follow from the existence of an area of legislative competence to which they have relevance. Where, as here, the documents are closely related to the operations of a non-federal agency which is principally the creation of two sovereign states, the doctrine of 'executive privilege' reinforced by considerations of comity basic to the successful operation of our Federal system, it is argued, bars Congress from access.
The documents sought to be immunized may be divided into three categories: (a) communications to and from the Governors and their staffs; (b) those prepared and circulated solely among the Authority staff and commissioners; and (c) confidential reports to the Authority by outsiders.
At the outset the matter of the Governors' communications must be considered. Although they relate to the operations of the Authority, these documents are directly involved in the functioning of the office of the chief executive of a sovereign body in our dual form of government. Thus it is arguable that they occupy a uniquely privileged status. However, the Court need not here decide whether Congress has the power to require the production of these documents, since the defense of special gubernatorial privilege was never properly raised before the committee. At no time during the course of the inquiry -- or, indeed, during the contempt proceeding in the House -- was Congress apprised that the committee's subpoena called for documents of this unique character.
Had Mr. Tobin so indicated to the committee, with anything approaching the particularity he was achieved in his presentation to this Court, the committee might then have determined, upon deliberation, whether to test its power in this area or to seek some mutually satisfactory resolution of the problem.
Having failed to give the committee the opportunity to deal with the issue, Mr. Tobin may not properly assert it here; and the Court would be stretching the limits of its discretion to rule upon an issue neither properly raised nor necessary to decision which is of such potentially great Constitutional and political importance.
As to the other materials the Authority contends, first, that the documents in each of these categories are absolutely privileged from demand by Congress. In the alternative, it maintains that if the proper test is to balance Congress' need for them against injuries to this compact and to the Federal system that might ensue from disclosure, the balance is in favor of non-disclosure.
Preliminarily, the Court notes that it has been unable to find any clear authority relating to the right of Federal agencies and departments to withhold documents from Congressional scrutiny on the grounds of executive privilege.
Moreover, while the Supreme Court has upheld the power of a Congressionally-created commission to secure state voting records,
the scope of the doctrine of executive privilege as claimed by state agencies against Congress is not clear. The Port Authority, however, is a hybrid;
its very existence depended upon joint action by the States and Congress, and aspects of its continued operation remain subject to the legislative power of both. Thus, neither the doctrine of separation of powers nor considerations of federalism can alone be dispositive of the arguments here, and it is necessary to look to the analogous cases and to factors bearing upon the use of the compact device to determine whether and to what extent these documents may be immune from Congressional scrutiny either constitutionally or as a matter of public policy.
The instances are few where absolute immunities have been judicially created. They include the right of an individual to invoke the self-incrimination bar of the Fifth Amendment against the demands of a Congressional committee;
the right of litigants and witnesses in court proceedings to invoke the recognized common-law privileges;
the Federal Government's right, in civil proceedings in which it is a defendant, to withhold military secrets;
the right of members of the Federal Executive to be absolutely free from private suits for libel based on statements made in connection with 'matters committed by law to (their) control and supervision;'
and the like privilege enjoyed by members of the judiciary.
The thread that ties these cases together is the importance of preserving uninhibited freedom to communicate or not to communicate where certain relationships are present. It would be impossible to qualify this freedom in any one situation without seriously impairing it or destroying it altogether.
However, in analogous situations where a conflict has been presented between asserted rights and privileges, often having Constitutional origins, courts have attempted to resolve the problem by balancing the interests in the particular case. This has been so, for example, where First Amendment rights have conflicted with the Congressional investigatory power;
where a criminal defendant's right to prepare his defense has clashed with the Government's interest inprotecting the flow of information from informants;
where a state's interest in maintaining an important activity has conflicted with the Federal power to tax;
and, significantly, where the interest of a defendant in a civil contempt case in preparing a full defense has conflicted with a Federal agency's asserted executive privilege for 'internal' documents.
