DOD'S PROPOSED REPORT ON H.R. 3564 )AND S. 1720) RE MODIFICATION OF THE APA'S 'MILITARY OR FOREIGN AFFAIRS' EXEMPTION.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81M00980R000800030077-7
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 7
• Document Creation Date: December 20, 2016
• Document Release Date: November 16, 2006
• Sequence Number: 77
• Publication Date: April 10, 1978
• Content Type: MF

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EX CUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
April 10, 1978
LEGISLATIVE REFERRAL MEMORANDUM
TO: Legislative Liaison Officer
Central Intelligence Agency
Department of State
Nuclear Regulatory Commission
Department of Energy
SUBJECT: DOD's proposed report on H.R. 3564 (and S. 1720)
re modification of the APA's "military or foreign
affairs" exemption.
with OMB Circular A-19.
A response to this request for
your
views is needed
no later than cob, Wednesday,
April
19,
1978.
The Office of Management and Budget requests the views of
your agency on the above subject before advising on its
relationship to the program of the President, in accordance
Questions should be referred to Robert Carlstrom
395-3856 ) --------------------------------[--- __.----i
the legislative analyst in this office.
James B. MacRae for
Assistant Director for
Legislative Reference
cc: Mr.
Mr.
Mr.
Mr.
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DEPARTMENT OF DEFENSE
OFFICE OF GENERAL COUNSEL
WASHINGTON, D. C. 20301
April 6, 1978
Honorable James T. McIntyre, Jr.
Director, Office of Management
and Budget
Washington, D. C. 20503
Dear Mr. McIntyre:
The views of the Department of Defense have been requested
on H. R. 3561, H. R. 3562, H. R. 3563, H. R. 3564 and H. R. 356,
95th Congress. Each bill is entitled "To amend chapter 5, sub-
chapter II, of title 5, United States Code, to provide for improve
administrative procedures. "
Advice is requested as to whether there is objection to the preserta.-
tion of the attached revised report to the Committee.
Sincerely,
Enclosure
Werner Windus
Director
Legislative Reference Service
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GE I.. ...: CGUNSEL C" THE DEPARTMENT OF DEFEN:
WASHII:GTON. 0. C. 20''
Honorable Peter W. Rodino, Jr.
Chairman. Committee on Judiciary
House of Representatives
Washington. D. C. 20515
Dear Mr. Chairman:
Reference is made to your request for the views of the Department
of Defense regarding H. R. 3561, FL R.. 3562, H. R. 3563, 1-I. R. 3564
and H. R. 3565, 95th Congress. Each bill is entitled "To amend
chapter 5, subchapter II, of title 5, United States Code, to provide
for improved administrative procedures.
The foregoing bills are directed toward one of the fol
ina three ends: (1) refinement of the administrative adjudi,
tive' function; (2) limitations on the release of informatio while an investigation is in process; or (3) diminishing t-hi
"military or foreign affairs function" exemption from the
rulemaking procedures of the Administrative Procedure Act.
Changes in the adjudicative processes are contemplated
by H.R. 3561, H.R. ?3562, H.R. 3565 and the first three secti
of H.R. 35663. Quasi-judicial procedures within the Departme
of the Defense are presently exempt from the strictures of
the Administrative Procedure Act. Nothing in these legislat
proposals appears to seek a change in that exempt status.
Therefore, as to the proposals relating to the adiministrativ,
adjudication process, the Department defers to outer agencies
having a greater involvement with the problem.
Section 4 of H.R. 3563 proposes a new section to be adde
to subchapter II of chapter 5 o title 5, United States Code.
The proposed addition would prohibit any agency from making
any statement or releasing any document concernin4 or relatir
to an agency investigation or proceeding if the re .ease tic ,.
harm any person in business, property, or*reputation, unlesz
"the benefit to the public clearly exceeds the potential har-
to the person adversely affected." The section further conte
plates advance warning by the agency to a person about whom
the derogatory mate=ial relates. Finally, it authorizes civi
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action either in equity or by extraordinary legal remedies.
It does not purport to amend the Federal Tort Claims Act tc
permit an action in damages for defamation.
We believe that section 4 of H.R. 3563 would not subst
tially alter present departmental policies and practices.
addition, it is doubtful that the proposal would have frequ
application to the Department's operations. We therefore d
to other agencies having greater concern over the section.
Section 1, H.R. 3564, amends section 551(4) of titl-e 5
United States Code, to'divide the older definition of "rule'
into distinct definitions of "rule" and. "ratemaking and cog;
proceedings." This can have little foreseeable imcsact on ti
Department of Defense. Accordingly, we defer to the Departr
of Justice and other agencies more directly concerned.
The apparent purpose of section 2 of H.R. 3564 is to gi
the Public more notice and greater opportunity to participat
in rulemaking. It seeks to accomplish that end by substitut
for the blanket "military or foreign affairs function" exemp
a narrow exclusion. This substitute measure, subsection 2(1
would only allow avoidance of the notice and public partici
process if the subject matter of the proposed rule was class:
pursuant to the standards set forth in an Executive order ant
such classification was ih fact proper.
