Office of Privacy, Records, and Disclosure; Privacy Act of 1974; Proposed Implementation, 38218-38224 [2012-15429]

Agencies

• SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION

[Federal Register Volume 77, Number 124 (Wednesday, June 27, 2012)]
[Proposed Rules]
[Pages 38218-38224]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-15429]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 77, No. 124 / Wednesday, June 27, 2012 / 
Proposed Rules

[[Page 38218]]



SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION

5 CFR Part 9301

RIN 3460-AA03


Office of Privacy, Records, and Disclosure; Privacy Act of 1974; 
Proposed Implementation

AGENCY: Special Inspector General for Afghanistan Reconstruction.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: In accordance with the requirements of the Privacy Act of 
1974, 5 U.S.C. 552a, the Special Inspector General for Afghanistan 
Reconstruction (SIGAR) gives notice of a proposed amendment to this 
part to exempt several systems of records maintained within the agency 
from certain provisions of the Privacy Act.

DATES: Comments must be received no later than July 27, 2012.

ADDRESSES: Comments should be sent to Hugo Teufel, Acting General 
Counsel, Special Inspector General for Afghanistan Reconstruction, 2530 
Crystal Drive, Arlington, VA 22202-3934. Comments will be made 
available for inspection upon written request. SIGAR will make such 
comments available for public inspection in the Office of Privacy, 
Records, and Disclosure, 9th Floor, 1550 Crystal Drive, Arlington, VA 
22202, on official business days between the hours of 9 a.m. and 5 p.m. 
Eastern time. You can make an appointment to inspect comments by 
telephoning (703) 545-6000. All comments, including attachments and 
other supporting materials, received are part of the public record and 
subject to public disclosure. You should submit only information that 
you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: Kate Gastner, Public Information 
Manager, Special Inspector General for Afghanistan Reconstruction, 2530 
Crystal Drive, Arlington, VA 22202-3934, (703) 545-5993.

SUPPLEMENTARY INFORMATION: On January 28, 2008, the President signed 
into law the National Defense Authorization Act for Fiscal Year 2008 
(Pub. L. 110-181), which created the Special Inspector General for 
Afghanistan Reconstruction (SIGAR). SIGAR is responsible for 
coordinating and conducting audits and investigations to promote 
efficiency and effectiveness of reconstruction programs, and to detect 
and prevent waste, fraud, and abuse of taxpayers' dollars. Under 5 
U.S.C. 301, heads of Executive or military departments may prescribe 
regulations governing the conduct of its employees and the custody, 
use, and preservation of the agency's records, papers, and property.
    SIGAR is publishing separately the notices of the new systems of 
records to be maintained by SIGAR.
    The provisions of the Privacy Act upon which SIGAR is relying for 
the exemptions are 5 U.S.C. 552a(j)(2), (k)(1), and (k)(2). Under 5 
U.S.C. 552a(j)(2), the head of a Federal agency may promulgate rules to 
exempt a system of records from certain provisions of 5 U.S.C. 552a if 
the system of records is ``maintained by an agency or component thereof 
which performs as its principal function any activity pertaining to the 
enforcement of criminal laws'', and includes information compiled for 
the purpose of a criminal investigation, including reports of 
informants and investigators, and associated with an identifiable 
individual; and reports identifiable to an individual compiled at any 
stage of the process of enforcement of the criminal laws.
    To the extent that these systems of records contain investigative 
material within the provisions of 5 U.S.C. 552a(j)(2), SIGAR proposes 
to exempt the following systems of records from various provisions of 
the Privacy Act pursuant to 5 U.S.C. 552a(j)(2):
    SIGAR-04 Freedom of Information Act and Privacy Act Records;
    SIGAR-05 Audit Records;
    SIGAR-06 Correspondence Records;
    SIGAR-07 Hotline Records;
    SIGAR-08 Investigation Records;
    SIGAR-09 Legal Records;
    SIGAR-10 Legislative Inquiries and Correspondence.
    The proposed exemption under 5 U.S.C. 552a(j)(2) for the above-
referenced systems of records is from provisions 5 U.S.C. 552a(c)(3), 
(c)(4), (d)(1), (d)(2), (d)(3), (d)(4), (e)(1), (e)(2), (e)(3), 
(e)(4)(G), (e)(4)(H), (e)(4)(I), (e)(5), (e)(8), (f), and (g).
    5 U.S.C. 552a(e)(4)(G) and (f)(l) enable individuals to inquire 
whether a system of records contains records pertaining to themselves. 
5 U.S.C. 552a(d)(1), (e)(4)(H), and (f)(2), (3), and (5) grant 
individuals access, or concern procedures by which an individual may 
gain access, to records pertaining to themselves. 5 U.S.C. 552a(d)(2), 
(3), and (4), (e)(4)(H), and (f)(4) permit an individual to request 
amendment of a record pertaining to the individual or concern related 
procedures, and require the agency either to amend the record or to 
note the disputed portion of the record, and to provide a copy of the 
individual's statement of disagreement with the agency's refusal to 
amend a record to persons or other agencies to whom the record is 
thereafter disclosed.
    5 U.S.C. 552a(c)(3) requires an agency to make accountings of 
disclosures of a record available to the individual named in the record 
upon his or her request. 5 U.S.C. 552a(c)(4) requires an agency to 
inform any person or other agency about any correction or notation of 
dispute that the agency made in accordance with 5 U.S.C. 552a(d) to any 
record that the agency disclosed to the person or agency if an 
accounting of the disclosure was made. 5 U.S.C. 552a(e)(4)(I) requires 
an agency to publish a general notice listing the categories of sources 
for information contained in a system of records.
    5 U.S.C. 552a(e)(1) requires an agency to maintain in its records 
only such information about an individual as is relevant and necessary 
to accomplish a purpose of the agency required to be accomplished by 
statute or Executive Order. 5 U.S.C. 552a(e)(2) requires an agency to 
collect information to the greatest extent practicable directly from 
the subject individual when the information may result in adverse 
determinations about an individual's rights, benefits, and privileges 
under Federal programs. 5 U.S.C. 552a(e)(3) requires an agency to 
inform each individual, whom it asks to supply information, of the 
agency's authority for soliciting the information, whether disclosure 
of information is voluntary or mandatory, the principal purpose(s) for 
which the agency will use the information, the routine uses that may

