Applicability of Trade Secrets Act to Intra-Governmental Exchange of Regulatory Information

Applicability of Trade Secrets Act to Intra-Governmental
Exchange of Regulatory Information
T he d isclosure to certain federal financial regulatory agencies o f propriety inform ation o f the Office
o f F ederal H o u sin g E nterprise Oversight obtained from the finance institutions it regulates would
b e “ auth o rized by law ” w ithin the m eaning o f the T rade S ecrets Act and therefore would not
violate that A c t’s prohibitions against unauthorized agency disclosures o f trade secrets or other
co n fidential business inform ation.

April 5, 1999

M e m o r a n d u m O p in io n f o r t h e G e n e r a l C o u n s e l
O f f ic e o f F e d e r a l H o u s in g E n t e r p r is e O v e r s ig h t

This responds to your request for our opinion regarding the applicability of
the Trade Secrets Act, 18 U.S.C. § 1905 (Supp. II 1996) (“ TSA” ), to the Office
of Federal Housing Enterprise Oversight’s (“ OFHEO” ) proposed provision to
other federal agencies of certain proprietary information that it receives in carrying
out its statutory responsibilities.1 For reasons set forth below, we conclude that
the TSA does not prohibit the inter-agency, official purpose disclosures outlined
in your request.

I.

OFHEO is a federal agency, within the Department of Housing and Urban
Development, created by the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992, Pub. L. No. 102-550, 106 Stat. 3941, 3944, (codified
at 12 U.S.C. §§ 4501-4641 (1994)) (“ FHE Act” or “ Act” ). Its purpose is, inter
alia, to ensure that the Federal National Mortgage Association (Fannie Mae) and
the Federal Home Loan Mortgage Corporation (Freddie Mac) (collectively, “ the
Enterprises” ) “ are adequately capitalized and operating safely” in accordance
with governing legislation. See 12 U.S.C. § 4513(a). The Enterprises are the
nation’s largest housing finance institutions. OFHEO’s oversight and regulatory
responsibilities with respect to them are similar to those exercised over banks
and financial institutions by agencies such as the Federal Deposit Insurance Cor­
poration and the Office of the Comptroller of the Currency. See OFHEO Letter
at 1.
In carrying out its responsibilities under the Act, OFHEO from time to time
requires the Enterprises to submit various reports on their financial condition and

1 See Letter for Lee J. Radek, Chief, Public Integrity Section, Criminal Division, Department o f Justice from
Anne E. Dewey, General Counsel, Office of Federal Housing Enterprise Oversight (June 5, 1998) ( “ OFHEO Letter” ).
The Attorney General has delegated her authority to provide legal opinions for departments and agencies of the
executive branch to this O ffice and, accordingly, your request has been forwarded to us for disposition. See 28
U.S C § § 5 1 0 -5 1 3 (1994), 28 C.F.R. §0.25(a) (1997).

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 Applicability o f Trade Secrets Act to Intra-Governmental Exchange o f Regulatory Information

operations. See 12 U.S.C. §4514. These reports, as well as other regulatory
information obtained from the Enterprises by OFHEO in performing its duties,
sometimes include sensitive proprietary information. OFHEO Letter at 2.
As explained in your letter, OFHEO desires to exchange regulatory information
obtained from the Enterprises (including some proprietary information) with cer­
tain other federal financial regulators in order to facilitate “ fulfilling its safety
and soundness mission.” Id. at 2. For purposes of this opinion, therefore, we
assume that these arrangements will materially enhance OFHEO’s performance
of its statutory responsibilities. If such disclosures do take place, we are advised
that the governmental recipients of the information would be required to maintain
its confidentiality and would, of course, be subject to the provisions of the TSA
in their own handling and maintenance of that information. See id. at 2.
The TSA prohibits officers and employees of federal agencies from publishing
or disclosing trade secrets and other confidential business information “ to any
extent not authorized by law.” 18 U.S.C. § 1905.2 Because some of the proprietary
information OFHEO wishes to share with other federal financial regulators would
be of the type otherwise covered by the TSA, you seek the Department’s legal
opinion whether the proposed provision of such information to other federal agen­
cies under the circumstances outlined in your letter would violate the TSA.