The defendant argues, in contending for absolute immunity of compact authority documents, that permission for Congressional investigations into agency operations, even to the extent here contemplated, would 'supersede the States in their control of the internal management and policies of their agencies,'
and would 'destroy' compacts and severely inhibit states from entering into them. This would result, it is argued, because legislative scrutiny of agency internal documents would inevitably result in legislative dictation of agency decisions.
Furthermore, he says, with anything less than absolute immunity, administrative efficiency and the atmosphere of candor necessary to well-considered agency decisions would be destroyed; raw files containing unverified reports about innocent individuals might fall into the hands of publicity-seekers; and sources of confidential information necessary to agency functioning would be exposed or inhibited. In addition, it is argued, other sources of information exist from which the information can be secured.
In opposition to these arguments the Government contends that the Federal legislative function cannot be fettered by immunities attaching to non-Federal instrumentalities. The compact clause itself, it is argued, confers power to act in the national interest, and the power to investigate in furtherance of an exercise of this power cannot be defeated by asserted interests of lesser dimension.
Neither of these arguments in its full thrust is persuasive. First, as the Court has already noted, the existence of a power to investigate does not, irrespective of the extent of that power, immutably lead to control by the investigating agency. Moreover, the fact that in several recent compacts the Federal Government has been included as a participant and that Congress has expressly reserved power to secure compact agency documents of the type here at issue strongly suggests that no serious inhibition to use of the compact device is presented. In two instances, the Tennessee River Basin Water Pollution Control Compact
and the Wabash Valley Compact,
provision is made for Presidential appointment of a 'Federal representative.' In two others, the New York-New Jersey Transportation Agency Compact
and the Washington Metropolitan Area Transit Regulation Compact,
Congress has reserved the right of 'access to all books, records, and papers * * * as well as the right of inspection of any facility * * *.' Moreover, the recently signed compact to develop the water resources of the Delaware River Basin includes the Federal Government as a full partner with the State of Delaware, New Jersey, New York and Pennsylvania.
Finally, any impediment to the ideal effectiveness of compact agencies that might result from the denial of an absolute privilege cannot outweigh the impediment to Congress' ability to legislate effectively that would result from a grant of an absolute privilege.
On the other hand, the Court is not prepared to rule that in no situation can a privilege attach to documents of a compact agency. The Court believes that it is appropriate in this situation to establish a test which balances Congressional need for documents subpoenaed from compact agencies against the dangers to the particular compact involved and to the compact process in general which would result from the particular subpoena and investigation. If possible, attempt should be made to accommodate conflicting powers which overlap before it is decided that one must yield absolutely to the other. Honest and vigilant administration of the balancing test by the courts can accomplish this result. The Federal system is itself the product of accommodation between the need for central direction of affairs affecting the entire nation and the desire to prevent overcentralization; the compact clause is a more refined product of the same problem. In resolving the conflict between the interests, asserted in cases such as this, accommodation is also the natural course.
The committee's need for the documents is based principally on these factors: since its inception over forty years ago, the Authority has not been the subject of any continuous public scrutiny, nor has any detailed investigation into its operations been made; oral testimony and documents already available to Congress cannot convey a complete picture of the Authority or provide adequate groundwork for potential legislation; the importance of the national interests that may be adversely affected requires that any action by Congress be based upon the fullest possible information and an attempt to act on anything less would subject Congress to a charge of arbitrariness.114A
The Authority's interests in nondisclosure have been stated above, but they may be summarized as a desire to preserve free communication to and among Authority personnel, and a fear that confidential information may be used for improper purposes.
The Court believes that on the facts of this case the balance must be struck in favor of disclosure. First, two factors indicate strongly that there is no overwhelming need to keep these particular documents secret.
In 1952, when Congress was presented with the resolution to withdraw consent from the compact resolutions until reservations could be added, Mr. Tobin offered
'to place at the disposal of your committee whatever records, information, data, or other material which may be helpful to your staff in preparation for the hearings on this resolution.'
Moreover, the executive privilege argument was not raised by the Authority when a committee of the New Jersey legislature recently inquired into its operations, and by defendant's own admission he was, in connection with this inquiry,
'producing every paper in the Port Authority that the Commission asks for. They are entitled to every scrap of paper and every memorandum and everything we have * * * without exception.'
