The MacNeil/Lehrer Report; Privacy Commission Report

ROBERT MacNEIL: Good evening. How much do you value your personal privacy? Whatever the answer, there`s probably precious little you can do to keep the confidential details of your finances, living habits, even your morals away from the interested snooper these days. A government commission reported to President Carter and the Congress today that this society has become so information-happy that the computers of business are stuffed with highly personal information about all of us -- information that can be shared very casually. The Commission on Personal Privacy recommends government action to protect citizens from misuse of such information. Ten bills were introduced today in Congress to implement those recommendations.

Tonight, how is our privacy abused in the name of business convenience, and what can be done about it? Jim?

JIM LEHRER: Robin, the genesis of the personal privacy problem is easy to trace. All we have to do is think for a moment about all of the information we routinely put on some kind of form: applications for employment, an auto or student loan, a house mortgage, a marriage license, a driver`s license, an auto registration; life, house, auto and hospitalization insurance, a credit card, a grocery store check cashing card; and there are medical histories for doctors and hospitals; there are also life histories for the military, residence histories for the school district and the landlord, and on and on it goes. Just think of how many times you`ve had to detail your past employment record and educational background, summarize your drinking habits, list the names and ages of your children, detail all of your outstanding debts. In short, there`s a lot of information about all of us out there in files and on computer tapes. The nut of the problem is how that information is used. Robin?

MacNEIL: Let`s take just one example and see how your "confidential financial information" can branch out and end up in many hands. Suppose you apply for a credit card. The issuing company, or creditor, passes the facts you give to a credit bureau for checking. The bureau will compare the facts with information about you they received when you applied for credit from other creditors, like stores or loan companies. They may also exchange information about you with your insurance company, your bank, other stores you do business with, even your employer. After you`ve got the credit you want your creditors may contact independent authorization services to ensure that you do not spend past your credit limit. And if you become lax in payment, information will go to collection agencies, who may discuss that with your employer. Finally, government at all levels can gain access to the same information through investigative agencies, like the IRS or the FBI. So information you pass to only one creditor in confidence may have spread to a huge network of people who now know about your private affairs. Jim?

LEHRER: The governmental commission which issued its report today is known officially as the Privacy Protection Study Commission. It was set up by Congress in 1974 and given $1.75 million to conduct its two-year study. The commission had seven members, including a liberal Democratic and a conservative Republican member of Congress and representatives of business and the law. The chairman was David F. Linowes, an accountant and Professor of Political Economics and Public Policy at the University of Illinois. Mr. Linowes, an overview first: how badly is our privacy being intruded upon?

DAVID LINOWES: In recent years the computer, as you know, has been applied to practically every dimension of society, and as a result more and more personal confidential information gets placed in data banks just about never to be destroyed -- retrievable, incidentally, in a matter of seconds. Now, if you ever want to get a profile on a person, just find out how he spends his money: the things he buys, the magazines he subscribes to, the places he travels, the organizations he contributes to. With that kind of information you can get a rather precise description of the nature of that person. Computer data banks for credit bureaus and credit card companies have tens of millions of this kind of information on our citizens. Now, in responsible hands you might feel, "Fine, there`s no real problem." But the temptation is there, and if this should fall into irresponsible hands, then this information could be used for harassment purposes, for political purposes or even for blackmail. We do have some indication, material in our files, that indicates that it has been used for some of these purposes. At the present time there are no adequate safeguards in place that can guarantee the fact that this information will be safe from external intrusion.

LEHRER: Is the area of personal financial information what you would consider the major intrusion into our privacy right now?

LINOWES: That is a major intrusion. Among the important areas are medical records, for example, which today play a very key role in what is happening to an individual. In the medical record area we have found evidence that organizations exist which as part of their operations obtain highly confidential personal medical information out of hospitals and out of doctors` offices and they take this information, sell it to insurance companies who in turn use it to negotiate claims or to set up reserves for those claims. They obtain this information by impersonating physicians, nurses or even clerics. There are no laws today in any of the states that are adequate to protect against that kind of abuse. Further, with medical records, we have in our society become a society of groupies insofar as insurance is concerned -- group health, group life, group accident. Most group policies are administered by your employer. Because of third party payers -- the insurance companies or someone else paying the bills -- the medical records find their way into the offices of the employer because they`re administered there, and then they`re processed for payment. With that...

