[Federal Register Volume 68, Number 51 (Monday, March 17, 2003)]
[Rules and Regulations]
[Pages 12584-12588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6247]


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DEPARTMENT OF THE TREASURY

Departmental Offices

31 CFR Part 1

RIN 1505-AA97


Disclosure of Records in Legal Proceedings

AGENCY: Departmental Offices, Treasury.

ACTION: Interim final rule.

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SUMMARY: This interim final rule amends Treasury's regulations that 
govern access to information and records in connection with legal 
proceedings, including litigation in which neither the United States 
nor the Department of the Treasury is a party. The amendments elaborate 
on the procedures used when determining whether employees in the 
Departmental Offices will be permitted to testify or provide records 
relating to their official duties when they are directly subpoenaed or 
otherwise requested to testify. The amendments also specify and clarify 
the criteria that Treasury officials use when deciding whether to allow 
an employee to testimony or provide records.

DATES: This interim final rule is effective March 17, 2003. Written 
comments may be submitted by April 16, 2003.

ADDRESSES: Submit written comments to Thomas M. McGivern, Counselor to 
the General Counsel, Department of the Treasury, 1500 Pennsylvania 
Avenue, NW., Room 3000, Washington, DC 20220.

FOR FURTHER INFORMATION CONTACT: Tom McGivern, Counselor to the General 
Counsel, at (202) 622-2317 or Traci J. Sanders, Deputy Counselor, at 
(202) 622-2744 (not toll-free numbers).

SUPPLEMENTARY INFORMATION: 

I. Background

    Under 5 U.S.C. 301, heads of Executive or military departments may 
prescribe regulations governing the conduct of its employees and the 
custody, use, and preservation of the department's records, papers, and 
property. Many departments and agencies have promulgated such 
regulations to provide procedures for the disclosure of official 
records and

[[Page 12585]]

information. Generally, these are termed Touhy regulations, after the 
Supreme Court's decision in United States ex rel. Touhy v. Regan, 340 
U.S. 462 (1951). In that case, the Supreme Court held that an agency 
employee could not be held in contempt for refusing to disclose agency 
records or information when following instructions of his or her 
supervisor regarding the disclosure that were issued pursuant to agency 
regulations. As such, an agency's Touhy regulations are the 
instructions agency employees are to follow when those employees 
receive requests or demands to testify or otherwise disclose agency 
records or information.
    Treasury's Touhy regulations are codified in sections 1.8 through 
1.12 of title 31 of the Code of Federal Regulations. These regulations 
provide that employees of the Departmental Offices of the Department of 
the Treasury may not disclose documents or information in response to a 
demand or other order of a court or any other authority without first 
being authorized to do so. The purpose of these regulations is to 
conserve valuable agency resources, protect Treasury employees from 
becoming enmeshed in litigation, and to protect sensitive government 
information and decision making processes.
    This interim final rule revises the regulations to prescribe the 
factors Treasury officials should consider when deciding whether to 
allow disclosure of documents and information and which officials may 
make these decisions. This rule also makes a number of clarifying and 
technical amendments to the current regulations.

II. Analysis of the Interim Final Rule

Section 1.8 Scope

    This section is amended to exclude references to the United States 
Savings Bonds Division and the United States Secret Service. The 
Savings Bond Division is currently a part of the Bureau of the Public 
Debt and the Secret Service will become a component of the Department 
of Homeland Security on March 1, 2003. This section also is amended to 
make clear that all offices and bureaus of the Department are covered 
by this subpart, except to the extent that the bureaus enact their own 
regulations governing the subject matter of a provision of this 
subpart.