Defendant's attempts at trial to counteract the unfavorable implication of these statements was not convincing.
Second, the Court is confident that the committee will not needlessly reveal publicly Authority documents that would otherwise be confidential. That preservation of confidentiality wherever possible was, in fact the committee's purpose is indicated by its original offer to inspect and sift the documents at the Authority's New York headquarters. This purpose is further borne out by a statement made by a member of the full Judiciary Committee on the floor of the House during debate preceding the vote on the Committee's recommendation to cite Mr. Tobin for contempt:
'I, for one, fully realize that much of the material could and properly should be examined in executive session. Such a procedure would enable the committee to cull out the material from the immaterial. This procedure is frequently followed in judicial proceedings and as members of the Judiciary Committee, I am satisfied that such will be the course followed by the committee.'
These facts indicate to the Court that if the committee is given access to the documents, it will not reveal to the public, by leaks or otherwise, any which are not essential to its proper legislative purposes.117A
Third, the argument that enthusiasm for the compact device will be dampened if Congress is afforded access to documents such as these is not persuasive in view of the fact that the very states involved in this case have entered into another compact, in approving which Congress reserved the right to subpoena such documents.
It cannot be emphasized too strongly taht the conclusion reached here is the result of a balancing of the unique facts of this case. In a future situation involving this agency or another, the factors will have to be weighed afresh, and clearly relevant will be the way in which the powers here recognized are exercised.
V. The Defense of Superior Order
Mr. Tobin's Final defense is that his noncompliance with the subpoena was ordered by the Gvernors in their letters to the Commissioners on June 25.
The purpose of the misdemeanor statute upon which this information rests is
'to facilitate the gathering of information deemed pertinent to the purpose of an investigating committee,'
by deterring those who consider obstructing such work and by punishing those who actually do.
The statute's requirement that the contempt be 'wilful' is satisfied if 'the refusal was deliberate and intentional and was not a mere inadvertence or an accident.'
'No moral turpitude is involved;'
for example, wilfulness is not negatived by good faith reliance on the advice of counsel.
Of course, if the individual subpoenaed is not physically able to comply with the request, he cannot be convicted -- unless he purposely caused the disability.
It is a generally accepted doctrine in criminal law that orders of another are no legal defense to a charge of performing an act otherwise illegal, except where they carry a threat of physical retaliation.
However, with one significant exception,
orders from a superior have been held a defense in certain contempt of court proceedings involving subordinate Government employees.
Thus, if the June 25 letters, when viewed in total context, (a) deprived prived Mr. Tobin, without his assistance or consent, of the physical ability to produce the documents, or (b) constituted a legally sufficient justification for his refusal to produce, or (c) caused his default to lack the statutorily required wilfulness, they would be a valid defense to this prosecution.
(a) The record makes it clear that the defense of physical inability to comply cannot be invoked, for the materials were not removed from Mr. Tobin's control. After the Governors' letters they remained exactly where they were, and Mr. Tobin retained access to them. This is borne out by his trial testimony that he has, without the Governors' consent, offered to produce for the New Jersey legislature all Authority documents.
(b) Although no court has ever decided whether the order of a superior justifies a Government official in not complying with a Congressional mandate to produce information, a body of precedent does exist with regard to court orders. The relevant cases
reveal that refusals to comply, based upon the Fderal Housekeeping statute
and regulations promulgated thereto, will generally be honored by the courts.
There are two principal policy motives which underlie this judicial attitude: (1) since requests for documents and information come from a great number of sources, it is desirable, in order to assure that consistent and responsible decisions are made, to centralize in one authority in each department the power to determine whether to honor such requests,
and (2) it is necessary, in order to avoid inhibiting those who furnish information to the Government, to insure that such information will not be released except by officials of high rank, in whose discretion informants presumably would have greater confidence.
However, where neither policy is operative, and where the sole purpose of the superior's directive is to resist the order to produce, the superior's mandate will not constitute justification.
