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1964, 42 U.S.C. §§2000e-5(b), 2000e-8(e); section 314 (a)(3) of the Federal Election Campaign Act, 2 U.S.C. §437g(a)(3); and section 801 of the Federal Aviation Act of 1958, 49 U.S.C. §1461; H. Rept. I, 10. See also Kruh v. General Services Administration, 421 F. Supp. 965 (E.D.N.Y. 1976), and S. Rept., 26-27.

Exemptions (4), (5), (6) — Proprietary Information; Accusation of Crime or Formal Censure; Invasion of Privacy

"(4) disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential;

“(5) involve accusing any person of a crime or formally censuring any person;

"(6) disclose information of a personal nature where disclosure would constitute a clearly unwarranted invasion of personal privacy;"

Exemption (4) is identical to the trade secrets exemption of the Freedom of Information Act, 5 U.S.C. §552(b)(4), and was adopted with recognition of judicial interpretations of that exemption. H. Rept. I, 10; Conf. Rept., 15.6

Exemption (5) is described in the Senate Report as follows: "This paragraph covers meetings which accuse an individual or corporation of a crime, or formally censure such person. The term 'formally censuring any person' includes formal reprimands. An agency may discuss a company's alleged crimes, such as the submission of fraudulent documents, and consider whether to refer the case to the Department of Justice for prosecution. An agency regulating financial or security matters may wish to censure a firm for failing to live up to its professional responsibilities, or an agency may consider whether to formally censure an attorney for his conduct in an agency proceeding. Opening to the public agency discussions of such matters could irreparably harm the person's reputation. If the agency decides not to accuse the person of a crime, or not to censure him, the harm done to the person's reputation by the open meeting could be very unfair.

This paragraph insures that where serious charges of this nature are formally discussed by the agency, the agency has the latitude to close the meeting, even if the discussion does not come within the precise terms of paragraph [(7)], governing investigatory files, or any

See also Natl. Parks and Conservation Assn. v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974); regulations of the Securities and Exchange Commission, 17 C.F.R. §200.402(a)(4), 42 F.R. 14964-65; U.S. Parole Commission, 28 C.F.R. §16.203(a)(4), 42 F.R. 14714.

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other part of subsection [(c)]. The provision should not be interpreted as grounds for closing every meeting placing a company in a bad light. To be applicable, the meeting must consider formal agency action accusing a person of a crime or formally censuring a person." S. Rept., 22.

There is some doubt as to whether issuance of a cease-anddesist order would constitute a formal censure within the meaning of exemption (5), but the availability of exemption (10) should make the question academic, except insofar as it may affect a person's rights under subsection (d)(2).”

Exemption (6) is similar to but perhaps somewhat broader than the sixth exemption of the Freedom of Information Act, 5 U.S.C. §552(b)(6). Examples cited in the Senate Report of situations in which it might be appropriate to invoke the exemption include a discussion of an individual's drinking habits or health, assessing an individual's professional competence in connection with review of his grant application, or reviewing an individual's finances to determine his eligibility for financial aid. S. Rept., 21. Both the Senate and House Reports suggest that whether this exemption should be invoked may depend on the official status and rank of the individual, in that the personal privacy interest of a high government official may be narrower than that of a lower level employee or of a private citizen. S. Rept., 21-22; H. Rept. I, 11. Both reports state, the Senate Report somewhat more emphatically, that the exemption would not be available where the individual involved prefers an open meeting." Exemption (7) — Investigatory Records

"(7) disclose investigatory records compiled for law enforcement purposes, or information which if written would be contained in such records, but only to the extent that the production of such records or information would (A) interfere with enforcement proceedings, (B) deprive a person of a right to a fair trial or an impartial adjudication, (C) constitute an unwarranted invasion of

"For agency regulations elaborating on exemption (5), see regulations of the Commodity Futures Trading Commission, 42 F.R. 13702; Nuclear Regulatory Commission, 10 C.F.R. §9.104(a)(5), 42 F.R. 12878; Securities and Exchange Commission, 17 C.F.R. $200.402(a)(5), 42 F.R. 14695.

See further discussion on p. 35, infra. However, inasmuch as one purpose to be served by the exemption seems to be to permit candid exploration of an individual's qualifications or characteristics, quaere whether the individual's preference for an open meeting should always be dispositive. Cf. Wu v. Natl. Endowment for Humanities, 460 F. 2d 1030 (5th Cir. 1972), cert. denied, 410 U.S. 926 (1973).

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personal privacy, (D) disclose the identity of a confidential source and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source, (E) disclose investigative techniques and procedures, or (F) endanger the life or physical safety of law enforcement personnel;"

Exemption (7) is substantially identical to the seventh exemption of the Freedom of Information Act, 5 U.S.C. §552(b)(7), and should be interpreted in a manner consistent with that Act. S. Rept., 22.9

Exemption (8) — Financial Institution Reports

"(8) disclose information contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions;"

The Senate Report says:

"This paragraph applies to meetings which disclose information contained in or relating to examination, operating, or condition reports on financial institutions. These reports are prepared by or for the use of such banking agencies as the Federal Reserve Board, Federal Deposit Insurance Corporation, and the Federal Home Loan Bank Board. This provision is identical to exemption (b) (8) of the Freedom of Information Act and should be interpreted in the same way." S. Rept., 25.

