Case No. VFA-0193, 26 DOE ¶ 80,146

December 23, 1996

DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Appeal

Name of Petitioner: Michael A. Grosche

Date of Filing: November 26, 1996

Case Number: VFA-0193

On November 26, 1996, Michael A. Grosche of Norwalk, Connecticut completed the filing of an Appeal from a determination issued on June 7, 1996, by the Office of the Inspector General (OIG) of the Department of Energy (DOE). That determination denied in part Mr. Grosche's request for information submitted pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, as implemented by the DOE in 10 C.F.R. Part 1004. This Appeal, if granted, would require the DOE to release the withheld information.

The FOIA requires that agency records held by a covered branch of the federal government, and that have not been made public in an authorized manner, generally be released to the public upon request. 5 U.S.C. § 552(a)(3). The FOIA also lists nine exemptions that set forth the types of information that may be withheld at the discretion of the agency. 5 U.S.C. § 552(b)(1)-(b)(9); 10 C.F.R. § 1004.10(b)(1)-(b)(9). The DOE regulations further provide that documents exempt from mandatory disclosure will nonetheless be released to the public if the DOE determines that disclosure is not contrary to federal law and is in the public interest. 10 C.F.R. § 1004.1.

BACKGROUND

In April of 1992, OIG received information from the Defense Contract Audit Agency regarding alleged labor mischarging on DOE projects from August 1990 to April 1991 at Ebasco Services, Inc. These allegations were made by Mr. Grosche. OIG investigated the allegations for possible criminal violations under 18 U.S.C. § 287 (dealing with making and presenting false claims) and for possible violations of 31 U.S.C. § 3729 (The False Claims Act). The OIG examination did not substantiate the allegations for some of the persons it investigated. For the other persons investigated, the OIG found that section 31.202 of the Federal Acquisition Regulation (FAR), 48 C.F.R. § 31.202 (dealing with direct costs) may have been violated by

incorrect and inaccurate allocation of time to various accounts. However, OIG determined that there was no loss or overcharge to the DOE, and that the net effect of making the accounting adjustments would be a credit to Ebasco Services, Inc. That is to say, the misbilling resulted in a lower cost to the government than if the hours had been correctly billed. The OIG then closed its investigation of this matter.

Mr. Grosche requested documents dealing with the OIG investigation and findings. OIG identified three responsive documents: (1) a memorandum summarizing findings and recommending closure of the case; (2) a memorandum from the Chief Financial Officer at the Savannah River Operations Office; and (3) an Administrative Report on the investigation to the Manager of the Savannah River Operations Office. Portions of all three documents were withheld because "[n]ames and information that would tend to disclose the identity of certain individuals have been withheld pursuant to Exemptions 6 and 7(C)." Mr. Grosche appeals all of the withholdings.

ANALYSIS

Both Exemptions 6 and 7(C) allow the withholding of information dealing with personal privacy. The former permits the non-disclosure of "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of privacy." 5 U.S.C. § 552(b)(6); 10 C.F.R. § 1004.10(b)(6). Exemption 7(C) applies to a much narrower class of cases, but has a less exacting standard that gives it somewhat more expansive coverage. Under Exemption 7(C), agencies may withhold "records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information... (C) could reasonably be expected to constitute an unwarranted invasion of a personal privacy." 5 U.S.C. § 552(b)(7)(C); 10 C.F.R. § 1004.10(b)(7)(iii). Both of these exemptions require a balance of the interest in personal privacy in the withheld information against the public interest in the same information. There are, however, two significant differences between Exemptions 6 and 7(C). Under Exemption 7 (C), the information must have been compiled for law enforcement purposes. In addition, because information may be withheld where there is only a reasonable expectation of an "unwarranted invasion of a personal privacy," there is a lower threshold of privacy interest employed in Exemption 7(C) than in Exemption 6 where the balance calls for a "clearly unwarranted invasion of privacy" (emphasis added). Because, as we find below, the documents at issue in this case meet Exemption 7's threshold test, we need only examine the withholding under the standard of Exemption 7(C). See, e.g., Burlin McKinney, 25 DOE ¶ 80,149 at 80,620 (1995); K.D. Moseley, 22 DOE ¶ 80,124 at 80,550 (1992).

