STATEMENT OF CLARK MOLLENHOFF, WASHINGTON BUREAU, DES MOINES REGISTER AND TRIBUNE, AND MINNEAPOLIS STAR AND TRIBUNE

Mr. MOLLENHOFF. Mr. Chairman, for about the last 4 years, I have been working with Mr. Field, James Polk, Russ Wiggins, and have had some success and quite a few failures, and I am not going to say anything about what has been. I think it is a lot better to dwell on what can be done right now, in a couple of specific instances: One deals with the extension of what are the confidential areas in the executive branch. In my opinion, it is far beyond anything we have known in the past. It has been within the last 2 years that this precedent has come up which I think is probably one of the greatest threats to freedom of information in our time, and I speak specifically of the May 17, 1954, letter which President Eisenhower wrote to Defense Secretary Wilson in the midst of the Army-McCarthy hearings. It was that letter in which Army counsel, John Adams, was prevented from testifying as to conversations with Deputy Attorney General William Rogers, and assistant to the President, Sherman Adams.

This was not intended as an infringement on the press, but that is not important, as far as we are concerned. I feel that it is to the adantage of the public, the press, the Congress, and the executive agency itself, to see that this precedent is not followed.

Shortly after that letter came out I was a little bit concerned myself because I found newspapers applauding the letter in the heat of the McCarthy hearings, failing to see the threat to the press itself perhaps. I personally feel that the rights of the press are pretty much contingent upon the rights of the Congress to get into executive agencies and it should never be any better than the right of the Congress to get into the executive agency, that is certain; and we actually have a stake in every congressional committee their efforts to get information out of executive departments.

At the time of those hearings, I talked about this to Senator McClellan, Senator Dirksen, and Senator Mundt about our concern about this, but because of a lot of other things that were pressing on their time with considerable political heat surrounding it, no one said anything.

Since that time, 17 departments of the Government have used this letter as a precedent for withholding actual decisions of the Government. Conversations and documents used in arriving at decisions are regarded as confidential, and the Congress and reporters alike are denied information.

I think that is startling to see that with Senator McCarthy a year ago, asking for information, that it was denied to reporters, that the American Civil Liberties Union today is filing this same kind of a complaint.

I think this demonstrates that this is not something political, something that should not be dealt with from the standpoint of Democrats or Republicans. The party in power may gain some kind of a temporary advantage, probably, from hiding the record, but in a long-time advantage, for both parties, it is best to try to make a full disclosure of what goes on in Government.

The Republican Congress and the press claimed, and with considerable justification, that the Truman administration had tried to hide

the record on certain matters, and I do not think it is necessary to go into any detailed study of that. Some agencies of the present Republican administration appear now to be just as reluctant to let the whole record come out on the table, and I think in most of these cases the executive agency itself would be better off if it would lay the full record on the table.

With respect to the Dixon-Yates deal, I personally feel that the executive department would have been much better off in that hearing if, at the outset, it had put the whole record on the table. In that particular case it was basically a difference of philosophy between the administration, on the one hand, and the people interested in the extension of public power, on the other hand. And the administration would have been better off if it had stated, "We oppose" whatever it wished to oppose and stood on that record. As it turned out, they put out half a record, and various committees went into this; little pieces of it came out from time to time, and then as each little piece came out the administration was put in the light of having covered up something that was derogatory to the administration.

I think this, that if the record of the Government must be confidential, it is not too much to ask the executive department to give a reason. I object to a letter such as that of May 17, where an agency can run under an umbrella and be given the authority to declare any record that it wishes to keep confidential as confidential.

It should be clear, I think, what is arbitrary secrecy, regardless of the party in power. Democrats and Republicans in Congress have an equal interest in obtaining, I think, the whole story, all of the information behind the decisions of the executive agency.

In stating that, I want to distinguish between the right to the facts behind the decision and any type of purely malicious interference with the Government agency. It is my opinion that the executive agency would be better off. The President must depend upon the executive agency heads to report to him. He cannot do the policing job himself, and even with the most careful selection of an official he is going to run into an occasional situation where they go wrong. And it is the press and the Congress that often give the President the first inkling that something is going wrong in the operation of the Government. And I would think that the President, the people who are head of the executive agency, would want this as a safety measure to warn them what is going on in their own department. I think it would be so much to the advantage of both political parties and the press, and, to my mind, there would be no harm result in upsetting this precedentthis May 17 letter.

