1\n(Oct. 1, 2019) (\xe2\x80\x9cBradbury Letter\xe2\x80\x9d). The variance would have required the\napproval of the Northeast Corridor Commission (\xe2\x80\x9cNEC Commission\xe2\x80\x9d),\nsee id., which is a federal-state body established by Congress to promote\nrail planning and cooperation across the NEC, see 49 U.S.C. \xc2\xa7 24905.\nThe NEC Commission has adopted a Cost Allocation Policy, which permits rail owners and operators to request variances from the Commission\xe2\x80\x99s requirements for their baseline capital charges. See Northeast\nCorridor Commuter and Intercity Rail Cost Allocation Policy \xc2\xa7 5.5.2.1\xe2\x80\x93.2\n(as amended June 19, 2019) (\xe2\x80\x9cCost Allocation Policy\xe2\x80\x9d); see also id. \xc2\xa7 1\n(describing the Passenger Rail Investment and Improvement Act of\n2008\xe2\x80\x99s direction to the NEC Commission \xe2\x80\x9cto create a cost-sharing arrangement for NEC infrastructure\xe2\x80\x9d). Members representing the Department of Transportation, \xe2\x80\x9cincluding the Office of the Secretary, the Federal\nRailroad Administration, and the Federal Transit Administration,\xe2\x80\x9d serve\nThe state laws define \xe2\x80\x9cfacilitate\xe2\x80\x9d to mean \xe2\x80\x9cthe planning, designing, financing, acquisition, development, redevelopment, expansion, construction, reconstruction, replacement,\napproval of works, lease, leaseback, licensing, consigning, asset management, optimization, rehabilitation, repair, alteration, improvement, extension, management, ownership,\nuse and effectuation of the matters described in [each of the acts].\xe2\x80\x9d N.J. Act \xc2\xa7 3; N.Y. Act\n\xc2\xa7 2, \xc2\xb6 2(e).\n2 As part of phase one of the \xe2\x80\x9cpassenger rail transportation project between Penn Station, Newark, New Jersey and Penn Station, New York, New York,\xe2\x80\x9d referred to as the\n\xe2\x80\x9cGateway Program,\xe2\x80\x9d the bridge project is a component of the \xe2\x80\x9cProject\xe2\x80\x9d subject to the\nGDC\xe2\x80\x99s authority under the legislation enacted by the States. See N.J. Act \xc2\xa7 3; N.Y. Act\n\xc2\xa7 2, \xc2\xb6 2(h)(i).\n1\n\n2\n\n\x0cApplicability of Section 410 of the Amtrak Reform and Accountability Act\n\non the NEC Commission, 49 U.S.C. \xc2\xa7 24905(a)(1)(B), and thus were\ncharged with considering whether the requested variance was permissible.\nIn the Amtrak Reform Act, Congress \xe2\x80\x9cgrant[ed] consent to States with\nan interest in . . . intercity passenger rail service . . . to enter into interstate\ncompacts to promote the provision of the service,\xe2\x80\x9d including by retaining\nexisting services, commencing new services, and performing capital\nimprovements. Amtrak Reform Act \xc2\xa7 410(a) (codified at 49 U.S.C.\n\xc2\xa7 24101 note). While authorizing the compacts to facilitate the use of\ncertain federal and state funds for intercity passenger rail service, Congress imposed a restriction to protect funding for Amtrak. Under the terms\nof the statute, \xe2\x80\x9c[a]n interstate compact established by States under sub\xe2\x80\x93\nsection (a) may provide that, in order to carry out the compact, the States\nmay . . . use any Federal or State funds made available for intercity\npassenger rail service (except funds made available for Amtrak).\xe2\x80\x9d Id.\n\xc2\xa7 410(b)(2) (emphasis added). The question therefore was whether the\nGDC was created by an \xe2\x80\x9cinterstate compact,\xe2\x80\x9d and if so, whether NJT\xe2\x80\x99s\nproposed variance would have diverted \xe2\x80\x9cfunds made available for\nAmtrak\xe2\x80\x9d to carry out a rail service project subject to the GDC\xe2\x80\x99s authority.\nThe Amtrak Reform Act does not define the phrase \xe2\x80\x9cinterstate compact,\xe2\x80\x9d but the term \xe2\x80\x9ccompact\xe2\x80\x9d has significance under the Compact Clause\nof the Constitution, which provides that \xe2\x80\x9c[n]o State shall, without the\nConsent of Congress, . . . enter into any Agreement or Compact with\nanother State.\xe2\x80\x9d U.S. Const. art. I, \xc2\xa7 10, cl. 3. Where a statute employs a\nterm with \xe2\x80\x9ca well-known meaning . . . in the law of this country,\xe2\x80\x9d we\npresume that Congress used the words \xe2\x80\x9cin that sense unless the context\ncompels to the contrary.\xe2\x80\x9d Standard Oil Co. of N.J. v. United States, 221\nU.S. 1, 59 (1911); see also U.S. Steel Corp. v. Multistate Tax Comm\xe2\x80\x99n,\n434 U.S. 452, 461\xe2\x80\x9362 (1978) (positing that \xe2\x80\x9cthe Framers used the words\n\xe2\x80\x98treaty,\xe2\x80\x99 \xe2\x80\x98compact,\xe2\x80\x99 and \xe2\x80\x98agreement\xe2\x80\x99 as terms of art, for which no explanation was required\xe2\x80\x9d). 3 Here, the words of the statute itself confirm that\nSee also Neder v. United States, 527 U.S. 1, 21 (1999) (\xe2\x80\x9c[W]here Congress uses\nterms that have accumulated settled meaning under . . . the common law, a court must\ninfer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms.\xe2\x80\x9d (internal quotation marks omitted)); cf. Steele v. United\nStates, 267 U.S. 505, 507 (1925) (noting that the Court interprets \xe2\x80\x9cofficer of the United\nStates\xe2\x80\x9d in a statute in light of its constitutional meaning unless relevant context indicates\notherwise); United States v. Smith, 124 U.S. 525, 531\xe2\x80\x9332 (1888) (interpreting a statutory\nreference to \xe2\x80\x9cpublic officers\xe2\x80\x9d based upon the constitutional meaning of \xe2\x80\x9cofficer[],\xe2\x80\x9d U.S.\nConst. art. II, \xc2\xa7 2, cl. 2); United States v. Mouat, 124 U.S. 303, 306\xe2\x80\x9307 (1888) (relying on\n3\n\n3\n\n\x0cOpinions of the Office of Legal Counsel in Volume 44\n\nCongress has employed the term \xe2\x80\x9c[c]ompact\xe2\x80\x9d in its constitutional sense.\nSection 410(a) is entitled, \xe2\x80\x9cConsent to Compacts,\xe2\x80\x9d and the statute provides that \xe2\x80\x9cCongress grants consent to States . . . to enter into interstate\ncompacts\xe2\x80\x9d according to its terms. Amtrak Reform Act \xc2\xa7 410(a). Plainly,\nCongress understood the statute to be a grant of the consent that Article I,\nSection 10, Clause 3 of the Constitution requires for States to enter into\n\xe2\x80\x9cCompact[s]\xe2\x80\x9d with each other.\nThe Supreme Court has held that not every interstate agreement constitutes an \xe2\x80\x9cAgreement or Compact\xe2\x80\x9d subject to the Compact Clause. See\nVirginia v. Tennessee, 148 U.S. 503, 519 (1893). According to the Court,\nan agreement falls within the scope of the Clause only if it \xe2\x80\x9ctend[s] to the\nincrease of political power in the states, which may encroach upon or\ninterfere with the just supremacy of the United States.\xe2\x80\x9d Id. The \xe2\x80\x9cpertinent\ninquiry,\xe2\x80\x9d the Court has explained, \xe2\x80\x9cis one of potential, rather than actual,\nimpact upon federal supremacy.\xe2\x80\x9d Multistate Tax Comm\xe2\x80\x99n, 434 U.S. at\n472. Under these precedents, \xe2\x80\x9c[i]nterstate agreements interfere with\nfederal power . . . if: (1) they involve a subject matter which the Congress\nis competent to regulate . . . and (2) they purport to impose some legal\nobligation or disability\xe2\x80\x9d on state or federal governments or private parties.\nApplicability of the Compact Clause to Use of Multiple State Entities\nUnder the Water Resources Planning Act, 4B Op. O.L.C. 828, 830\xe2\x80\x9331\n(1980) (\xe2\x80\x9cApplicability of the Compact Clause\xe2\x80\x9d) (citing Multistate Tax\nComm\xe2\x80\x99n, 434 U.S. at 467\xe2\x80\x9371; Wharton v. Wise, 153 U.S. 155, 171 (1894)).\nThe Court has also held that Congress\xe2\x80\x99s decision to authorize an interstate agreement on a subject matter that is within the scope of federal\nlegislative authority would itself suffice to bring the agreement within the\nCompact Clause due to its inherent potential to impact federal supremacy.\nSee Cuyler v. Adams, 449 U.S. 433, 440\xe2\x80\x9341 (1981) (holding that \xe2\x80\x9cwhere\nCongress has authorized the States to enter into a cooperative agreement,\nand where the subject matter of that agreement is an appropriate subject\nfor congressional legislation, the consent of Congress transforms the\nStates\xe2\x80\x99 agreement into federal law under the Compact Clause\xe2\x80\x9d); see also\nWash. Metro. Area Transit Auth. v. One Parcel of Land in Montgomery\nCty., 706 F.2d 1312, 1317 n.9 (4th Cir. 1983) (suggesting that, even if a\nstate agreement would not independently qualify as an Article I \xe2\x80\x9cCompact,\xe2\x80\x9d congressional consent turns a state agreement touching on an area\nthe constitutional definition of \xe2\x80\x9cOfficers of the United States\xe2\x80\x9d when interpreting the\nstatutory phrase \xe2\x80\x9cofficers of the navy\xe2\x80\x9d).\n\n4\n\n\x0cApplicability of Section 410 of the Amtrak Reform and Accountability Act\n\nof Congress\xe2\x80\x99s legislative power into federal law). An agreement between\ntwo or more States may therefore constitute an interstate compact for\nconstitutional purposes where it has been expressly authorized by an act\nfalling within the appropriate scope of congressional authority.\nApplying these precedents, we concluded that New York and New Jersey entered into an interstate agreement subject to the Compact Clause by\nenacting the reciprocal state laws establishing the GDC. The GDC has\n\xe2\x80\x9cseveral of the classic indicia of a compact,\xe2\x80\x9d including the existence of a\n\xe2\x80\x9cjoint organization or body\xe2\x80\x9d with regulatory authority, the inability of\neach State to \xe2\x80\x9cmodify or repeal [the compact] unilaterally,\xe2\x80\x9d and interstate\n\xe2\x80\x9creciprocation.\xe2\x80\x9d Ne. Bancorp, Inc. v. Bd. of Governors of Fed. Reserve\nSys., 472 U.S. 159, 175\xe2\x80\x9376 (1985). The two States established the GDC as\na governmental body, for public purposes. The GDC exercises governmental authority\xe2\x80\x94it acts as a coordinating agency for federal, state, and\nprivate funding, and it has authority to enter into binding contracts with\nfederal, state, and private entities; to acquire property for the projects,\nincluding through eminent domain; and to levy tolls and fees payable by\nproject users. See N.J. Act \xc2\xa7 4(a); N.Y. Act \xc2\xa7 2, \xc2\xb6 1; see also N.J. Act\n\xc2\xa7\xc2\xa7 4(a)(1)\xe2\x80\x93(6), 7, 8; N.Y. Act \xc2\xa7 2, \xc2\xb6\xc2\xb6 3, 6, 7. Each State further obligated\nitself to commit funds to rail projects that the GDC is authorized to facilitate. N.J. Act \xc2\xa7 20; N.Y. Act \xc2\xa7 2, \xc2\xb6 19.