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assistant treasury secretary for enforcement and then director of enforcement of the Bureau of Alcohol, Tobacco and Firearms.

A third Watergate figure, former Presidential Counsel John Dean, had recommended the Internal Revenue Service zero in on political targets by making a requested audit “of a group of individuals having the same occupation."

Under questioning by Rep. Bill Alexander, D-Ark., who helped uncover the executive order and trigger last year's hearings, Paarlberg said he was not sure whether the decision not to publish the order or announce it publicly had come in a phone call from the Treasury Department "or whether it came from the President's staffman.” He said he had been in touch with both.

He said, however, he had not talked to indicted Nixon aides H. R. Haldeman and John D. Ehrlichman.

Alexander said that blanket authority to inspect individual tax returns of any group, as the Nixon order provided, "clearly constitutes an invasion of the right of privacy of that group."

"Is this evidence of a master plan of the federal government to oversee the private affairs of every group of citizens?" he asked in his latest newsletter to constituents.

He raised the possibility that it might open the door for eventual Commerce Department inspection of returns of homeowners receiving Federal Housing Administration-insured loans, Labor Department inspection of returns of wage earners and Health, Education and Welfare Department inspection of returns of doctors and teachers.

Mr. GOLDWATER. Mr. Speaker, I thank the gentleman for his words.

I would like to add that the gentleman along with his colleague, the gentleman from Nebraska (Mr. Thone) were very instrumental in persuading the White House that this was in fact a bad move and a direct question of personal privacy. I think the general public owe the gentleman from Missouri (Mr. Alexander) and the gentleman from Nebraska (Mr. Thone) a debt of gratitude for getting this order rescinded.

Mr. ROUSSELOT. Mr. Speaker, will the gentleman yield?
Mr. GOLDWATER. I yield to the gentleman from California (Mr. Rousselot).

(Mr. ROUSSELOT asked and was given permission to revise and extend his remarks and include extraneous matter.)

Mr. ROUSSELOT. Mr. Speaker, I appreciate having the opportunity to join with my colleagues in an expression of concern about the congressional commitment to privacy. This commitment is rooted in the oath of office we take swearing to uphold the principles of the Constitution. Unfortunately, many of the legislative proposals we have approved in recent years have ignored this basic right of American citizens, and I believe it is important that we discuss here today the meaning of this responsibilty, and how we, as legslators, can regain the confidence of the Nation by affirming our commitment.

My discussion will be limited to specific areas which are related to my committee assignments on the Post Office and Civil Service Committee and the Banking and Currency Committee.


First. Congressional commitment to privacy and the census. In recent years, many Members have expressed concern that the very nature of the personal questions asked in a decennial census violate the privacy of American citizens. As ranking minority member of the Census and Statistics Subcommittee, I share this concern. The mandatory questions being asked on census forms probe extensively the most intimate details of Americans' lives and gor far beyond the constitutional intent of the census—to count the people in order to determine congressional districting. The subcommittee plans to undertake an in-depth study of laws and regulations relating to the confidentiality of statistical data collected by government agencies, and I fully endorse this effort.

Last week the subcommittee concluded hearings on legislation relating to congressional approval of the content of economic census questionnaires. The ques. tions asked in an economic census or in a decennial census may constitute just one form of invasion of privacy. In testimony before the subcommittee, Congresswoman Edith Green brought out that another important concern is that the paperwork burden which is imposed on American citizens by their Government is in itself an invasion of privacy and an intrusion of the lives of our citizens. The economic census—a questionnaire that is completed in its entirety over a 2-year period—being just on example. We also have Occupational Safety and Health Act reporting requirements, wage and price control reporting requirements, IRS reporting requirements—the list is endless, Mr. Speaker. The paperwork burden required by the legislation we approve is an important factor which is often overlooked, and demonstrates that our commitment to privacy goes far beyond abvious considerations.


Second. Congressional commitment to privacy and the banking industry. In connection with our responsibilities as members of the Banking and Currency Committee, Cengressman Clair Burgener and I introduced a bill last session, H.R. 10021, the Right to Financial Privacy Act. This legislation is designed to protect the constitutional rights of citizens of the United States, and to prevent unwarranted invasions of privacy by prescribing procedures and standards governing the disclosure of financial information by financial institutions to Federal officials or agencies. I believe this legslation is necessary to preserve the confidential relationship between financial institutions and their customers and the constitutional rights of these customers. Enactment of this bill would insure that the individual has the same rights of protection against unwarranted disclosure of records maintained in the financial institution as he would have if these records were maintained in his own possession.