There are 2 or 3 other specific things that I would like to mention: Three of them deal with the Internal Revenue Service; these are things which I consider to be against the best public policy. They are, one, the secret compromise in the Federal liquor laws, tax law violations by the Alcohol-Tobacco Tax Unit. Another one is the secrecy of applications for tax-exempt status in the Bureau of Internal Revenue; and the third is the secrecy that surrounds the reason for stipulating settlement in the United States Tax Court.

The first involves the violation, criminal violation, of the law by an individual who waters liquor. For 2 or 3 years we have been promised there would be some change in this. Today those things are still settled behind closed doors and there is no reason why a criminal

violation of this tax law, this alcohol tax law, should be settled behind closed doors, than there is for the settlement of some other violation behind closed doors.

The secrecy concerning applications for tax-exempt status is something which I took up with Henry Pope 4 years ago I think it was something like that, and I, took it up with Russ Wiggins at a later time. There is absolutely no disagreement within the Government as to the philosophy behind opening this up.

Mr. Jimmie Polk and I went over and talked to Commissioner Dunlap during the Democratic administration and he agreed that the application should be open. When any firm comes in, when any foundation comes in, and tells the Federal Government it wants to be tax exempt it is asking for a special privilege and it should be willing to place on the record what it wants in more detail.

Mr. Dunlap agreed and I also talked with other people and he agreed and started this through the mill about 2 years ago, but it got over in the Department of Justice and was hung up. Some lawyer over there did not argue that is, did not take the position that there would be any legal obstacle to taking this up, but thought that a question might be raised, and that it would be best for them to get a law passed. For the last year and a half I have been hasseling with the Department of Justice and the Treasury Department to get them to come up with some recommendations for legislation. There has not been anything done as yet, and I think that is something that the committee would like to go into. I think that is particularly important at this time now, when some of these tax-exempt organizations are under fire, and I do not think it makes any difference whether it is a conservative group, whether it is the fact forum, the ITR, or a liberal group, each and every one of them should come in and lay their facts on the table when they are asking for tax exemption. This is a very valuable right and I think if they are not going to lay the facts on the line, I think perhaps all of us should be able to start a little tax-exempt organization.

The secrecy surrounding the settlement stipulations in the United States Tax Court was emphasized-that is, the danger of it was emphasized-to me when an American distilling company case, running about twelve and a half million dollars-I am just giving you the rough figures, about an $18 million case, just giving the figures over a long period of time, the tax case was over in the United States Tax Court. The firm of T. Coleman Andrews handled that case in the United States Tax Court. During the present administration, with Mr. Andrews over there, the case was settled for something like $1,250,000, which means about 10 cents on the dollar.

I tried to find out why that case was settled. Actually there was only one principle of law involved. It was the question of whether the market value of the liquor should apply or the cost value should apply in transferring the liquor from-into a trust fund, under the conditions which the committee will recall existing back in World War II.

I was unable to get an answer as to what the principle of law involved change was. I took the position that, as a lawyer and as a taxpayer and as a citizen, I should be entitled to go in there and find out if the cost value would be used in determining this, or whether

they are going to use the market value in this case, where $12 million or more in taxes would be paid. I have not had that question answered yet.

I think this is one of the specific things that the committee should look into and I think you have done a great job so far, Mr. Chairman. Thank you very much.

Mr. Moss. Thank you, Mr. Mollenhoff.

The committee will now recess for lunch, and I hope that we will find it possible to return at 2: 15 in order that we may have a roundtable discussion.

As requested, I wish to insert, at this point, a statement by William K. Hutchinson.

STATEMENT OF WILLIAM K. HUTCHINSON, CHIEF, WASHINGTON BUREAU, INTERNATIONAL NEWS SERVICE

It is the position of International News Service and its principle-that one of the cornerstones of a free press is the right of access to information concerning all activities of Government, excepting only when publication of such information would adversely affect national security.