\nIn addition, while the two States did not sign a formal writing to embody their agreement, they did much the same thing by enacting reciprocal laws, on the same day, that were conditioned upon the other State\xe2\x80\x99s\napproval of a law with identical effect. N.J. Act \xc2\xa7 30(a); N.Y. Act \xc2\xa7 10(a);\nsee also Multistate Tax Comm\xe2\x80\x99n, 434 U.S. at 470 (\xe2\x80\x9cAgreements effected\nthrough reciprocal legislation may present opportunities for enhancement\nof state power at the expense of the federal supremacy similar to the\nthreats inherent in a more formalized \xe2\x80\x98compact.\xe2\x80\x99\xe2\x80\x9d). The state laws expressly require that each State must receive the \xe2\x80\x9cconcurre[nce]\xe2\x80\x9d of the\nother State to amend or repeal its own law. N.J. Act \xc2\xa7 25; N.Y. Act \xc2\xa7 8.\nThe two States not only entered into an interstate agreement, but the\nagreement is one with the potential to encroach on \xe2\x80\x9cfederal supremacy,\xe2\x80\x9d\neven beyond the agreement\xe2\x80\x99s mere connection to a subject matter within\nthe scope of Congress\xe2\x80\x99s constitutional authority to legislate. See Multistate Tax Comm\xe2\x80\x99n, 434 U.S. at 468\xe2\x80\x9370; Virginia v. Tennessee, 148 U.S. at\n519. The GDC laws \xe2\x80\x9cimpose some legal obligation or disability\xe2\x80\x9d on the\nState governments related to the regulation of rail operations. Applicability of the Compact Clause, 4B Op. O.L.C. at 830\xe2\x80\x9331. There is no question\n5\n\n\x0cOpinions of the Office of Legal Counsel in Volume 44\n\nthat Congress is \xe2\x80\x9ccompetent to regulate\xe2\x80\x9d the field of interstate rail operations. Id. The Amtrak Reform Act itself recognizes that \xe2\x80\x9cintercity rail\npassenger service is an essential component of a national intermodal\npassenger transportation system.\xe2\x80\x9d Amtrak Reform Act \xc2\xa7 2. In addition,\nthe compact imposes \xe2\x80\x9clegal obligation[s] or disabilit[ies]\xe2\x80\x9d on the States by\nrequiring them to fund the Commission\xe2\x80\x99s projects, empowering the Commission to exercise regulatory powers across state lines, and requiring the\nStates to engage in \xe2\x80\x9cjoint . . . operation[s]\xe2\x80\x9d that involve interstate rail\noperations within the scope of federal legislative power. See Applicability\nof the Compact Clause, 4B Op. O.L.C. at 831. 4\nThe proposed variance demonstrated that the GDC\xe2\x80\x99s authority may directly impinge upon federal equities. New Jersey had proposed to meet its\nfinancial obligations for a bridge project subject to the GDC\xe2\x80\x99s authority\nby diverting funds from Amtrak, and as you explained, such a diversion,\nif permitted, would have decreased Amtrak\xe2\x80\x99s available \xe2\x80\x9cgood repair\xe2\x80\x9d\nfunds, which could have created a shortfall requiring replenishment from\nother federal or state sources. See Bradbury Letter at 1, 3; Amtrak-NJT\nBCC Variance Request for Portal North Bridge, Resolution 2019-R-##\n(May 16, 2019) (\xe2\x80\x9cDraft Variance Request\xe2\x80\x9d) (proposing a draft NEC\nCommission resolution). Accordingly, we believe that the States\xe2\x80\x99 reciprocal laws establishing the GDC constitute an interstate compact under the\nCompact Clause.\nUnder Supreme Court precedent, the States\xe2\x80\x99 reciprocal laws further\nqualify as an interstate compact by virtue of Congress\xe2\x80\x99s express authorization of the formation of \xe2\x80\x9cinterstate compacts\xe2\x80\x9d promoting intercity\n\n4 In these respects, the GDC is quite different from the multistate administrative bodies\nthat the Supreme Court has held to stand outside the Compact Clause. See Multistate Tax\nComm\xe2\x80\x99n, 434 U.S. at 471\xe2\x80\x9372; New York v. O\xe2\x80\x99Neill, 359 U.S. 1, 11 (1959) (\xe2\x80\x9cThe Constitution of the United States does not preclude resourcefulness of relationships between States\non matters as to which there is no grant of power to Congress and as to which the range of\nauthority restricted within an individual State is inadequate.\xe2\x80\x9d). In Multistate Tax Commission, for instance, the Court held that the States could establish such a body, even absent\ncongressional consent, where the commission lacked any \xe2\x80\x9cdelegation of sovereign\npower,\xe2\x80\x9d could issue only \xe2\x80\x9cadvisory\xe2\x80\x9d regulations, could be \xe2\x80\x9cwithdraw[n] [from] at any\ntime,\xe2\x80\x9d and did not otherwise intrude on federal supremacy. 434 U.S. at 457, 473\xe2\x80\x9376. By\ncontrast here, as we have explained, the GDC exercises delegated state authority to take\nbinding action across state lines, such as condemning property and levying tolls, and the\nreciprocal agreement occupies a field\xe2\x80\x94interstate rail transit\xe2\x80\x94that falls directly within\nCongress\xe2\x80\x99s legislative purview.\n\n6\n\n\x0cApplicability of Section 410 of the Amtrak Reform and Accountability Act\n\npassenger rail service. See Amtrak Reform Act \xc2\xa7 410(a). An agreement\nmay qualify as an interstate compact where Congress has consented to it\nby \xe2\x80\x9cauthorizing joint state action in advance\xe2\x80\x9d and the matter is \xe2\x80\x9can appropriate subject for congressional legislation.\xe2\x80\x9d Cuyler, 449 U.S. at 440\xe2\x80\x9341.\nThe Amtrak Reform Act here provides express consent to New York and\nNew Jersey to enter into a compact to provide intercity rail services, and\nthat is plainly an appropriate subject for congressional legislation under\nthe Commerce Clause, U.S. Const. art. I, \xc2\xa7 8, cl. 3 (\xe2\x80\x9cThe Congress shall\nhave Power . . . [t]o regulate Commerce . . . among the several States[.]\xe2\x80\x9d).\nAccordingly, even if the state laws establishing the GDC did not embody\na potential intrusion on federal sovereignty, the federal law authorizing\nthe agreement should itself be sufficient to bring it within the scope of the\nCompact Clause.\nHaving determined that the States entered into an interstate compact,\nwe then considered whether NJT\xe2\x80\x99s proposal to divert funds that otherwise\nwould have gone to Amtrak would have violated the terms of Congress\xe2\x80\x99s\nconsent to that compact. In the Amtrak Reform Act, Congress authorized\nStates to \xe2\x80\x9cuse any Federal or State funds made available for intercity\npassenger rail service (except funds made available for Amtrak ).\xe2\x80\x9d Amtrak\nReform Act \xc2\xa7 410(b)(2) (emphasis added); see generally Cuyler, 449 U.S.\nat 439\xe2\x80\x9340 (Congress may condition its consent for compacts \xe2\x80\x9con the\nStates\xe2\x80\x99 compliance with specified conditions\xe2\x80\x9d). Consequently, NJT may\nnot use any federal or state \xe2\x80\x9cfunds made available for Amtrak\xe2\x80\x9d to fulfill\nits alternate funding obligations for projects that the GDC is authorized to\nfacilitate.\nWe believe that NJT\xe2\x80\x99s proposed variance would have constituted a diversion of state \xe2\x80\x9cfunds made available for Amtrak.\xe2\x80\x9d Federal appropriations law speaks of funds being \xe2\x80\x9cmade available\xe2\x80\x9d when they have been\nappropriated to be spent by a government entity for an authorized purpose, during an authorized period of time. See, e.g., 3 Government Accountability Office, Principles of Federal Appropriations Law 3-9 (4th\ned. 2017). The Amtrak Reform Act, however, does not apply simply to\nfederal funds, but also to state funds, and the statute is specifically intended to regulate how the States make funding decisions in connection with\ninterstate compacts relating to rail service. Accordingly, we do not believe\nthat funds may be viewed as being \xe2\x80\x9cmade available\xe2\x80\x9d for Amtrak only\nwhen Congress has appropriated them for that purpose as a matter of\nfederal appropriations law.\n7\n\n\x0cOpinions of the Office of Legal Counsel in Volume 44\n\nInstead, we think that the question whether state funds have been\n\xe2\x80\x9cmade available\xe2\x80\x9d should turn on the ordinary meaning of the phrase,\nwhich refers to funds that would otherwise be provided to Amtrak. See\n1 Oxford English Dictionary 812 (2d ed. 1989) (\xe2\x80\x9cavailable\xe2\x80\x9d: \xe2\x80\x9ccapable of\nbeing made use of, at one\xe2\x80\x99s disposal, within one\xe2\x80\x99s reach\xe2\x80\x9d); Webster\xe2\x80\x99s\nThird New International Dictionary 150 (1993) (\xe2\x80\x9cavailable\xe2\x80\x9d: \xe2\x80\x9ccapable of\nuse for the accomplishment of a purpose; immediately utilizable\xe2\x80\x9d; \xe2\x80\x9cthat is\naccessible or may be obtained . . . : at disposal, esp. for sale or utilization\xe2\x80\x9d). The Fifth Circuit approached the phrase in a similar way in connection with the Individuals with Disabilities Education Act (\xe2\x80\x9cIDEA\xe2\x80\x9d),\nsee IDEA Amendments for 1997, Pub. L. No. 105-17, \xc2\xa7 101, 111 Stat. 37,\n68 (codified at 20 U.S.C. \xc2\xa7 1412(a)(18)(A)), which conditions federal\nfunding on a prohibition against a State\xe2\x80\x99s reducing the amount of state\nfinancial support \xe2\x80\x9cmade available\xe2\x80\x9d for special education and related\nservices. See Texas Educ. Agency v. U.S. Dep\xe2\x80\x99t of Educ., 908 F.3d 127,\n132\xe2\x80\x9333 (5th Cir. 2018). The court accepted that the phrase referred to\nfunds that were \xe2\x80\x9ccapable of being used, not actually used,\xe2\x80\x9d id., and concluded that the State had breached that condition by appropriating fewer\nfunds for that purpose in that year than the prior one, id. at 130, 132\xe2\x80\x9335.\nWhere a State has committed under relevant agreements to make future\npayments to Amtrak, under federal law or otherwise, we believe that those\nfunds have been \xe2\x80\x9cmade available\xe2\x80\x9d for Amtrak. If funds were \xe2\x80\x9cmade available\xe2\x80\x9d to Amtrak only when the state funds had been actually expended, or\notherwise transferred to Amtrak, then the prohibition on state use of funds\n\xe2\x80\x9cmade available for Amtrak\xe2\x80\x9d would have little effect, because such\namounts that had already been transferred to Amtrak could hardly be\ndiverted.\nUnder this standard, New Jersey\xe2\x80\x99s assumption of funding obligations to\nAmtrak \xe2\x80\x9cmade [those funds] available for Amtrak\xe2\x80\x9d within the meaning of\nthe Amtrak Reform Act. NJT\xe2\x80\x99s underlying obligation to Amtrak resulted\nfrom the NEC\xe2\x80\x99s Cost Allocation Policy, a congressionally mandated\n\xe2\x80\x9cpolicy for determining and allocating costs, revenues, and compensation\nfor [NEC] commuter rail passenger transportation.\xe2\x80\x9d See 49 U.S.C.