The bill we introduced would allow the disclosure of a customer's records only if: the customer specifically authorizes the disclosure; the financial records are disclosed in response to an administrative subpena or summons providing the individual is notified by certified mail and directs the financial institution to comply, or the financial institution is served with a court order directing it to comply which is issued after the customer has been notified and has an opportunity to challenge the subpena or summons; a search warrant is obtained by the Federal official or agency which is served in both the customer and the financial institution; or a judicial subpena is issued with a copy being served on the customer and 10 days pass without notice that the customer has moved to quash the subpena.

Similar financial privacy bills have been introduced in the House but the Rousselot-Burgener bill differs in that it does not preempt State and local laws regulating disclosure of customer information. Like legislation to govern actions by State and local officials and agencies has passed the California State Assembly and is now pending before the California State Senate. It is entirely possible that State legislative bodies might also wish to establish such regulatory controls as are appropriate to their individual requirements. H.R. 10021 would regulate only those actions of Federal officials and agencies. Other financial privacy bills extend the regulating provisions to also govern actions by State and local officials and could possibly be in conflict with States' rights.

Also, other versions would only allow a financial institution to notify law enforcement officials of violations of criminal law suspected of being committed against the financial institution itself. The Rousselot-Burgener bill recognizes that in some rare instances the financial institution could have reason to suspect other violations of criminal law.

Passage of this legislation would be an important step in assuring an individual's right of privacy, and I urge my colleagues to review this important bill and consider it favorably when it comes before this House for vote.

Another instance where the banking system has been used as a tool to inrade the privacy of American citizens is the Bank Secrecy Act-Public Law 91508. Yesterday the U.S. Supreme Court handed down a ruling, and by a vote of 6 to 3 upheld the constitutionality of the domestic reporting and recordkeeping requirements in title I of this act. In dissent, Associate Justice William Ö. Douglas argued, and rightfully so, that this act has “saddled upon the banks of this Nation an estimated bill of over $6 million a year to spy on their customers." Justice Douglas further made the point that, "Unless we are to assume that every citizen is a crook, an assumption I cannot make,” it is "sheer nonsense" to claim that every citizen's bank records are important in tax and criminal investigations.

Mr. Speaker, we in Congress are responsible for the Bank Secrecy Act which I believe does, in fact, violate the constitutional rights of the citizens of this Nation. In connection with the Supreme Court ruling yesterday, Associate Justice William Rehnquist to agreeing with the decision has reportedly said, "that depositors must wait until their records are seized before they can claim in court that their privacy rights are threatened. He did not rule that banks must notify their customers nor did he guarantee success for the customers when they do go to court." This statement emphasizes the need for the Congress to take action immediately, not only to repeal the provisions in title I which require the American banking system to spy on its customers, but to also enact my bill, H.R. 10021, to protect a customer's privacy.

The California Bankers Association was involved in initiating this challenge to the Bank Secrecy Act. They have effectively stated the unconstitutional provisions in the act in their brief which was filed with the court, and I believe that every Member who is concerned with our commitment to privacy will be interested in the following excerpt from this brief summarizing the arguments. [The excerpt follows:]

SUMMARY OF ARGUMENT (1) The announced purpose of the Bank Secrecy Act is the recording and retention of bank records having “a high degree of usefulness in criminal tax or regulatory investigations or proceedings.” The Act and implementing regulations, in alleged pursuit of that purpose, require banks to monitor every bank account in the United States, and to copy and retain virtually every piece of paper that passes through the American banking system. As a result, and since the checks one writes reveal the intimate details of a citizen's financial, social and political life, banks are being forced to compile an exhaustive profile on virtually every adult member of the American community.

(2) There is almost no relationship between the Bank Secrecy Act's basic purpose--the detection, apprehension and conviction of criminals-and the requirement that virtually every piece of paper passing through all 200 million American bank accounts be copied and retained. Even if one were to assume that every crime committed in the United States would somehow be revealed by the perpetrator's bank account-including those such as homicide and forcible rape that have little or nothing to do with banks and banking-less than 4.4% of the bank accounts in the United States would be involved. Quite apart, then, from all other objections, the wholesale surveillance of every bank account in the United States is a witless enterprise.

(3) The indiscriminate, mass surveillance of every bank account in the United States is unnecessary and inappropriate. There are any number of alternate, reasonable means available. As such, the Bank Secrecy Act violates due process. See, e.g., Helvering v. City Bank Farmers Trust Co., 296 U.S. 85 (1935) and N.A.A.C.P. v Alabama, 337 U.S. 288 (1964).