Section 1.11 Testimony or the Production of Records in a Court or Other 
Proceeding

    This section sets forth the policies and procedures of the 
Department regarding the testimony of employees as witnesses in legal 
proceedings and the production or disclosure of Treasury documents for 
use in legal proceedings.
    Paragraph (a) describes the applicability of section 1.11. It 
specifies that section 1.11 does not apply (1) to an employee's 
testimony regarding matters that are unrelated to the official business 
of the Department and (2) to access to records pursuant to the Freedom 
of Information Act, the Privacy Act, or the Trade Secrets Act. 
Paragraph (a) also clarifies that the procedures of section 1.11 only 
provide guidance for the internal operations of the Department and do 
not create any rights or benefits enforceable at law by a party against 
the United States.
    Paragraph (b) defines various terms used in section 1.11.
    Paragraph (c) sets forth the general policy of the Department 
concerning requests that employees testify or provide documents or 
other information in litigation. This policy provides that employees 
may not respond to a demand, produce any documents, provide testimony 
regarding any information relating to, or based upon Department 
documents, or disclose any information or produce materials acquired as 
part of the performance of that employee's official duties or official 
status, without the prior authorization of the General Counsel or the 
appropriate agency counsel.
    Paragraph (d) sets forth procedures applicable to requests for 
testimony or the production of documents. Paragraph (d)(1) provides 
that requests directed at the Department for testimony by an employee 
of the Departmental Offices or for the production of documents are to 
be directed to the General Counsel of the Department. Requests for 
testimony by an employee of a Treasury office or bureau are to be 
directed to the Chief or Legal Counsel of the office or bureau.
    Paragraph (d)(2) provides that subpoenas or other requests for 
testimony or the production of documents directed at a Department 
employee be served in accordance with the Federal Rules of Civil or 
Criminal Procedure, or applicable State procedure.
    Paragraph (d)(3) provides that any request for testimony or the 
production of documents in litigation in which neither the Department 
nor the United States is a party be supported by an affidavit setting 
forth the nature of the litigation, describing the nature of the 
testimony and/or documents sought, and explaining why the testimony 
and/or documents are desired.
    Paragraph (d)(4) provides that employees may not give testimony or 
produce documents in connection with legal proceedings without the 
approval of agency counsel.
    Paragraph (e) sets forth the factors to be considered by agency 
counsel when reviewing requests for testimony or records. These factors 
include (1) the burden on government resources, (2) applicable 
privileges, and (3) the potential release of classified documents. The 
factors enumerated in paragraph (e) are not exclusive and other 
relevant factors may be considered in appropriate circumstances.
    Paragraph (f) provides that requests for employees to provide 
expert testimony shall be denied except in cases of exceptional need 
and when the matter is not adverse to the interests of the Department. 
This provision is designed to ensure that the Department's resources 
are not consumed by repeated requests for employee expert testimony. 
This provision also allows former employees who hire themselves out as 
experts in the subject area in which they worked while with the 
government to provide testimony, as long as the testimony involves only 
the employee's general expertise.
    Paragraph (g) sets forth procedures to be followed by an employee 
when agency counsel determines that it is not appropriate to comply 
with a request for testimony or the production of documents.

Section 1.12 Regulations Not Applicable to Official Request

    This section currently provides that subpart B does not apply to 
official requests made by other government agencies or officials, 
unless it appears that granting a request would be in violation of law 
or inimical to the public interest. The interim final rule clarifies 
that agency counsel should be consulted if an employee has any doubt 
concerning the applicability of this section to a particular request.

III. Procedural Requirements

    Because this rule relates to agency management and personnel, and 
because it merely amends Treasury's existing regulations to more 
closely parallel similar regulations adopted by other Federal agencies, 
it is not subject to notice and public procedure pursuant to 5 U.S.C. 
553(a)(2) and (b)(B). For the same reasons, a delayed effective date is 
not required pursuant to 5 U.S.C. 553(a)(2) and (d)(3). Nevertheless, 
the Department will consider any public comments on this interim final 
rule before issuing a final rule.
    Because no notice of proposed rulemaking is required, the 
provisions

[[Page 12586]]

of the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply.
    It has been determined that this interim final rule is not a 
significant regulatory action for purposes of Executive Order 12866.

List of Subjects in 31 CFR Part 1

    Courts, Freedom of information, Government employees, and Privacy.
    Therefore, for the reasons discussed in the preamble, 31 CFR part 1 
is amended as set forth below:

PART 1--[AMENDED]

    1. The authority citation for part 1 continues to read as follows:

    Authority: 5 U.S.C. 301 and 31 U.S.C. 321. Subpart A also issued 
under 5 U.S.C. 552, as amended. Subpart C also issued under 5 U.S.C. 
552a.