\n\xc2\xa7 24905(c)(1)(A). That Policy obligated New Jersey, as a participant in\nthe NEC Commission, to make certain defined capital contributions. See\nCost Allocation Policy \xc2\xa7 1.6.1\xe2\x80\x93.2. The Policy set requirements for the\nprioritization of baseline capital charges, which the NEC Commission\ncalculates annually for each participant. See id. \xc2\xa7 5.5.1\xe2\x80\x93.2. NJT recognized that this prioritization formula would, in the absence of a variance,\n8\n\n\x0cApplicability of Section 410 of the Amtrak Reform and Accountability Act\n\nrequire that the NJT funds at issue be provided \xe2\x80\x9cto Amtrak.\xe2\x80\x9d See Memorandum for the Northeast Corridor Commission, from Joseph Quinty, NJ\nTransit, Re: BCC Variance Request at 1 (May 16, 2019) (\xe2\x80\x9cQuinty Memorandum\xe2\x80\x9d). The proposed variance would have enabled NJT to divert a\nportion of its payments set aside for NEC-related capital costs to pay\ndown a portion of NJT\xe2\x80\x99s obligations to the aforementioned bridge project,\nranging from $16 to $20 million per year, covering the period from 2019\nthrough 2033. Id.; see also Portal North Bridge Variance Request at 1\n(updated May 16, 2019) (\xe2\x80\x9cVariance Request Form\xe2\x80\x9d) (explaining that the\nrequested variance covered a fifteen-year period and included a $20\nmillion reduction\xe2\x80\x94or credit\xe2\x80\x94applied to NJT\xe2\x80\x99s annual baseline capital\ncharge obligation to Amtrak for fiscal years 2019 through 2029, followed\nby a $19 million credit for fiscal year 2030, reduced by $1 million annually through fiscal year 2033). Because NJT\xe2\x80\x99s request would have reduced\nthe funds provided to Amtrak, we believe that the proposed variance\nwould have presented precisely the kind of diversion prohibited by the\nAmtrak Reform Act.\nWe see two possible counterarguments, but we do not view either to be\npersuasive. First, one could argue that the NEC Commission\xe2\x80\x99s approval of\na variance from the Cost Allocation Policy itself would reduce the amount\nof funds that NJT would be obliged to pay to Amtrak in the future. Under\nthis reasoning, New Jersey\xe2\x80\x99s redirection of resources would not in fact\nreduce any funds \xe2\x80\x9cmade available\xe2\x80\x9d to Amtrak; those reductions would\narise solely from the discretionary decision by the NEC Commission. We\nthink, however, that this argument ignores the fact that it was New Jersey\nitself that had requested a variance from its obligations for the purpose of\nmeeting its new funding commitments under the GDC laws for the bridge\nproject. Because the Amtrak Reform Act prohibits a State from entering\ninto an interstate agreement that will take funds away from Amtrak, we\nthink it similarly applies to prevent New Jersey from making a variance\nrequest to the NEC Commission that would have the same effect.\nSecond, because NJT\xe2\x80\x99s variance proposal addressed funding over a fifteen-year period, it could be said that the request concerned the projected\nexpenditure of funds, and not simply funds that have already been \xe2\x80\x9cmade\navailable\xe2\x80\x9d to Amtrak. See Quinty Memorandum at 1. NJT calculated the\nfuture funding, beyond fiscal year 2019, that Amtrak would have been\nexpected to receive based on NJT\xe2\x80\x99s actual payment obligations for fiscal\nyear 2019 but a \xe2\x80\x9cprojected . . . total payment amount\xe2\x80\x9d for fiscal year\n2020. Variance Request Form at 1 (emphasis added). For the years fol9\n\n\x0cOpinions of the Office of Legal Counsel in Volume 44\n\nlowing fiscal year 2020, the NEC Commission had not yet specified even\nthe projected annual baseline capital charge spending obligations for each\nrail operator, so NJT\xe2\x80\x99s variance request for fiscal years 2021 through\n2033 was based on NJT\xe2\x80\x99s assumptions regarding its annual future BCC\nobligations. See id. Nonetheless, the statutorily authorized NEC Cost\nAllocation Policy bound NJT to provide an agreed-upon amount of funding to Amtrak for infrastructure repairs, before diverting funds to thirdlevel backlog projects such as the Portal North Bridge project. See Cost\nAllocation Policy \xc2\xa7 5.5.2.1 (prioritizing basic infrastructure projects\nahead of major backlog projects); Draft Variance Request arts. (B)\xe2\x80\x93(D)\n(summarizing the Cost Allocation Policy requirement and asserting that\nthe Portal North Bridge project is a \xe2\x80\x9cMajor Backlog\xe2\x80\x9d project). Even\nthough only current fiscal year funds are presently \xe2\x80\x9cavailable\xe2\x80\x9d for\nAmtrak, the future obligations are \xe2\x80\x9cexpected,\xe2\x80\x9d see Cost Allocation Policy\n\xc2\xa7 4.2.1(2)\xe2\x80\x93(3), and the current policy continues to bind parties until such\ntime as the NEC Commission adopts a replacement policy. 5 Under the\nAmtrak Reform Act, NJT could not lawfully divert funds for use on\nprojects the GDC is authorized to facilitate that, under the current Cost\nAllocation Policy, would have been \xe2\x80\x9cavailable\xe2\x80\x9d to Amtrak in future years.\nSee, e.g., id. \xc2\xa7 2.2; Amtrak Reform Act \xc2\xa7 410(b)(2) (\xe2\x80\x9cAn interstate compact established by States under subsection (a) may provide that, in order\nto carry out the compact, the States may . . . use any Federal or State\nfunds made available for intercity passenger rail service (except funds\nmade available for Amtrak).\xe2\x80\x9d). Should the NEC Commission revise its\nCost Allocation Policy in the future in a way that reduces NJT\xe2\x80\x99s obligations to Amtrak, then New Jersey may have more funds to direct toward\nGDC-facilitated projects. But under the Cost Allocation Policy as it\ncurrently exists, NJT was seeking a variance that would take away funds\nexpected to be \xe2\x80\x9cmade available\xe2\x80\x9d for Amtrak.\nNJT\xe2\x80\x99s request made clear that, absent the proposed variance, Amtrak\nwould have been the recipient of the capital charges that NJT owes. VariSee Cost Allocation Policy \xc2\xa7 2.2\xe2\x80\x93.4; see also id. \xc2\xa7 2.6 (providing for the imposition\nof financial penalties for parties who do not meet their payment obligations under the\npolicy); 49 U.S.C. \xc2\xa7 24905(c)(1)\xe2\x80\x93(2) (requiring \xe2\x80\x9cAmtrak and public authorities providing\ncommuter rail passenger transportation on the Northeast Corridor\xe2\x80\x9d to implement agreements, based on cost allocation policies, that are enforceable by the Surface Transportation Board); Cost Allocation Policy app. \xc2\xa7 1.4.2.3 (providing that \xe2\x80\x9cif the policy expires,\nthen the last year for which fully allocated costs were calculated according to the policy\n. . . will be used as the basis for calculating the current-year costs\xe2\x80\x9d).\n5\n\n10\n\n\x0cApplicability of Section 410 of the Amtrak Reform and Accountability Act\n\nance Request Form at 1. Because NJT had been obligated to make these\npayments to Amtrak under the NEC policy\xe2\x80\x99s prioritization requirements,\nwe believe that the funds had been \xe2\x80\x9cmade available\xe2\x80\x9d for Amtrak within\nthe meaning of the Amtrak Reform Act. A diversion of these funds thus\nwould have contravened the prohibition on using \xe2\x80\x9cfunds made available\nfor Amtrak\xe2\x80\x9d to \xe2\x80\x9ccarry out the [interstate] compact.\xe2\x80\x9d Amtrak Reform Act\n\xc2\xa7 410(b)(2). Accordingly, we advised that the NJT\xe2\x80\x99s proposed variance\nwould have been contrary to federal law. 6\nJENNIFER L. MASCOTT\nDeputy Assistant Attorney General\nOffice of Legal Counsel\n\n6 The NEC Commission ultimately approved a baseline capital charge variance that,\nlike NJT\xe2\x80\x99s initial proposal, reprioritized baseline capital charges from basic infrastructure\nto backlog projects but, unlike NJT\xe2\x80\x99s proposal, stipulated that \xe2\x80\x9cthe Gateway Development\nCommission is not authorized to receive or control the funds (or credit of funds) that are\nthe subject\xe2\x80\x9d of the request. Resolution to Approve the NJT/Amtrak BCC Variance\nRequest for Portal North Bridge, Resolution 2019-R-18 (Sept. 12, 2019).\n\n11\n\n\x0c'


b'March 7, 1977\n\n78-75 MEMORANDUM OPINION FOR THE COUNSEL\nTO THE PRESIDENT\nPresidential Authority\xe2\x80\x94Legality of Proposed\nExecutive Order Requiring Public Disclosure of\nEmployee Financial Statements\xe2\x80\x94Freedom of\nInformation Act (5 U.S.C. \xc2\xa7 522)\xe2\x80\x94Privacy Act\n(5 U.S.C. \xc2\xa7 552a)\nYou have asked for our opinion on the question whether the President is\nprohibited from ordering the public disclosure of detailed financial statements\nfiled by certain officers or employees of the Executive branch or of independent\nagencies. It is our conclusion that the President is prohibited from doing so\nwithout the consent of the persons involved.\nI. Background\nThe Civil Service Commission was directed by \xc2\xa7 403 of Executive Order\n11222, 3 CFR 306 (1965), issued May 8, 1965, to prescribe regulations for the\nsubmission of statements of financial interests by such employees as the\nCommission might designate. The Commission\xe2\x80\x99s implementing regulations\nrequire statements to be filed by all employees paid at a level of the Executive\nSchedule, 5 U.S.C. \xc2\xa7\xc2\xa7 5311 et seq. (1976); other employees classified at\nGS-13 or above pursuant to 5 U.S.C. \xc2\xa7 5332 (1976), or those at a comparable\npay level under other authority having procurement, grant, regulatory, or\nsimilar responsibilities; and certain employees classified below GS-13. 5 CFR\n735.403 (1977).\nAt a minimum, an employee required to file must disclose the identity of his\ncreditors, his real property interests and those of his immediate household, as\nwell as the identity of companies or organizations with which the employee or a\nmember of his immediate household is affiliated as an officer or employee or in\nwhich he has a financial interest through the ownership of securities or\nparticipation in pension or similar plans. See 5 CFR 735.401 (1977); Federal\nPersonnel Manual, Chapter 735, Appendix D. The amounts of income earned\nfrom outside employment and the value of assets need not be reported. Section\n329\n\n\x0c405 of Executive Order 11222 expressly provides that the financial statements\n\xe2\x80\x9c shall be held in confidence, and no information as to the contents thereof shall\nbe disclosed except as the Chairman of the Civil Service Commission may\ndetermine for good cause shovyn.\xe2\x80\x9d See also 5 CFR 735.410 (1977).\nWe understand that consideration is being given to the issuance of an\nExecutive order by the President that would revise the financial reporting\nprovisions in Part IV of Executive Order 11222 in two principal respects.1\nFirst, the reports would be far more detailed than those presently filed. For\nexample, employees would be required to report the value of their assets and\nliabilities, as well as those of their families; liabilities for mortgages and\nhousehold expenses (which are presently omitted) would have to be included;\nand extensive reporting of the amounts of gifts, reimbursements, and outside\nincome of the employee, his spouse, and minor children.2 Second, the order\nwould require that the statements be made available for public inspection,\neither in the employing agency or at a central location under the supervision of\nthe Civil Service Commission.