(4) The Act violates the Fifth Amendment right of due process by imposing two separate and unreasonable requirements on the American banking industry.

First, the Bank Secrecy Act plainly violates the limitations this Court has imposed on compulsory recordkeeping. There is virtually no relationship between the objectives of the Act and the mass surveillance of every bank account in the United States. The records required have no specific purpose. They have nothing to do with the regulation of banks and the banking business. They destroy the Fifth Amendment limitations this Court has imposed on the use of required records against the recordkeeper. See, Shapiro v. United States, 335 U.S. 1 (1948); Marchetti v. United States, 390 U.S. 39 (1968); Grosso v. United States, 390 U.S., 62 (1968).

Second, the Act violates economic due process by requiring banks to spend approximately $6.1 million each year to make and retain records they do not need or want-$6.1 million a year to spy on their customers.

(5) In United States v. Pouell, 379 U.S. 48 (1964), Donaldson v. United States, 400 U.S. 517 (1970) and Couch v. United States, 409 U.S. 322 (1973), this Court set forth various safeguards against the unlawful use of the governments summons and subpoena power against third-parties. By requiring banks, among others, to record and retain writings that would otherwise belong to the maker (e.g., checks deposit slips, etc.) the recordkeeping required by the Bank Secrecy Act transfers title and possession to the banks. This destroys the practical and legal ability of a citizen under investigation to assert the Fourth and Fifth Amendment rights outlined in Powell, Donaldson and Couch.

(6) The privacy and anonymity protected by the First Amendment includes the confidentiality inherent in bank-customer relations. By allowing the Treasury Secretary unlimited discretion to include or exclude banks and bank accounts from its recordkeeping requirements, the Bank Secrecy Act violates the rule that intrusions on First Amendment rights be narrowly drawn, reasonable and definite. See, e.g. Niemothko v. State of Maryland, 340 U.S. 268 (1951).

(7) The wording of the Bank Secrecy Act and the government's arguments to this Court confirm that the recordkeeping provisions are the handmaiden of the Act's automatic reporting requirements. Since the reporting requirements plainly violate the First. Fourth and Fifth Amendments, the Act's recordkeeping provisions are unconstitutional for the same reasons.

(8) Finally, since its members are being injured, the California Bankers Association has standing to assert their constitutional rights (Sierra Club v. Morton, 405 U.S. 727 (1972)). In addition, the CBA has standing to assert the constitutional rights of its members' customers. Those rights are fundamental and the banks appear to be the only parties affected by the Act’s recordkeeping requirements in a position to assert this constitutional challenge. See Eisenstadt v. Baird, 105 U.S. 438 (1972).

In conclusion, Mr. Speaker, I sincerely hope that we can start a new trend in Congress. A trend that will result in our protecting American citizens' privacy instead of violating it, a trend that can only be accomplished by less Federal control and intervention.

Mr. GOLDWATER. I thank the gentleman. He is absolutely right. It is time for the farmers and the American people to review this procedure, to look where we are going. The technological age has brought many rapid advances in many areas of our lives. One of the great areas is in the multitudinous use of computer technology to record information about individuals.

It reminds me of the same situation that occurred with supersonic transportation. At one time we were building supersonic transportation at such a rate until we had to stop and say, "Where are we going? What effect does this have on human life?"

I think we have to do that in the area of computers in this technological age and stop and say, "Where are we going in our personal lives?"

This commitment by the Congress is a good one. I congratulate my colleague for his contribution in his area of expertise.

Mr. ROUSSELOT. Mr. Speaker, will the gentleman yield further?
Mr. GOLDWATER. I yield to the gentleman from California.

Mr. RoUssELOT. I know the gentleman has worked long and hard on this subject. It has taken some time for all the Members to gather together the information on this sweeping matter of rights.

Mr. GOLDWATER. Mr. Speaker, if I might also mention to my friend, the gentleman from California, not only his interest in the census data, but the fine contribution of a former colleague, Mr. Jackson Betts, made many years prior to our involvement. Certainly he paved the way and aroused our interests and our concern. I think we all owe him a compliment for his contribution.

Mr. LAGOMARSINO. Mr. Speaker, will the gentleman yield?

Mr. GOLDWATER. I yield to my friend and colleague, the gentleman from southern California (Mr. Lagomarsino).

Mr. LAGOMARSINO asked and was given permission to revise and extend his remarks.)

Jr. LAGOMARSINO. Mr. Speaker. I commend my very good friend and colleague from California and from my own county, Mr. Goldwater: Mr. Koch, the gentleman from New York, and others who are bringing this special order to our attention and allowing us to participate in it. I do not think there is any subject the American people are more concerned about and want us to do something about than this question.

