Prying Open Executive Privilege with a Business Lever
Byline: Chief Justice Reynato S. Puno, Supreme Court of the Philippines
(Speech delivered at the ACCRALAW 35th Anniversary on November 16, 2007.)
Let me first thank Atty. Eusebio V. Tan for inviting me to speak on the occasion of the 35th anniversary of the Angara Abello Concepcion Regala & Cruz Law Offices. I congratulate your Firm on this memorable milestone.
The theme of your celebration, "Significant Trends and Developments that Impact on Business and Industry," made me ponder for some time on a suitable topic to speak about - a topic that would be relevant to your theme, challenging in legal discourse, concerned with present-day events in our country, and though not necessarily of such interest as to keep you teetering at the edge of your seat, it would hopefully not lead you to the gates of slumberville. With this equation in mind, I thought it would be interesting and timely to speak on the subject of executive privilege and business. The conjunction "and" may seem misplaced as these two topics are not frequently seen together like carrots and peas, but there is more than meets the eye. My goal in this discourse is not to prescribe the lens with which to view specific issues falling under the topic at hand, but to make an exposition, albeit a limited one given the limited time, for us to examine the interstices of this doctrine of executive privilege and how it can affect business and industry, hence the title of this speech, "Prying Open Executive Privilege with a Business Lever."
I beg your indulgence for me to fancy your imagination for a moment and take you to the Board meeting of a giant multinational chemical company, a client of a recognized law firm. Chemical Company X produced Chemical Agent A for use of the Philippine government in its defense program. The company manufactured the chemical agent according to specifications provided by the government, but as it turned out, Chemical Agent A wrought disastrous side effects on a large population caught in the cross-fire of the government's anti-insurgency efforts, a tort class suit was filed against Company X. To prop up its defense, the company requested documents from the Secretary of Defense to show that Chemical Agent A was manufactured with nary a deviation from government specifications drawn up from years of research. Invoking executive privilege, the Secretary of Defense refused to release the documents as their disclosure would compromise confidentiality of security matters. Company X turns to its counsel, seeking a remedy to access the classified files. Does Company X face an insurmountable wall of executive privilege?
Definition, roots of the phrase, trajectory of the practice
"Executive privilege" has been defined as the right of the President and high-level executive branch officials to withhold information from Congress, the courts, and the public. Schwartz defines "executives privilege" as the "power of the Government to withhold information from the public, the courts, and the Congress."
The phrase "executive privilege" nowhere appears in the Philippine Constitution nor in the US Constitution after which our constitution was patterned. This absence is in large part the reason that the doctrine is controversial. Opponents of executive privilege go even as far as describing it as a "constitutional myth." The phrase "executive privilege" is, in fact, not even half a century old, having made its maiden appearance only in the 1958 case of Kaiser Aluminum & Chemical Co. v. United States where Justice Reed, sitting on the United States Court of Claims, wrote: "The power must lie in the courts to determine Executive Privilege in litigation... (T)he privilege for intra-departmental advice would very rarely have the importance of diplomacy or security. (emphasis supplied)"
Nonetheless, the practice of the president withholding information has been consistently observed since the diaper days of the US Republic. Given the developments in the executive and legislative branches of government, it has been predicted that the occasions for invocation of executive privilege in the United States will likely become more numerous. There has been a dramatic growth in the bureaucracy directly reporting to the President and an increasing number and complexity of administrative tasks at the national level that have prompted a burgeoning of congressional staff and oversight, all taking place in a political atmosphere of "open government" that supports executive disclosure of information. The situation in the Philippines is not very different, with the ratification of the 1987 Constitution and its provisions on transparency and openness of government and the public's right to information. Hence, it will be good to hammer out a conceptual hook with which to grasp the subject of executive privilege and be a step ahead in its trajectory.
Executive privilege is a direct descendant of the constitutionally designed separation of powers among the legislative, executive and judicial branches of government. The separation of powers was fashioned to avert tyranny by "safeguar[ding] against the encroachment or aggrandizement of one branch at the expense of the other." As James Madison explained in The Federalist No. 47:
The reasons on which Montesquieu grounds his maxim [that the legislative, executive and judicial departments should be separate and distinct] are a further demonstration of his meaning. "When the legislative and executive powers are united in the same person or body," says he, "there can be no liberty, because apprehension may araise lest the same monarch or senate should enact tyrannical laws to execute them in a tyrannical manner." Again: "Were the power of judging joined with the legislative, the life and liberty of the subject would be exposed to arbitrary control, for the judge would then be the legislator. Were it joined to the executive power the judge might behave with all the violence of an oppressor."