\nII. Application of the Privacy Act\nWe assume for the purposes of this opinion that an Executive order requiring\npublic disclosure of financial statements would constitute a reasonable regula\xc2\xad\ntion for the conduct of employees and is therefore within the ambit of the\nPresident\xe2\x80\x99s power under 5 U.S.C. \xc2\xa7 7301 (1976).3 But the President\xe2\x80\x99s broad\npower under \xc2\xa7 7301 has been clearly circumscribed by the subsequent\nenactment of the Freedom of Information Act and the Privacy Act, which\ntogether govern access to records relating to most Federal employees.\nEach financial statement would contain information pertaining to the\nemployee and the employee\xe2\x80\x99s spouse and minor children and would be\nretrievable, using the employee\xe2\x80\x99s name, from either a central file maintained by\nthe Civil Service Commission or a separate set of files maintained by the\nemploying agency. It seems evident, then, that an employee\xe2\x80\x99s financial statement\nwould constitute a \xe2\x80\x9c record\xe2\x80\x9d contained in a \xe2\x80\x9c system of records\xe2\x80\x9d within the\nmeaning of the Privacy Act. 5 U.S.C. \xc2\xa7\xc2\xa7 552a(a)(4) and (5) (1976). Such a\nrecord may only be disclosed with the prior written consent of the individual to\n\'The proposed order apparently would also rephrase the standard for determining who must file\nfinancial statements. Under the order, filing would be required of all persons classified at GS-16 or\nabove or at a comparable pay level under other authority, and any other employee in a position\nwhere filing is necessary in order to protect the integrity of the Government and to avoid\ninvolvement in possible conflicts of interest. It is not clear whether this standard is intended to bring\nmore employees under the filing system or fewer.\n2Assets, liabilities, and items of income would be reported within broad categories of value,\nrather than in specific dollar terms.\n3We also assume that public disclosure would not impermissibly infringe on whatever\nconstitutionally based right of privacy there may be in one\'s financial affairs. See. e.g..\nMontgomery County v. Walsh, 274 Md. 489, 336 A. (2d) 97 (1975), appeal dismissed. 424 U.S.\n901 (1976); Stein v. Howlett. 52 111. 2d 570, 289 N.E. (2d) 409 (1972), appeal dismissed. 412\nU.S. 925 (1973); Fritz v. Gorton, 83 Wash. 2d 275, 517 P. (2d) 9 1 1 (1974), appeal dismissed, 417\nU.S. 902 (1974).\n\n330\n\n\x0cwhom the record pertains, unless one of the exceptions from the consent\nrequirement specifically identified in 5 U.S.C \xc2\xa7 552a(b) (1976) is satisfied. Of\nthe eleven conditions of disclosure, only two are even arguably relevant\nhere\xe2\x80\x94that which permits disclosures required to be made under the Freedom of\nInformation Act, 5 U.S.C. \xc2\xa7 552a(b)(2) (1976), and that which permits\ndisclosure for a \xe2\x80\x9c routine use\xe2\x80\x9d of the record which has been included in the\nagency\xe2\x80\x99s published notice pertaining to that system of records, 5 U.S.C. \xc2\xa7\n552a(b)(3) (1976). We do not believe that public disclosure of the financial\nstatements would be permissible under either of these provisions.\nA. Disclosures under the Freedom of Information Act. Under the Freedom\nof Information Act, an agency must make an agency record available to \xe2\x80\x9c any\nperson,\xe2\x80\x9d 5 U.S.C. \xc2\xa7 552(a)(3) (1976), unless it is specifically exempt from\nrelease under subsection (b). The relevant provision of subsection (b) is\nexemption 6, exempting from disclosure \xe2\x80\x9c personnel and medical files and\nsimilar files the disclosure of which would constitute a clearly unwarranted\ninvasion of personal privacy.\xe2\x80\x9d Thus, financial disclosure statements are not\nrequired to be made available to the public under the Freedom of Information\nAct\xe2\x80\x94and therefore may not be disseminated under section (b)(2) of the Privacy\nAct\xe2\x80\x94if to do so would constitute \xe2\x80\x9c a clearly unwarranted invasion of personal\nprivacy.\xe2\x80\x9d\nAs stated in the Senate report on the bill later enacted as the Freedom of\nInformation Act, the phrase just quoted enunciates a policy that requires \xe2\x80\x9c a\nbalancing of interests between the protection of an individual\xe2\x80\x99s private affairs\nfrom unnecessary public scrutiny, and the public\xe2\x80\x99s right to government\ninformation.\xe2\x80\x9d S. Rept. No. 813, 89th Cong., 1st. sess. 9 (1965). See,\nDepartment o f the Air Force v. Rose, 425 U.S. 352, 372-73, 380 (1976); Wine\nHobby USA, Inc. v. United States Internal Revenue Service, 502 F. (2d) 133 (3d\nCir. 1974); Getman v. National Labor Relations Board, 450 F. (2d) 670 (D.C.\nCir. 1971). This balancing process calls for a determination that privacy\ninterests are implicated, identification of the public interest in release of the\ninformation, and a weighing of the public interest against the anticipated\nseriousness of the invasion of privacy.\nPrivacy interests protected by exemption 6 are unquestionably implicated in\nthe release of information about an individual\xe2\x80\x99s personal finances. In the\nAttorney General\xe2\x80\x99s view,\n[tjhe privacy interest does not extend only to types of information that\npeople generally do not make public. Rather, in the present context it\nmust be deemed generally to include information about an individual\nwhich he could reasonably assert an option to withhold from the\npublic at large because of its intimacy or his family. [Attorney\nGeneral\xe2\x80\x99s Memorandum on the 1974 Amendments to the Freedom of\nInformation Act 9-10 (1975).]\nSee, e.g., Wine Hobby, supra, at 136-137and n. \\5\\G etm an\\. National Labor\nRelations Board, supra, at 674-675. One\xe2\x80\x99s family finances certainly constitute\n\xe2\x80\x9c information that people generally do not make public\xe2\x80\x9d and about which an\n331\n\n\x0cindividual may reasonably \xe2\x80\x9c assert an option to withhold from the public at\nlarge.\xe2\x80\x9d\nThe countervailing public interest in financial disclosure derives from the\nneed to prevent real and apparent conflicts of interest among Government\nemployees. Specifically, it appears that public disclosure is intended to permit\nthe interested public to determine for itself whether, a given employee has a\nconflict of interest, rather than leaving this determination entirely to agency\nofficials who may take a narrow view of what constitutes a conflict of interest.\nIt might also be thought that disclosure of financial statements will enable the\npublic to assess the performance of agency officials responsible for preventing\nconflicts of interest among their employees. The proposal may proceed on the\nadditional premise that the mere possibility that his financial statement will be\ninspected by an enterprising press or interested party in a specific proceeding,\nand the prospect of public embarrassment that may result, will deter an\nemployee from having any affiliations or interests that could even remotely\ngive rise to an allegation that he has a real or apparent conflict of interest.\nSimilarly, the prospect of public scrutiny may cause agency officials to\nexamine financial statements more closely.\nThe typical exemption 6 case involves a specific request for a limited amount\nof information which may pertain to certain individuals, not a blanket request\nfor release. In perhaps the leading court of appeals case applying the balancing\ntest under exemption 6, the court held that in the context of a narrow request, a\ncourt may properly balance the particular privacy interest to be affected against\nthe public interest in the specific disclosure. Getman v. National Labor\nRelations Board, supra, at 674-677 and n. 10. Also under Getman, \xe2\x80\x9c a court\xe2\x80\x99s\ndecision to grant disclosure under exemption (6) carries with it an implicit\nlimitation that the information, once disclosed, be used only by the requesting\nparty and for the public interest purpose upon which the balancing was based.\xe2\x80\x9d\nId. at 677 n. 24. See also, Wine Hobby, supra, at 136-137. If the information is\ndisclosed only to the requester, who will not in turn release it to the public at\nlarge in a manner that reveals the identity of the persons involved, the resulting\ninvasion of privacy is far less than if the information is made available to any\nmember of the public without regard to the uses to which it will be put.\nHowever, the balancing test in this context cannot focus on the merits of a\nspecific request for a given financial statement because the proposed revision of\nExecutive Order No. 11222 contemplates wholesale release of financial\nstatements without regard to the intentions of any particular requester. The\ninvasion of privacy and the public interest in disclosure must therefore be\nconsidered in relation to the possible release of information to the public at\nlarge.\nIf financial statements are available to the public at large, it is our view that\nthe potential invasion of privacy is significant. There can be no assurance that\nthe information in the statements will not be used to solicit contributions or to\npromote commercial purposes, see. Wine Hobby, supra, or to identify likely\ntargets for theft. Cf. H. Rept. No. 1497, at II. Perhaps more significantly,\nhowever, anyone who had the inclination\xe2\x80\x94 neighbors, coworkers\xe2\x80\x94could\n332\n\n\x0cobtain detailed information about how an individual managed his affairs. As\nMr. Justice Powell pointed out in his concurring opinion in California Bankers\nAssociation v. Shultz, 416 U.S. 21 (1974), upholding the constitutionality of a\nFederal statute and regulations requiring banks to report certain financial\ntransactions of their customers:\nIn their full reach, the reports apparently authorized by the openended language of the Act touch upon intimate areas of an individu\xc2\xad\nal\xe2\x80\x99s personal affairs. Financial transactions can reveal much about a\nperson\xe2\x80\x99s activities, associations and beliefs. At some point, govern\xc2\xad\nmental intrusion upon these areas would implicate legitimate expecta\xc2\xad\ntions of privacy. Moreover, the potential for abuse is particularly\nacute where, as here, the legislative scheme permits access to this\ninformation without invocation of the judicial process. In such\ninstances, the important responsibility for balancing societal and\nindividual interests is left to unreviewed executive discretion, rather\nthan the scrutiny of a neutral magistrate. [416 U.S. at 78.]