In re Legislative Subpoena [1995] FMCSC 13; 7 FSM Intrm. 261 (Chk. S. Ct. Tr. 1995) (22 September 1995)

CHUUK STATE SUPREME COURT
TRIAL DIVISION
Cite as In re Legislative Subpoena[1995] FMCSC 13; , 7 FSM Intrm. 261 (Chk. S. Ct. Tr. 1995)

IN RE: LEGISLATIVE SUBPOENA SASAO H. GOULAND,
Plaintiff,

vs.

HOUSE SPECIAL INVESTIGATION COMMITTEE,
Defendant.

CA No. 182-95

OPINION AND JUDGMENT

Soukichi Fritz
Chief Justice

Hearing: September 11, 1995
Decided: September 22, 1995

APPEARANCES:

For the Plaintiff:
Wesley Simina, Esq.
Attorney General
Office of the Chuuk Attorney General
P.O. Box 189
Weno, Chuuk FM 96942

For the Defendant:
Daniel Furrh, Esq.
Legislative Counsel
P.O. Box EX
Weno, Chuuk FM 96942

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HEADNOTES

Constitutional Law - Chuuk - Legislative Powers
The power to investigate and issue subpoenas is expressly granted the legislature by the constitution. In re Legislative Subpoena[1995] FMCSC 13; , 7 FSM Intrm. 261, 265 (Chk. S. Ct. Tr. 1995).

Constitutional Law - Chuuk - Legislative Powers
In determining whether the Legislature has the power to subpoena personal financial records of a public official in a legislative investigation, a court must consider the right to privacy as it specifically applies to a public official. In re Legislative Subpoena[1995] FMCSC 13; , 7 FSM Intrm. 261, 265 (Chk. S. Ct. Tr. 1995).

Constitutional Law - Chuuk - Legislative Powers
The power to investigate has historically been found to be an inherent power of the legislative process and a power that is very broad. It comprehends probes into departments of the government to expose corruption, inefficiency or waste, and may not be unduly hampered. In re Legislative Subpoena[1995] FMCSC 13; , 7 FSM Intrm. 261, 265 (Chk. S. Ct. Tr. 1995).

Constitutional Law - Chuuk - Legislative Powers
The legislative power to investigate is not unlimited. There is no general authority to expose the private affairs of individuals without justification in terms of the functions of the legislature, and the right to privacy embodied in Article III, section 3 of the Chuuk Constitution is a restraint on the investigative power of the legislature. In re Legislative Subpoena[1995] FMCSC 13; , 7 FSM Intrm. 261, 265 (Chk. S. Ct. Tr. 1995).

Constitutional Law - Chuuk - Legislative Powers
The legislature's investigative powers are greatest when it is inquiring into and publicizing corruption, maladministration or inefficiency in the agencies or branches of government. In re Legislative Subpoena[1995] FMCSC 13; , 7 FSM Intrm. 261, 265 (Chk. S. Ct. Tr. 1995).

Constitutional Law - Chuuk - Legislative Powers
The Chuuk House of Representatives possesses the sole authority and power to pass a Bill of Impeachment seeking to remove those state officials responsible for misfeasance or malfeasance. In re Legislative Subpoena[1995] FMCSC 13; , 7 FSM Intrm. 261, 266 (Chk. S. Ct. Tr. 1995).

Public Officers and Employees - Chuuk
The Governor, as all public officials, occupies a fiduciary relationship to the state he serves, may not use his official power to further his own interest, and shall cooperate with any legislative investigating committee. In re Legislative Subpoena[1995] FMCSC 13; , 7 FSM Intrm. 261, 266 (Chk. S. Ct. Tr. 1995).

Constitutional Law - Chuuk; Search and Seizure
The Chuuk Constitution protects persons from an unreasonable invasion of privacy. The right to privacy depends upon whether a person has a reasonable expectation that the thing, paper or place should remain free from governmental intrusion. A person's right to privacy is strongest when the government is acting in its law enforcement capacity. In re Legislative Subpoena[1995] FMCSC 13; , 7 FSM Intrm. 261, 266 (Chk. S. Ct. Tr. 1995).

Constitutional Law - Chuuk - Legislative Powers
The Chuuk House of Representatives has no criminal prosecution function. It is limited to passing laws and under the proper circumstance bringing bills of impeachment, which are not criminal in nature. In re Legislative Subpoena[1995] FMCSC 13; , 7 FSM Intrm. 261, 266 (Chk. S. Ct. Tr. 1995).