[[Page 38219]]

be made of the information, and the effects on the individual of not 
providing all or part of the information.
    5 U.S.C. 552a(e)(5) requires an agency to maintain all records it 
uses in making any determination about any individual with such 
accuracy, relevance, timeliness, and completeness as is reasonably 
necessary to assure fairness to the individual in the determination. 5 
U.S.C. 552a(e)(8) requires an agency to make reasonable efforts to 
serve notice on an individual when the agency makes any record on the 
individual available to any person under compulsory legal process, when 
such process becomes a matter of public record. 5 U.S.C. 552a(g) 
provides for civil remedies to an individual when an agency wrongfully 
refuses to amend a record or to review a request for amendment, when an 
agency wrongfully refuses to grant access to a record, when an agency 
fails to maintain accurate, relevant, timely, and complete records 
which are used to make a determination adverse to the individual, and 
when an agency fails to comply with any other provision of 5 U.S.C. 
552a so as to adversely affect the individual.
    Under 5 U.S.C. 552a(k)(1), the head of any agency may promulgate 
rules to exempt any system of records within the agency from certain 
provisions of the Privacy Act to the extent that the system contains 
information subject to the provisions of 5 U.S.C. 552(b)(1), to protect 
material authorized to be kept secret in the interest of national 
defense or foreign policy pursuant to Executive Order.
    To the extent that these systems of records contain national 
defense or foreign policy information within the provisions of 5 U.S.C. 
55a(k)(1), SIGAR proposes to exempt the following systems of records 
from various provisions of the Privacy Act pursuant to 5 U.S.C. 
552a(k)(1):
    SIGAR-07 Hotline Records;
    SIGAR-08 Investigation Records;
    SIGAR-09 Legal Records.
    The proposed exemption under 5 U.S.C. 552a(k)(1) for the above-
referenced systems of records is from provisions of 5 U.S.C. 
552a(c)(3), 5 U.S.C. 552a(d)(1), (2), (3), and (4), 5 U.S.C. 
552a(e)(1), 5 U.S.C. 552a(e)(4)(G), (H), and (I), and 5 U.S.C. 552a(f).
    5 U.S.C. 552a(c)(3) requires an agency to make accountings of 
disclosures of a record available to the individual named in the record 
upon his or her request. 5 U.S.C. 552a(d)(1), (e)(4)(H), and (f)(2), 
(3), and (5) grant individuals access, or concern procedures by which 
an individual may gain access, to records pertaining to them. 5 U.S.C. 
552a(d)(2), (3), and (4), (e)(4)(H), and (f)(4) permit an individual to 
request amendment of a record pertaining to the individual or concern 
related procedures, and require the agency either to amend the record 
or to note the disputed portion of the record, and to provide a copy of 
the individual's statement of disagreement with the agency's refusal to 
amend a record to persons or other agencies to whom the record is 
thereafter disclosed.
    5 U.S.C. 552a(e)(1) requires an agency to maintain in its records 
only such information about an individual as is relevant and necessary 
to accomplish a purpose of the agency required to be accomplished by 
statute or Executive Order. 5 U.S.C. 552a(e)(4)(G) and (f)(1) enable 
individuals to inquire whether a system of records contains records 
pertaining to them. Application of these provisions to the above-
referenced systems of records could allow individuals to learn whether 
they have been identified as subjects of investigation. 5 U.S.C. 
552a(e)(4)(I) requires an agency to publish a general notice listing 
the categories of sources for information contained in a system of 
records.
    Under 5 U.S.C. 552a(k)(2), the head of a Federal agency may 