The Court is of the view that this case is controlled by the reasoning implicit in Sawyer v. Dollar,
and that the policies operative in the Housekeeping Statute cases are not present here. The purpose of the Governors' letters, by their own language, was not to centralize determinations about release of Authority documents; such power was already centralized in Mr. Tobin. Nor was it to preserve the continued flow of outside confidential communications to the Authority; the defense of privilege of the subpoenaed documents could have been and, indeed, was forcefully asserted before the committee by Mr. Tobin, the custodian of the documents, who reflected the attitude of all connected with the Authority. Rather, the letters' objective was either to compel the committee to confer with the Governors before the inquiry proceeded, or to insure default on the subpoena to precipitate a court test of the committee's power to demand the subpoenaed material.
As such, it could not constitute a justification for Mr. Tobin's refusal to produce the documents.
(c) Mr. Tobin also seeks to establish by the letters that his conduct lacked the wilfulness required by the statute. As phrased by the amicus brief filed in this case by New York and New Jersey
'it runs contrary to out system of justice to allow a person to be held criminally liable when he has acted in accordance with orders from his superiors and his oath of office.'
This is so, it is argued, principally because if Mr. Tobin disregarded the directive, the Governors would then dismiss him from office or veto the Commissioners' action renewing his contract; while if he disobeyed the subpoena and it were upheld, he would be found guilty of a Federal crime and would face the possibility of a jail term. The Court, it is contended, should construe the statutory requirement of wilfulness to avoid such a result.
Had the record only contained Mr. Tobin's statement at the return of the subpoena that he had recommended non-disclosure to the two Governors, the Court might conclude that he acted only within the scope of his proper duties as the Governors' advisor, and thus the construction contended for might be permissible. However, from a study of the entire record, the Court is satisfied that the Governors' letters were the product of efforts to justify Mr. Tobin's continuous position of noncompliance. His role was thus more than that of an advisor, and the letters were a ratification of his position rather than a command to assume that position. When the letters are thus viewed, the Court concludes, refusal to obey the subpoena was wilful within the meaning of the statute.
These factual conclusions are justified by Mr. Tobin's own statements and by documents presented to the committee and to the Court. He testified on trial that from the time he received the first letter from the Judiciary Committee Chairman in March, 1960, he had thought 'it would be a grave mistake for the two States to permit this sort of investigation * * *.'
The import of the remainder of his testimony is that he encouraged, assisted, and concurred in a letter sent to the two Governors on March 18, 1960, over the signatures of the Authority Chairman and Vice-Chairman, the last sentence of which stated:
'We will not grant them (the committee) access to internal administrative material or the day-to-day working files of the various departments of the Port Authority until we receive your authorization to do so.'
Further, Mr. Tobin testified that he participated in many meetings between the Authority staff and Commissioners and the Governors, which were held not to discuss whether there ought to be production of the Authority documents, because all agreed that there should not be, but to resolve 'differences * * * as to procedure * * * the two Governors should take.'
Just as one summoned by a Congressional committee cannot destroy subpoenaed documents and then claim that his failure to produce them was not wilful, one cannot take a position of noncompliance, play a major role in procuring a directive to confirm that attitude, and then argue that he has been so deprived of free choice that his actual failure to comply was not wilful. It is no argument that had Mr. Tobin wanted to comply, the Governors still might have issued a contrary directive; the statute focuses on his conduct, not theirs, and it is enough that had his attitude been one of compliance, the directive might not have issued.
It is regrettable that the differences between two members of our governmental family should have ripened into litigation such as this. Hostile lawsuits, like wars between nations, are a poor substitute for effective diplomacy where interacting governmental units are concerned. Conflicts of power are, of course, inevitable in our federal system, with its beilt-in fragmentation of power centers, but the greater the chance of conflict, the greater the need for statesmanship on the part of those who head the various units.
The fact that the Court decides that Congress has the power to request the documents here shbpoenaed and to investigate this compact agency is neither carte blanche to excessive use of that power nor an excuse for failure by the committee to re-examine the relative necessity and desirability of some of its requests and the manner in which it conducts its hearings. As the Court has previously indicated, one of the controlling factors in this case is that this is the first full probe into the Port Authority ever conducted by Congress.