    2. The second sentence of Sec. 1.8 is amended by removing the 
references to the United States Savings Bond Division and the United 
States Secret Service. The amended sentence reads as follows:


Sec.  1.8   Scope.

    * * * This subpart is applicable to the Departmental Offices and to 
the bureaus of the Department as defined in Sec.  1.1(a) of this part, 
except to the extent that bureaus of the Department have adopted 
separate guidance governing the subject matter of a provision of this 
subpart.

    3. Section 1.9 is republished and reads as follows:


Sec.  1.9  Records not to be otherwise withdrawn or disclosed.

    Except in accordance with this part, or as otherwise authorized, 
Treasury Department officers and employees are prohibited from making 
records or duplicates available to any person who is not an officer or 
employee of the Department, and are prohibited from withdrawing any 
such records or duplicates from the files, possession or control of the 
Department.

    4. Section 1.10(a) is revised to read as follows:


Sec.  1.10   Oral information.

    (a) Officers and employees of the Department may, in response to 
requests, orally provide information contained in records of the 
Department that are determined to be available to the public. If the 
obtaining of such information requires a search of records, a written 
request and the payment of the fee for a record search set forth in 
Sec.  1.6 will be required.
* * * * *

    5. Section 1.11 is revised to read as follows:


Sec.  1.11  Testimony or the production of records in a court or other 
proceeding.

    (a) Applicability. (1) This section sets forth the policies and 
procedures of the Department regarding the testimony of employees and 
former employees as witnesses in legal proceedings and the production 
or disclosure of information contained in Department documents for use 
in legal proceedings pursuant to a request, order, or subpoena 
(collectively referred to in this subpart as a demand).
    (2) This section does not apply to any legal proceeding in which an 
employee is to testify while on leave status regarding facts or events 
that are unrelated to the official business of the Department.
    (3) (i) Nothing in this section affects the rights and procedures 
governing public access to records pursuant to the Freedom of 
Information Act (5 U.S.C. 552) or the Privacy Act (5 U.S.C. 552a).
    (ii) Demands in legal proceedings for the production of records, or 
for the testimony of Department employees regarding information 
protected by the Privacy Act (5 U.S.C. 552a), the Trade Secrets Act (18 
U.S.C. 1905), or other confidentiality statutes, must satisfy the 
requirements for disclosure set forth in those statutes and the 
applicable regulations of this part before the records may be provided 
or testimony given.
    (4) This section is intended only to provide guidance for the 
internal operations of the Department and to inform the public about 
Department procedures concerning the service of process and responses 
to demands or requests, and the procedures specified in this section, 
or the failure of any Treasury employee to follow the procedures 
specified in this section, are not intended to, do not, and may not be 
relied upon to create a right or benefit, substantive or procedural, 
enforceable at law by a party against the United States.
    (b) Definitions. For purposes of this section:
    (1) Agency counsel means:
    (i) With respect to the Departmental Offices, the General Counsel; 
and
    (ii) With respect to a bureau or office of the Department, the 
Chief Counsel or Legal Counsel (or his/her designee) of such bureau or 
office.
    (2) Demand means a request, order, or subpoena for testimony or 
documents related to or for possible use in a legal proceeding.
    (3) Department means the United States Department of the Treasury.
    (4) Document means any record or other property, no matter what 
media and including copies thereof, held by the Department, including 
without limitation, official letters, telegrams, memoranda, reports, 
studies, calendar and diary entries, maps, graphs, pamphlets, notes, 
charts, tabulations, analyses, statistical or informational 
accumulations, any kind of summaries of meetings and conversations, 
film impressions, magnetic tapes and sound or mechanical reproductions.
    (5) Employee means all employees or officers of the Department, 
including contractors and any other individuals who have been appointed 
by, or are subject to the supervision, jurisdiction or control of the 
Secretary. The procedures established within this subpart also apply to 
former employees of the Department where specifically noted.
    (6) General Counsel means the General Counsel of the Department or 
other Department employee to whom the General Counsel has delegated 
authority to act under this subpart.
    (7) Legal proceeding means all pretrial, trial and post trial 
stages of all existing or reasonably anticipated judicial or 
administrative actions, hearings, investigations, or similar 
proceedings before courts, commissions, boards, grand juries, or other 
tribunals, foreign or domestic. This phrase includes all phases of 
discovery as well as responses to formal or informal requests by 
attorneys or others involved in legal proceedings.
    (8) Official business means the authorized business of the 
Department.
    (9) Secretary means the Secretary of the Treasury.
    (10) Testimony means a statement in any form, including personal 
appearances before a court or other legal tribunal, interviews, 
depositions, telephonic, televised, or videotaped statements or any 
responses given during discovery or similar proceedings, which response 
would involve more than the production of documents.
    (c) Department policy. No current or former employee shall, in 
response to a demand, produce any Department documents, provide 
testimony regarding any information relating to or based upon 
Department documents, or disclose any information or produce materials 
acquired as part of the performance of that employee's official duties 
or official status, without the prior authorization of the General 
Counsel or the appropriate agency counsel.
    (d) Procedures for demand for testimony or production of documents. 
(1) A demand directed to the Department for the testimony of a 
Department employee or for the production of documents shall be served 
in accordance with the Federal Rules of Civil Procedure, Federal Rules