\nAside from its mere exposure, public financial disclosure \xe2\x80\x9c is almost certain\ninvitation to demagogic political attack of one kind or another\xe2\x80\x94upon the poor\nman as one who cannot manage even his own economic affairs, and upon the\nrich man as one who is privileged and has lost contact with the mass of the\ncitizenry.\xe2\x80\x9d Association of the Bar of the City of New York, Conflict of Interest\nand Federal Service, at 255 (1960). Moreover, even where inspection takes\nplace solely to uncover possible conflicts of interest, what constitutes a real or\napparent conflict of interest would legitimately be the subject of public debate.\nThus, even though agency officials responsible for determining what constitutes\na conflict of interest under applicable statutes and regulations may have\nconcluded that there was no legal prohibition against the holding of certain\nassets, the employee may nevertheless be subjected to criticism in the press and\nhis community for owning them. Exemption 6 was intended to protect persons\nfrom such embarrassment and disgrace. Department of the Air Force v. Rose,\n425 U.S. 352, 377 (1976).\nOf course, we cannot say that such uses and abuses of the financial\nstatements will occur with regularity; but they are certainly more than \xe2\x80\x9c mere\npossibilities,\xe2\x80\x9d Department of the Air Force v. Rose, at 380-381 and n. 19, and\nthere is no protection against them. We are not aware of any case requiring\npublic release of personal information under exemption 6 where there would be\nanything approaching the degree of potential for abuse and harm involved here.\nNor, in fact, are we aware of any case that has upheld the release of information\nconcerning an individual in which the detail of disclosure and the degree of the\nresulting invasion of privacy is at all comparable to that contemplated here,\neven with protections against wider dissemination. Typically, when detailed\nfacts are released, the individual\xe2\x80\x99s name and other identifying characteristics\nare deleted. See, e.g., Department of the Air Force v. Rose; Rural Housing\nAlliance v. Department of Agriculture, 498 F. (2d) 73, 78 (D.C. Cir. 1974).\nWhen the individual\xe2\x80\x99s identity is disclosed, the invasion of privacy is ordinarily\n333\n\n\x0climited to the prospect of a single contact by an outside party, Getman v.\nNational Labor Relations Board, supra, or relevation of an isolated fact that\nwould not furnish insights into the person\xe2\x80\x99s private life generally. Id.; Robles v.\nEnvironmental Protection Agency, 484 F. (2d) 843 (4th Cir. 1973).\nWeighing against this potential invasion of privacy is the asserted public\ninterest in preventing conflicts of interest and in reassuring the public regarding\nthe integrity of the Government. Insofar as actually preventing conflicts of\ninterest is concerned, public disclosure can accomplish this goal only indirectly.\nThere is apparently no plan to eliminate the review of financial statements by\nagency officials familiar with the employee\xe2\x80\x99s work. That review of statements\nfiled by officials familiar with the applicable statutes and regulations and nature\nof the work of the persons who file\xe2\x80\x94as opposed to haphazard review by\nmembers of the press and public4\xe2\x80\x94 will continue to be the principal prophylaxis\nagainst conflicts of interest. Because of this existing and probably more reliable\nalternative, public disclosure cannot be thought to be essential to prevent\nconflicts of interest in most cases. Compare, Wine Hobby at 137 n. 17; Rural\nHousing Alliance v. Department of Agriculture, at 77-78. And even if public\ndisclosure would result in the identification of a number of conflicts of interest\nthat agency officials had overlooked, this would have been accomplished at the\nexpense of invading the privacy of numerous employees about whom no\nquestion will be raised. In our view, the significant invasion of privacy entailed\nin order to accomplish this incremental result would be \xe2\x80\x9c clearly unwarranted.\xe2\x80\x9d\nThe more substantial argument for public disclosure appears to be that it is\nnecessary to restore the public\xe2\x80\x99s confidence in Government by exposing the\nholdings of employees and agency review of financial statements to public\nscrutiny. But the decision to further the public interest by purposefully\nsacrificing the privacy of personal information is fundamentally inconsistent\nwith the thrust of exemption 6. The Senate report indicates that privacy\ninterests were not to be wholly disregarded in this manner.\nIt is not an easy task to balance the opposing interests, but it is not an\nimpossible one either. It is not necessary to conclude that to protect\none of the interests, the other must, of necessity, either be abrogated\nor substantially subordinated. Success lies in providing a workable\nformula which encompasses, balances, and protects all interests, yet\nplaces emphasis on the fullest responsible disclosure. [S. Rept. No.\n813, supra, at 3.]\nAs we have pointed out, the courts construing exemption 6 have adhered to this\npurpose and demonstrated a meticulous concern for personal privacy to the\nextent possible even when there is a legitimate public interest in disclosure.\nSee, e.g., Department o f the Air F orce v. Rose, at 380-381. For this reason, we\ndo not believe that the extraordinary invasion of privacy entailed in the release\n\xe2\x96\xa0\n\xe2\x80\x98The fact that many statements will probably not be inspected by members of the public at all\ndoes not affect the invasion of privacy or the attendant anxieties in making a statement available for\npublic inspection.\n\n334\n\n\x0cof employees\xe2\x80\x99 financial statements to the public is consistent with the spirit of\nexemption 6.\nWe recognize, of. course, that there has recently been rather broad-based\nsupport for some type of public financial disclosure by top-level Federal\nofficials. Title 111 of S. 495, 94th Cong., 1st sess. (1975), which passed the\nSenate in July 1976 and appeared to have considerable support in the House,\nwould have required detailed public financial disclosure by all officers or\nemployees paid at the rate established for GS-16 or above, and comparable pay\nlevels. President Ford proposed legislation closely paralleling S. 495 in this\nrespect and, of course, President Carter supports public financial disclosure as\nwell. In addition, public interest groups, such as Common Cause, continue to\npress for public disclosure, and a number of State and local governments have\nadopted financial disclosure requirements by legislative or executive action.5\nAgainst this political climate, it might be argued that the public interest in\nfinancial disclosure now outweighs the substantial invasion of the privacy of\nthe officials who would be affected by the proposed Executive order and that\nthe release of financial statements would therefore not constitute a \xe2\x80\x9c clearly\nunwarranted invasion of personal privacy.\xe2\x80\x9d But we are not concerned here with\nthe current desirability of public financial disclosure as a matter of policy. The\nissue here is whether the balance must be struck in favor of public disclosure\nunder a statutory standard adopted by Congress in 1966 to protect personal\nprivacy. That standard is necessarily general in view of the wide range of\nsituations in which it must be applied. But the generality of the invasion of\nprivacy against the public interest in release on a case-by-case basis should not\nobscure the fact that exemption 6 was intended to draw a relatively fixed line\nbetween the types of information that, in general, have to be released and those\nthat do not. In other words, we do not believe that exemption 6 was designed to\ncut agency officials and courts entirely free from all moorings and to permit\nthem to apply their own conception of the proper balance between private and\npublic interests at a given point in time. Viewed in this light, the case-by-case\nbalancing required under exemption 6 is merely the sifting of the particular\nfacts to determine how the relatively fixed standard under that exemption\napplies. Thus, to the degree that the recent sentiment in favor of public\nfinancial disclosure by Federal employees represents a shift in public thinking\nsince the passage of the Freedom of Information Act in 1966 regarding the\nrelative weight of the privacy interests of Government employees and the\npublic interest in financial disclosure, that sentiment is largely beside the point\nhere.6\n5In 1978 Congress passed and President Carter signed the Government in Ethics Act, Pub. L.\n95-521, 92 Stat. 1836, Title II of which provides for public disclosure of executive personnel\nfinancial reports.\n6We are not aware that Congress has given specific consideration to whether public disclosure of\nfinancial statements would be consistent with the spirit of exemption 6. But its views on this issue,\nsome eleven years after the Act was passed, would not in any event be binding on a court or on the\nExecutive branch in determining what the exemption requires. See. United Stares v. Southeastern\n(Continued)\n\n335\n\n\x0cThe fact that Congress intended to adopt an identical standard in exemption 6\nemerges quite clearly from the legislative history of the provision. For\nexample, the House report states:\nThe limitation of a \xe2\x80\x9c clearly unwarranted invasion of personal\nprivacy\xe2\x80\x9d provides a proper balance between the protection of an\nindividual\xe2\x80\x99s right of privacy and the preservation of the public\xe2\x80\x99s right\nto Government information by excluding those kinds of files the\ndisclosure of which might harm the individual. [H. Rept. No. 1497,\n89th Cong., 2d sess. 11 (1966).]\nThe implication, of course, is that exemption 6 itself \xe2\x80\x9c provides a proper\nbalance,\xe2\x80\x9d which must be applied in particular cases, and that \xe2\x80\x9c files the\ndisclosure of which might harm the individual\xe2\x80\x9d are to be excluded from\ndisclosure in all events.7\nThis view of exemption 6 also finds support in the treatment Congress\nexpected to be accorded the kinds of files it specifically had in mind in enacting\nthe exemption. The Senate report states:\nSuch agencies as the Veterans Administration, Department of Health,\nEducation, and Welfare, Selective Service, etc., have great quanti\xc2\xad\nties of files, the confidentiality of which has been maintained by\nagency rule but without statutory authority. There is a consensus that\nthese files should not be opened to the public, and the committee\ndecided upon a general exemption rather than a number of specific\nstatutory authorizations for various agencies. It is believed that the\nscope of the exemption is held within bounds by the use of the\nlimitation of a \xe2\x80\x9c clearly unwarranted invasion of personal privacy.