n.
There is significant precedential support for the view that the kind of disclosures
described in your letter would not violate the TSA. A number of federal court
opinions have expressed the view that the TSA applies only to the public disclo­
sure of covered information and does not apply to official intra-govemmental
disclosures of such information. Additionally, two opinions of this Office have
concluded that the TSA does not prohibit the exchange of trade secret or propri­
etary information between federal agencies for lawful governmental purposes —
at least where such disclosures are authorized by the Paperwork Reduction Act

2 The TSA provides in pertinent part as follows-
Whoever, being an officer or employee o f the United States or o f any department or agency thereof,
any person acting on behalf o f the Office o f Federal Housing Enterprise Oversight, . publishes, divulges,
discloses, or makes known in any manner or to any extent not authonzed by law any information coming
to him in the course of his employment or official duties or by reason of any examination or investigation
made by, or return, report or record made to or filed with, such department or agency or officer or employee
thereof, which information concerns or relates to the trade secrets, processes, operations, style of work,
or apparatus, or to the identity, confidential stausucal data, amount or source of any income, profits, losses,
or expenditures o f any person, firm, partnership, corporation, or association,
shall be fined under this title or imprisoned not more than one year, or both, and shall be removed
from office or employment.
18 U S C § 1905 (emphasis added) The underscored phrase, extending the TSA to cover disclosures by “ person[s]
acting on behalf o f the [OFHEO],” was added by Pub L No. 102-550, tit XIII, § 1353, 106 Stat at 3970 As
shown by the Senate Report on a contemporaneous bill o f the same Congress containing the exact same provision,
the apparent purpose o f this addition to the statute was simply to “ subjectU any consultant to the [OFHEOl to
the same criminal penalties for release o f confidential information as government employees ” S. Rep. No. 102—
282, at 53 (1992).

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of 1980, Pub. L. No. 96-511, 94 Stat. 2812 ( “ PRA” ), see 44 U.S.C. § 3510(a)
(Supp. I 1995), or by any other federal statute, either explicitly or implicitly. An
additional opinion of this Office, moreover, emphasizes the broader principle —
grounded on the President’s executive powers set forth in Article II of the Con­
stitution — that the exchange of commercial regulatory information among federal
government agencies for legitimate government purposes is presumptively lawful,
and that only explicit statutory language prohibiting such disclosure can overcome
that presumption.3 These opinions would suggest the conclusion that the TSA does
not apply to any authorized inter-agency disclosures. It is not necessary, however,
for us to reach that issue, because we conclude that the disclosures at issue here
would be “ authorized by law” within the meaning o f the TSA itself. At a min­
imum, the precedents call for a generous reading of statutes that may implicitly
authorize inter-agency disclosures such as those in question, and we thus read
the FHE Act as providing such authority here, as we discuss in Part II.C, below.

A.

In Emerson Elec. Co. v. Schlesinger, 609 F.2d 898 (8th Cir. 1979), the Eighth
Circuit considered whether the Equal Employment Opportunity Commission and
the Department of Labor’s Office of Federal Contract Compliance could lawfully
exchange certain information and records that those agencies had gathered from
regulated companies reflecting the companies’ compliance with federal employ­
ment discrimination laws. The court assumed arguendo that the information in
question was of the type protected by the TSA. Based upon the pertinent
“ pronouncements of Congress, the President and the agencies” — notably, certain
statutory provisions authorizing inter-agency cooperation, see 42 U.S.C. § 2000e-
4(g)(1) (1994) — the court first concluded that the particular exchanges of
information proposed would be “ authorized by law” within the meaning of the
TSA even if that act were otherwise applicable to the inter-agency exchanges.
609 F.2d at 907. The court then proceeded to elaborate upon the proper relation­
ship between inter-governmental information exchanges and the TSA.

It is again worth emphasizing that the disclosure contemplated
. . . is between two agencies, both of which are charged with the
task of eliminating employment discrimination. We seriously doubt
whether § 1905 was intended to prohibit any interagency informa­
tion transfers. Since the Federal Reports Act, 44 U.S.C. § § 3 5 0 1 -
3512, directly controls exchanges between agencies, it appears that

3 An exam ple o f such an explicit statutory provision is contained in the Privacy Act. See 5 U S C §552a(b)
(1994) (providing that “ [n]o agency shall disclose . . . to another agency” personal records covered by the Privacy
Act, subject to listed exceptions). The category o f sensitive personal records protected by the Privacy Act is not
implicated by the disclosure o f commercial regulatory information proposed here

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§ 1905 was designed to apply only to public disclosures o f trade
secret material.

