Senator CHILES. I am impressed by the letter because it appears to me that the Division in trying to prepare, and to get agencies to prepare, for the possibility of litigation that Justice has come up with good guidelines as to what the agencies should be doing. Ms. Babcock

states:

[W]e believe that in order to avoid ultimately fruitless litigation, a "briefing session" attended by at least the number of agency members required to take action on behalf of the agency, where the members attending have an opportunity to ask questions or seek clarification of matters of concern, should be included within the purview of the regulations or practices applying to the internal "meeting."

I am delighted to see that.

I note that a number of the agencies define those sessions as being preliminary sessions. I think they definitely fall within the act's broad definition of meeting. I think that litigation will bring that out. I am glad to see that the Justice Department does not want to defend on those grounds and wants to have that matter cleared up. Ms. Babcock further states:

Should your agency have drawn a more narrow regulation, it leaves the agency's proceedings subject to continuous attack.

At the bottom of that paragraph Ms. Babcock continues:

I suggest that you insure that the term "meeting" is broadly defined in practice so that the statute of limitations can come into play and the potential for litigation can be reduced.

Paragraph 2 of Ms. Babcock's letter addresses public observation:

I suggest that you accommodate members of the public desiring to attend open meetings. * ** [T]he public should be permitted to take notes and photographs. *** [It] should be permitted to make sound recordings in a nonobtrusive manner. Each of these measures will enhance the public's ability to observe meetings and still permit the agency's business to proceed.

A number of agencies say you have got to have their permission to record or photograph. One of them even regulates the taking of notes. Others ban photographing. Some have outlawed sound recordings. We in the Senate seem to be able to conduct our meetings with people moving around with mikes and with sound recording devices. In fact, we are happy to see it. I guess it is the nature of our business, maybe, but I don't see that those things should handicap people. I am delighted that the Justice Department doesn't see that either. The letter also says:

Of course, any person may attend a meeting without indicating his identity and/or the person, if any, whom he represents, and no requirement of prior notification of intent to observe a meeting may be required.

Well, we found that some agencies make you give prior notification if you are going to attend, and then you must identify yourself. I am delighted to see the Justice Department clearing that up.

A general practice of opening meetings to the fullest extent practicable will not only reduce litigation under the Act, but will likely place us in a better posture in litigation, if and when any litigation occurs. I am certain that a vote of the membership of your agency on whether to close a meeting or portion thereof would, of course, take the public interest into account.

I am glad that she is sure. I hope she is right.

We do want to place this letter in the record. I would like to ask you, has the Department come up with any guidelines on notation voting?

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Ms. ZUSMAN. No, we have not been asked any specific interpretations yet. In preparing for my appearance this morning, I did meet with individuals who had been involved in the development of the act previously, and I did learn that it had been contemplated at one time that in the Office of Legal Counsel in the Justice Department, which performs a very strong consulting role to the agencies in many subject areas, there had been some thought of producing guidelines in the form of a blue book memorandum, similar to what had been done when the FOIA was originally enacted, and then when the FOIA was amended. The blue book, as we call it, has been very helpful to the agencies and I did inquire whether there was any likelihood that OLC would be taking on this responsibility in regard to the Sunshine Act.

I guess it is in limbo. It was considered last winter and it wasn't followed through on. It may be, perhaps, that if there were sufficient interest or encouragement that something like that might be done.

Senator CHILES. Well, that seems to be the prevailing theme around here, that everything is sort of in limbo. We can't find any hand at the helm right now in providing these guidelines, but we are looking for it. We are continuing through this meeting, hopeful that we are not only going to have a hand at the helm, but wind in the sails.

MS. ŽUSMAN. The Department would like to help you in any way that is appropriate. Obviously, wherever it is possible it is a good idea to reduce litigation, to reduce the strain on the courts, and to practice preventive law and try and assist the agencies in comporting their behavior to the standards and the intent of the legislation. I think, basically, it comes down very often to a commonsense interpretation. We all know what the framework of the statute is, and we all know that the purpose of it is to provide the maximum accessibility to meetings, and I think that this is the theme of the letter that you quoted from.

Senator CHILES. It very definitely is. The letter was very encouraging. I am delighted to see the Department taking such an approach. We thank you very much for your appearance here today.

