I am reminded of the power of the Census Bureau to secure even from the reach of subpena information that is collected for Census reports.

In short, when secrecy of the kinds of pollutants dumped into the environment could keep the Government and the public at bay, the corporations went for secrecy. But when the Government, in effect, said:

Look, we have discovered a law that was passed in 1899, a couple of years ago, and we want to enforce it, but there are 40,000 daily corporate violators of this criminal statute, dumping pollutants into navigable waterways without a license or permit,

the Government is going to set up a permit system.

In order to set up a permit system it has to get the information about the pollutants from each company applying for the permit. But these companies, apparently, will be quite willing to exchange this information in return for a permit that would get them out from under the violation of the 1899 act.

The extent of the corporate secrecy tension in the last 8 years in the pollution area extends to, in effect, telling the public the following: "We are not going to tell you what processes are being dumped into the environment that are jeopardizing your health and safety." In other words, the companies are claiming and the Government is acknowledging a trade secret in lethal contaminants, which is even extreme for some of these polluters to contend. (See exhibit 9 in app. IV.)

ENERGY SHORTAGE

Energy shortages is the fourth category.

Senator Lee Metcalf has fought long and hard to get the State utility commissions and the Federal Power Commission to collect and make available information essential both to regulators and to citizens who hope to measure the effectiveness of those regulators.

For the last several years, oil and gas producers have been bewailing the critical shortage of energy fuels, yet they refuse to disclose the data upon which their predictions of an energy crisis is based. (See exhibit 10 in app. IV.)

It took a former member of President Nixon's Council of Economic Advisers, Mr. Houthakker, to release a statement about 3 months ago criticizing the myth that the oil energy companies are portraying around the country, that there is an energy shortage.

I will try to obtain a copy of that statement for the record. (See exhibit 11 in app. IV.)

The National Petroleum Council serves as the primary source of information for the Interior Department, the American Gas Association is the Federal Power Commission's source of information on gas reserves. But they refuse to make the basic data available and the Federal Power Commission refuses to demand that they do otherwise. All the public or the Commission can see are aggregate figureswhich, by the way, have been seriously challenged as a gross overstatement by the Commission's own staff. The Commission's latest "concession" is to set up an independent body of petroleum geologists to sample the hard data on which estimates of future reserves are based.

Again, the data will never be publicly available and will never be available to the staff of the Commission. Yet, these reserve estimates will form the basis for pricing decisions which will cost industrial and individual and family gas consumers hundreds of millions of dollars.

This, I submit, is massive regulatory fraud grounded on corporate secrecy and the Government's willingness to condone it. The issue is elaborated in my testimony.

EMPLOYMENT INFORMATION

The fifth category is Employment Information. Most corporations refuse to make available statistics on the race, sex, age, and job status of their work force. For small companies, the data is available by direct observation of the plant or office. Yet, the giants have escaped public accountability for their employment practices even though national policy as defined by Congress and as proclaimed by the last three Presidents demands that they be accountable for discriminatory employment practices. (See exhibit 12 in app. IV.)

The McDonnell Aircraft Corp., a major defense and aerospace contractor, even told the Civil Rights Commission that the details of its affirmative action plan to recruit minority employees was a trade secret. The Department of Defense did not disturb that categorization. One of the premises underlying the new Occupational Safety Act is that employees should be fully advised of the risks involved in their work and should be placed in a position to protest threats to their health and safety caused by polluted and/or dangerous in-plant environment.

Under the act, workers and their representatives are permitted to initiate complaints to the Occupational Health and Safety authorities of the Labor Department and even to request that an entire plant or portions of the plant be shut down, if the danger is so imminent as to threaten death or serious injury.

But how is the worker to know that mercury poisoning, for instance, can cause serious injury and that his work environment contains excessive quantities of mercury?