Id. at 907 (emphasis added).
In her separate opinion in Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984),
Justice O ’Connor expressed a similar view, observing: “ The question of inter­
agency use of trade secrets before 1972 is more difficult because the Trade Secrets
Act most likely does not extend to such uses." Id. at 1023 (O’Connor, J., concur­
ring in part and dissenting in part) (emphasis added). Other courts have also
expressed a restrictive interpretation of the TSA in this respect. See Tri-Bio Lab­
oratories, Inc. v. United States, 836 F.2d 135, 141 n.7 (3d Cir. 1987) ( “ Because
the Trade Secrets Act . . . prohibits only public disclosure of application data,
it does not bar internal agency use of submitted data.” ) (emphasis added), cert,
denied, 488 U.S. 818 (1988); Interco, Inc. v. FTC, 490 F. Supp. 39, 40 (D.D.C.
1979) (documents including trade secrets could be disclosed by FTC to State
Attorneys General who provide reasonable assurances of confidentiality because
such disclosure would be “ authorized by law” under a broad reading of section
6(0 of the Federal Trade Commission Act). Cf. United States v. Wallington, 889
F.2d 573, 579 (5th Cir. 1989) (in order to avoid arbitrary enforcement, court nar­
rowly construed TSA to apply only to “ confidential” information and “ further
defined ‘confidential’ to require a t least that the government agency in question
have an official policy that the information not be disclosed (or that nondisclosure
be mandated by statute or regulation)” ).4
This Office invoked the above-quoted interpretation of the court in Emerson
Electric in reaching the conclusion that, in light of the Paperwork Reduction Act,
the TSA did not prohibit the Department of Justice from sharing proprietary
information obtained from companies under the National Cooperative Research
and Production Act (“ NCRPA” ), 15 U.S.C. § 4305(d) (1994), with other federal
departments and agencies. See Memorandum for Anne Bingaman, Assistant
Attorney General, Antitrust Division, from Walter Dellinger, Assistant Attorney
General, Office of Legal Counsel, Re: Sharing o f M aterials with other Federal
Agencies (May 31, 1994) ( “ 1994 Opinion” ). As we noted in that opinion:

We have also considered whether provision of the information
to other federal agencies might be prohibited by the Trade Secrets
Act (TSA), 18 U.S.C. § 1905, which prohibits federal officials from

4 But see Shell Oil Co. v. Department o f Energy, A l l F. Supp 413. 419 (D Del 1979), a jfd , 631 F.2d 231
(3d Cir. 1980), cert denied, 450 U S 1024 (1981), where the court assumed, without deciding, that the TSA applies
to inter-agency disclosures, afier stating “ While a number o f opinions of the Attorney General have suggested,
largely based on practical considerations, that [the TSA] was not intended to apply to inter-agency transfers of
proprietary information, no court appears to have so held ” The Shell Oil opimon was issued before the Eighth
Circuit’s opinion in Emerson Electric In any event, the Shell Oil court went on to hold that the Department of
Energy was “ authorized by law” to disclose the proprietary data in question to any federal agency with a legitimate
need for such information pursuant to the Federal Energy Administration Act, 15 U S C §§761-790h (1994)

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disclosing, “ in any manner or to any extent not authorized by law,”
trade secrets or similar information in the possession of federal
agencies. If the exchanges of information are not prohibited by the
NCRPA or the [Hart-Scott-Rodino Antitrust Improvements Act],
we believe they would be authorized by 44 U.S.C. §3510 (part
of the Paperwork Reduction Act (PRA)), which provides that “ an
agency may make available to another agency, information obtained
pursuant to an information collection request if the disclosure is
not inconsistent with any applicable law.” The Eighth Circuit held
the TSA inapplicable to inter-agency information transfers in
Emerson E lectric Co. v. Schlesinger, 609 F.2d 898, 907 (1979),
stating, “ Since the Federal Reports Act (since supplanted by the
PRA, as quoted above) directly controls exchanges between agen­
cies, it appears that § 1905 was designed to apply only to public
disclosures of trade secret material.”