Applying these standards to the records in this case, we find that the records sought by the appellant were compiled for a law enforcement purpose. The courts have held that where Inspectors General are investigating potentially criminal activity, they are engaged in law enforcement activities for the purposes of Exemption 7(C) even if they conclude there was no criminal wrongdoing. Ortiz v. Department of Health and Human Services, 70 F.3d 729, 732-33 (2d Cir. 1995) (and cases collected therein), cert. denied, ___ U.S. ___, 134 L.Ed.2d 546, 116 S.Ct. 1422 (1996). We also have made extensive examinations of the Inspector General's activities in this area and found that they are law enforcement activities. See, e.g., Stoel Rives, LLP, 25 DOE ¶ 80,189 at 80,723 (1996); Robert Burns, 19 DOE ¶ 80,134 at 80,596-97 (1989). In this case, the investigation into potential criminal activities clearly demonstrates the relation "to the enforcement of federal law and ... a rational connection between the investigative activities and the agency's law enforcement duties" that meets the Exemption 7 threshold test. Western Journalism Center v. Office of the Independent Counsel, 926 F. Supp. 189, 191 (D.D.C. 1996).

Once the material qualifies for Exemption 7 treatment, we consider whether release of the withheld material would result in one of the harms listed in Exemption 7. Ferguson v. Federal Bureau of Investigation, 957 F.2d 1059, 1065 (2d Cir. 1992). In this case, OIG believes release would harm the personal privacy of certain individuals and invoked Exemptions 6 and 7(C). Thus, the agency must perform the balancing test noted above. The OIG Determination Letter divided the withheld material into two categories: (1) names and (2) other information which might disclose individual identity. We will follow OIG's categories in this examination.

1. Names

In Documents 1 and 3, OIG withheld the names of persons it investigated who allegedly misbilled their time on DOE projects. In addition, in Document 3 OIG withheld the names of persons it interviewed in the course of its investigation. As we have stated previously, a name by itself does not create a protectable privacy interest for the purposes of FOIA exemption analysis. The News Tribune, 25 DOE ¶ 80,181 at 80,700 (1996). Rather, the privacy interest exists when a name is linked with information which reveals something personal or private about an individual. Id. at 80,699.

In this case, the names are linked with an OIG investigation into possible criminal conduct. Both this office and the courts have held time and again that a person has a strong privacy interest in the fact that he or she was subject to an investigation with potential criminal consequences especially where, as here, the investigation uncovered no criminal act. Stern v. Federal Bureau of Investigation, 737 F.2d 84, 91-92 (D.C. Cir. 1984); Abramson v. Federal Bureau of Investigation, 566 F. Supp. 1371, (D.D.C. 1983); Blumberg, Seng, Ikeda & Albers, 25 DOE ¶ 80,124 at 80,563 (1995); James E. Phelps, 20 DOE ¶ 80,169 at 80,702 (1990). The reason for this is simple and obvious. Linking a person with a potential criminal investigation could result in harassment and certainly would involve considerable embarrassment. Manna v. Department of Justice, 51 F.3d 1158, 1166 (3d Cir.), cert. denied, ___ U.S. ___, 133 L.Ed.2d 405, 116 S.Ct. 477 (1995); Wichlacz v. Department of the Interior, 938 F. Supp. 325, 333 (E.D. Va. 1996). The same is true for those who were interviewed during the investigation. Id.; McDonnell v. United States, 4 F.3d 1227, 1255 (3d Cir. 1993); Jon Berg, 22 DOE ¶ 80,140 at 80,587 (1992).