LEHRER: Medical records with various kinds of confidential information.

LINOWES : For employees or others who might be part of that group. Employers have been known to obtain access to these records, use it for purposes of deciding whether or not to promote an individual or whether even to retain the individual, all without the knowledge of the person concerned.

LEHRER: Is it Possible to identify who the villains are in this piece, or is this a system problem, lack of laws, or what?

LINOWES: Like so many things, there is no one villain. What we have is a phenomenon that has surfaced in our society as a result of two basic things: one, the advent of the computer and that technology and the ability to store indefinitely and retrieve immediately; and secondly, society`s rising expectations of government and business. If you want the kind of services from government, then you have to be able to prove that you`re eligible for it so that an administrator can pass on it. Therefore you`re required to give up certain pieces of information. If you want the use of a credit card so you would have instant credit available no matter where you travel in the world, again you have to give up certain pieces of information. And it`s this kind of interdependence that comes to the fore, and there is no one villain; it`s a circumstance of life and it`s a condition we now find ourselves in. Society must readjust our approach to dealing with this area so that it is a matter that can be implemented with adequate safeguards for all, both the organization and the individual.

LEHRER: You commission today made 162 recommendations. I`m not going to ask you to name them, but could you name what you consider to be one or two of the major changes that the commission would like to see that would help correct this problem that you`ve just outlined?

LINOWES: Frankly, through the entire 162 or more recommendations are five or six basic points. One is that the individual should have a right to see and copy a record about him. Also, the individual should have a right to correct that record. We don`t have that right today. Further, the individual should have a right to authorize the transfer of any information about him from one organization to another. Also, an organization should only collect relevant data to make that decision and not all of the unnecessary data that is constantly collected today. We don`t believe there should be any secret records about individuals in either the private or public sector; the public should know what organizations are accumulating information and what they intend to do with it. Also, we feel that pretext interviews -- that is, interviews undertaken under false pretenses -- should be outlawed. These permeate practically all of our recommendations.

LEHRER: All right, sir. Thank you. Robin?

MacNEIL: Let`s turn to a lawyer and journalist who has made privacy his business for a number of years. In 1974 Robert Ellis Smith started publishing Privacy Journal, which describes itself as an independent monthly on privacy in a computer age. Previously Mr. Smith was a civil rights lawyer with HEW and worked on the privacy issue for the American Civil Liberties Union. Mr. Smith, has the commission correctly identified the problem, in your view?

ROBERT ELLIS SMITH: I think they have in terms of what are the issues that bother people currently in this year of 1977, namely, bank records, medical records, insurance records, employment records. I think the commission took a very orphanlike and legalistic approach to privacy matters and within those confines I think they accurately did focus on the right issues.

MacNEIL: Have they left anything important out that you would have preferred, with your interest, to see in there?

SMITH: I think a commission of this sort, almost by definition ought to be thinking about the year 1984 and beyond, and not the current year. I`m awfully worried, for instance, about the surveillance invasions of privacy that are necessitated by the development of nuclear power plants, both of individuals who oppose that development and those who work for such plants. Secondly, the commission spent a lot of time on mail solicitation, which is an irritant to many people, but really didn`t mention telephone solicitation, which I think is a greater intrusion. It is now possible for marketing companies to use the computer to dial up your telephone automatically and perhaps even to intrude into your home with a recorded message.

I`m also intrigued by the monopoly interests that seem to be attracted to what`s called the personal information market. You have IBM, AT&T, Retail Credit Company, which dominates about ninety percent of this field, and the Medical Information Bureau, which is the huge data bank in Boston which has records on eleven million persons.

MacNEIL: I see. You`re a professional collector of horror stories in this area. Just to give us some idea of why you think it`s important, can you give us one where somebody`s privacy was grossly intruded upon in this way?