Finally, the Court must comment on the way in which it was necessary for Mr. Tobin and the Authority to challenge, in goodfaith, Congrees' right to subpoena these documents: to stand in contempt and be liable for criminal prosecution. During the House debate on the contempt citation, the Committee inserted in the Congressional Record a memorandum purporting to show that declaratory judgment procedures were not an available means for procuring judicial resolution of the basic issues in dispute in this case.
Although this question is not before the Court, it does feel that if contempt is, indeed, the only existing method, Congress should consider creating a method of allowing these issues to be settled by declaratory judgment. Even though it may be constitutional to put a man to guessing how a court will rule on difficult questions like those raised in good faith in this suit,140A what is constitutional is not necessarily most desirable. Especially where the contest is between different governmental units, the representative of one unit in conflict with another should not have to risk jail to vindicate his constituency's rights. Moreover, to raise these issues in the context of a contempt case is to force the courts to decide many questions that are not really relevant to the underlying problem of accommodating the interest of two sovereigns.
Upon a finding of guilty of the offense charged against the defendant the statute requires a sentence of a fine of not more than $ 1,000 nor less than $ 100, and imprisonment for not less than one month nor more than twelve months. The defendant, therefore is sentenced to a fine of $ 100 and thirty days in jail. However, because defendant has stipulated his willingness to turn over the documents to the committee in the event of a finding of guilty, the sentence
will be stayed for a period of thirty days, and in the event of compliance with the subpoena, will then be suspended.
Assuming a review and affirmance of this conviction, the sentence will be further stayed until thirty days after the mandate of the appellate court has been filed.
Statement entitled 'The Documents Required by the Subpoenas as Modified by the Letters are Pertinent to Authorized Purpose of this Investigation,' authorized by Subcommittee number 5 to be read at the June 29, 1960 hearing, and read at that time by Committee Chief Counsel (H.Rep. 2117, 86th Cong., 2d Sess. (Report Citing Austin J. Tobin) pp. 48-52):
Questions have been raised as to the pertinence to the subcommittee's inquiry of the documents required by the subpenas served upon these witnesses. With respect to those questions, the Chair wishes to make the following statement:
In the judgment of the subcommittee, the pertinence to the stated purpose of the subcommittee's inquiry of each of the categories of documents required by the subpenas served upon these witnesses on June 15, 1960, is clear on the face of the subpenas.
Virtually all these documents were first requested from the port authority in March of this year. Since then, other letters have been sent to the executive director of the port authority setting forth generally the scope of the inquiry, particularizing the requests, and making clear that the subcommittee will consider production of all documents described in these subpenas dating from January 1, 1946, to June 15, 1960, to be full compliance with the subpenas.
Thus, the port authority, its officers and employees, including these three witnesses, have had ample opportunity to study these requests and ascertain their pertinence.
While in the view of the subcommittee further explanation is not necessary, nevertheless, to avoid nay possible question and in order to make abundantly clear to these witnesses wherein the documents requested by the subcommittee are pertinent to the subcommittee's inquiry, the Chair will explain briefly some of the reasons for requesting each of the categories of documents listed in the subpenas.
As the Chair pointed out in his opening statement, the purpose of this inquiry is 'to ascertain conformance or nonconformance of thePort of New York Authority with the congressionally imposed limitations on its powers and the extent and adequacy with which the authority is carrying out its duties and responsibilities under the congressionally approved compacts in order to determine whether Congress should legislate 'to alter, amend or repeal' its resolutions of approval.'
The documents listed in the subpenas are sought to aid the subcommittee in performing this legislative purpose. Each category of documents was considered by the subcommittee and was concluded to be necessary and pertinent to the accomplishment of this purpose.
1. Item (1) of the subpenas calls for production of 'all by-laws, organization manuals, rules and regulations' of the port authority.