\xe2\x80\x9d\nsfc $ sf:\n\n. . . The application of this policy should lend itself particularly to\nthose Government agencies where persons are required to submit vast\namounts of personal data usually for limited purposes. For example,\n(Continued)\nCable Co., 392 U.S. 157, 170(1968); Waterman S.S. Corp. v. United Slates. 381 U.S. 252, 269\n(1965); United States v. Philadelphia National Bank, 374 U.S. 321, 348-349 (1963). Thus, recent\ncongressional action favoring public financial disclosure is not entitled to any particular weight in\nassessing the public interest factor under present law.\n\xe2\x80\x99Similarly, the Senate report indicates that the Freedom of Information Act as a whole, and the\nsection dealing with personal privacy in particular, provides \xe2\x80\x9c a workable formula which\nencompasses, balances, and protects all interests, yet places emphasis on the fullest responsible\ndisclosure.\xe2\x80\x9d S. Rept. No. 813, supra, at 3 (1965). This too suggests that the "form ula\xe2\x80\x9d in\nexemption 6 itself balances all interests, albeit in a general way.\nIt is true that in Department o f the Air Force v. Rose, supra, the Supreme Court, in holding that\nall \xe2\x80\x9c personnel files\xe2\x80\x9d were not exempt from disclosure without regard to whether the release of\ncertain information from those files would constitute a \xe2\x80\x9c clearly unwarranted invasion of personal\nprivacy," rejected the view that Congress had itself struck the balance as to "personnel files" and\nconfined the courts to striking the balance only as to "sim ilar files\xe2\x80\x9d under exemption 6. 425 U.S.\nat 352. But the fact that Congress has not struck a balance with respect to a whole category of files\ndoes not mean that Congress has not established a fixed standard for the courts to apply with respect\nto types of information in those files.\n\n336\n\n\x0chealth, welfare, and selective service records are highly personal to\nthe person involved, yet facts concerning the award of a pension or\nbenefit should be disclosed to the public. [S. Rept. No. 813, supra, at\n9 (emphasis added).]\nFrom this passage, it seems clear that Congress intended that personal data\ncompiled by agencies in order to determine a person\xe2\x80\x99s eligibility for a pension\nor benefit were not to be made available to the public.8 This would be true, it\nseems to us, irrespective of any asserted public interest in the release of such\ninformation to enable the public to scrutinize the performance of its public\nofficials in awarding pension and welfare benefits.\nIn our view, the distinction between the public availability of information\nregarding the payment of a benefit itself and the privacy of the underlying\npersonal details supporting the award suggests that a similar distinction should\nbe drawn between the facts surrounding a Federal employee\xe2\x80\x99s position \xe2\x80\x94 his\n\xe2\x80\x9c benefit\xe2\x80\x9d \xe2\x80\x94 and the underlying personal details which shed additional light on\nhis fitness to perform his duties. And indeed such a distinction has been drawn\nas a matter of practice.\nWhen the Freedom of Information Act was passed, the Civil Service\nCommission had adopted a policy, which Congress apparently approved, that\nthe names, position titles, grades, salaries, and duty stations of Federal\nemployees are public information. See H. Rept. No. 1497, at 6. See also\nAttorney General\xe2\x80\x99s Memorandum on the Public Information Section of the\nAdministrative Procedure Act 37 (1967). This policy has remained in effect\never since and is embodied in the Commission\xe2\x80\x99s regulations issued under the\nauthority of the Freedom of Information Act. See 5 CFR Part 294, Subpart G.\nThe regulations state flatly that information other than that specifically\nauthorized to be disclosed under the regulations \xe2\x80\x9c is not available to the\npublic,\xe2\x80\x9d 5 CFR 294.702(f)( 1977), without regard to any asserted public interest\nin the disclosure of other information in the files. It may be that a court would\nrequire the disclosure of some other, relatively harmless information from a\npersonnel file, if the information was reasonably segregable or was released in\na form that did not reveal the identity of the employee involved. But we are\nconfident that a court would approve the essentials of the Commission\xe2\x80\x99s policy\nof revealing only the specific facts directly relating to an employee\xe2\x80\x99s position\nbut not any underlying personal information, especially in view of Congress\xe2\x80\x99\napparent approval of this policy. C f, Campbell v. Civil Service Commission,\n539 F. (2d) 58 (10th Cir. 1976); but see, Columbia Packing Co. v. Department\n\xe2\x80\x9cThe Supreme Court appeared (o suggest that the passages in the Senate and House reports\nreferring to files maintained by the Department of Health, Education, and Welfare, the Selective\nService, and the Veterans Administration might permit disclosure of the facts concerning the award\nof a pension or benefit only if the recipient was not identified. Department o f the Air Force v. Rose,\nsupra, at 375-376. However, the exception may have been intended to permit the disclosure of the\nidentity of the recipient as well, as may be done under a special statute applicable to the Veterans\nAdministration, 38 U.S.C. \xc2\xa7 3301(6). See Hearings on H.R. 5012 before a Subcommittee of the\nHouse Government Operations Committee, 89th Cong., 1st sess. 262 (1965).\n\n337\n\n\x0cof Agriculture, 417 F. Supp. 651 (D. Mass. 1976).9 We are confident too that a\ncourt would maintain the basic privacy of information in personnel folders even\nagainst a claim that the public is entitled to receive that information in order to\ndetermine for itself whether the employee was qualified to be appointed to his\nposition, just as it would reject a similar claim of a right of access to the files of\nrecipients of welfare or veterans\xe2\x80\x99 benefits.\nThe financial statements filed by Federal employees under Executive Order\nNo. 11222 are not part of the employees\xe2\x80\x99 personnel folders and would not be\nunder the proposed revision of Part IV of that order. But the limitations on the\ndisclosure of information from personnel folders are highly instructive regard\xc2\xad\ning the protection given privacy interests of Federal employees under the\nFreedom of Information Act generally. The analogy to personnel information is\nespecially apt here because the detailed financial reports filed under Executive\nOrder No. 11222 are specifically intended to provide a basis for assessing the\nsuitability of a person to hold office or participate in certain decisions, just as is\ninformation in a personnel folder. Thus, the legislative history of exemption 6\nfurnishes additional support for the conclusion reached earlier in this opinion\nthat information contained in financial statements filed pursuant to the proposed\nrevision of Part IV of Executive Order No. 11222 is not the kind of information\nthat Congress intended to be made available to the public under that exemp\xc2\xad\ntion.10\nB. Applicability o f 5 U.S.C. \xc2\xa7 552a (b) (3): Disclosure as a \xe2\x80\x9croutine use.\xe2\x80\x9d\nThe other arguably permissible basis for release of employees\xe2\x80\x99 financial\nstatements without their consent might be the routine use exception in\nsubsection (b)(3) of the Privacy Act, 5 U.S.C. \xc2\xa7 552a(b)(3) (1976). A \xe2\x80\x9c routine\nuse\xe2\x80\x9d is defined in \xc2\xa7 552a(a) as a use of a record \xe2\x80\x9c for a purpose which is\ncompatible with the purpose for which it was collected.\xe2\x80\x9d The argument would\napparently be that if the information contained in a financial statement is\ncollected for the purpose of making it available to the public, then making it\navailable to the public is obviously compatible with the purpose for which it\nwas collected. We do not believe that the Privacy Act permits this kind of\nbootstrapping.\n\xe2\x80\x99The Senate Report on the Privacy Act states that certain personal information, such as names,\nsalaries, and duty stations of Federal employees, should continue to be made public. S. Rept. No.\n93-1183, 93d Cong., 2d sess. 13 (1974). This reflects continuing congressional approval of the\nCommission\xe2\x80\x99s policy and, by negative implication, suggests that other information should not be\nmade public.\nl0The longstanding confidentiality of financial statements filed pursuant to the present Part IV of\nExecutive Order No. 11222 also supports the view that the President could not properly order such\nstatements to be made public under the revised order. We have been informally advised by the\nOffice of the General Counsel of the Civil Service Commission that, insofar as that Office is aware,\nit is the uniform practice of Federal agencies to deny requests for access to such statements,\nalthough the issue has apparently not arisen too often. It is true that Executive Order No. 11222\npresently requires that financial statements be kept confidential, but a pledge of confidentiality\ncannot in itself preclude the release of information that is not otherwise protected by exemption 6.\nSee, Robles v. Environmental Protection Agency, 484 F. (2d) at 846-847; Ackerly v. Ley, 420 F.\n(2d) 1336, 1339-1340 n. 3 (D.C. Cir. 1969).\n\n338\n\n\x0cAs an initial matter, we have some doubt that making financial statements\navailable to the public may properly be termed the \xe2\x80\x9c purpose\xe2\x80\x9d for which such\nstatements would be collected. The true purpose, it seems to us, is to discover\nand hopefully prevent possible conflicts of interest. Public disclosure is simply\nan additional means by which it is hoped this purpose will-be accomplished.\nGiven the marked difference in terms of the values the Privacy Act was\ndesigned to protect between preventing conflicts of interest through confiden\xc2\xad\ntial agency review of financial statements and preventing conflicts of interest\nthrough public inspection of those statements, we question whether public\ndisclosure is \xe2\x80\x9c compatible\xe2\x80\x9d with the purpose of preventing conflicts of interest.