Public Officers and Employees - Chuuk; Search and Seizure
It is unreasonable for a public official, required by law to cooperate with legislative investigating committees, to have an expectation of privacy in matters that are linked to his performance in office, and it is unreasonable for a public official, such as the Governor, who is a trustee of the state's finances and who owes a fiduciary duty to the state to expect that his personal finances will be kept private if there is some reason to believe he has violated his trust. In re Legislative Subpoena[1995] FMCSC 13; , 7 FSM Intrm. 261, 267 (Chk. S. Ct. Tr. 1995).

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COURT'S OPINION

SOUKICHI FRITZ, Chief Justice:

This matter came before the court September 11, 1995 for argument on the merits. The plaintiff [herein Governor] was represented by Mr. Wesley Simina, Attorney General of Chuuk State and the defendant [herein Committee] was represented by Mr. Daniel Furrh, Legislative Counsel for the Third Chuuk State Legislature. Both parties submitted written briefs. The following opinion and discussion shall constitute the court's findings of fact and conclusions of law.

Course of the Proceedings

On August 18, 1995 the defendants, a special investigation committee of the Chuuk State Legislature House of Representatives issued a Subpoena Duces Tecum to the plaintiff, the Governor, of Chuuk State. The subpoena required the Governor, by August 28, 1995, to produce for the Committee's inspection certain documents. The documents sought by the Committee were: 1) all receipts and other supporting documents related to the Governor's official travel from April 1990 to present; 2) all U.S. tax returns and other tax-related documents for the years 1990 through 1994; 3) all bank statements for the period April 15, 1990, to the present for all accounts in the Governor's individual name, his name jointly with any other person or in the name or names of any members of his immediate family, including accounts located in the FSM or in any other nation, territory, or location and 4) all documents related to the ownership of real property in the State of Hawaii. The time span of the documents sought fell within the Governor's current and previous terms of office. On the day the documents were to be provided, the Governor sent a letter to the Speaker[1] that complied with item 1 of the subpoena and filed a declaratory relief action in this court.

The complaint alleged that the legislative subpoena in seeking the Governor's bank records violated his right to privacy and the doctrine of separation of powers.[2] Along with the complaint, the Governor by motion sought an ex parte Temporary Restraining Order (TRO) preventing enforcement of the subpoena to produce the bank records. The court granted a TRO but only with respect to the production of bank records of the Governor's immediate family. The TRO did not restrain the production of any family account on which the Governor was named as either an owner, joint owner or had the right to withdraw funds.

A hearing on the Governor's motion for a preliminary injunction to be combined with the trial on the merits was scheduled for September 4, 1995. The Committee moved to continue the matter and disqualify the Attorney General as counsel of record. The Governor filed a notice of appeal from the interlocutory TRO and moved to stay the proceedings.[3] The court set a hearing on the motions for September 1, 1995.

At that hearing, the court by separate order and opinion denied the Committee's motion to disqualify the Attorney General. The parties then stipulated to continue the hearing on the merits until September 11, 1995. The parties also agreed that the previously entered TRO would be converted to a Preliminary Injunction. The Committee stipulated that it would not attempt to enforce the subpoena until after the court issued its ruling on the merits. The Governor withdrew his motion to stay the proceedings.

Issue

It is not contested that the Committee has the power to investigate and issue subpoenas. That right is expressly granted the legislature by the constitution. Chk. Const. art. V, § 18. Rather tsue is the reac reach of the Committee's subpoena power. The Governor contends that he is a private citizen and seeks to shield his personal bank records from the Committee based on the right ivacy under Article III, SeI, Section 3, of the constitution.[4] The Governor has not asserted any privilege such as that contained in Article III, Section 5 [privilege against self-incrimination]. In the court's view the issue presented is very narrow. It is confined to determining whether the Committee has power to subpoena personal financial records of a public official in the course of a legislative investigation into the workings of state government. In reaching a determination on this question, the court must consider the right to privacy as it specifically applies to a public official. Both the right to privacy and the legislative investigation and subpoena power are legal ideas that come from American constitutional law. The difference is that in our state constitution both ideas are explicit but neither is expressly found in the United States Constitution.