1994 Opinion at 3 n.4.
We expressed similar views in a 1981 opinion concluding that confidential trade
information obtained by the Secretary of Commerce pursuant to the Export
Administration Act ( “ EAA” ) may be lawfully released to federal law enforcement
and intelligence agencies. See D isclosure o f Information Collected under the
Export Administration A ct , 5 Op. O.L.C. 255 (1981). Although that opinion pri­
marily concerned interpretation of the EAA and the Paperwork Reduction Act,
it also rejected the Commerce Department’s argument that inter-agency disclosure
of the information would violate the TSA:

We do not agree with the Department of Commerce that 18
U.S.C. § 1905, which prohibits the disclosure of confidential trade
information unless authorized by law, would bar interagency disclo­
sure because, assuming no other statutory prohibition against disclo­
sure, §3510 of the Paperwork Reduction Act would authorize the
disclosure. 44 U.S.C. §3510.

Id. at 261 n.3.5
Another opinion of this Office, although not directly addressing the TSA, lends
further general support to the view that federal statutes prohibiting public disclo­
sure of proprietary regulatory information do not prohibit the exchange of such
information between federal agencies for legitimate government purposes. See
Inter-Departm ental Disclosure o f Information Submitted Under the Shipping Act

5 The opinion further observed. “ The question whether 18 U.S C § 1905 applies to intra-govemmental transfers
. . has never been resolved.” Id at 262 n 6. Although it did not seek to resolve that question, the opinion did
establish a framework for construing the TSA’s phrase “ authorized by law” that provides the basis for our analysis
here. See Part II.C, infra.

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o f 1984, 9 Op. O.L.C. 48 (1985) (“ Shipping Act Opinion” ). There, we concluded
that the confidentiality provisions of section 6(j) of the Shipping Act, 46 U.S.C.
app. §§1701-1719 (Supp. II 1984),6 do not prohibit the Federal Maritime
Commission from disclosing Shipping Act information to other federal govern­
ment agencies. Id. at 48-49. In reaching that conclusion, we discussed the broader
constitutional considerations that may be implicated by legislative restrictions on
the disclosure of regulatory information between executive branch departments
and agencies for official purposes. Referring to “ the general presumption that
information obtained by one federal government agency is to be freely shared
among federal government agencies,” and after noting that “ [i]t is axiomatic that
all information and documents in the possession of Executive Branch agencies
are within the control of the President as the head of the Executive Branch,”
id. at 52-53, we continued:

We believe it follows from these general constitutional principles
that a decision by Congress to restrict the flow of information
among federal agencies when such information relates to the
performance of the official duties of these agencies must be
executed by legislation that leaves no doubt as to Congress’ intent.
Particularly regarding the development by the President o f his for­
eign policy, it would be untenable to read into the statute at issue
here an implied intent to deny to those subordinates of the President
charged with the formulation of foreign policy those documents and
information deemed relevant to that formulation.

Id. at 53. We therefore concluded that section 6(j) of the Shipping Act, as its
language indicates, prohibits only public disclosure of information obtained under
that Act and that such information may be disclosed for official purposes to other
federal agencies or executive branch departments.
The Trade Secrets Act would not appear to satisfy the standards of specificity
and clarity described in our Shipping Act opinion — i.e., “ legislation that leaves
no doubt as to Congress’ intent’ ’ — as necessary for legislation to prohibit the
official exchange of commercial regulatory records between executive branch
agencies.7 On the contrary, there is more than considerable doubt that Congress

6 Section 6(j) o f ihe Shipping Act provides in relevant part.
Except for an agreement filed under section 1704 of this Appendix, information and documentary material
filed with the Commission under section 1704 o f this Appendix or this section is exempt from disclosure
under section 552 o f Utle 5 [United States Code the Freedom of Information Act] and may not be made
public except as may be relevant to an administrative or judicial action or proceeding This section does#
not prevent disclosure to either body of Congress or to a duly authorized committee or subcommittee
of Congress.
46 U.S C app. 1705(j) (emphasis added)
7 Earlier opinions o f the Attorney General are also consistent with the conclusion we reach here In an opinion
concluding that a predecessor trade secrets nondisclosure statute similar to the TSA (section 708 of the Act of
Continued