promulgate rules to exempt a system of records from certain provisions 
of 5 U.S.C. 552a if the system of records is ``investigatory material 
compiled for law enforcement purposes, other than material within the 
scope of subsection (j)(2).'' To the extent that these systems of 
records contain investigative material within the provisions of 5 
U.S.C. 552a(k)(2), SIGAR proposes to exempt the following systems of 
records from various provisions of the Privacy Act pursuant to 5 U.S.C. 
552a(k)(2):
    SIGAR-04 Freedom of Information Act and Privacy Act Records;
    SIGAR-05 Audit Records;
    SIGAR-06 Correspondence Records;
    SIGAR-07 Hotline Records;
    SIGAR-08 Investigation Records;
    SIGAR-09 Legal Records;
    SIGAR-10 Legislative Inquiries and Correspondence.
    The proposed exemption under 5 U.S.C. 552a(k)(2) for the above-
referenced systems of records is from provisions 5 U.S.C. 552a(c)(3), 
(d)(1), (d)(2), (d)(3), (d)(4), (e)(1), (e)(4)(G), (e)(4)(H), 
(e)(4)(I), and (f).
    5 U.S.C. 552a(c)(3) requires an agency to make accountings of 
disclosures of a record available to the individual named in the record 
upon his or her request. 5 U.S.C. 552a(d)(1), (e)(4)(H), and (f)(2), 
(3), and (5) grant individuals access, or concern procedures by which 
an individual may gain access, to records pertaining to them. 5 U.S.C. 
552a(d)(2), (3), and (4), (e)(4)(H), and (f)(4) permit an individual to 
request amendment of a record pertaining to the individual or concern-
related procedures, and require the agency either to amend the record 
or to note the disputed portion of the record, and to provide a copy of 
the individual's statement of disagreement with the agency's refusal to 
amend a record to persons or other agencies to whom the record is 
thereafter disclosed.
    5 U.S.C. 552a(e)(1) requires an agency to maintain in its records 
only such information about an individual as is relevant and necessary 
to accomplish a purpose of the agency required to be accomplished by 
statute or Executive Order. 5 U.S.C. 552a(e)(4)(G) and (f)(1) enable 
individuals to inquire whether a system of records contains records 
pertaining to them. Application of these provisions to the above-
referenced systems of records could allow individuals to learn whether 
they have been identified as subjects of investigation. 5 U.S.C. 
552a(e)(4)(I) requires an agency to publish a general notice listing 
the categories of sources for information contained in a system of 
records.
    Any information from a system of records for which an exemption is 
claimed under 5 U.S.C. 552a(j) or (k) which is also included in another 
system of records retains the same exempt status such information has 
in the system for which such exemption is claimed.
    This proposed rule is not a ``significant regulatory action'' under 
Executive Order 12866.
    Pursuant to the requirements of the Regulatory Flexibility Act 
(RFA), 5 U.S.C. 601-612, it is hereby certified that this rule will not 
have significant economic impact on a substantial number of small 
entities. The term ``small entity'' is defined to have the same meaning 
as the terms ``small business,'' ``small organization'' and ``small 
governmental jurisdiction'' as defined in the RFA.
    The proposed regulation, issued under section 522a(j)(2) and (k) of 
the Privacy Act, is to exempt certain information maintained by SIGAR 
in the above systems of records from notification, access and amendment 
of a record by individuals who are citizens of the United States or 
aliens lawfully admitted for permanent residence. In as much as the 
Privacy Act rights are personal and apply only to U.S. citizens or an 
alien lawfully admitted for permanent residence, small entities, as 
defined in the RFA, are not provided