Nature of the Legislative Investigation Power

The power of the legislature to compel testimony and the production of documents has a long history in both England and the United States. See Watkins v. United States, [1957] USSC 87; 354 U.S. 178, 188-98[1957] USSC 87; , 77 S. Ct. 1173, 1179-85[1957] USSC 87; , 1 L. Ed. 2d 1273, 1284-1290 (1957) for the history and development of this idea. The power to investigate has historically been found to be an inherent power of the legislative process and a power that is very broad. Id. at 187, 77 S. Ct. at 1179, 1 L. Ed. 2d at 1284. Specifically, the investigative power "comprehends probes into departments of the . . . nmentxpose cose corruptiouption, inefficiency or waste." Id. The U.S. Courts have "recognized the danger to effective and honest conduct of Government if the legislature's power to probrupti the executive brve branch anch were unduly hampered." Id. at 194-95, 77 S. Ct. at 1183, 1 L. Ed. 2d at 1288 [citing Sinclair v. United States, [1929] USSC 68; 279 U.S. 263, 49 S. Ct. 268, 73 L. Ed. 692 (1929); McGrain v. Daugherty, [1927] USSC 29; 273 U.S. 135, 47 S. Ct. 319, 71 L. Ed. 580 (1927)]. All of these legislative powers arise under U.S. law without any express constitutional provision. Since our own constitution is modeled on the U.S. Constitution and constitutional law, the court concludes that the framers of the Chuuk Constitution wanted the legislature of this state to have these same powers by expressly providing for the legislative investigative process in Article V, Section 18.

Limits on the Investigative Power

Of course as broad as the legislative power to investigate may be it is not unlimited. There is "no general authority to expose the private affairs of individuals without justification in terms of the functions" of the legislature. Watkins, 354 U.S. at 187, 77 S. Ct. at 1179, 1 L. Ed. 2d at 1284. The protections embodied in Article III of our constitution are a restraint on all governmental investigations just as the Bill of Rights restrains the investigations of the U.S. Congress. Id. at 188, 77 S. Ct. at 1179, 1 L. Ed. 2d at 1284. Therefore, the right to privacy embodied in Article III, section 3 of our constitution is a restraint on the investigative power of the legislature. Thus, this court is faced with the difficult and delicate task of balancing the Committee's need for the particular information sought against the Governor's personal interest in privacy. As difficult as this task may be, it is the very heart of the judiciary's constitutional function to "insure that the . . .[latures not unot unjustifustifiably encroach on an individual's right to privacy . . ." Watki>, 354 U.S. at 1 at 19 77 S at 1185, 1 L. Ed. 2d at 1290.

Balancing the Right ight to Prto Privacy with the Investigative Powerhe "critical element" in this balance is "the exie existencstence of, and weight to be ascribed to, the interest of the . .&#160egislature] in demandemanding disclosures from an unwilling witness." Id. at 198, 77 S. Ct. at 1185, 1 L. Ed. 2d at 1290.

The legislature's investigative powers and its interest are greatest when it is engs engaged in its "informing function." That is when the legislature is inquiring into and publicizing corruption, maladministration or inefficiency in the agencies or branches of government. See id. at 200 n.33, 77 S. Ct. at 1185 n.33, 1 L. Ed. 2d at 1291 n.33. The resolution authorizing the Committee's investigation charges the Committee with this exact function, investigating malfeasance, misfeasance and maladministration of the state government. Particularly, the Committee is to investigate the cause of the current financial crisis that confronts the state. The legislative interest is clearly very high. The House of Representatives in seeking to remedy the causes of the continuing financial deficit needs to understand how the state could come to this point. The House also possesses the sole authority and power to pass a Bill of Impeachment seeking to remove those government officials that may be responsible for the situation through misfeasance or malfeasance. Chk. Const. art. V, § 19(b). The Govern such an o an official.

The Governor as a Public Official

The Governor as the Chief Executive Officer of the statehe public official ultimately responsible for implementing ting the budget laws and overseeing the day to day finances of the state. Chk. Const. art. VI, § 1. The Governor, as all public officials, occupies a fiduciary relationship to the state he serves. 63A Am. Jur. 2d Public Officers and Employees § 319, at 896-897 (1984). In other words the Governor, as a c officer, is a trustee ande and owes the duty of utmost good faith in dealing with the finances of the state. Id. He is requio perform his duties "honestly, faithfully" and in a manneranner that is "above suspicion of irregularities." Id. As a public official, the Governor, is not permitted to place himself in any position which will "expose him to the temptation of acting in any manner other than the best interest of the public." Id. § 321, at 897-898. er, the Gohe Governor "may not use his official power to further his own interest." Id. See also Chk. Const. art. VI, § 9 [prohibiting tvernom hold holding any other "public office or public or p or private employment or occupation"].

Finally, the legislatung ago made it a requirement that all officers or employees of the state government "shall hall cooperate with any investigating committee" and "furnish . .&#16uch information as mays may be called for in connection with the research activities of the committees." Truk D.L. 27-37 § 86 (effective July 19, 1977).