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intended the TSA to criminalize such intra-govemmental exchanges, which do
not involve the kind of misuse or misappropriation of proprietary information
which the TSA was intended to forestall. See Emerson Electric, 609 F.2d at 906.
Although the foregoing judicial and administrative precedents support the view
that the proposed disclosure of proprietary information to other agencies is not
the kind of disclosure that the TSA was intended to prohibit, we need not decide
here whether the TSA is wholly inapplicable to authorized inter-agency disclo­
sures. Taking into account the background of these precedents, we believe that
the provisions of the Federal Housing Enterprises Act (together with OFHEO
regulations recently promulgated thereunder, see Part II.D, infra) provide adequate
authorization for such disclosures to fall within the “ authorized by law” exception
to the TSA ’s prohibitions.

B.

Before turning to the FHE Act, we first consider the availability of the Paper­
work Reduction Act as a source o f authority for the particular category of disclo­
sures contemplated here. That statute warrants consideration because the above­
quoted opinions of this Office emphasized that the inter-agency exchanges of
information which they approved had been affirmatively authorized by the PRA
and were therefore “ authorized by law” within the meaning of the TSA. See
1994 Opinion at 3 n.4; 5 Op. O.L.C. at 261 n.3. Similarly, the court in Emerson
Electric bolstered its conclusion that the TSA applies ‘‘only to public disclosures’ ’
by stressing that the Federal Reports Act (predecessor statute to the PRA) “ con­
trols exchanges between agencies.” 609 F.2d at 907.
The PRA provides in relevant part:

(a) The Director [of the Office of Management and Budget] may
direct an agency to make available to another agency, or an agency
m ay make available to another agency, information obtained by a

Sept 8, 1916, 39 Stat. 756, 798) did not prohibit the U S. Tariff Commission from providing the W ar Trade Board
certain trade secrets obtained by the Commission in performing its regulatory duties, the Attorney General stated:
It will be noted that the inhibition in the foregoing section is directed against the disclosure of trade
secrets “ to any person ” It is a well-recognized rule o f law that the sovereign power is not included
by the general terms o f a statute.

These considerations, it seems to me, are persuasive o f an interpretation of section 708, which, m pursu­
ance o f the cooperation authorized by section 707, would not preclude the availability o f all the information
gathered by the Tariff Commission fo r any appropriate use by any Department or independent branch
o f the Government, including the War Trade Board
T ariff C om m ission— Disclosure o f Trade Secrets, 31 Op. A tt’y Gen 541, 542-43 (1919) (emphasis added). See
also Authority o f Federal Communications Commission to Disclose Confidential Information to Senate Committee
on Interstate and Foreign Commerce, 41 Op. A tt’y Gen. 221 (1955). There, in concluding that the Federal Commu­
nications C om m ission’s disclosure of certain proprietary information to a Senate committee was “ authorized by
law ” w ithin the meaning o f the TSA, the Attorney General opined that the statutory or other authorization for
such intra-govemmental disclosure of such material may be “ reasonably implied rather than express.” Id at 228

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collection o f information if the disclosure is not inconsistent with
applicable law.

44 U.S.C. § 3510(a) (emphasis added).
It does not appear, however, that the particular category of information ref­
erenced in your opinion request is the kind of information covered by the PRA —
that is, information obtained by a “ collection of information,” see 44 U.S.C.
§3502(3) (Supp. I 1995). In this regard, your letter refers to “ reports on [the]
financial condition and operations” of the Enterprises required by OFHEO; other
special reports submitted by the Enterprises that, in the judgment of the Director,
are necessary to carry out the purposes of the 1992 Act; and other “ sensitive,
proprietary data” received from the Enterprises by OFHEO “ [i]n carrying out
its oversight authorities.” OFHEO Letter at 2.
Under the PRA, the term “ collection of information” is defined as

the obtaining, causing to be obtained, soliciting, or requiring the
disclosure to third parties or the public, of facts or opinions by
or for an agency, regardless of form or format, calling for either —

(i) answers to identical questions posed to, or identical reporting
or recordkeeping requirements imposed on, ten or more persons,
other than agencies, instrumentalities, or employees o f the United
States', or

(ii) answers to questions posed to agencies, instrumentalities, or
employees o f the United States which are to be used fo r general
statistical purposes', . . . .