[[Page 38220]]

rights under the Privacy Act and are outside the scope of this 
regulation.

    Dated: June 19, 2012.
Steven J. Trent,
Acting Inspector General.

List of Subjects in 5 CFR Part 9301

    Administrative practice and procedure, Freedom of information, 
Privacy.

    For the reasons set forth above, SIGAR proposes to amend 5 CFR part 
9301 as follows:

PART 9301--DISCLOSURE OF RECORDS AND INFORMATION

    1. The authority citation for part 9301 continues to read as 
follows:

    Authority: Privacy Act of 1974, Pub. L. No. 93-579, 88 Stat. 
1896, codified at 5 U.S.C. 552a(f) (agency rules).

    2. Add Sec.  9301.20 to subpart B to read as follows:


Sec.  9301.20  Systems exempt in whole or in part from provisions of 5 
U.S.C. 552a and this part.

    (a) In General. In accordance with 5 U.S.C. 552a(j) and (k), SIGAR 
hereby exempts the systems of records identified below from the 
following provisions of the Privacy Act for the reasons indicated.
    (b) Authority. These rules are promulgated pursuant to the 
authority vested in the Special Inspector General by 5 U.S.C. 552a (j) 
and (k).
    (c) General exemptions under 5 U.S.C. 552a(j)(2). (1) Under 5 
U.S.C. 552a(j)(2), the head of any agency may promulgate rules to 
exempt any system of records within the agency from certain provisions 
of the Privacy Act of 1974 if the agency or component thereof that 
maintains the system performs as its principal function any activities 
pertaining to the enforcement of criminal laws. Certain components of 
SIGAR have as their principal function activities pertaining to the 
enforcement of criminal laws and protective service activities which 
are necessary to assure the safety of individuals protected by SIGAR 
pursuant to the provisions of 18 U.S.C. 3056. This paragraph applies to 
the following systems of records maintained by SIGAR:
    SIGAR-04 Freedom of Information Act and Privacy Act Records;
    SIGAR-05 Audit Records;
    SIGAR-06 Correspondence Records;
    SIGAR-07 Hotline Records;
    SIGAR-08 Investigation Records;
    SIGAR-09 Legal Records;
    SIGAR-10 Legislative Inquiries and Correspondence.
    (2) SIGAR hereby exempts the systems of records listed in 
paragraphs (c)(1)(i) of this section from the following provisions of 5 
U.S.C. 552a, pursuant to 5 U.S.C. 552a(j)(2): 5 U.S.C. 552a(c)(3) and 
(4), 5 U.S.C. 552a(d)(1), (2), (3), (4), 5 U.S.C. 552a(e)(1), (2) and 
(3), 5 U.S.C. 552a(e)(4)(G), (H), and (I), 5 U.S.C. 552a(e)(5) and (8), 
5 U.S.C. 552a(f), and 5 U.S.C. 552a(g).
    (d) Reasons for exemptions under 5 U.S.C. 552a(j)(2). (1) 5 U.S.C. 
552a(e)(4)(G) and (f)(l) enable individuals to inquire whether a system 
of records contains records pertaining to them. Application of these 
provisions to the systems of records would give individuals an 
opportunity to learn whether they have been identified as suspects or 
subjects of investigation. As further described in (d)(2) of this 
section, access to such knowledge would impair SIGAR's ability to carry 
out its mission, since individuals could:
    (i) Take steps to avoid detection;
    (ii) Inform associates that an investigation is in progress;
    (iii) Learn the nature of the investigation;
    (iv) Learn whether they are only suspects or identified as law 
violators;
    (v) Begin, continue, or resume illegal conduct upon learning that 
they are not identified in the system of records; or
    (vi) Destroy evidence needed to prove the violation.
    (2) 5 U.S.C. 552a(d)(1), (e)(4)(H) and (f)(2), (3) and (5) grant 
individuals access to records pertaining to them. The application of 
these provisions to the systems of records would compromise SIGAR's 
ability to provide useful tactical and strategic information to law 
enforcement agencies.
    (i) Permitting access to records contained in the systems of 
records would provide individuals with information concerning the 
nature of any current investigations and would enable them to avoid 
detection or apprehension by:
    (A) Discovering the facts that would form the basis for their 
arrest;
    (B) Enabling them to destroy or alter evidence of criminal conduct 
that would form the basis for their arrest; and
    (C) Using knowledge that criminal investigators had reason to 
believe that a crime was about to be committed, to delay the commission 
of the crime or commit it at a location that might not be under 
surveillance.
    (ii) Permitting access to either on-going or closed investigative 
files would also reveal investigative techniques and procedures, the 
knowledge of which could enable individuals planning crimes to 
structure their operations so as to avoid detection or apprehension.
    (iii) Permitting access to investigative files and records could, 
moreover, disclose the identity of confidential sources and informers 
and the nature of the information supplied and thereby endanger the 
physical safety of those sources by exposing them to possible reprisals 
for having provided the information. Confidential sources and informers 
might refuse to provide criminal investigators with valuable 
information unless they believed that their identities would not be 
revealed through disclosure of their names or the nature of the 
information they supplied. Loss of access to such sources would 
seriously impair SIGAR's ability to carry out its mandate.
    (iv) Furthermore, providing access to records contained in the 
systems of records could reveal the identities of undercover law 
enforcement officers who compiled information regarding the 
individual's criminal activities and thereby endanger the physical 
safety of those undercover officers or their families by exposing them 
to possible reprisals.
    (v) By compromising the law enforcement value of the systems of 
records for the reasons outlined in paragraphs (d)(2)(i) through (iv) 
of this section, permitting access in keeping with these provisions 
would discourage other law enforcement and regulatory agencies, foreign 
and domestic, from freely sharing information with SIGAR and thus would 
restrict SIGAR's access to information necessary to accomplish its 
mission most effectively.
    (vi) Limitation on access to the material contained in the 
protective intelligence files is considered necessary to the 
preservation of the utility of intelligence files and in safeguarding 
those persons SIGAR is authorized to protect. Access to the protective 
intelligence files could adversely affect the quality of information 
available to SIGAR; compromise confidential sources, hinder the ability 
of SIGAR to keep track of persons of protective interest; and interfere 
with SIGAR's protective intelligence activities by individuals gaining 
access to protective intelligence files.
    (vii) Many of the persons on whom records are maintained in the 
protective intelligence suffer from mental aberrations. Knowledge of 
their condition and progress comes from authorities, family members and 
witnesses. Many times this information comes to SIGAR as a result of 
two party conversations where it would be impossible to hide the 
identity of informants. Sources of information must be developed, 
questions asked and