Conversely, the public interest in this information in this case is minimal. In the case of Exemption 7(C), the Supreme Court has constructed a narrow public interest standard. Information falls within the public interest for the purposes of the FOIA only if release of the information is likely to contribute "'significantly to public understanding of the operations of the government.'" Reporters Comm. for Freedom of the Press, 489 U.S. 749, 775 (1989) (quoting 5 U.S.C. § 552(a)(4)(A)(iii)). See also Department of Defense v. Federal Labor Relations Auth., 510 U.S. 487, 494-95 (1994). Release of the names in this case would add little to the public's knowledge about governmental activity. Rather, it is the information dealing with what happened, the government's investigation and conclusions which serve the public need for insight into the workings of government. James L. Schwab, 21 DOE ¶ 80,117 at 80,557 (1991). Thus, under the circumstances of this case, release of the names of the private citizens who OIG concluded did not mischarge the government would not advance the public's understanding of government. Similarly, knowing the names of those who were interviewed would not appreciably assist the public understanding of government. In fact, both this office and the courts have found that withholding the names of witnesses better serves the public interest by allowing those witnesses to speak freely to government investigators without fear that their identities will be disclosed and that they will be subject to possible harassment. Kiraly v. Federal Bureau of Investigation, 728 F.2d 273, 278-79 (7th Cir. 1984); Holy Spirit Ass'n for the Unification of World Christianity v. Federal Bureau of Investigation, 683 F.2d 562, 564-65 (D.C. Cir. 1982) (per curiam); Lloyd R. Makey, 20 DOE ¶ 80,109 at 80,523-24 (1990); The Die-Gem Co., 19 DOE ¶ 80,124 at 80,569 (1989).

Turning to the balancing test on these names, we find that in the present case there is little or no public interest in the additional information to be gained by release of the names. On the other side of the scale there is a considerable privacy interest in not being linked with allegations of potential criminal conduct (particularly when OIG has determined there was no criminal act). There is also a strong privacy interest in not being identified as a person interviewed in a criminal investigation. Thus, on balancing these facts, we find that the privacy interest of these individuals outweigh the public interest and that release of the names would pose an unacceptable breach of personal privacy. See, e.g., Fund for Constitutional Gov't v. National Archives and Record Admin., 656 F.2d 856, 866 (D.C. Cir. 1981) (where person investigated but not charged for potential criminal act, release of name is "a severe intrusion on the privacy interests of the individual and should yield only where exceptional circumstances militate in favor of disclosure"); L&C Marine Transp., Ltd. v. United States, 740 F.2d 919, 922-23 (11th Cir. 1984) (witnesses); Southwest Resource Development, 24 DOE ¶ 80,164 at 80,654 (1995). Accordingly, we find that OIG properly withheld these names under Exemption 7(C).

Notwithstanding these factors, Mr. Grosche contends that there is a strong public interest that outweighs any intrusion into the privacy of the persons whose names were withheld. In particular, he states he is seeking the names of those who defrauded and committed a crime against the government. He states that release of this information would deter future criminal acts and that other government agencies should have this knowledge about these individuals before hiring them to manage financial accounts. He also states he needs this information to pursue a Qui Tam action under the False Claims Act as well as to seek reconsideration of a whistleblower complaint he filed with the DOE's Office of Contractor Employee Protection.

Each of Mr. Grosche's claims can be simply answered. First, although the report does make clear that there was inaccurate billing of time and a possible violation of the FAR, the report also makes clear that there was no loss to the government. Thus, contrary to Mr. Grosche's assertion, there is no evidence of fraud in the record of this FOIA appeal. Absent some special circumstance not apparent in this case, where the OIG finds no fraud or criminal violation, the privacy interest outweighs the public interest in the release of the names of persons investigated, and the public interest is satisfied by release of the facts and conclusions of the investigation. Robert E. Caddell, 20 DOE ¶ 80,103 at 80,508-09 (1990).