Mr. Speaker, more than 2,400 years ago, the Greek orator Pericles noted that one of the hallmarks of a free society is “mutual toleration of private conduct." The common law precept that a man's home is his castle, finds expression in the English Magna Carta. And our own Constitution guarantees the right of the people to be secure in their persons, houses papers, and effects.

Despite this admirable, and nonpartisan, historical commitment to privacy as a prerequisite of free society, we find ourselves today facing a very real threat to this right. The challenge comes not from without, but from within. Our own technology threatens to render the guarantees of our constitution useless. And unless we act now, just as our forefathers did and their fathers before them, we may find ourselves the slaves rather than the masters of our modern information systems.

Mr. Speaker, I have some Greek antecedents, but I have more Roman blood, and I remember from my history books what happened when the Roman Empire herame topheavy with bureaucracy and red tape. It collapsed of its own weight. and became ripe pickings for renegades. This issue is not a partisan issue. It transcends ideologies. It goes to the root of what governments are created to do. Our Republican form of Government was created to do those things that the people find difficult to do for themselves, and no more. The people, whom we serve, have reserved to themselves all other rights and authority. And when Government. or any private group, gains such power over the private conduct of its citizens that by its very operation it threatens their security, then it is time to act.

The people of California 2 years ago enacted an amendment guaranteeing their right to privacy. I believe they did this, not because they wanted an increase in criminal activity, obviously, but because they wanted a decrease in governmental activity. In our society, where an honest man's word is his reputation, where a presumption of innocence is the law, perpetual surveillance is anathema. And when it is conducted on a pervasive scale, often without even the knowledge of the people or an opportunity for challenging an individual dossier, then the time has come to sound the alarm.

I believe the Congress should act now to renew the commitments made in the Constitution and in our laws for the right of free citizens to be secure. Secure in their persons, in their houses, papers and effects, and in their private lives.

If we do not make this commitment, if we do not act now to gain control over the paper bureaucracy, public and private, which is beginning to pervade our lives, we will wake up, 2,400 years after Pericles set out the limits of Government interference in private affairs, in the year 1984. Let us pray that day never comes.

Mr. Speaker, my colleague from California (Barry M. Goldwater, Jr.) is working steadfastly to restore rights of privacy in America. He recently spoke before a seminar sponsored by the National Bureau of Standards. I include his remarks.

[The remarks follow :]


STANDARDS COMPUTER SECURITY CONFERENCE A distinguished former colleague of mine, Congressman Jackson Betts, who was one of the pathfinders in promoting legislation to protect privacy, once said : “Privacy is not simply an absence of information about us in the minds of others; rather, it is the control we have over information about ourselves.

I am pleased to be a congressional participant in the conference sponsored by the Institute for Computer Sciences and Technology, here today.

Since coming to Congress almost five years ago, I have become increasingly concerned about the growing menace privacy invasion poses to the American citizen.

Early last year, I decided to initiate certain proposals to assure the American citizen that he would indeed have control, as mentioned by Congressman Betts, over information compiled and retained about him.

An initial report was to work very closely with the Secretary of Health, Education, and Welfare prior and after the release of the very extensive HEW study entitled “Records, Computers, and the Rights of Citizens". This report was released last July.

I am most impressed with this study, and in order to carry out its specific recommendations, I introduced two bills.

One, "The Freedom of Information Act”, H.R. 11275, is basically aimed at accomplishing the following three objectives :

(1) To guarantee individuals the right to find out what information is being maintained about them in computerized systems and be able to obtain a copy of it upon demand.

(2) To allow a person to contest the accuracy, pertinence, and timeliness of any information in a computer-accessible record about him.

(3) To require record-keeping organizations to inform individuals on request of all uses made of information being kept about them in computerized files.

Shortly after introducing this bill, I joined with Massachusetts Governor Francis Sargent, Senator Edırard Brooke, and Congressman Michael Harrington, in an administrative petition with the Justice Department, which asked former Attorney General Elliot Richardson to terminate operation of the F.B.I. administered offender files, which are a part of the National Crime Information Center, until he has issued formal regulations to safe-guard the rights of individual citizens.

Additionally, I introduced a bill to amend the Social Security Act, that would give each individual in this country the right to refuse to disclose his or her social security number. Then too, organizations with the authority to use the number would be prohibited from disclosing the number to organizations that lack such authority.

This legislation is designed to prevent the social security number from becoming a "standard universal identifier" that can be used by computers to track all the errors, omissions, and/or sins of an individual from cradle to grave.

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