[[Page 38221]]

answers recorded. Trust must be extended and guarantees of 
confidentiality and anonymity must be maintained. Allowing access to 
information of this kind to individuals who are the subjects of 
protective interest may well lead to violence directed against an 
informant by a mentally disturbed individual.
    (viii) Finally, the dissemination of certain information that SIGAR 
may maintain in the systems of records is restricted by law.
    (3) 5 U.S.C. 552a(d)(2), (3) and (4), (e)(4)(H), and (f)(4) permit 
an individual to request amendment of a record pertaining to him or her 
and require the agency either to amend the record, or to note the 
disputed portion of the record and to provide a copy of the 
individual's statement of disagreement with the agency's refusal to 
amend a record to persons or other agencies to whom the record is 
thereafter disclosed. Since these provisions depend on the individual's 
having access to his or her records, and since these rules exempt the 
systems of records from the provisions of 5 U.S.C. 552a relating to 
access to records, for the reasons set out in paragraph (d)(2) of this 
section, these provisions should not apply to the systems of records.
    (4) 5 U.S.C. 552a(c)(3) requires an agency to make accountings of 
disclosures of a record available to the individual named in the record 
upon his or her request. The accountings must state the date, nature, 
and purpose of each disclosure of the record and the name and address 
of the recipient.
    (i) The application of this provision would impair the ability of 
law enforcement agencies outside SIGAR to make effective use of 
information provided by SIGAR. Making accountings of disclosures 
available to the subjects of an investigation would alert them to the 
fact that another agency is conducting an investigation into their 
criminal activities and could reveal the geographic location of the 
other agency's investigation, the nature and purpose of that 
investigation, and the dates on which that investigation was active. 
Violators possessing such knowledge would be able to take measures to 
avoid detection or apprehension by altering their operations, by 
transferring their criminal activities to other geographical areas, or 
by destroying or concealing evidence that would form the basis for 
arrest. In the case of a delinquent account, such release might enable 
the subject of the investigation to dissipate assets before levy.
    (ii) Moreover, providing accountings to the subjects of 
investigations would alert them to the fact that SIGAR has information 
regarding their criminal activities and could inform them of the 
general nature of that information. Access to such information could 
reveal the operation of SIGAR's information-gathering and analysis 
systems and permit violators to take steps to avoid detection or 
apprehension.
    (iii) The release of such information to the subject of a 
protective intelligence file would provide significant information 
concerning the nature of an investigation, and could result in impeding 
or compromising the efforts of Department personnel to detect persons 
suspected of criminal activities or to collect information necessary 
for the proper evaluation of persons considered to be of protective 
interest.
    (5) 5 U.S.C. 552(c)(4) requires an agency to inform any person or 
other agency about any correction or notation of dispute that the 
agency made in accordance with 5 U.S.C. 552a(d) to any record that the 
agency disclosed to the person or agency if an accounting of the 
disclosure was made. Since this provision depends on an individual's 
having access to and an opportunity to request amendment of records 
pertaining to him or her, and since these rules exempt the systems of 
records from the provisions of 5 U.S.C. 552a relating to access to and 
amendment of records, for the reasons set out in paragraph (f)(3) of 
this section, this provision should not apply to the systems of 
records.
    (6) 5 U.S.C. 552a(e)(4)(I) requires an agency to publish a general 
notice listing the categories of sources for information contained in a 
system of records. The application of this provision to the systems of 
records could compromise SIGAR's ability to provide useful information 
to law enforcement agencies, since revealing sources for the 
information could:
    (i) Disclose investigative techniques and procedures;
    (ii) Result in threats or reprisals against informers by the 
subjects of investigations; and
    (iii) Cause informers to refuse to give full information to 
criminal investigators for fear of having their identities as sources 
disclosed.
    (7) 5 U.S.C. 552a(e)(1) requires an agency to maintain in its 
records only such information about an individual as is relevant and 
necessary to accomplish a purpose of the agency required to be 
accomplished by statute or executive order. The term ``maintain,'' as 
defined in 5 U.S.C. 552a(a)(3), includes ``collect'' and 
``disseminate.'' The application of this provision to the systems of 
records could impair SIGAR's ability to collect and disseminate 
valuable law enforcement information.
    (i) At the time that SIGAR collects information, it often lacks 
sufficient time to determine whether the information is relevant and 
necessary to accomplish a SIGAR purpose.
    (ii) In many cases, especially in the early stages of 
investigation, it may be impossible to immediately determine whether 
information collected is relevant and necessary, and information that 
initially appears irrelevant and unnecessary often may, upon further 
evaluation or upon collation with information developed subsequently, 
prove particularly relevant to a law enforcement program.
    (iii) Compliance with the records maintenance criteria listed in 
the foregoing provision would require the periodic up-dating of SIGAR's 
protective intelligence files to insure that the records maintained in 
the system remain timely and complete.
    (iv) Not all violations of law discovered by SIGAR fall within the 
investigative jurisdiction of SIGAR. To promote effective law 
enforcement, SIGAR will have to disclose such violations to other law 
enforcement agencies, including State, local and foreign agencies, that 
have jurisdiction over the offenses to which the information relates. 
Otherwise, SIGAR might be placed in the position of having to ignore 
information relating to violations of law not within the jurisdiction 
of SIGAR when that information comes to SIGAR's attention during the 
collation and analysis of information in its records.
    (8) 5 U.S.C. 552a(e)(2) requires an agency to collect information 
to the greatest extent practicable directly from the subject individual 
when the information may result in adverse determinations about an 
individual's rights, benefits, and privileges under Federal programs. 
The application of this provision to the systems of records would 
impair SIGAR's ability to collate, analyze, and disseminate 
investigative, intelligence, and enforcement information.
    (i) Most information collected about an individual under criminal 
investigation is obtained from third parties, such as witnesses and 
informants. It is usually not feasible to rely upon the subject of the 
investigation as a source for information regarding his criminal 
activities.
    (ii) An attempt to obtain information from the subject of a 
criminal investigation will often alert that individual to the 
existence of an investigation, thereby affording the