The provisions of section 2(1) would apply the standards of disclosure
in the Freedom of Information Act to the rulemaking procedures of the
Administrative Procedures Act. This provision could permit a litigant
to halt issuance of a rule essential to national security an the basis that
the classification was improper. Although the propriety of a classifica?
tion may be germane to the ultimate release of a document under the
Freedom of Information Act, it is ancillary to the necessity for pro-
mulgation of the rule. The swift and unencumbered issuance of rules
covering both classified and unclassified matters is of paramount
importance to our national defense.- . Any procedures that would create
administrative delay in the promulgation or application of such rules
-would be harmful to the national defense. The public interest in proper
classification is adequately served by the provisions for release of such
information under the Freedom of Information Act.
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The current exemption for matters involving a military or foreign affairs
function has proved to be of great importance to the Department of Defens
The worldwide operations of the Department often call for expeditious
guidance on matters essential to the national defense. Subordinate
commands, in turn, frequently issue regulations interpreting Department`
of Defense Directives and establishing local policies. If all such directive
were published for notice and public comment, action by the Department
of Defense and its components would be hopelessly encumbered.
Section 2(3) of the bill, which includes national defense within the public
interest exemption, provides insufficient. protection for the national
security interests of our country. The judicial tests used in applying the
public interest" exemption should not be imported into the field of niational
defense. Those charged with the responsibility for the national defense
should not be placed in the position of weighing the public interest in
notice and comment against the public interest in national defenses rather,,
the requirements of national security dictate that such policymakerc
have the authority to invoke the interest of national defense when they
determine that such interest does not permit a waiting period for notice
and eomrnPrit
n
vo ve xn notice and comment proceedings. Therefore, the prepubli.catio`
requirements should be applied only to the executive headquarters of the
Department of Defense and the Military Departments. The opportunity for.
the public to petition for issuance, amendment, or repeal of a rule can
provide a sufficient mechanism for public participation at the local level.
Third, rulemaking at the departmental level must not be inhibited by the
In view of the foregoing, the Department objects to the provisions of
H. R. 3564 that would equate the military and foreign affairs exemption
with the public interest exemption. The Department recognizes that public
participation in rulemaking can playran important role where expeditious
promulgation is not required. The Department has adopted a procedure
for such public participation. 32 .CFR Part 296. The Department cannot
support modification of the military and foreign affairs exemption unless
the following provisions are incorporated into any change. First, there
must be a blanket exemption for all classified matters. The propriety
of the classification should not be imported into the rulemaking procedure;-
rather, it should be reserved for questions as to the release of documents
under the Freedom of Information Act. Second, prepublication should not
be required as a part of rulemaking by subordinate commands. Subordinat
commanders must have the freedom to act expeditiously without being
i
1 d
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same "public interest" balancing? test that is used in measuring the pr
publication requirements in ? matters other than the national defer
Likewise, the determination as to whether the national defense inters,
requires the Department to forego prepublication. should be left in the
sole discretion of the Department, and should be reviewable only for a
of discretion. Use of an external standard such as the "good cause"
requirement would place an unwarranted burden on the expeditious poi
making essential to the national defense.
Subsection (2) of section 2 of H.R. 3564 would repeal the exemption
from the rulemaking procedures for matters relating.to public propert
loans, grants, benefits, and contracts. These constitute the so-called
"proprietary exemption. " The Department objects. to this subsection 'a
viewed in the context of the other provisions of H. R. 3564. As previo
noted, the national defense exemption in H.R. 3564 is not sufficient to
meet the needs of national security. The Department would not object
to repeal of the proprietary exemption if appropriate modifications we:
made in the national defense exemption as outlined above. Functions
related to national defense, including proprietary functions, cannot be
susceptible to inordinate administrative delays at times when expeditia
action is required.
Accordingly, it is recommended that Section 2 of H. R. 3564 be modifie
as follows:
SEC. 2. Section 553 of title 5, United States Code, is amended
as follows:
(1) Paragraph (1) of subsection (a) is amended to read as
follows:
"(1) a matter pertaining to a military or foreign affair
function of the United States that is kept secret in the
interest of national defense or foreign policy pursuant
to criteria established by Executive Order or statute.
"(2) a matter relating to agency management or
personnel. ".
(2) The third sentence of subsection (b) is amended to read
as follows:
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"(A) to interpretative rules, general statements of
policy, or rules of agency organization, procedure, o,
practice:
"(B) when the agency for good cause finds that notice
and public procedure thereon would be impracticable,
unnecessary, or contrary to the public interest. The
agency shall publish in the document promulgating
each rule issued in reliance upon this provision
either (i) the finding and a brief statement of reasons
therefore, or (ii) a statement that the rule is within
the category of rules established by a specified rule
which has been previously published and for which
the finding and statement of reasons have been made; a
"(C) in any other matter pertaining to a military or
foreign affairs function of the United States when the
agency finds that notice and public procedure thereon
would be contrary to the interest of national defense
or foreign policy. The agency shall publish in the
document promulgating each rule issued in reliance
upon this provision, either (i) the finding and a brief
statement of reasons therefore, or (ii) a statement
that the rule is within the category of rules established
by a specified rule which has been previously puslished
and for which the finding and statements of reasons
have been made. "
(3) Subsection (e) is redesignated as subsection (f).
(4) Section 553 is further amended by inserting immediately
after subsection (d) the following new subsection:
"(e) In a matter pertaining to a military or foreign
affairs function of ,the United States, subsections (b) -
(d) do not apply to the Department of Defense except
for rulemaking by the executive parts of the Depart-
ment of Defense and the Military Departments. "
The Office of Management and Budget advises that, from the standpoint
of the Administration's program, there is no objection to the presentation
of this report for the consideration' of the Committee.
Sincerely,
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