44 U.S.C. § 3502(3)(A) (emphasis added).
The information obtained by OFHEO from the Enterprises does not appear to
have been obtained by a “ collection of information” that conforms to the defini­
tion under either subparagraph (i) or (ii). Subparagraph (i) appears inapplicable
because OFHEO’s collection efforts are not imposed on “ ten or more persons.”
Rather, it appears that they are imposed only on the two Enterprises. Subparagraph
(ii) likewise appears inapplicable based upon both of its criteria. The Enterprises
are both private entities, rather than agencies or instrumentalities of the United
States. See 12 U.S.C. § 1716b (1994) (Fannie Mae re-established as “ a Govern­
ment-sponsored private corporation” ); American Bankers Mortgage Corp. v. Fed­
eral Home Loan M ortgage Corp., 75 F.3d 1401, 1408 (9th Cir.) (Freddie Mac
is not a government entity), cert, denied , 519 U.S. 812 (1996); Patriot, Inc. v.
HUD, 963 F. Supp. 1, 7 (D.D.C. 1997) (“ Fannie Mae is a ‘private corporation,’
12 U.S.C. § 1716b, owned by its private shareholders, and as a private entity,
it does not issue regulations.” ); Liberty Mortgage Banking, Ltd. v. Federal Home

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Loan M ortgage Corp., 822 F. Supp. 956, 958-60 (E.D.N.Y. 1993) (Freddie Mac
is a private corporation rather than a government agency). Moreover, it does not
readily appear that the information in question here is to be used for general statis­
tical purposes. Rather, it is to be used for specific regulatory and oversight pur­
poses bearing upon the Enterprises.
Because the information at issue does not appear to have been obtained through
a “ collection of information” within the meaning of the PRA, we do not believe
that the PRA ’s authorization for inter-agency disclosures, see 44 U.S.C. § 3510(a),
may be relied upon as affirmative authority for the disclosures proposed here.
That raises the question whether the proposed inter-agency disclosure is otherwise
“ authorized in a general way by law,” Liquidation o f Reconstruction Finance
Corporation — D isclosure o f Information, 41 Op. Att’y Gen. 166, 169 (1953). We
believe that it is.

C.

This Office has previously considered whether certain information or records
not covered by the express authorizations of the PRA (and also exempt from
disclosure to the public under the FOLA, as in the case of trade secrets) may
nonetheless be disclosed or provided by one federal agency to another for official
agency purposes. See 5 Op. O.L.C. 255 (1981). As we framed the issue in that
opinion:

The existence of an affirmative authorization in the Paperwork
Reduction Act for certain information arguably implies that some
authorization is required, whether by statute, either expressly or by
necessary implication, or by substantive regulation. Moreover, it
may be necessary to determine whether there is an authorization
for disclosure to federal law enforcement and intelligence agencies
to avoid the strictures of 18 U.S.C. § 1905.

Id. at 262. We then described the kind of authorization “ by law” that would
satisfy this concern when the PRA is not apparently applicable:

The phrase “ authorized by law” does not mean that the authoriza­
tion must be “ specifically authorized by law” ; it is sufficient that
the disclosure is “ authorized in a general way by law.” 41 Op.
Att’y Gen. 166, 169 (1953).

Id. We then listed some examples of the kinds of authorizations that satisfy the
foregoing standard, ranging from subpoenas and requests from congressional
committees, to substantive agency regulations that expressly or implicitly authorize