[[Page 38222]]

individual an opportunity to attempt to conceal his criminal activities 
so as to avoid apprehension.
    (iii) In certain instances, the subject of a criminal investigation 
is not required to supply information to criminal investigators as a 
matter of legal duty.
    (iv) During criminal investigations it is often a matter of sound 
investigative procedure to obtain information from a variety of sources 
to verify information already obtained.
    (9) 5 U.S.C. 552a(e)(3) requires an agency to inform each 
individual whom it asks to supply information, on the form that it uses 
to collect the information or on a separate form that the individual 
can retain, of the agency's authority for soliciting the information; 
whether disclosure of information is voluntary or mandatory; the 
principal purposes for which the agency will use the information; the 
routine uses that may be made of the information; and the effects on 
the individual of not providing all or part of the information. The 
systems of records should be exempted from this provision to avoid 
impairing SIGAR's ability to collect and collate investigative, 
intelligence, and enforcement data.
    (i) Confidential sources or undercover law enforcement officers 
often obtain information under circumstances in which it is necessary 
to keep the true purpose of their actions secret so as not to let the 
subject of the investigation or his or her associates know that a 
criminal investigation is in progress.
    (ii) If it became known that the undercover officer was assisting 
in a criminal investigation, that officer's physical safety could be 
endangered through reprisal, and that officer may not be able to 
continue working on the investigation.
    (iii) Individuals often feel inhibited in talking to a person 
representing a criminal law enforcement agency but are willing to talk 
to a confidential source or undercover officer whom they believe not to 
be involved in law enforcement activities.
    (iv) Providing a confidential source of information with written 
evidence that he or she was a source, as required by this provision, 
could increase the likelihood that the source of information would be 
subject to retaliation by the subject of the investigation.
    (v) Individuals may be contacted during preliminary information 
gathering, surveys, or compliance projects concerning the 
administration of the internal revenue laws before any individual is 
identified as the subject of an investigation. Informing the individual 
of the matters required by this provision would impede or compromise 
subsequent investigations.
    (vi) Finally, application of this provision could result in an 
unwarranted invasion of the personal privacy of the subject of the 
criminal investigation, particularly where further investigation 
reveals that the subject was not involved in any criminal activity.
    (10) 5 U.S.C. 552a(e)(5) requires an agency to maintain all records 
it uses in making any determination about any individual with such 
accuracy, relevance, timeliness, and completeness as is reasonably 
necessary to assure fairness to the individual in the determination.
    (i) Since 5 U.S.C. 552a(a)(3) defines ``maintain'' to include 
``collect'' and ``disseminate,'' application of this provision to the 
systems of records would hinder the initial collection of any 
information that could not, at the moment of collection, be determined 
to be accurate, relevant, timely, and complete. Similarly, application 
of this provision would seriously restrict SIGAR's ability to 
disseminate information pertaining to a possible violation of law to 
law enforcement and regulatory agencies. In collecting information 
during a criminal investigation, it is often impossible or unfeasible 
to determine accuracy, relevance, timeliness, or completeness prior to 
collection of the information. In disseminating information to law 
enforcement and regulatory agencies, it is often impossible to 
determine accuracy, relevance, timeliness, or completeness prior to 
dissemination, because SIGAR may not have the expertise with which to 
make such determinations.
    (ii) Information that may initially appear inaccurate, irrelevant, 
untimely, or incomplete may, when collated and analyzed with other 
available information, become more pertinent as an investigation 
progresses. In addition, application of this provision could seriously 
impede criminal investigators and intelligence analysts in the exercise 
of their judgment in reporting results obtained during criminal 
investigations.
    (iii) Compliance with the records maintenance criteria listed in 
the foregoing provision would require the periodic up-dating of SIGAR's 
protective intelligence files to insure that the records maintained in 
the system remain timely and complete.
    (11) 5 U.S.C. 552a(e)(8) requires an agency to make reasonable 
efforts to serve notice on an individual when the agency makes any 
record on the individual available to any person under compulsory legal 
process, when such process becomes a matter of public record. The 
systems of records should be exempted from this provision to avoid 
revealing investigative techniques and procedures outlined in those 
records and to prevent revelation of the existence of an ongoing 
investigation where there is need to keep the existence of the 
investigation secret.
    (12) 5 U.S.C. 552a(g) provides for civil remedies to an individual 
when an agency wrongfully refuses to amend a record or to review a 
request for amendment, when an agency wrongfully refuses to grant 
access to a record, when an agency fails to maintain accurate, 
relevant, timely, and complete records which are used to make a 
determination adverse to the individual, and when an agency fails to 
comply with any other provision of 5 U.S.C. 552a so as to adversely 
affect the individual. The systems of records should be exempted from 
this provision to the extent that the civil remedies may relate to 
provisions of 5 U.S.C. 552a from which these rules exempt the systems 
of records, since there should be no civil remedies for failure to 
comply with provisions from which SIGAR is exempted. Exemption from 
this provision will also protect SIGAR from baseless civil court 
actions that might hamper its ability to collate, analyze, and 
disseminate investigative, intelligence, and law enforcement data.
    (e) Specific exemptions under 5 U.S.C. 552a(k)(1). (1) Under 5 
U.S.C. 552a(k)(1), the head of any agency may promulgate rules to 
exempt any system of records within the agency from certain provisions 
of the Privacy Act to the extent that the system contains information 
subject to the provisions of 5 U.S.C. 552(b)(1). This paragraph applies 
to the following systems of records maintained by SIGAR:
    SIGAR-07 Hotline Records;
    SIGAR-08 Investigation Records;
    SIGAR-09 Legal Records.
    (2) SIGAR hereby exempts the systems of records listed in paragraph 
(e)(1) of this section from the following provisions of 5 U.S.C. 552a, 
pursuant to 5 U.S.C. 552a(k)(1): 5 U.S.C. 552a(c)(3), 5 U.S.C. 
552a(d)(1), (2), (3), and (4), 5 U.S.C. 552a(e)(1), 5 U.S.C. 
552a(e)(4)(G), (H), and (I), and 5 U.S.C. 552a(f).
    (f) Reasons for exemptions under 5 U.S.C. 552a(k)(1). The reason 
for invoking the exemption is to protect material authorized to be kept 
secret in the interest of national defense or foreign policy pursuant 
to Executive Orders 12958, 13526, or successor or prior Executive 
Orders.
    (g) Specific exemptions under 5 U.S.C. 552a(k)(2). (1) Under 5 
U.S.C. 552a(k)(2), the head of any agency may