And as regards what is and what is not classified information in peacetime, we at INS believe that the decision cannot and should not be left entirely to the discretion of the Government itself, its agencies and representatives.

The danger seems evident that if agencies and representatives of Government are given discretion of decision on what may or may not be published, this right of decision may be abused, intentionally or otherwise, for political or private

reasons.

We would recommend establishment of an impartial body, or council comprised of responsible people in and out of Government, to rule on the broad, general outlines of the type of information that should be restricted. In cases of dispute on specific matters involving information on Government activities, a procedure could be provided to make possible an appeal to this group for impartial decision. It may be recalled in this connection the record of the American press during World War II, when on a virtual daily basis the press was advised of, or learned independently about, matters of military importance, and worked with great success under a form of voluntary, code-of-honor censorship. To cite one specific item of information of highly important military value, the United States press withheld with an outstanding record of security news of ship and troop movements.

The American press, on its record, has recognized and honored the need for security when such need actually has existed. The few violations of so-called security have been in cases where there has been grave doubt that national good has been served by suppression of information.

In standing on the right of free and full access to information, International News Service does not necessarily encourage or defend information by handout. This organization in its own experience has found that good reporters can always get the news, although they may not always be able honorably to publish it. (At 12:45 p. m. a recess was taken until 2: 15 p. m. of the same day.)

AFTERNOON SESSION

Mr. Moss. The subcommittee will come to order.

(Members present: John E. Moss (subcommittee chairman), William L. Dawson (chairman of the Government Operations Committee), Dante B. Fascell, and Clare E. Hoffman.)

I think for an understanding of the procedure this afternoon it might be helpful if the members direct some questions to the panel and then have the panel direct questions to each other in order to try to stir up as much discussion as possible on the views advanced in the oral presentations this morning.

I would like to direct a few questions to Dr. Cross.

First, do you think that there is a constitutional right of public inspection of what are clearly public records and which contain no information that can be restricted by the Federal agency by any specific statutory or Presidential authority?

FURTHER STATEMENT OF HAROLD L. CROSS, FREEDOM OF INFORMATION COUNSEL FOR AMERICAN SOCIETY OF NEWSPAPER EDITORS

Mr. CROSS. I do, sir, think that both under the first amendment and under the fifth amendment there is a constitutional right to freedom of information as a part of the freedom of speech and of the press. That, of course, is to be determined in much the same way as problems are of printing in connection with the first amendment. There is no absolute right to print anything, but I think there is a right to be determined by due process, and by the courts, to access of public records.

Mr. Moss. The free press, without reasonably free access to information, could not be free. Would that be one way of stating it?

Mr. CROSS. My point about it, sir, is there can be no practical utilization of the right of freedom of speech and freedom of the press without access to something to talk about and print. The organs of expression, the human voice, and the printing press, are silenced if information for them to operate with are withheld.

Mr. Moss. Is not the provision of the Administrative Procedures Act, title 5, United States Code, section 1002, paragraph (c), really a public records law, or would you interpret it as a public records law? Mr. CROSS. It is, sir, a public records law with access to such public records limited to persons immediately and directly concerned-or whatever the language of that is which by regulation has been interpreted practically to apply to litigants and to exclude the ordinary member of the general public and the press.

You will notice, sir, there are two diffierent provisions in there. One says "open to public inspection" and the other says, "open to persons immediately and directly concerned."

Now, as an advocate, I would cheerfully welcome an opportunity to thresh out the meaning of that, but in section 1002 (b) it says

Every agency shall publish, or, in accordance with published rule, make available to public inspection all final opinions or orders in the adjudication of cases (except those required for good cause to be held confidential and not cited as precedents) and all rules

which seems to me to bear a striking resemblance to what the law would be if it stated the people of the United States are entitled to public inspection of final opinions and decisions of the courts and to nothing else.

Subdivision (c) says:

Save as otherwise required by statute, matters of official record shall in accordance with published rule be made available to persons properly and directly concerned except information held confidential for good cause found.

That, as far as I am aware, is a term that has not been judicially construed but has been administratively construed, I think, to exclude the common garden-variety member of the general public, and to be limited to persons properly and directly concerned. That seems to