These documents are needed to apprise the subcommittee of the scope and extent of the port authority's activities in order that the subcommittee may ascertain whether or not the authority is adhering to the duties, responsibilities and limitations placed upon it by Congress in the enabling resolutions of 1921 and 1922.
A thorough knowledge of the port authority's structure, lines of authority, and its rules and regulations governing the activities of its officers and employees is needed so that the subcommittee may fully comprehend the scope of the authority's operations.
Furthermore, article XVIII of the 1921 compact, approved by the Congress in Public Resolution No. 17 of the 67th Congress, authorizes the port authority to make suitable rules and regulations 'not inconsistent with the Constitution of the United States' and 'subject to the exercise of the power of Congress for the improvement and conduct of navigation and commerce.'
Manifestly, the subcommittee must examine, among other things, all rules, regulations, and manuals promulgated by the authority to find out whether they are in conformity with the limitations expressed in that article.
2. Item (2) of the subpenas calls for production of 'annual financial reports; internal financial reports, including budgetary analyses, post-closing trial balances, and internal audits; and management and financial reports prepared by outside consultants.'
These materials, in addition to the port authority's annual two-page summaries of financial condition, are required by the subcommittee so that it may learn with particularity the extent and scope of the port authority's operations and activities with respect to specific undertakings.
It is therefore necessary for the subcommittee to find out how much of the authority's revenues are derived from, and how much of its expenditures go toward carrying out, each of its various projects.
Such information is essential to determine whether or not certain channels of interstate commerce in the port district are being discriminated against, or unduly burdened by, the policies -- including financial policies -- of the authority.
In addition, it has been alleged that the policy of the port authority in combining revenues for financing purposes from all its facilities, rather than reducing tolls on each facility as it is amortized, places an undue burden on the channels of interstate commerce and is contrary to national transportation policy.
The subcommittee needs the information specified in this item in considering the advisability of legislation conditioning congressional consent to the compacts upon agreement to modify existing policies of the authority.
Moreover, some of the receipts and expenditures of the port authority are, under the terms of the interstate compacts and under Federal law, subject to the scrutiny of various Federal agencies.
For example, the Department of the Navy, the U.S. Army .Engineer Corps, the Federal Aviation Agency, the General Services Administration and the General Accounting Office, among others, all have legal responsibilities over some of the authority's activities and finances.
Accordingly, it will be necessary for the subcommittee to examine all audits and internal financial data of the authority to determine the manner and extent to which the port authority has complied with the supervisory requirements imposed by the Federal agencies with responsibility for various port authority activities under the interstate compacts and to determine whether or not congressional consent should be conditioned upon added safeguards.
3. Item (3) of the subpenas calls for all 'agenda and minutes of meetings of the board of commissioners and of its committees; all reports to the commissioners by members of the executive staff.'
These documents are pertinent to the inquiry to enable the subcommittee to learn what policies have been adopted by the board, the manner and extent to which those policies have been carried out by the authority personnel and staff, and how those policies conform to obligations and limitations imposed by the congressionally-approved compacts.
This will permit a thoroughgoing review of the scope and extent of the activities and operations of the port authority at the top levels. It will also enable the subcommittee to determine whether or not policy formation and execution by the authority is consistent with congressionally-approved objectives.
The agenda and the reports of the staff are also required in order to afford a full view of the authority's activities and operations. For example, failure of the authority to follow staff recommendations with respect to any Federal interest affected by the authority's operations might frame issues significant in the subcommittee's assessment of those operations.
Item 4(a) of the subcommittee's subpenas calls for all files relating to 'negotiation, execution and performance of construction contracts; negotiation, execution and performance of insurance contracts, policies and arrangements; and negotiation, execution and performance of public relations contracts, policies and arrangements.'
This request was made because those three categories of authority activities represent areas having direct impact upon Federal interests.
Construction contracts are important to the subcommittee because most construction undertaken by the authority is for facilities used in, or in the aid of, interstate commerce or national defense. The subcommittee desires to ascertain whether this construction satisfies Federal requirements, policies and responsibilities and whether other construction work by the authority affects or interferes with any Federal projects or construction policy.