In regard to the other two claims, even if we were to assume that pursuing his Qui Tam and whistleblower complaints constitute a public interest for the purposes of the FOIA, Mr. Grosche has not explained how the withheld information would aid his pursuit of these suits and thus aid the public understanding of some governmental operation. Mr. Grosche informed us he already knows all of the names OIG withheld. Given the imposition on personal privacy, it is difficult to see how release of information already in his possession would advance his suit and aid the public interest. Indeed, if Mr. Grosche were to bring this suit in the Second Circuit where he resides or in the Third Circuit where the misbilling apparently occurred, release of the names might in fact impair his suit. See United States ex rel. Doe v. John Doe Corp., 960 F.2d 318, 322-23 (2d Cir. 1992) (public availability of information in report makes the False Claims Act action publicly known and limits the class of people who may bring suit); United States ex rel. Stinson v. Lyons, Gerlin & Bustamante, P.A. v. Prudential Ins. Co., 944 F.2d 1149, 1155-60 (3d Cir. 1991) (same). In addition, the potential invasion of personal privacy on these grounds also seems unwarranted in this case because the statute of limitations may have expired for at least some of Mr. Grosche's claims. 31 U.S.C. § 3731(b)(1) (6 year statute of limitation from date of violation). Similarly, in seeking reconsideration of his whistleblower claim, Mr. Grosche has not explained how release of the names would contribute to public understanding of government operations. Again, we find that release to the public of these names for these reasons seems unreasonable given the fact that OIG now has authority for initial consideration of all DOE contractor employee whistleblower cases. See H.R. Conf. Rep. No. 104-782 at 83 (1996). Because Mr. Grosche knows the withheld names and because OIG has access to its own files, we can see nothing that can be added by release of names that would justify the intrusion into those persons' privacy.

Although we find that OIG properly withheld the names of persons investigated and the names of witnesses it contacted in the course of its investigation, there is another set of withheld names that do not appear to belong in either of these two classes. In Document Number 2, OIG withheld the names of two persons who are apparently federal auditors. The first person works for the Defense Contract Audit Agency. The second person works for the Savannah River Operations Office of Procurement and Contractor Human Resources. Document Number 2 memorializes a conversation between these two persons concerning future checks on time billing. We have previously held that federal employees carrying out their official duties have no privacy interest in having their names linked with their work-product unless it reveals something personal or private about that individual or there are other special circumstances (such as a reasonable, articulable belief of potential harassment). The Cincinnati Enquirer, 25 DOE ¶ 80,206 at 80,769 (1996); William H. Payne, 25 DOE ¶ 80,190 at 80,727 (1996). Document Number 2 seems to deal only with official business. Although the persons in this document do not appear to be sources or subjects of investigation and no other special factors appear to be present, we believe the best avenue is to allow OIG, which is most familiar with the overall file and with the circumstances surrounding this document, to focus on this document in particular and to determine whether these names may be released.

2. Other Information

OIG also withheld small amounts of a wide variety of other information. This includes, but is not limited to, general job titles, report and document titles, cost codes, accounts which were billed, subcontract numbers, pronouns, and contract types. None of this material has an inherent privacy interest. Nor does it appear to reveal anything personal or private about an individual. Conversely, much of this material seems to have a high level of public interest. For example, the public surely has an interest in learning which subcontracts are well or poorly managed. Also, the OIG determined that although there was no overbilling of the government, some of the billing did violate the FAR. The public has an interest in knowing all the pertinent facts of what constitutes compliance or a violation of the FAR. Cost codes and accounts billed for particular types of actions seem essential to complete the picture of activity. Even if this material might somehow reveal an identity of a person when coupled with other information, we have held that Exemption 7(C) may not be used to withhold information if there is sufficient public interest. See, e.g., Valley Times, 23 DOE ¶ 80,154 at 80,633 (1993). As we have done in similar cases considering nearly identical Determination Letter language and material which does not appear to have any privacy interest, we will remand the withheld material in this category to the OIG for further consideration. See, e.g., James L. Schwab, 23 DOE ¶ 80,146 at 80,614, 80,615-16 (1993).

It Is Therefore Ordered That:

(1) The Freedom of Information Act Appeal filed by Michael A. Grosche of Norwalk, Connecticut, OHA Case No. VFA-0193, is hereby granted in part as set forth in Paragraph (2) below, and denied in all other respects.

(2) This matter is hereby remanded to the Office of the Inspector General which shall either release the information previously withheld on which the foregoing Decision did not reach a final conclusion, or issue a new determination in accordance with the above Decision.

(3) This is a final order of the Department of Energy from which any aggrieved party may seek judicial review pursuant to 5 U.S.C. § 552(a)(4)(B). Judicial review may be sought in the district in which the requester resides or has a principal place of business, or in which the agency records are situated or in the District of Columbia.

George B. Breznay

Director

Office of Hearings and Appeals

Date: December 23, 1996