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the waiver of confidentiality, to authorizations that are based upon “ necessary
statutory implication.” Id. at 263.8
Applying these standards to the matter presented here, we believe the legislation
establishing the OFHEO and its powers and responsibilities (i.e., the FHE Act)
contemplates a degree of inter-agency cooperation and interaction that reasonably
implies authorization to exchange regulatory information obtained by OFHEO
with cooperating federal agencies in furtherance of OFHEO’s statutory purposes.
C f Interco, 490 F. Supp. at 44, 46 (construing section 6(f) of FTC Act to authorize
“ non-public release” of trade secret material to State Attorneys General for law
enforcement purposes, even while acknowledging that the “ statute does not on
its face authorize [such] release” ); Shell Oil Co. v. DOE, A ll F. Supp. at 433.9
Initially, we note that the Director of OFHEO is broadly authorized to “ take
such actions . . . as the Director determines necessary” regarding a broad range
of matters, including “ examinations of the enterprises,” “ other matters relating
to safety and soundness [of the enterprises],” and “ conducting research and finan­
cial analysis.” 12 U.S.C. §4513(b)(2), (5), and (10). In exercising this broad
authority, the Director could reasonably conclude that appropriately controlled
regulatory information exchanges with other federal financial regulators are
needed to maintain the level of knowledge and understanding demanded in the
highly complex and technical field of federal financial regulation. In this regard,
we note that OFHEO’s letter to this Office asserts that the proposed exchanges
of supervisory information would “ enable[] Federal agencies to proactively
address regulatory compliance more effectively and efficiently.” OFHEO Letter
at 3. OFHEO further stales that it seeks to exchange the information in question
“ [i]n fulfilling its safety and soundness mission.” Id. at 2. In view of such rep­
resentations, the proposed reciprocal inter-agency exchanges would appear to fall
within the broad discretionary authority granted the Director under 12 U.S.C.
§ 4513(b).
Additional, and more specific, grants of authority to the OFHEO Director under
the FHE Act reinforce our conclusion that the statute taken as a whole provides
adequate, albeit implicit, authorization for the proposed inter-agency disclosures.

8 In this regard, we believe that an application o f the Paperwork Reduction Act that would effectively bar official
purpose inter-agency disclosures by negative implication would be plainly inconsistent with lhat legislation’s stated
objective “ to maximize the utility o f information created, collected, maintained, used, shared and disseminated by
or for the Federal Government ” 44 U S.C § 3501(2) (Supp. I 1995).
9 In holding that the Federal Energy Administration Act provided adequate authority for inter-agency disclosure
of energy company financial and operational information that would otherwise be barred by the TSA, the court
in the Shell Oil case stated.
Given the purpose o f the National Energy Information System and the express declaration of a policy
favonng agency cooperauon with respect to energy data, it is difficult to argue lhat Congress did not
contemplate disclosure o f energy information by the Administrator at least to those other federal agencies
who are vested with policy making responsibility in the energy area
477 F Supp at 433 The court went on to hold that the information could be disclosed to any other federal agency
which had a legitimate need for that information. Id. at 433-35. See also Emerson Electric, 609 F.2d at 906, where
the court, in referring to the provisions of the Federal Reports Act (the predecessor version of the PRA), stated
“ the provisions o f the Act are to be read with an eye toward encouraging interagency cooperation . .

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For example, the Act provides: “ In carrying out the duties of the Office, the
Director may use information, services, staff, and facilities of any executive
agency, independent agency, or department on a reimbursable basis, with the con­
sent of such agency or department.” 12 U.S.C. § 4 5 15(c). Additionally, 12 U.S.C.
§ 4 5 17(c) authorizes OFHEO, through the Director, to contract with other federal
banking agencies (such as the Comptroller of the Currency, the FDIC, and the
Office of Thrift Supervision) for the services of examiners to assist OFHEO in
conducting examinations of the Enterprises required by the Act. The examiners
appointed from other agencies “ shall have the same authority and . . . shall be
subject to the same disclosures, prohibitions, obligations, and penalties as are
applicable to examiners employed by the Federal Reserve banks.” Id. § 4517(d).
In authorizing OFHEO to use the information, personnel, and services of other
agencies in carrying out its statutory responsibilities, it is reasonable to assume
that these provisions contemplate that OFHEO could disclose its regulatory
information to those agencies insofar as necessary to obtain the authorized assist­
ance or support.
In sum, we conclude that these and other provisions of the OFHEO legislation
provide adequate “ general” authorization for OFHEO to disclose proprietary
regulatory information to other federal agencies for the official purposes stated,
and subject to appropriate controls to maintain confidentiality, without violating
the TSA .10

D.