Insurance contracts are necessary to the inquiry, in part, because of the huge risks involved in the day-to-day operation of authority facilities and the potential liability of the port authority with respect to important national defense instrumentalities and with respect to the movement of persons and goods in interstate commerce.
In the event of any casualty for which the authority is liable, the possible indemnity could reach hundreds of millions of dollars, as was the case, for example, in the Texas City disaster. Should the files show that insurance coverage has not been adequate to protect fully all of the Federal interests affected by the port authority, modification of the interstate compacts may be necessary.
Further, if in the negotiation or letting of insurance or construction contracts clothed with Federal interests, practices are followed that prevent full competition or otherwise conflict with national policies, again, legislation modifying consent in these regards may become important.
Public relations contracts are needed for similar reasons and for the additional reason that such contracts can be, and according to reports brought to the subcommittee's attention, have been used for the purpose of affecting legislation and other governmental decisions on a variety of subjects, including diversion of interstate and foreign commerce from certain United States ports to the port of New York.
Such activities of the port authority are of manifest significance to the Congress because the very purpose of the constitutional requirement of congressional consent is to safeguard the interests of the many States from the combined efforts of those acting under a compact.
Item 4(b) of the subcommittee's subpenas calls for all records relating to 'the acquisition, transfer and leasing of real estate.'
These documents are sought by the subcommittee, in part, because of its concern over certain real estate practices of the port authority as reported in various allegations coming to the subcommittee's attention. The subcommittee's duty to ascertain whether amending legislation to the consent resolutions of 1921 and 1922 is necessary with respect to these matters, makes it essential for it to examine these files.
In this connection, the subcommittee wishes to consider, for example, whether real estate acquisitions, transfers and leases by the port authority outside the specified geographical limits of the port district as contemplated by Congress should be further limited by modifying legislation. It also wishes to consider, as an additional example, whether the acquisition transfer and leasing of real estate by the port authority for industtial development and similar commercial purposes not related to the initially approved purpose of coordinating transportation should be curtailed or regulated.
These legislative aims require that the subcommittee have full knowledge of current and past practices and policies of the port authority with respect to all real estate transactions.
Item 4(c) of the subcommittee's subpenas requires the production of files relating to 'the negotiation and issuance of revenue bonds.'
These documents are sought, in part, because it has been alleged that full and free competition is not permitted by the authority in underwriting arrangements for issuance of its bonds.
In addition, it appears that issuance of these bonds is not subject to regulation by the Securities and Exchange Commission. The effectiveness with which the port authority conducts these financing operations bears directly upon its ability to carry out its responsibilities under the compacts.
Accordingly, it is essential that the subcommittee scrutinize these files in considering whether to condition further consent to the compacts upon changes in financial policies of the authority.
Item 4(d) of the subcommittee's subpenas calls for files relating to 'the policies of the authority with respect to the development of rail transportation.'
These documents have been requested because of the subcommittee's desire to ascertain the extent to which one of the authority's principal purposes has been carried out. In article 6 of the 1921 compact as approved by Congress, certain primary powers granted under the compact are conditioned upon approval of a comprehensive plan for the development of the port.
In 1922, this comprehensive plan was presented to the Congress and approved. The 1922 comprehensive plan dealt extensively with development of rail transportation into and out of the port district. Accordingly, examination of files dealing with policies concerning the development of rail transportation are necessary to give the subcommittee information as to how this part of the authority's mandate as approved by Congress in 1922 has been and is being carried out.
The foregoing explanation, the Chair wishes to emphasize, illustrates only some of the respects in which the documents required by its subpenas are necessary to the effectuation of the subcommittee's inquiry.
The Chair has made the forgoing statement to make clear to all concerned that the selection of documents required by the subpenas is reasonably calculated to aid the subcommittee in carrying out the duties and responsibilities imposed upon it by its parent Committee on the Judiciary and by the U.S. House of Representatives. However, the foregoing in no way exhausts the reasons why the documents called for by the subpenas are pertinent and necessary to the subcommittee's inquiry.