SMITH: Well, in terms of access, I can speak from personal experience. I`ve been trying for two years to find out what the Medical Information Bureau has on me in its data bank in Boston. I remember a gentleman who came into my office with a letter from his doctor, literally, showing that he did not suffer from high blood pressure. But this computer data bank in Boston continued to report to various insurance companies that he was suffering from high blood pressure. He had never heard of this computer data bank, had no idea how to reach them or how he could get that record corrected. Under one of the reforms that the commission came up with today, he would have that right to know what`s in his file and to correct it if necessary.

MacNEIL: I see. The commission speaks of an independent entity, a sort of privacy board to oversee all this and see that its recommendations are implemented. What kind of a body do you think that should be?

SMITH: Well, I`m not so sure, and I`m not sure that`s key to the privacy issue. I think what is key is for individuals, for consumers, to know more about their bargaining powers, to know more about what they have to give up and what they don`t have to give up. And I think the commission was right in not defining this body in all specificity. Perhaps it is necessary to have an ongoing body. I guess I`m rather encouraged that the commission didn`t insist that a body of its type be continued.

MacNEIL: I see. But nobody`s in favor, apparently, of another government agency -- a privacy agency, or something.

SMITH: Oh, there are those that are. I think you can see a lot of Congressional opposition to this entity, as it`s now being called. It`s very close to the Consumer Protection Agency, which would advocate the consumer point of view before various federal regulatory bodies so that you :could have one arm of the federal government arguing against another arm, and that will create great problems but it might create creative tension within the government.

MaCNEIL: Thank you. One of the professionals who finds easy? access to much of the information we`re talking about is Irwin Blye, a private investigator licensed here in New York State. He`s the subject of a book called Blye, Private Eye, which documents Blye`s belief that privacy is a myth these days. Mr. Blye, why is it a myth?

IRWIN BLYE: Well, using forms I can conduct a background investigation without leaving my office and using only public records. Just the simplest of forms -- in the State of New York, a Motor Vehicle form -- will inform me as to whether you have a heart condition, whether you are on parole, and all other kinds of disabilities you may have. It at one time also stated where you were employed. We can proceed with that and go on to any loans you may have obtained, any judgments against you; and using the correct terminology we can call up banks, canvass them, identifying ourselves properly, and ask for information regarding your account. Now, when I say ask for information regarding your account, we`re restricted to certain information regarding the account: whether the account exists, whether the account is satisfactory. But they usually will not state how much is in the account.

MacNEIL: No. Is it easy for a professional investigator, then, to get access to the kind of information we`re talking about, by and large?

BLYE: Yes, but what you`ve been talking about, by and large, is probably information that the federal government agency would obtain. In the private sector, we would use public information, and there is an enormous amount of public information that we can obtain legally, without having to go to any of these data banks.

MacNEIL: I see. In your experience, do the personnel of organizations that you deal with -- banks and people like that -- do they regard this sort of information as really private, if you sound very authoritative when you ask for it?

BLYE: When we call, we are restricted. We must identify ourselves, we cannot use a ruse. We identify, "I`m Irwin Blye, a New York State licensed investigator. I`m calling regarding so-and-so," using their terminology.

MacNEIL: You never use impersonation or subterfuge?

BLYE: No. It is not necessary. It really is not necessary. I inquire about a certain individual and, using their terminology, in certain areas I`m permitted to get the information. Having certain leads,

I can then go on, without having to use any ruse, without having to take any false identification. It`s not necessary.

MacNEIL: But do you find employees of organizations like credit bureaus or banks or whatever -- medical record keeping things -- when you identify yourself as a private investigator, reluctant to give this information because they really consider it private or confidential?

BLYE: At times. Of course, it`s the individual. Many times when you say you`re a private investigator or course they`re somewhat thrilled -- private investigator brings out these thoughts of television, someone `creaking dove a door -- and they`ll ask you questions. I find that there are people who probably give us a little more information than the should give. That` s the individual employee.

MacNEIL: Is it possible for an average citizen these days to keep his life private?

BLYE: For the most part I would say no.

MacNEIL: Thank you. Jim?

LEHRER: The insurance industry, of course, is one of the main gatherers and repositories of private information about people. They need it to issue and service insurance policies and claims, and consequently they`re in the middle of any discussion of the privacy problem. Ned Cabot is Assistant General Counsel of the Equitable Life Insurance Company, the nation`s third largest life insurance company. Mr. Cabot chaired an internal company task force on privacy also. Mr. Cabot, from your point of view, is the right of privacy being overwhelmed by the need of yours and other organizations like yours to get personal information?