The Framers of the Constitution, however, recognized that a "hermetic sealing off of the three branches of Government from one another would preclude the establishment of a Nation capable of governing itself effectively," hence the separation of powers between the branches is not absolute. The Constitution contemplates that practice will integrate the dispersed powers into a workable government. "It enjoins upon its branches separateness but interdependence, autonomy but reciprocity." The boundaries established by the Constitution delineating the powers of the three branches must be fashioned "according to common sense and the ... necessities of governmental co-ordination." This constitutional design would consist of an internal balancing mechanism by which government powers cannot be abused.
Although the US Constitution does not directly mention "executive privilege," commentators believe that the privilege of confidentiality is constitutionally based so far as it relates to the President's effective discharge of his executive powers. The Founders of the American nation recognized an implied constitutional prerogative of presidential secrecy, a power they believed was occasionally necessary and proper. In the early years of the Republic, the leading Founders either exercised or acknowledged the right of executive branch secrecy.
In the 1974 case of United States v. Nixon, the US Supreme Court for the first time officially recognized executive privilege. It declared that the privilege derives from the supremacy of each branch in the process of carrying out its constitutional responsibilities. In addition, the Court held that the privilege is "fundamental to the operation of Government and inextricably rooted in the separation of powers under the Constitution." Nonetheless, the Court also recognized that the privilege is not absolute, but rather a qualified privilege as "(t)he impediment that an absolute, unqualified privilege would place in the way of the primary constitutional duty of the Judicial Branch to do justice in criminal prosecutions would plainly conflict with the function of the courts under Art. III." The Court made it clear that, within the separateness of the three branches of government, there must also be interdependence such that the government will exist in a workable system.
History of executive privilege.
In the United States.
As the first US President, George Washington established time-honored principles that have since molded the doctrine of executive privilege. He well understood the crucial role he played in setting precedents as shown by a letter he wrote on May 5, 1789 to James Madison where he said, "As the first of every thing, in our situation will serve to establish a precedent, it is devoutly wished on my part that these precedents may be fixed on true principles."
Though not yet then denominated "executive privilege," President Washington originally claimed authority to withhold information in the St. Clair investigation in 1792 when a committee of Congress requested papers and records from the executive to assist them in investigating a military expedition headed by General Arthur St. Clair against Native Americans. After conferring with his cabinet, President Washington decided that disclosure was in the public interest but, as Secretary of State Jefferson explained, the President was inclined to withhold papers that would injure the public. In 1794, in response this time to a Senate request, Washington replied that he would allow the Senate to examine some parts of, but withhold certain information in relation to, correspondence between the French government and the American minister thereto, and between the minister and Secretary of State Randolph, because the information could prove damaging to the public interest. The Senate never challenged his action. In 1796, Washington refused to comply with a House resolution requesting information about his instructions to the US Minister to Britain regarding the Jay Treaty negotiations, claiming that "(t)he nature of foreign negotiations requires caution, and their success must often depend on secrecy...." He explained that "the boundaries fixed by the Constitution between the different departments should be preserved, a just regard to the Constitution and to the duty of my office ... forbids a compliance with your request."
Thus, Washington established historical precedent for executive privilege that is firmly rooted in two theories: First, a separation of powers theory that certain presidential communications should be free from compulsion by other branches; and second, a structural argument that secrecy is important to the President's constitutional duties in conducting state and foreign affairs. Washington established that he had the right to withhold information if disclosure would injure the public, but he did not believe that it was appropriate to withhold embarrassing or politically damaging information.
Then came President Thomas Jefferson who also thoroughly defended executive secrecy. In the 1807 case of United States v. Burr, Jefferson was ordered to comply to a subpoena duces tecum for a letter concerning Vice President Aaron Burr who was on trial for treason arising from a secessionist conspiracy.
In all, the modern period of executive privilege has thus far given it this contour: Executive privilege, though a constitutional presumption, is limited and must yield to the needs associated with the administration of the criminal and civil justice systems. Modern examples show that the privilege is strongest when based not on a bare personal desire to avoid responsibility but on a legitimate need to protect the President's constitutional mandate, the prudential separation of powers, and ultimately the public interest that is served by the President's performance of his constitutionallymandated duty. Under these circumstances, both the Congress and the judiciary have afforded most respect to the President's prerogatives.