We note finally that, subsequent to the submission of the request for this
opinion, OFHEO promulgated new regulations governing the release of its docu­
ments and information. See Releasing Information, 63 Fed. Reg. 70,998 (1998)
(to be codified at 12 C.F.R. pt. 1710). Two of the new provisions appear pertinent
to the issue of inter-agency disclosure presented here. The new “ General rule”
in § 1710.6 provides:

Except as authorized by this part or as otherwise necessary in
performing official duties, no employee shall in any manner dis­
close or permit disclosure of any document or information in the

10 As indicated in our Shipping Act Opinion (discussed infra pp 78-80), only a clear and specific legislative
prohibition is sufficient to overcome “ the general presumption that information obtained by one federal government
agency is to be freely shared among federal government agencies” when such information “ relates to the [official]
perform ance o f the official duties of these agencies ” 9 Op O L C at 52-53 That position could be said to rest
on the more fundamental proposition that executive agencies have inherent authority to exchange such information
for valid official purposes in the absence of specific legislation, or constitutional provision, prohibiting such exchange.
Because w e conclude that the provisions o f the legislation establishing OFHEO adequately authorize the disclosures
in question by statutory implication, and because the information at issue here is proprietary in nature and thus
raises special considerations, we need not base our conclusion on an assertion of such inherent authority.

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possession of OFHEO that is confidential or otherwise of a non­
public nature, including that regarding OFHEO or [the Enterprises].

12 C.F.R. § 1710.6. Further, with respect to OFHEO’s reports of examinations
of the Enterprises, which may include confidential financial information of the
type otherwise covered by the TSA, the new regulations provide: “ The Director
may make available reports of examination for the confidential use of Federal
agencies responsible for investigating or enforcing applicable Federal laws.” Id.
§ 1710.8(c).
These new regulations provide further support for our conclusion. As recognized
in our 1981 opinion, duly promulgated agency regulations based on valid statutory
authority provide a lawful source of disclosure authority for purposes of the TSA’s
“ authorized by law” exception. See 5 Op. O.L.C. at 262 (stating that agency
regulations may provide the requisite authorization by law, “ provided that the
authority on which the regulation is based includes, either expressly or by nec­
essary implication, the power to waive the confidentiality of the information” ).
Courts have held to the same effect. See, e.g., CNA Fin. Corp. v. Donovan, 830
F.2d 1132, 1138 (D.C. Cir. 1987), cert, denied, 485 U.S. 977 (1988); Doctors
Hosp. o f Sarasota, Inc. v. Califano, 455 F. Supp. 476, 481 (M.D. Fla. 1978)
( “ information disclosure pursuant to a validly enacted agency regulation is author­
ized by law for purposes of 18 U.S.C. § 1905” ). Here, OFHEO expressly invoked
the provisions of 12 U.S.C. §4513 (discussed above) as well as other provisions
of the FHE Act as providing authority for the regulations in question. Thus, these
regulations fortify our conclusion that disclosures of confidential information made
pursuant to them would be “ authorized by law” and thus outside the prohibitions
of the TSA. For example, 12 C.F.R. § 1710.8(c) authorizes the Director to make
available reports of examinations of the Enterprises “ for the confidential use of
Federal agencies responsible for investigating or enforcing applicable Federal
laws.” We understand that these reports may include the kind of confidential or
proprietary business information otherwise covered by the TSA. This regulation
would authorize disclosures of such information to other financial regulatory agen­
cies, provided that the agencies in question have some federal investigatory or
enforcement authority.11

11 It should be recognized that OFHEO’s disclosures o f confidential or proprietary information must comply with
its own regulations even if such disclosures are not prohibited by the TSA. Thus, new § 1710 6 o f the regulations
specifically provides that OFHEO employees may disclose confidential information in possession of OFHEO only
if the disclosure is authorized by part 1710 or is otherwise “ necessary in performing official duties ” Apart from
§1710.6 itself and §1710 8 (governing inter-agency disclosure o f reports of examinations of the Enterprises), we
have not identified any other provision o f part 1710 that authonzes disclosure of confidential or proprietary informa­
tion to other federal agencies. Consequently, § 1710 6 appears to limit O FHEO’s disclosures of confidential informa­
tion to other agencies (other than that covered by § 1710 8) to situations where the disclosure is considered “ necessary
in performing official duties ” We believe that the Director would have considerable discretion, however, in deter­
mining whether particular disclosures are “ necessary” within the meaning of the regulation

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Conclusion

For all the foregoing reasons, we conclude that the type o f inter-agency, official
purpose disclosures set forth in your letter would be “ authorized by law” within
the meaning of the Trade Secrets Act and therefore would not violate that act.

WILLIAM MICHAEL TREANOR
Deputy Assistant Attorney General
Office o f Legal Counsel

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