\nThe more fundamental difficulty with the argument is that the routine use\nexception was never intended by Congress to be an independent vehicle for\ndisclosing information to the public at large. Under the Privacy Act, public\navailability of personal information continues to be governed by the Freedom of\nInformation Act; it was precisely for this reason that exception (b)(2),\npermitting disclosure without the consent of the subject if required under that\nAct, was included in the Privacy Act. The routine use exception was included\nbecause of the practical necessity of permitting agencies to make the myriad of\nconventional nonpublic transfers of records in the day-to-day operation of the\nGovernment without first obtaining the consent of the individual to whom the\nrecords pertain. To permit an agency to ignore the limitations on public\ndissemination of personal information contained in the remainder of the Privacy\nAct and in exemption 6 of the Freedom of Information Act simply by\npublishing a notice designating a certain public release as a routine use would,\nin our view, reduce the protection of the Privacy Act to an empty promise.\nThe rather limited scope of the routine use exception and its inapplicability in\nthe present situation emerge quite clearly from the legislative history of the\nPrivacy Act. The Senate bill, S. 3418, 93d Cong., 2d sess. (1974), did not\ncontain a specific exception for routine uses as such. But \xc2\xa7\xc2\xa7 202(a) and (b)\nprovided that an agency could disseminate information to persons outside the\nagency only if the individual gave his consent, the recipient had adopted rules\nfor maintaining the confidentiality of the information, and the information\nwould be used by the sender or recipient only for purposes set forth in the\npublished notice. See Source Book on Privacy, Legislative History of the\nPrivacy Act of 1974, House and Senate Committees on Government Opera\xc2\xad\ntions, 94th Cong., 2nd sess. 138 (Joint Comm. Print 1976) [hereafter Source\nBook]. The third requirement, of course, parallels the provision for publication\nof routine uses under the Act as passed. Obviously, mandatory public\ndisclosure of financial statements would have been impermissible under this\nprovision because of the requirements of consent and assurances of confidentiality.\nMoreover, the Senate report makes clear that the power of agencies to make\ndisseminations outside the agency, even with the subject\xe2\x80\x99s consent, was not to\nbe augmented by the bill:"\n"In describing the section of the bill that would have required that employees refrain from dis\xc2\xad\nclosing personal data within the agency other than to persons who had a need for them in the course\n(Continued)\n\n339\n\n\x0c. . . [Including the three requirements noted above] prevents an\nagency from merely citing a notice of intended \xe2\x80\x9c use\xe2\x80\x9d as a routine\nand easy means of justifying transfer or release of information.\nAdministration spokesmen were concerned that this might expand\ninteragency dataswapping. By allowing the agency to cite a \xe2\x80\x9c use\xe2\x80\x9d\ndisclosed by its published notice, the bill is not intended to broaden\ndissemination and interagency transfer where they must be pursuant\nto or are required or limited by over 150 Federal statutes. [S. Rept.\nNo. 93-1183, 93d Cong., 2d sess. 69 (1974).]\nAt the same time, the bill provided that disclosures made pursuant to the\nFreedom of Information Act were to be exempt from the requirements of\nconsent, assurances of confidentiality, and conformity to published notices of\nuse, as well as certain accounting provisions. \xc2\xa7 202(c). This exception was\nincluded because of objections from the press that the restrictions might defeat\nthe statutory right of access under the Freedom of Information Act. S. Rept.\nNo. 92-1183, at 71. Senator Ervin, the sponsor and floor manager of the\nlegislation, stated that the effect of these and other provisions in the Senate bill\nwas to prevent agency employees \xe2\x80\x9c from making [information] available\noutside the agency without the consent of the individual and proper guarantees\nfor confidentiality, unless pursuant to open records laws or unless it is for\ncertain law-enforcement or other purposes which are cited in the bill.\xe2\x80\x9d 120\nCong. Rec. 36892 (1974). Because, as shown earlier in this opinion, public\ndisclosure of financial statements is not permissible under the applicable \xe2\x80\x9c open\nrecords law\xe2\x80\x9d \xe2\x80\x94 i.e., of the Freedom of Information Act\xe2\x80\x94and because none\nof the other exceptions in the Senate bill would have applied, such disclosure\ncould not have been accomplished under the Senate bill.\nUnlike the Senate bill, the House bill, H.R. 16373, 93d Cong., 2d sess.\n(1974),- contained a special exception from the consent requirement for\ndisclosures made for routine uses of information. Source Book, at 279. The\nHouse report states that the consent requirement was perhaps the most\nimportant provision. H.R. Rept. No. 93-1416, 93d Cong., 2d sess. 13 (1974).\nAn exception from the consent requirement was believed to be necessary for\nroutine transfers, however, so as not \xe2\x80\x9c to impede the orderly conduct of\ngovernment or delay services performed in the interests of the individual.\xe2\x80\x9d Id.\nThe importance given the consent requirement and the evidence just quoted\nsuggest that the routine use exception was intended to apply to those types of\ndisclosures of an unexceptional nature to which the individual would be\nunlikely to have any reason or basis to object.\n(Continued)\nof their duties, the Senate report expressly stated that this was designed to cover \xe2\x80\x9c reporting per\xc2\xad\nsonal disclosures contained in personnel and medical records, including questionnaires containing\npersonal financial data filed under the ethical conduct programs o f the agency." S. Rept. No.\n93-1183, supra, at 51 (emphasis added). If the Senate committee was concerned about gratuitous\ndisclosures of this type within the agency, it seems reasonable to suppose that the committee\nwould not have expected such information to be released outside of the agency where there could\nbe no assurances that it would be kept confidential.\n\n340\n\n\x0cThe House bill did not have a separate exception permitting disclosures\nrequired under the Freedom of Information Act. All individually identifiable\ninformation in Government files would therefore have been exempt from\ndisclosure under that Act and could have been made available to the public only\npursuant to agency rules. H.R. Rept. No. 93-1416, at 13. The committee report\nmakes clear that agencies were authorized to \xe2\x80\x9c allow by published rule only\nthose [public] disclosures which would not violate the spirit of the Freedom of\nInformation Act by constituting \xe2\x80\x98clearly unwarranted invasions of personal\nprivacy\xe2\x80\x99 \xe2\x80\x9d under exemption 6. Because public disclosure of financial state\xc2\xad\nments \xe2\x80\x9c would violate the spirit of the Freedom of Information,\xe2\x80\x9d such\ndisclosure could not have been accomplished as a routine use of financial\nstatements under the House bill.12\nThe compromise bill eventually enacted as the Privacy Act contains both the\nSenate\xe2\x80\x99s express exception from the consent requirement for disclosures\nrequired by the Freedom of Information Act and the House\xe2\x80\x99s express exception\nfor routine uses. There is no indication in the brief debates on the compromise\nlegislation that Congress intended to depart from the approach taken in the\nSenate and House bills in making public disclosures of private information to\nbe governed exclusively by the Freedom of Information Act. To the contrary,\nthe staff analysis of the compromise bill introduced in the Congressional\nRecord by Senator Ervin and Representative Moorhead states that the\nexception for disclosures required under the Freedom of Information Act was\nintended to preserve the status quo with respect to the public disclosure of\npersonal information under exemption 6 of that Act, and it describes the\nexception for routine uses in a way that does not seem to apply to public\ndisclosures at all:\nThe compromise definition should serve as a caution to agencies to\nthink out in advance what uses it will make of information. This act is\nnot intended to impose undue burdens on the transfer of information\nto the Treasury Department to complete payroll checks, the receipt of\ninformation by the Social Security Administration to complete\nquarterly posting of accounts, or other such housekeeping measures\nand necessarily frequent interagency or intra-agency transfers of\ninformation. It is, however, intended to discourage the unnecessary\nexchange of information to another person or to agencies who may\nnot be as sensitive to the collecting agency\xe2\x80\x99s reasons for using and\ninterpreting the material. [120 Cong. Rec. 40881 (1974); Id. at\n40406.]\nl2It is also significant that aside from the reference to release under the Freedom of Information\nAct, all other references to the routine use exception during consideration of the House bill\ninvolved limited transfers to other Federal agencies. State and local governments, and private\ncompanies participating in the industrial security program. See e.g., 120 Cong. Rec. 36957,\n36967, 36645, 36655 (1974). This of course reinforces the conclusion in the text that public\ndisclosure under the routine use exception was to conform to the Freedom of Information Act.\n341\n\n\x0cThe release of the financial statements of Federal employees to members of the\npublic who may not be familiar with the meaning of applicable conflict of\ninterest laws and regulations and without regard to the intended use of the\nstatements would be contrary to the purpose of Congress, as stated in the\nanalysis, \xe2\x80\x9c to discourage the unnecessary exchange of information to other\npersons . . . who may not be as sensitive to the collecting agency\xe2\x80\x99s reasons for\nusing and interpreting the material.\xe2\x80\x9d 13\nIII. Conclusion\nFor the reasons given in Part A of this memorandum, we conclude that the\npublic release of financial statements that would be filed under a proposed\nrevision of Part IV of Executive Order No. 11222 is not \xe2\x80\x9c required\xe2\x80\x9d under the\nFreedom of Information Act, and such release therefore may not be undertaken\npursuant to 5 U.S.C. \xc2\xa7 552a(b)(2) (1976). As explained in Part B, the\nexception for routine uses in 5 U.S.C. \xc2\xa7 552a(b)(3) (1976) was not intended to\nbe an independent means of making public disclosures of information, and that\nexception therefore cannot furnish the basis for public disclosure of employees\xe2\x80\x99\nfinancial statements.\nJo hn M . H a rm on\n\nActing Assistant Attorney General\nOffice of Legal Counsel\n\nl3Elsewhere, Representative Moorhead stated that while the routine exception was designed to\npermit ordinary and necessary transfers of information, the bill was \xe2\x80\x9c intended to prohibit\ngratuitous, and ad hoc disseminations for private or otherwise irregular purposes.\xe2\x80\x9d 120 Cong. Rec.\n36967 (1974). Public disclosure of financial statements is, in general, intended to further the public\ninterest in preventing conflicts of interest, but of course any individual inspection of a statement is\n\xe2\x80\x9c ad hoc,\xe2\x80\x99\xe2\x80\x99 and, because of the absence of effective restrictions on use, may be for \xe2\x80\x9c private or\notherwise irregular purposes.\xe2\x80\x9d\n\n342\n\n\x0c'