The Allied Chemical Co. at its chlorine gas plant in Moundsville, W. Va., routinely tested workers' urine for the presence of mercury. Workers with quantities of mercury greater than company-established tolerances were moved to parts of the plant where apparently little or no mercury vapor was present.

One worker later reported that he had been pulled off the job 17 times in this process. Ultimately, workers reported the situation to the Occupational Safety and Health authorities who found the company guilty of a serious violation of the law. The company made no effort to report to workers the levels of toxic substances present in different parts of the plant, nor the identity of these substances.

Nor did the company ever suggest the risks the workers were running in being exposed to mercury vapor over long periods of time, nor did it report the extent to which it was temporarily shifting workers around to lower the level of mercury in their bodies. Only through a fortuitous set of circumstances did the workers learn the full implication of what was happening to them.

83-437-72-pt. 2-2

This is corporate secrecy in one of its most tragic forms. The company had apparently set arbitrarily high tolerance levels for mercury, far greater than those generally regarded as acceptable even with the present limited state of knowledge about the effect of concentrated dosages of mercury on the human body.

At last report, Allied had taken a number of significant steps acceptable to both the workers and the Agency, but was refusing to disclose the results of its own surveys of mercury vapor in the plant.

Senator NELSON. Who was refusing to disclose to whom? The public or the Government?

Mr. NADER. To the workers and to the Government.

The Chairman of the Board of Allied Chemical, it might be added, is former Secretary of Commerce John Connor, who should know something about Government and information policy.

In short, I think what we are saying, Mr. Chairman, is that corporate secrecy in these areas, in these dozen areas, and particularly in the area of environment, product safety, occupational safety, leads to as serious a deprivation of a human being's constitutional rights as the stifling of freedom of speech, at least.

This is a stifling of the freedom to continue one's occupation in a healthy environment. That is at least as serious as the stifling of freedom of speech.

While the Supreme Court and the Government, and many Members of Congress, have recognized the critical importance of the civil liberties aspect under the Constitution, they have only begun to recognize the importance of the physiological integrity of human beings to escape these serious impacts-impacts that they could escape if they had free access to this information and it was publicly known by Government agencies at all levels as well.

TAX INFORMATION

Tax information is another important category. It is hardly known to people.

There are numbers of Internal Revenue Service auditors who spend virtually year-round at General Motors. One can imagine the size of the job. This closeness, and the possible preferential access that these companies have to resolve disputes right on their premises, so to speak, without any disclosure, bears much greater scrutiny.

Tnited States Steel, to move to a property tax area, has, in effect, told the Gary, Ind., property tax collector that it is none of his business what kind of investment the company is putting into taxable plant facilities.

The IRS and its corporate clients strike almost 30,000 private tax deals a year which in effect become secret law between the Service and the corporation, applicable to no other taxpayers, business or individual, and not subject to judicial or any other form of review. These are the private rulings. No doubt the corporation which can afford a battalion of lawyers and which might have some political clout comes off better than the hardware store owner from Dubuque who might be sent to prison for violating the same laws which his giant competitors can have reinterpreted for their benefit. (See exhibit 13 in app. IV.)

In short, they have right on their premises the most authoritative tax counsel there is, which is the Internal Revenue Service, itself. They are not only explicit rulings, but all kinds of informal rulings that are made just on the spot in negotiations between the Government auditors and the corporations.

It is very rare for these companies to be taken to the formal stage of litigation in the tax area. When it comes to property tax, look at the situation. Here we are with an economy still growing. It is projected to increase by $100 billion, by Mr. Heller, next year alone. And yet, in the last few weeks we have seen the closing down of schools in areas around the country, elementary and secondary schools, because they no longer have sufficient revenues, many of them coming from the property tax.