In the Philippines
Executive privilege did not have an exogenous growth in the field of Philippine constitutional law as our early organic acts and constitutions - their structure and design - follow the mold of the US Constitution. Thus, executive privilege also lies deeply embedded in the mantle of presidential power found in our constitution. Admittedly, adjudication on executive privilege in the Philippines is still in its chrysalis stage, with the Supreme Court having had only three occasions to resolve cases that directly deal with the privilege, all decided relatively recently in a span of twelve years.
The 1995 case of Almonte v. Vasquez involved an investigation by the Office of the Ombudsman of petitioner Jose T. Almonte who was formerly Commissioner of the Economic Intelligence and Investigation Bureau (EIIB) and Villamor C. Perez, Chief of the EIIB's Budget and Fiscal Management Division. An anonymous letter from a purported employee of the bureau and a concerned citizen alleging that funds representing savings from unfilled positions in the EIIB had been illegally disbursed spurred the investigation. The Ombudsman required the Bureau to produce all documents relating to Personal Services Funds for the year 1988 and all evidence, such as vouchers (salary) for the whole plantilla of EIIB for 1988. Petitioners refused to comply.
The Court recognized a government privilege against disclosure with respect to state secrets bearing on military, diplomatic and similar matters. Citing United States v. Nixon, the Court acknowledged that the necessity to protect public interest in candid, objective and even blunt or harsh opinions in Presidential decisionmaking justified a presumptive privilege of Presidential communications. It also acknowledged that the "privilege is fundamental to the operation of the government and inextricably rooted in the separation of powers under the Constitution" as pronounced by the US Supreme Court in United States v. Nixon.
Executive privilege in relation to business in particular.
With the pungent and powerful criticism hurled at President Nixon for his attempt at unfettered secrecy through invocation of "executive privilege," subsequent presidents were careful to avoid using "executive privilege" to shield information as the doctrine had almost become synonymous with covering up a wrongdoing. President George H.W. Bush for example, on many occasions, used other names or sources of authority for justifying secrecy other than "executive privilege": deliberative process privilege, attorney-client privilege, attorney work product, internal departmental deliberations, deliberations of another agency, secret opinions policy, sensitive law enforcement materials, and ongoing criminal investigation, among others. Some of these species of confidentiality weapons are considered forms of executive privilege as we have mentioned earlier. In the absence or failure of statute-base claims of confidentiality, may executive privilege trump demands from the executive of information that can affect business and commerce?
First, the Morton documents. In 1975, Congress prevailed over the executive in its request for reports compiled by the Department of Commerce identifying the US companies that had been asked to join a boycott - organized by Arab nations - of companies doing business with Israel. The Secretary of Commerce Rogers Morton refused to release the documents to a House Interstate and Foreign Commerce Subcommittee on the strength of Section 7(c) of the Export Administration Act of 1969, viz:
No department, agency, or official exercising any functions under this Act shall publish or disclose information obtained hereunder which is deemed confidential or with reference to which a request for confidential treatment is made by the person furnishing such information, unless the head of such department or agency determines that the withholding thereof is contrary to the national interest.
Morton wrote the subcommittee, saying that he understood the need to provide Congress "with adequate information on which to legislate," but concluded that "disclosing the identity of reporting firms would accomplish little other than to expose such firms to possible economic retaliation by certain private groups merely because they reported a boycott request, whether or not they complied with that request." The subcommittee issued a subpoena. In a letter to the committee, Morton reiterated his refusal to release the documents, explaining that his decision was not based "on any claim of executive privilege, but rather on the exercise of the statutory discretion conferred upon me by the Congress." He said however that he was prepared to make copies of the documents available, "subject only to deletion of any information which would disclose the identity of the firms reporting, and the details of the commercial transactions involved." At a subsequent Subcommittee hearing, representative John Moss, chairman of the subcommittee seeking the documents, told Morton that Section 7(c) did not "in any way refer to the Congress nor does the Chair believe that any acceptable interpretation of that section could reach the result that Congress by implication had surrendered its legislative and oversight authority under Article I and the Rules of the House of Representatives." Morton told Moss that Attorney General Edward Levi advised him not to make the documents available to the committee. The subcommittee voted Morton in contempt for failure to comply with the subpoena. The prospect of contempt proceedings urged Morton to release the material to the subcommittee. Congress later amended Section 7(c) making explicit that information obtained under the section is available to any committee or subcommittee of Congress.