b'February 14, 1978\n\n78-9\n\nMEMORANDUM OPINION FOR THE\nDEPUTY ASSISTANT DIRECTOR FOR\nLEGISLATIVE REFERENCE, OFFICE OF\nMANAGEMENT AND BUDGET\nCorporation for Public Broadcasting\xe2\x80\x94\nGrants\xe2\x80\x94 Monitoring Administration of (47\nU.S.C. \xc2\xa7 392)\n\nThis memorandum is in response to your request for our opinion concerning\nthe question o f administration o f existing public educational television or radio\nbroadcasting facilities grants. The question has been raised in connection with\nproposed legislation now being reviewed by your Office. The issue presented is\nwhether compliance with conditions contained in existing grants previously\nawarded under the present law should be monitored in the future by the\nDepartment o f Health, Education, and Welfare (HEW ), by the Corporation for\nPublic Broadcasting (CPB), or by some third agency such as the Department of\nJustice.\nUnder current law, if, within 10 years after completion of a project for which\na grant has been awarded, certain conditions no longer continue to be m et, the\nUnited States is entitled to recover a proportionate amount of the value of the\nfacilities, determined either pursuant to agreement as to that amount or by\njudicial action (47 U .S.C . \xc2\xa7 392(0)- Although this provision gives the G overn\xc2\xad\nment a continuing right to seek to recover such amounts, as a practical matter,\nunless the grantee voluntarily tenders an agreed-upon sum, recourse to a\njudicial proceeding will be necessary. In future administration of existing\ngrants a key role will continue to be played by the agency charged with\nmonitoring the status o f grantees (currently HEW ), for only it will become\naware o f noncompliance with required conditions and be in a position to take\nsteps to recover funds due.\nIt therefore appears that the potential for recapturing funds cannot realisti\xc2\xad\ncally be regarded simply as property which can be treated without concern for\nany trailing strings. The sort of administrative role necessarily required in these\ncircumstances clearly cannot be played by a litigating agency such as the\nDepartment o f Justice. We question whether CPB should be called upon to\n39\n\n\x0cassume authority to monitor these grants where the Corporation\xe2\x80\x99s anticipated\nrole with respect to existing grants would be much the same as that currently\nplayed by HEW . C PB \xe2\x80\x99s carefully preserved nongovernmental status might be\nlegally jeopardized by following so closely in the steps of a government\nagency. W hether that step should be taken is, o f course, a question of policy as\nto which we express no opinion.\nL eon U lm an\n\nDeputy Assistant Attorney General\nOffice o f Legal Counsel\n\n40\n\n\x0c'


b'January 27, 1978\n\n78-6\n\nMEMORANDUM OPINION FOR THE\nADMINISTRATOR, DRUG ENFORCEMENT\nADMINISTRATION\nDrug Enforcement Administration\xe2\x80\x94\nSupergrade Positions Created by\nReorganization Plan\xe2\x80\x94 Exemption From\nCompetitive Service\n\nThis is in response to your oral request for our opinion on the question\nwhether \xc2\xa7 201(a) of the Crime Control Act of 1976 (Public Law 94-503; 90\nStat. 2425; 28 U .S.C . \xc2\xa7 509, note) which excepts certain positions in the Drug\nEnforcement Administration (DEA) from the competitive service,1 also applies\nto four positions in your Agency established by \xc2\xa7 3(b) o f Reorganization Plan\nNo. 1 of 1968, 3 CFR 1063 (1966-1970 Compilation), creating the Bureau of\nNarcotics and Dangerous Drugs, the predecessor to DEA. Section 3(b)\nprovides:\nThere are hereby established in the Department o f Justice, in\naddition to the positions transferred to that Department by this Plan,\nfour new positions, appointment to which shall be made by the\nAttorney General in the competitive service. Two of those positions\nshall have compensation at the rate now or hereafter provided for\nGS-18 positions of the General Schedule and the other two shall have\ncompensation at the rate now or hereafter provided for GS-16\n\'Section 201(a) provides as follows:\n(a) Effective beginning one year after date o f the enactm ent of this A ct, the following\npositions in the Drug Enforcem ent Adm inistration (and individuals holding such\npositions) are hereby excepted from the com petitive service:\n(1) positions at G S-16, 1 7 ,and 18 o f the General Schedule under section 5332(a) of\nTitle 5, United States C ode, and\n(2) positions at GS-15 o f the General Schedule which are designated as\xe2\x80\x94\n(A) regional directors,\n, (B) office heads, or\n(C) executive assistants (or equivalent positions) under the im mediate supervi\xc2\xad\nsion o f the A dm inistrator (or the Deputy Adm inistrator) of the Drug Enforcement\nAdm inistration.\n\n27\n\n\x0cpositions of the General Schedule (5 U .S.C . 5332). Each such\nposition shall have such title and duties as the Attorney General shall\nprescribe.\nThe positions created by the Reorganization Plan are generally referred to as\n\xe2\x80\x9c SR \xe2\x80\x9d or \xe2\x80\x9c Supergrade-Equivalent\xe2\x80\x9d positions.\nThe former Administrative Counsel in the Office of Management and\nFinance, in a meticulous textual analysis of the pertinent statutes, concluded\nthat the four SR positions are not subject to \xc2\xa7 201(a) and that they consequently\nremain in the competitive service. His conclusion was based to a large extent on\nthe language o f \xc2\xa7 201(a), which exempts from the competitive service\n\xe2\x80\x9c positions at GS-16, 17, and 18 o f the General Schedules- under Section\n5332(a) of title 5, United States C o d e.\xe2\x80\x9d The memorandum points out that,\ntechnically, the GS-16 and 18 positions established by the Reorganization Plan\nare not under 5 U .S.C . \xc2\xa7 5332(a). It also concludes that according to the\nlanguage o f the Reorganization Plan the four positions are in the Department of\nJustice, while \xc2\xa7 201(a) is limited to positions in DEA. The final argument is\nthat while the four SR positions were textually covered by the language of\n\xc2\xa7 201(a) as it was originally introduced in the Senate,2 the statute as finally\nenacted is less precise. In view o f the pertinent provisions o f the conference\nreport that the conference substitute \xe2\x80\x9c adopts a modified and more restrictive\nversion of the Senate bill provisions\xe2\x80\x9d (H. Conf. Rept. No. 94-1723, 94th\nCong., 2d sess. 32, 1976), the m emorandum takes the position that \xc2\xa7 201(a) is\nto be narrowly construed; hence, since there are doubts as to the coverage o f the\nfour SR positions by the 1976 Act, they should be excluded from its operation.\nOur difficulty with this approach is that it makes distinctions in the\napplication of the legislation having no relevance to its purpose. That purpose,\nin the words of Senator Percy, the sponsor o f the amendment on which \xc2\xa7 201 is\nbased, was to\n. . . place these DEA supervisory positions on a basis comparable to\nthose o f the FBI. Certainly there is a need for greater managerial\nflexibility and for the ability to move people about at one policy\xc2\xad\nmaking level in a law enforcem ent agency of this kind. (122 Cong.\nRec. S 12434 (Daily ed ., July 26, 1976)).\nAccording to the conference report, the final bill adopts a more restrictive\nversion. That version, however, consists essentially o f providing that the bill\nwould not apply to all DEA employees in G S-15, but only to those now listed in\n\xc2\xa7 201(a)(2), thereby giving greater protection under the Veterans Preference\nAct to those who have served with the DEA for more than a year. In other\nwords, the bill, as finally enacted, exempts certain classes o f employees from\nthe impact of the original am endm ent, based apparently on the congressional\ndetermination that GS-15 employees who are not regional directors, office\nheads, or executive assistants do not hold policym aking positions, and that the\n2The pertinent language was "p o sitio n s . . . to which grades GS-15 or above o f the General\nSchedule under section 5332(a) o f title 5, U nited States C ode, apply . . . . \xe2\x80\x9d (122 Cong. Rec. S\n12434 (Daily ed. July 26, 1976)).\n\n28\n\n\x0cpurpose of the amendment can be carried out even if policymaking employees\nwho served for more than a year would continue to enjoy the benefits of the\nVeterans Preference Act with respect to personnel actions other than reduc\xc2\xad\ntions in rank or pay.\nAn interpretation of the statute excepting SR positions from its operation\nwould be contrary to that purpose. To begin with, we doubt that Congress was\naware of the existence of SR positions as opposed to the GS classification.\nMoreover, the four SR positions do not represent any particular class of\npositions which would render it rational to except them from the congressional\ndetermination that the Administrator should have greater flexibility over\npolicymaking positions. Thus, while some of the Assistant Administrators in\nDEA have a GS rating, one is an SR; the same applies to the positions of\nDirector and division heads. The determination as to whether a position should\nbe in the GS or SR classification apparently was not made on the basis of the\nconsideration that it involved less policymaking than a GS position, but at\nrandom, possibly on the basis of available slots in either classification.\nSimilarly, we have been advised that at least one of the present top officials at\nDEA was moved from an SR to a GS position when he received a new\nassignment.\nWe therefore conclude that a distinction between a GS position and its SR\nequivalent is not consistent with the statutory purpose; hence, \xc2\xa7 201(a) is to be\nread as being applicable to SR as well as to GS positions.\nL eo n U\n\nlm an\n\nD eputy Assistant Attorney General\nOffice o f Legal Counsel\n\n29\n\n\x0c'