[[Page 38223]]

promulgate rules to exempt any system of records within the agency from 
certain provisions of the Privacy Act of 1974 if the system is 
investigatory material compiled for law enforcement purposes and for 
the purposes of assuring the safety of individuals protected by SIGAR 
pursuant to the provisions of 18 U.S.C. 3056. This paragraph applies to 
the following systems of records maintained by SIGAR:
    SIGAR-04 Freedom of Information Act and Privacy Act Records;
    SIGAR-05 Audit Records;
    SIGAR-06 Correspondence Records;
    SIGAR-07 Hotline Records;
    SIGAR-08 Investigation Records;
    SIGAR-09 Legal Records;
    SIGAR-10 Legislative Inquiries and Correspondence.
    (2) SIGAR hereby exempts the systems of records listed in 
paragraphs (g)(1)(i) of this section from the following provisions of 5 
U.S.C. 552a, pursuant to 5 U.S.C. 552a(k)(2): 5 U.S.C. 552a(c)(3), 5 
U.S.C. 552a(d)(1), (2), (3), (4), 5 U.S.C. 552a(e)(1), 5 U.S.C. 
552a(e)(4)(G), (H), and (I), and 5 U.S.C. 552a(f).
    (h) Reasons for exemptions under 5 U.S.C. 552a(k)(2). (1) 5 U.S.C. 
552a(c)(3) requires an agency to make accountings of disclosures of a 
record available to the individual named in the record upon his or her 
request. The accountings must state the date, nature, and purpose of 
each disclosure of the record and the name and address of the 
recipient.
    (i) The application of this provision would impair the ability of 
SIGAR and of law enforcement agencies outside SIGAR to make effective 
use of information maintained by SIGAR. Making accountings of 
disclosures available to the subjects of an investigation would alert 
them to the fact that an agency is conducting an investigation into 
their illegal activities and could reveal the geographic location of 
the investigation, the nature and purpose of that investigation, and 
the dates on which that investigation was active. Violators possessing 
such knowledge would be able to take measures to avoid detection or 
apprehension by altering their operations, by transferring their 
illegal activities to other geographical areas, or by destroying or 
concealing evidence that would form the basis for detection or 
apprehension. In the case of a delinquent account, such release might 
enable the subject of the investigation to dissipate assets before 
levy.
    (ii) Providing accountings to the subjects of investigations would 
alert them to the fact that SIGAR has information regarding their 
illegal activities and could inform them of the general nature of that 
information.
    (2) 5 U.S.C. 552a(d)(1), (e)(4)(H) and (f)(2), (3) and (5) grant 
individuals access to records pertaining to them. The application of 
these provisions to the systems of records would compromise SIGAR's 
ability to utilize and provide useful tactical and strategic 
information to law enforcement agencies.
    (i) Permitting access to records contained in the systems of 
records would provide individuals with information concerning the 
nature of any current investigations and would enable them to avoid 
detection or apprehension by:
    (A) Discovering the facts that would form the basis for their 
detection or apprehension;
    (B) Enabling them to destroy or alter evidence of illegal conduct 
that would form the basis for their detection or apprehension, and
    (C) Using knowledge that investigators had reason to believe that a 
violation of law was about to be committed, to delay the commission of 
the violation or commit it at a location that might not be under 
surveillance.
    (ii) Permitting access to either on-going or closed investigative 
files would also reveal investigative techniques and procedures, the 
knowledge of which could enable individuals planning non-criminal acts 
to structure their operations so as to avoid detection or apprehension.
    (iii) Permitting access to investigative files and records could, 
moreover, disclose the identity of confidential sources and informers 
and the nature of the information supplied and thereby endanger the 
physical safety of those sources by exposing them to possible reprisals 
for having provided the information. Confidential sources and informers 
might refuse to provide investigators with valuable information unless 
they believed that their identities would not be revealed through 
disclosure of their names or the nature of the information they 
supplied. Loss of access to such sources would seriously impair SIGAR's 
ability to carry out its mandate.
    (iv) Furthermore, providing access to records contained in the 
systems of records could reveal the identities of undercover law 
enforcement officers or other persons who compiled information 
regarding the individual's illegal activities and thereby endanger the 