NED CABOT: I certainly hope not. We as a company have made a commitment and have reviewed our processes very comprehensively because we believe that privacy -- the privacy of our customers -- is vital to our business. We think that the customer service relationship that Equitable has established will simply not survive unless our customers believe that their privacy is protected when they deal with the Equitable.

LEHRER: All right. Let`s say Mr. Blye calls Equitable and identifies himself as he said he did and says, "Look, I`d like to know boom-boom-boom about Sammy Sue Smith." Could he get that information from your company?

CABOT: I would hope not. One of my concerns about the Privacy Commission`s report -- and I in general think it`s a fine report and that they`ve done a wonderful, comprehensive job -- is that at one point in the report they suggest that a consumer have a right to get information over the telephone, or the nature and substance of that information about them. We are very reluctant to do that, because it seems to me and has seemed to us that the problems inherent in identifying the person who`s calling are very substantial, and therefore we much prefer to send that information out; and except in very unusual circumstances our people are instructed to send that information to the policyholder at home.

LEHRER: In other words, no luck for Mr. Blye, is that right, over the telephone?

CABOT: I`d be reluctant to suggest that Mr. Blye couldn`t break our system, but our people are under instructions not to respond to those kinds of requests.

LEHRER: All right, to whose requests do you respond? In other words, who do you share this confidential information with? You said you feel very strongly it is confidential, but do you share it with anybody, and with whom?

CABOT: We do, and we think that the Privacy Protection Study Commission in their report have recognized and taken account of the reasonable uses of information. For instance, the SIB, which was referred to earlier, we feel -- and I think in the commission`s recommendations...

LEHRER: That`s the Medical Information Bank.

CABOT: Yes -- that they have recognized that the MIB is necessary to prevent fraud and therefore that sort of sharing is appropriate. But I think we`ve implemented procedures which handle even those sharings which are appropriate very carefully.

LEHRER: All right. What about the gathering of information? Do you really need the answers to all the questions that you folks ask?

CABOT: I think we`ve got to keep looking at that kind of thing. For instance -- to talk from the employer`s standpoint for a moment -- we`ve been over the past several years reviewing our employment files and have found that there was quite a lot of information in those files which we could eliminate and we`re certainly very ready to do that. It seems to us that the cost of collecting and storing unnecessary information is really not useful to us. It increases our cost of doing business, and we have no interest in doing that unless it`s necessary.

LEHRER: In a general way, and do you feel that you could speak for the industry generally, can you-all live with the recommendations of the commission?

CABOT: Well, I wouldn`t want to speak for the industry, which should speak in its many voices for itself, but speaking for Equitable, we think that the commission`s recommendations are good and sound ones, that they are the result of a comprehensive study undertaken over a long period of time and we think they make a lot of sense. As a matter of fact, we adopted a set of privacy principles two years ago which are quite similar to those which underlie the recommendations of the commission.

LEHRER: All right, thank you. Robin?

MacNEIL: Yes, let`s pursue some of these points. Mr. Linowes, two of the Congressmen, Barry Goldwater, and Edward Koch of New York, who were members of your commission introduced legislation, ten bills to day to implement many of your recommendations. First of all, are you sanguine about what`s going to happen to all that in the Congress? Is the Congress interested in this, exercised about it?

LINOWES: We`re very pleased about the fact that two of the members of our commission had enough confidence in the results of our work that they did see fit to immediately move into a posture whereby much of the results of our findings are being transmitted into legislation. I should add, however -- I would hope -- that there wouldn`t be that kind oœ hasty rush to introduce legislation by those who haven`t been quite as close to our work because there are many interrelated units that have to be attended to. Now, if there`s any value in getting reactions, both formal and informal, from leaders in the House and Senate, then my response to that question would have to be: by all means, we are very much encouraged that our recommendations will be well received and that`s also true from the kind of response I received from the President this morning at the White House.

MacNEIL: What did he say, actually, about this, Mr. Linowes?

LINOWES: Well, he assured us that he would give it his personal attention and that he will take it up with his cabinet Which meets next Monday.