[[Page 12587]]

of Criminal Procedure, or applicable state procedures and shall be 
directed to the General Counsel, Department of the Treasury, 1500 
Pennsylvania Avenue, NW., Washington, DC 20220, or to the Chief or 
Legal Counsel of the concerned Department component. Acceptance of a 
demand shall not constitute an admission or waiver with respect to 
jurisdiction, propriety of service, improper venue, or any other 
defense in law or equity available under the applicable laws or rules.
    (2) A subpoena or other demand for testimony directed to an 
employee or former employee shall be served in accordance with the 
Federal Rules of Civil or Criminal Procedure or applicable State 
procedure and a copy of the subpoena shall be sent to agency counsel.
    (3)(i) In court cases in which the United States or the Department 
is not a party, where the giving of testimony or the production of 
documents by the Department or a current or former employee is desired, 
an affidavit (or if that is not feasible, a statement) by the litigant 
or the litigant's attorney, setting forth the information with respect 
to which the testimony or production is desired, must be submitted in 
order to obtain a decision concerning whether such testimony or 
production will be authorized. Such information shall include: the 
title of the legal proceeding, the forum, the requesting party's 
interest in the legal proceeding, the reason for the demand, a showing 
that the desired testimony or document is not reasonably available from 
any other source and, if testimony is requested, the intended use of 
the testimony, a general summary of the desired testimony, and a 
showing that no document could be provided and used in lieu of 
testimony. The purpose of this requirement is to assist agency counsel 
in making an informed decision regarding whether testimony or the 
production of document should be authorized. Permission to testify or 
produce documents will, in all cases, be limited to the information set 
forth in the affidavit or statement, or to such portions thereof as may 
be deemed proper.
    (ii) Agency counsel may consult or negotiate with an attorney for a 
party, or the party if not represented by an attorney, to refine or 
limit a demand so that compliance is less burdensome or obtain 
information necessary to make the determination required by paragraph 
(e) of this section. Failure of the attorney or party to cooperate in 
good faith to enable agency counsel to make an informed determination 
under this subpart may serve, where appropriate, as a basis for a 
determination not to comply with the demand.
    (iii) A determination under this subpart to comply or not to comply 
with a demand is without prejudice as to any formal assertion or waiver 
of privilege, lack of relevance, technical deficiency or any other 
ground for noncompliance.
    (4)(i) Employees shall immediately refer all inquiries and demands 
made on the Department to agency counsel.
    (ii) An employee who receives a subpoena shall immediately forward 
the subpoena to agency counsel. Agency counsel will determine the 
manner in which to respond to the subpoena.
    (e) Factors to be considered by agency counsel. (1) In deciding 
whether to authorize the release of official information or the 
testimony of personnel concerning official information (hereafter 
referred to as ``the disclosure'') agency counsel shall consider the 
following factors:
    (i) Whether the request or demand is unduly burdensome;
    (ii) Whether the request would involve the Department in 
controversial issues unrelated to the Department's mission;
    (iii) Whether the time and money of the United States would be used 
for private purposes;
    (iv) The extent to which the time of employees for conducting 
official business would be compromised;
    (v) Whether the public might misconstrue variances between personal 
opinions of employees and Department policy;
    (vi) Whether the request demonstrates that the information 
requested is relevant and material to the action pending, genuinely 
necessary to the proceeding, unavailable from other sources, and 
reasonable in its scope;
    (vii) Whether the number of similar requests would have a 