Second, the Califano documents. In 1978, a subcommittee of the House of Committee on Interstate and Foreign Commerce commenced investigating on the manufacturing process used by drug companies for making generic drugs and pricing brand-name drugs. The body looked into charges that drug companies merely put trade names on drugs manufactured by generic drug firms and sold them at much higher prices. One way to claim manufacturing responsibility was for a trade name company to put an employee in a generic drug house while the product was being manufactured. To dig deeper into this "man-in-the-plant" strategy, the subcommittee requested documents from the Department of Health, Education, and Welfare (HEW). Legislation had been introduced to limit or eliminate the man-in-the-plant practice.
The subcommittee sent several letters to Secretary of HEW Joseph Califano, Jr., for the documents. Having failing to receive the material, the subcommittee agreed to subpoena Califano. In a memorandum, the Department of Justice took the position that the withholding of the material from the subcommittee was justified in view of the language in the Food, Drug, and Cosmetic Act which prohibited FDA employees from disclosing trade secret information. The memorandum argued that there was no clearly expressed congressional intent in the statute to exclude committee access from the general restriction on disclosure; significantly, the statute provided for disclosure to the courts but not to the committees of Congress. At a meeting with the subcommittee, Califano produced some material but also stated that any documents relating to trade secret information and the manufacturing process would be blackened out because of the DOJ position. Subcommittee chairman John Moss stated in no uncertain terms that the blackened-out material did not comply with the subpoena. Califano explained that his refusal to release the unredacted material had nothing to do with separation of powers or executive privilege, but rather, with statutory prohibition on the release of trade secret information. Congress, he said, "has the power to change that statute." The subcommittee then voted Califano in contempt for failing to comply with the subpoena. A month later, the subcommittee dropped the contempt action after Califano turned over the materials that had been subpoenaed. He explained that the HEW further reviewed the withheld materials and found that some information had been "inappropriately deleted" from documents given to the panel.
Third, the Cheney energy committee. In 2001, shortly after President George W. Bush took office, he established the National Energy Policy Development Group (NEPDG) in the office of Vice President Richard Cheney. The Vice President came into the White House from the chief offices of a company with one foot in the energy business and the other in defense contracting. While the formal members of the NEPDG were all government officials, critics charged that oil company executives and energy company lobbyists sat in on its meetings. The activities of the NEPDG drew the attention of Representative Henry Waxman, a ranking minority member of the House Committee on Government Reform, who asked the Vice President for documents on NEPDG's secret meetings. When the Vice President declined the request, Congressman Waxman and a ranking member of the House Committee on Energy and Commerce asked the General Accounting Office (GAO), Congress' independent investigative arm, to investigate the process by which the NEPDG Report on National Energy Policy was developed, purportedly containing portions that were unduly favorable to oil companies. The Vice President questioned the jurisdiction of the GAO, urging the latter to sue to enforce its mandate. While the Vice President did not technically invoke executive privilege in his response, his argument was steeped on executive privilege principles. The case was dismissed on grounds of standing and separation of powers. But several interest groups and a conservative political group filed suits seeking similar disclosure. Without explicitly invoking executive privilege, the Vice President filed an emergency motion for a writ of mandamus to keep the operation of NEPDG secret. The cases found their way to the Supreme Court which ruled that the assertion of executive privilege is not a necessary precondition to the government's separation of powers objections. In the end, the Vice President succeeded in keeping his secrets. In the meantime, public interest groups brought suits seeking the same documents not from the Vice President but from the Department of Energy and other federal agencies. These cases resulted in the release of thousands of pages of deliberations of the Task Force.
Fourth, foreign participation in mining companies. In 1981, President Reagan set the tone for executive privilege disputes during his presidency. On that year, a House subcommittee investigated the Mineral Lands Leasing Act because of takeovers of U.S. companies by foreign interests. Responding to a subcommittee request, Interior Secretary James Watt ruled that thirty-one documents contained sensitive information and refused to supply them to Congress. The subcommittee responded with a subpoena.
President Reagan sought the opinion of Attorney General William French Smith regarding the executive's right to withhold the documents. Smith defended an assertion of executive privilege. The documents were "either necessary and fundamental to the deliberative process presently ongoing in the Executive Branch or relate to sensitive foreign policy considerations." According to Smith, by demanding confidential documents, Congress was trying to participate in executive branch decision-making. In a most controversial opinion adopted by his successors, Smith alleged that Congress lacked an interest in executive branch information when requested for investigative purposes.