MacNEIL: Okay. Can I ask you, Mr. Smith, as somebody who`s studied this for several years yourself, will legislation framed to implement these recommendations, which by and large you approve of, will this make a major difference, supposing it were all passed --or is so much of this activity now of an illegal or quasi-legal nature anyway that it won`t make a lot of difference -- that the economic forces in the society are overwhelming any possibility of the laws making a difference? Not a very clear question, but maybe you know what I mean.

SMITH: I get your point, but I wouldn`t classify any of it as illegal activity, or most of it. In fact, the problem is, it`s perfectly legal.

MacNEIL: I see.

SMITH: I think the latter overkill, information pollution know everything about everybody information. And so what we`ve say, when in doubt don`t gather more than legislation is true, that we have an information in our society. Everybody wants to else, and when in doubt we gather the got to do is reverse that so that we it. And that`s going to take a lot.

MacNEIL: Maybe that`s my question, now that I understand it: can laws reverse it?

SMITH: They can reverse it to some extent. I`m awfully gratified that a couple of years ago I was able to walk down to my credit bureau and see what they had on file about me and I was much less apprehensive after that happened. And that`s as a direct result of a law that was passed in 1970. And college students all over the nation now can go in and see their own records and correct them if necessary. And college administrators are much more reluctant now to give out student information to the police or to local employers. So laws do make a difference, but more than that we need a change in, really, our national attitude.

MacNEIL: I know you haven`t seen the details of these laws yet, Mr. Blye, but would laws stop you from getting a lot of this information?

BLYE: Oh, certainly; certainly. But I disagree with Mr. Smith in what he says, when in doubt don`t get the information. You know, if you put an employer in a position where he`s hiring an employee and this employee is going to be in charge of a certain amount of monies that may be private or publicly held and could do great damage not only to the company but to the public, certainly that employer is allowed, I would think -- should be permitted to know a certain amount about that employee.

MacNEIL: I`d like to go back to the chairman of the commission, Mr. Linowes. Mr. Linowes, in my experience most people don`t worry too much about giving personal information if they`re filling out a credit application or something like that. Do you think that Americans really care if this information is spread around as promiscuously as we`ve been discussing, as long as it not inaccurate information. or blatantly prejudicial to them? Are they really exercised about it? They seem to hand it out awfully freely.

LINOWES: That`s been one of the problems in our society: the fact that they do give up much more information than is necessary. What people are not aware of is that this information is being preserved and it`s retrievable in a matter of seconds. This information could be kept in data banks for ten, twenty years and retrieved at a time when you thought you`d forgotten -chose experiences and those problems, and as a result we have found that there have been abuses, abuses in the form of people taking information, using it in a way that never was intended.

MacNEIL: You think Americans are too willing to give up personal information.

LINOWES: Yes. We`re an information-prone society and as such we are inclined to be free with information when an insurance company requests it or a bank...

LEHRER: But excuse me, how can a person refuse if an auto loan or something like that is at stake? You can`t refuse, can you?

LINOWES: Well, this has been one of the problems; a number of our witnesses said just that, that a person need not do business with us, they can go elsewhere. And as a practical matter they cannot go else where because certain industries tend to function in certain procedures. So therefore we need legislation in order to help establish in this instance certain criteria for the type of information that`s appropriate. And this, of course, is one of our recommendations.

MaCNEIL: Mr. Linowes, could I ask you -- we just have half a minute left -- what is the bottom line, in your view, on privacy? What has the citizen a right to expect can be kept private about him?

LINOWES: Today in the private sector, very little. What we have to recognize is that increasingly the demands being made because the individual wants so much, whether he deals with government or with industry, that he must give up a certain amount of that information; and the reason we feel our recommendations are so critical for society to be able to continue functioning in democratic fashion is that there is very little that the individual can do in order to protect himself against giving up this information.

MacNEIL: Thank you. We have to leave it there. Thank you all in Washington. Good night, Jim. And thank you both, gentlemen here. That`s all for tonight. Jim and I will be back tomorrow night, when we`ll examine President Carter`s decision to back development of the neutron bomb. I`m Robert MacNeil. Good night.