Indianapolis, Ind.; Independence, Mo.; Dayton, Ohio-those are only three school systems that have closed down in the last few days waiting for next year's tax revenue. Gary, Ind., schools have been continually on the brink of bankruptcy because in very significant part the largest steel plant in the world, into which U.S. Steel is estimated to have poured at least $1 billion worth of plant and equipment, refuses to pay its fair share of property taxes. It refuses to let the assessor have access to its books. It refuses on occasion to even file building permit as required by law because it would have to, in effect, submit data as to the value of the equipment or the construction that is the subject of the building permit.

This is a lawless corporation. It is a blue chip corporation. The deprivation of information flow to the public about the property valuation of this plant has direct consequences in terms of the quality of education, in terms of whether there is going to be local education for the school children in Gary, as well as a great many other municipal services.

INFORMATION ON POLITICAL ACTIVITY

The seventh category deals with Information on Political Activity. The expenditure of corporate and trade association energy on influencing the behavior of legislators, regulators, and even Presidents is a national scandal-not because the public has access to their expenditures, but because a few persistent reporters have been willing to follow the labyrinthian channels of campaign financing and high-powered lobbying. (See exhibit 14 in app. IV.)

It is mockery of the political process when the milk-producing co-ops can get away with giving the Republican campaign war chest a quarter of a million dollars a few months before and after the Department of Agriculture in a major reversal of policy opts for higher milk supports.

This episode was uncovered only because it was spectacularly lavish and because a reporter for the Minneapolis Tribune pierced the veil of hundreds of dummy committees designed to keep the source of funds off the public record.

PROCUREMENT

This is another area of corporate secrecy, as well as dividing up bid projects and the like. Small businessmen do not have meaningful access to those who spend billions of dollars for supplies and services needed for the public sector. Giant defense contractors have direct access to

the highest levels of the Department of Defense through their industry advisory committee. And the public is unable to examine even after contracts have been awarded the data submitted to justify a contract award. (See exhibit 15 in app. IV.)

Furthermore, the whole process of government procurement is currently undergoing a fundamental change which will largely insulate the procurement process from congressional as well as citizen scrutiny. Agencies are now "contracting out" vast portions of their duties to private consultants and giant "systems" contractors. In a sense, the whole postal service is contracted out to a corporation which has all the benefits, but none of the burdens, of being a public trust. (See exhibit 16 in app. IV.)

I will submit for the record some of the things that are going on, which were disclosed a few weeks ago, between the Postal Corp. and the IBM Corp. (See exhibit 17 in app. IV.)

OWNERSHIP INFORMATION

The ninth category is a sort of fundamental one: Who owns America? No one really knows who owns the giant corporations that dominate our economic life. Neither the SEC, the Civil Aeronautics Board nor the Federal Power Commission penetrate the veil of so-called nominee shareholders to determine who are the actual owners-corporate or individual of the industries they purport to regulate. (See exhibit 18 in app. IV.)

Senator Metcalf has lifted the veil a bit by publishing in the Congressional Record in June the nominee list kept by the American Society of Corporate Secretaries for the benefit of members.

The ICC, which has supposedly been regulating the railroads since the 1880's, still doesn't know who owns the railroads. (See exhibit 19 in app. IV.)

RECOMMENDATIONS

I would like to move to the recommendations at this point, Mr. Chairman.

First, the concept of "trade secrecy" and "confidentiality" must be redefined in virtually every regulatory act and administrative regulation applicable to corporate behavior. Such new definitions would specifically enumerate the types of information eligible for confidential treatment. (See exhibit 20 in app. IV.)

Second, no information submitted to any governmental agency by any business enterprise should receive confidential treatment in the absence of a showing that the business interest in secrecy outweighs the public's right to know. Any agency decision in favor of confidential treatment should be subject to judicial review.

Third, corporate income tax returns-especially those of the top 100 to 500 companies by sales-should be public information. Summaries of these returns should be published annually and copies of individual returns should be made available at cost.

Mr. Chairman, your home State Wisconsin denied confidentiality to virtually all State income tax returns from the early twenties until

1953.

Senator NELSON. I might say, at the time the legislature voted to close the returns, I was there and voted against it.