physical safety of those undercover officers, persons, or their 
families by exposing them to possible reprisals.
    (v) By compromising the law enforcement value of the systems of 
records for the reasons outlined in paragraphs (h)(2)(i) through (iv) 
of this section, permitting access in keeping with these provisions 
would discourage other law enforcement and regulatory agencies, foreign 
and domestic, from freely sharing information with SIGAR and thus would 
restrict SIGAR's access to information necessary to accomplish its 
mission most effectively.
    (vi) Finally, the dissemination of certain information that SIGAR 
may maintain in the systems of records is restricted by law.
    (3) 5 U.S.C. 552a(d)(2), (3) and (4), (e)(4)(H), and (f)(4) permit 
an individual to request amendment of a record pertaining to him or her 
and require the agency either to amend the record, or to note the 
disputed portion of the record and to provide a copy of the 
individual's statement of disagreement with the agency's refusal to 
amend a record to persons or other agencies to whom the record is 
thereafter disclosed. Since these provisions depend on the individual's 
having access to his or her records, and since these rules exempt the 
systems of records from the provisions of 5 U.S.C. 552a relating to 
access to records, for the reasons set out in paragraph (h)(2) of this 
section, these provisions should not apply to the systems of records.
    (4) 5 U.S.C. 552a(e)(1) requires an agency to maintain in its 
records only such information about an individual as is relevant and 
necessary to accomplish a purpose of the agency required to be 
accomplished by statute or executive order. The term ``maintain,'' as 
defined in 5 U.S.C. 552a(a)(3), includes ``collect'' and 
``disseminate.'' The application of this provision to the system of 
records could impair SIGAR's ability to collect, utilize and 
disseminate valuable law enforcement information.
    (i) At the time that SIGAR collects information, it often lacks 
sufficient time to determine whether the information is relevant and 
necessary to accomplish a Department purpose.
    (ii) In many cases, especially in the early stages of 
investigation, it may be impossible immediately to determine whether 
information collected is relevant and necessary, and information that 
initially appears irrelevant and unnecessary often may, upon further 
evaluation or upon collation with information developed subsequently, 
prove particularly relevant to a law enforcement program.
    (iii) Not all violations of law discovered by SIGAR analysts fall 
within the investigative jurisdiction of

[[Page 38224]]

SIGAR. To promote effective law enforcement, SIGAR will have to 
disclose such violations to other law enforcement agencies, including 
State, local and foreign agencies that have jurisdiction over the 
offenses to which the information relates. Otherwise, SIGAR might be 
placed in the position of having to ignore information relating to 
violations of law not within the jurisdiction of SIGAR when that 
information comes to SIGAR's attention during the collation and 
analysis of information in its records.
    (5) 5 U.S.C. 552a (e)(4)(G) and (f)(1) enable individuals to 
inquire whether a system of records contains records pertaining to 
them. Application of these provisions to the systems of records would 
allow individuals to learn whether they have been identified as 
suspects or subjects of investigation. As further described in the 
following paragraph, access to such knowledge would impair SIGAR's 
ability to carry out its mission, since individuals could:
    (i) Take steps to avoid detection;
    (ii) Inform associates that an investigation is in progress;
    (iii) Learn the nature of the investigation;
    (iv) Learn whether they are only suspects or identified as law 
violators;
    (v) Begin, continue, or resume illegal conduct upon learning that 
they are not identified in the system of records; or (vi) Destroy 
evidence needed to prove the violation.
    (6) 5 U.S.C. 552a(e)(4)(I) requires an agency to publish a general 
notice listing the categories of sources for information contained in a 
system of records. The application of this provision to the systems of 
records could compromise SIGAR's ability to complete or continue 
investigations or to provide useful information to law enforcement 
agencies, since revealing sources for the information could:
    (i) Disclose investigative techniques and procedures;
    (ii) Result in threats or reprisals against informers by the 
subjects of investigations; and
    (iii) Cause informers to refuse to give full information to 
investigators for fear of having their identities as sources disclosed.

[FR Doc. 2012-15429 Filed 6-26-12; 8:45 am]
BILLING CODE 3710-L9-P