cumulative effect on the expenditure of agency resources;
    (viii) Whether disclosure otherwise would be inappropriate under 
the circumstances; and
    (ix) Any other factor that is appropriate.
    (2) Among those demands and requests in response to which 
compliance will not ordinarily be authorized are those with respect to 
which any of the following factors exists:
    (i) The disclosure would violate a statute, Executive order, or 
regulation;
    (ii) The integrity of the administrative and deliberative processes 
of the Department would be compromised;
    (iii) The disclosure would not be appropriate under the rules of 
procedure governing the case or matter in which the demand arose;
    (iv) The disclosure, including release in camera, is not 
appropriate or necessary under the relevant substantive law concerning 
privilege;
    (v) The disclosure, except when in camera and necessary to assert a 
claim of privilege, would reveal information properly classified or 
other matters exempt from unrestricted disclosure; or
    (vi) The disclosure would interfere with ongoing enforcement 
proceedings, compromise constitutional rights, reveal the identity of 
an intelligence source or confidential informant, or disclose trade 
secrets or similarly confidential commercial or financial information.
    (f) Requests for opinion or expert testimony. (1) Subject to 5 CFR 
2635.805, An employee shall not provide, with or without compensation, 
opinion or expert testimony concerning official information, subjects, 
or activities, except on behalf of the United States or a party 
represented by the Department of Justice, without written approval of 
agency counsel.
    (2) Upon a showing by the requestor of exceptional need or unique 
circumstances and that the anticipated testimony will not be adverse to 
the interests of the Department or the United States, agency counsel 
may, in writing, grant authorization for an employee, or former 
employee, to appear and testify at no expense to the United States.
    (3) Any expert or opinion testimony by a former employee of the 
Department shall be excepted from Sec.  1.11(f)(1) where the testimony 
involves only general expertise gained while employed at the 
Department.
    (g) Procedures when agency counsel directs an employee not to 
testify or provide documents. (1) If agency counsel determines that an 
employee or former employee should not comply with a subpoena or other 
request for testimony or the production of documents, agency counsel 
will so inform the employee and the party who submitted the subpoena or 
made the request.
    (2) If, despite the determination of the agency counsel that 
testimony should not be given and/or documents not be produced, a court 
of competent jurisdiction or other appropriate authority orders the 
employee or former employee to testify and/or produce documents, the 
employee shall notify agency counsel of such order.
    (i) If agency counsel determines that no further legal review of, 
or challenge to, the order will be sought, the employee or former 
employee shall comply with the order.
    (ii) If agency counsel determines to challenge the order, or that 
further legal

[[Page 12588]]

review is necessary, the employee or former employee should not comply 
with the order. Where necessary, the employee should appear at the time 
and place set forth in the subpoena. If legal counsel cannot appear on 
behalf of the employee, the employee should produce a copy of this 
subpart and respectfully inform the legal tribunal that he/she has been 
advised by counsel not to provide the requested testimony and/or 
produce documents. If the legal tribunal rules that the subpoena must 
be complied with, the employee shall respectfully decline to comply, 
citing this section and United States ex rel. Touhy v. Ragen, 340 U.S. 
462 (1951).

    6. The second sentence of Sec.  1.12 is revised to read as follows:


Sec.  1.12  Regulations not applicable to official request.

    * * * Cases of doubt should be referred for decision to agency 
counsel (as defined in Sec.  1.11(b)(1)).

    Dated: March 11, 2003.
David D. Aufhauser,
General Counsel.
[FR Doc. 03-6247 Filed 3-14-03; 8:45 am]
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