Armed with the attorney's general's opinion and a memorandum from the President asserting executive privilege, Watt appeared before the subcommittee. He refused to answer subcommittee members' questions about the documents. The President refused a subsequent request to release the documents. The subcommittee did not accept the claim of executive privilege. The General Counsel to the Clerk of the House refuted the Attorney General's legal opinion. The subcommittee voted Watt in contempt and referred the conflict to the full committee. The Committee on Energy and Commerce recommended that Watt be cited by the full House for contempt of Congress. President Reagan made the documents available to the subcommittee. The Committee dropped the contempt citation.
Fifth, trade agreement negotiations. In recent years in the US, as in the rest of the world including the Philippines, expansive government-negotiated bilateral and multilateral international trade agreements have gained momentum. This has prompted concerns about their far-reaching implications especially on private conduct and an increased focus upon the process by which they are negotiated. There are calls for greater openness and public participation in the negotiation of these agreements and access to negotiating documents shared by the United States with other governments prior to conclusion of a free trade agreement. The fact that three hundred or even twenty-five years ago international agreements were negotiated in secret can no longer alone justify the continuation of that approach in this age of North American Free Trade Agreement (NAFTA), the Central American Free Trade Agreement (CAFTA) or General Agreement on Tariffs and Trade (GATT).
Admittedly, secrecy of negotiations permits frank discussion, minimizes posturing and allows for flexibility in negotiating positions, which are essential to conclude an agreement. At the same time, however, government secrecy can be prone to abuse; its use is often assailed as undemocratic and can weaken accountability and undermine legitimacy of government action in the public eye. Legal efforts have been initiated to compel disclosure of negotiation documents. In a motion for summary judgment filed in a dispute over the Office of the United States Trade Representative (USTR) withholding of Free Trade Agreement of the Americas (FTAA) negotiating documents, plaintiff public advocacy groups insisted that "(d)isclosure of all or part of the documents would permit Plaintiff and other members of the US public to provide useful and informed input to the US government," but warned that the documents only had value while time remained to modify U.S. positions: "If the public is not informed of the exact terms of the (agreement) until the conclusion of the process, then any opportunity for Meaningful input is lost''. With the rise of international trade, secrecy issues in negotiating trade agreement also merit significantly increased attention.
The above examples show various ways by which the executive's disclosure or non-disclosure of information can significantly affect businesses and industries. Whether dealing with information on business transactions of companies, trade secrets or product information, foreign participation in businesses, formulation of industry policies arrived at with the participation of businessmen, or conclusion of trade agreements which impact on businesses, the coordinate branches of government and the interplay of their powers hold the key to the opening or closing of information doors that affect the bottom line and dynamics of industries.
Information, knowledge, exchange, and enlightened judgment is the air that democracy breathes. The great statesman Thomas Jefferson admonished people in a democracy to be informed, saying that "(i)f a nation expects to be ignorant and free in a state of civilization, it expects what never was and never will be." For "(w)hen information which properly belongs to the public is systematically withheld by those in power, the people soon become ignorant of their own affairs, distrustful of those who manage them, and-eventually incapable of determining their own destinies."
Ironically, those words trumpeting the tenets of democracy were uttered by President Nixon just three months prior to the Watergate break-in." As with all other grants and authority, the power to do good is also the power to do bad if the authority is filtered through the sieve of self-interest. To strip away the authority so that the lattermay be avoided will consequently also eliminate the ability to do the former. But history and precedent have shown that the doctrine of executive privilege is a viable and valid exercise of executive power. The key, as we have seen from the cases and situations discussed above, is not to do away with the authority but to turn to the theory of separation of powers that offers the necessary mechanisms by which presidential prerogatives can be exercised, challenged, and constrained by the legislature and the judiciary.
There is no escaping the truth that executive privilege is not only a constitutionally valid authority but a necessity, just as secrecy is as indispensable to human beings as fire, and as greatly feared. But with a legislature and judiciary working as independent coordinate branches of government and a citizenry participating in a robust democracy, executive privilege cannot ignite a firestorm that will burn the soul of a transparent and honest government.
Thank you and good day.…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Prying Open Executive Privilege with a Business Lever. Contributors: Not available. Newspaper title: Manila Bulletin. Publication date: November 19, 2007. Page number: Not available. © 2009 Manila Bulletin Publishing Corp. COPYRIGHT 2007 Gale Group.
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