Ms. ZUSMAN. You are very welcome.

[The prepared statement of Ms. Zusman follows:]

STATEMENT TO SUBCOMMITTEE ON FEDERAL
SPENDING PRACTICES AND OPEN GOVERNMENT
OF UNITED STATES SENATE

Sunshine Act Hearing, November 29, 1977
Department of Justice represented by Lynne K. Zusman

In your letter of November 2, 1977 to the Attorney General, you stated that the purpose of this hearing was to discuss the impact of the Act since its effective

date of March 11, 1977.

been filed under the Act, ience with the Act.

To date, only one lawsuit has
1/

and we have had little exper

We have previously transmitted to the Subcommittee two letters sent to government agencies by Assistant Attorney General Barbara A. Babcock regarding the Sunshine Act. The letter sent on March 7, 1977 alerted the agencies to the imminent effective date of the statute and that the Information and Privacy Section is assigned the responsibility for defending all litigation under the Act. In the letter of April 19, 1977 several specific matters were addressed and Ms. Babcock noted that a general practice of opening meetings to the fullest extent practicable is desirable.

1/

In Consumers Union of the United States, Inc. v. Board of Governors of the Federal Reserve System, (U.S.D.C. D. D.C., No. 77-1800), plaintiff asserts that defendant violated 5 U.S.C. 552b (b) of the Sunshine Act by failing to make available a memorandum discussed during an "open" meeting. The lawsuit was filed on October 17, 1977 and the government answered on November 21, 1977.

The Sunshine Act clearly adds an important dimension to the accessibility of information to American citizens about their Government. The Department of Justice stands willing to cooperate in any way to assist the achievement of the goals of the Sunshine Act.

FEDERAL DEPOSIT INSURANCE CORPORATION

Senator CHILES. Our next witness will be Miles A. Cobb, Generai Counsel of the Federal Deposit Insurance Corporation. The FDIC is charged with promoting and preserving public confidence in banks through the provisions of insurance coverage for bank deposits.

Mr. Cobb, it is a pleasure to have you with us today. Your statement in full will be inserted in the record. If you could summarize your remarks in any way it would be appreciated because we do have a full line of witnesses.

TESTIMONY OF MILES A. COBB, GENERAL COUNSEL, FEDERAL DEPOSIT INSURANCE CORPORATION; ACCOMPANIED BY ALAN R. MILLER, EXECUTIVE SECRETARY

Mr. COBB. I will just hit the high points of the statement, Senator. With me is Alan Miller, FDIC's Executive Secretary.

I think in summary we have found that, as the act anticipated, a fair portion of the items to come before the FDIC Board are not suitable for open meetings. As a consequence we have found that on an item basis we have closed those portions of meetings dealing, for example, with the issuance of cease and desist orders designed to prevent unsafe or unsound banking practices and with applications by banks to employ individuals who have at some point in their life been convicted of a criminal offense involving dishonesty or breach of trust. Under the provisions of our act FDIC approval is required to hire that kind of employee.

We have also closed to the public those agenda items dealing with applications where the applicant bank may be suffering from a sensitive problem involving a weakness in its capital structure or manage

ment.

The FDIC is also charged with responsibilities as insurer of bank deposits and as received of insolvent banks and in those capacities the Board is frequently involved in negotiations with banks leading up to financial assistance to troubled banks or the sale of certain assets of an insolvent bank and the assumption by the purchaser of its deposit liabilities. As receiver of failed banks the FDIC and its Board of Directors must also pass on the sale or liquidation of bank assets in countless commercial transactions. As a consequence, in these areas of our responsibility we have closed agenda items dealing with applications by financially distressed banks to the FDIC for financial assistance. We have closed agenda items involving sensitive negotiations leading to the sale of assets of an insolvent bank and the assumption by the purchaser of its deposit liabilities. We have also closed agenda items which involve the discussion of proposed liquidation transactions such as sales of assets, compromises of debts, settlements of lawsuits.

Now, since the Sunshine Act became effective we have had 77 meetings from March 12 to November 22 involving a total of 1,102 agenda items. Four hundred and twenty-one of these items were considered in open session, approximately 40 percent of the total.

The point we would like to make in that regard is that we don't view this as static. About midway through our experience under the act, we