It should be noted, however, that in its explanation of exemption (9)(A), the same report stated:

"The term 'financial institutions' is intended to include banks, savings and loan associations, credit unions, brokers and dealers in securities or commodities, exchanges dealing in securities or commodities, such as the New York Stock Exchange, investment companies, investment advisers, self-regulatory organizations subject to 15 U.S.C. §78s, and institutional managers as defined in 15 U.S.C. §78m (f)." S. Rept., 24.

Presumably, the term has the same meaning in exemption (8), and the Securities and Exchange Commission has so construed it.10

See, e.g., regulation of the Securities and Exchange Commission, 17 C.F.R. §200.402(a)(7), 42 F.R. 14695.

1017 C.F.R. §200.401(g), 42 F.R. 14694.

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Exemptions (9)(A), (B) — Financial Speculation and Stability; Frustration of Proposed Agency Action

"(9) disclose information the premature disclosure of which would

(A) in the case of an agency which regulates currencies, securities, commodities, or financial institutions, be likely to (i) lead to significant financial speculation in currencies, securities, or modities, or (ii) significantly endanger the stability of any financial institution; or

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(B) in the case of any agency, be likely to significantly frustrate implementation of a proposed agency action,

except that subparagraph (B) shall not apply in any instance where the agency has already disclosed to the public the content or nature of its proposed action, or where the agency is required by law to make such disclosure on its own initiative prior to taking final agency action on such proposal;"

Exemption (9) consists of two parts. Subparagraph (A) is available only to agencies which regulate currencies, securities, commodities, or financial institutions and would permit such agencies11 to close meetings in order to protect information the disclosure of which would lead to financial speculation or would "significantly endanger the stability of any financial institution." Among the agencies to which exemption (9)(A) is available are the Federal Reserve Board, the Securities and Exchange Commission, and the Federal Deposit Insurance Corporation. S. Rept., 24.12

Subparagraph (B) is potentially available to any agency, and its scope represents one of the more difficult questions of interpretation which have arisen under the Act. There are potential disadvantages to any collegial body in opening meetings and thereby airing the pros and cons of various pro

11 We read "in the case of an agency," etc., as referring to the agency holding the meeting, H. Rept. I, 12. Other agencies which have occasion to discuss information otherwise within exemption (9)(A) might be able to close the meeting on other grounds, but could not invoke (9)(A). Some agencies have taken different view; see, e.g., regulation of the U.S. Commission on Civil Rights, 42 F.R. 14107. The Civil Aeronautics Board concludes that "the exemption relates to the source and type of information, not the location of the meeting," 42 F.R. 14679.

12The Commodity Credit Corporation has concluded that its programs for stabilizing and supporting commodity prices constitute regulation of commodities for purposes of exemption (9)(A), 42 F.R. 14673.

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posed actions and the strengths and weaknesses of alternative positions. Even public knowledge that an agency is not unanimous in support of a particular policy might possibly be regarded by some as a source of weakness. These possibilities for frustration of agency action are inherent in the open meeting principle and, at least absent special circumstances, are not grounds for invoking exemption (9)(B).

The prototypal situation to which the exemption is addressed seems to be the regulatory action which must be imposed without notice in order to prevent forestalling action by the regulated community. See Attorney General's Manual on the Administrative Procedure Act, 31 (1947). Such an example, cited at S. Rept., 24, is an embargo on shipment of certain goods, which, if announced in advance, would lead to export of the goods before the embargo took effect. This can be characterized as a situation in which the agency's action. takes place, but its intended effects are frustrated by the prior notice to the affected parties.

There is, however, legislative history supporting the application of exemption (9)(B) to somewhat different circumstances. The Senate Report cites as an example of a situation appropriate for invoking (9)(B) "discussion of the strategy an agency will follow in collective bargaining with its employees. Public disclosure might make it impossible to reach an agreement." S. Rept., 24. See also H. Rept. I, 12. The thrust of the exemption here appears to be to protect agency discussions which are aimed at developing a negotiating position as opposed to resolving a matter by unilateral action. The purpose presumably is to enable the agency to avoid divulging its fallback positions in advance of negotiation.13 This rationale is also adequate to explain the availability of exemption (9)(B) for discussion of the possible purchase of real property, Conf. Rept., 15. Here, too, it is not the development of the agency position so much as its intended effect which is frustrated by disclosure.

Another situation which seems eligible for exemption (9) (B) is a meeting to discuss the release of information or documents which, arguably, might properly be withheld, as under subsection (f)(2) or under the Freedom of Information Act.

The Office of Management and Budget has suggested that a meeting to discuss the agency's budget proposal prior to the transmittal by the President to Congress of the budget of which it is a part may be eligible for closure under exemption

13See, e.g., regulation of the U.S. Postal Service, 39 C.F.R. §7.3(i), 42 F.R. 12863. Cf. regulation of the Civil Aeronautics Board, 42 F.R.