Thus, the Governor's position as a public officer, fiduciary and trustee of the states finances clearly limits the Governor's reasonable expectations of privacy and thus his right toacy.

Governor's Right to Privacy

Article III, Section 3 of our constitution contains the protection the Governor asserts. Specifically, the Governor claims that to be required to produce his personal bank records for the Committee's inspection is an "unreasonable invasion of privacy." Of course, as a citizen of Chuuk, he, like everyone else, is entitled to the protection of the constitution.

In general, the right to privacy depends upon whether or not an individual has a "reasonable expectation" that the thing, paper or place should remain free from governmental intrusion. Truk Con. Con. SCREP No. 23 at 3 (Comm. on Civil Liberties) (1988). But, what is reasonable is not fixed. It depends on the situation and in some cases on the individual involved. The individual's right to privacy is probably the strongest when the government is acting pursuant to its law enforcement function that will subject the individual to criminal penalties.

However, neither the Committee nor its parent, the House of Representatives, has any criminal prosecution function. As part of a legislative body, it is limited to passing laws and under the proper circumstance bringing bills of impeachment. But even a judgment of impeachment is not criminal in nature as it "shall not extend beyond removal from office and disqualification to hold any office of trust, honor, or profit in government." Chk. Const. art. V, § 19(d). Additionallder AmeriAmerican law the individual's constitutional expectation of privacy in bank records is minimal. See United States v. Miller, 425 U.S. 435S. Ct. [1976] USSC 66; 1619, 48 L. Ed. 2d 71 (1976).[5] So the question becomes: Are the Governor's expectations of privacy concerning his personal bank records reasonable in the face of the Committee's need to try and remedy the financial disaster that the state confronts?

Unreasonable Expectation of Privacy

The court finds that it is unreasonable for a public official and government officer that is required by law to cooperate with legislative investigating committees to have an expectation of privacy in matters that are linked to his performance in office. The court further finds that it is unreasonable for a public official, such as the Governor, who is a trustee of the state's finances and who owes a fiduciary duty to the state to expect that his personal finances will be kept private if there is some reason to believe he has violated his trust. The court finds it is especially unreasonable for the Governor to expect that his personal finances will remain private from the Committee which is acting pursuant to its legislative "informing function" and is attempting to find and remedy the cause of the state's dire financial crisis. And it is an equally unreasonable for the Governor to harbor an expectation of privacy in the situation where the Committee has reason to believe that the Governor may have violated his fiduciary duties to the public as trustee of the state's treasury.

Conclusion

Therefore the court must conclude that the Committee's issuance of the subpoena is proper and that the material requested relates to a legitimate legislative function of the Committee and its parent the House of Representatives. The court also concludes that the Governor as a public official and trustee of the state's finances does not have a reasonable expectation of privacy concerning his private bank records when the Committee is investigating maladministration, malfeasance or misfeasance as a cause of the state government's financial crisis and has reason to believe the Governor has violated his trust.

JUDGMENT

Upon the foregoing findings and conclusions the court hereby enters judgment accordingly. It is therefore

Ordered, Adjudged and Decreed that the Plaintiff, the Governor of Chuuk State, must provide his personal bank records including any bank records in which he is an owner, joint owner or has the authority to withdraw funds to the Defendant, House Special Investigating Committee, within ten (10) days of this judgment.

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^[1] By letter to the Speaker of the House, the Governor indicated that he had instructed the Department of Finance to provide all travel documents for the period requests. He advised the Committee that he did not file U.S. Tax returns and that he owned no property in Hawaii.

^[2] The complaint did not allege that the legislative demand for items 2 and 3 [tax records and land ownership records] invaded the governor's right to privacy.

^[3] Normally, the filing of a notice of appeal from a final order terminates the trial court's jurisdiction of a case. Election Commissioner v. Petewon, [1994] FMCSC 2; 6 FSM Intrm. 491, 498, 1 CSR 5, 10 (Chk. S. Ct. App. 1994). In this instance, the order appealed from was not a final order but an interlocutory one. A appeal of an interlocutory order especially one granting or denying a TRO does not divest the trial court of jurisdiction to hear the merits of the case.

^[4] The Governor abandoned his separation of powers claim at the hearing on the merits by failing to assert that right in his written papers or in oral argument.

^[5] The Governor's analysis of his expectation of privacy in this situation is based exclusively on criminal law. The Miller court held that even in a criminal investigation an individual's private bank records could be subject to a subpoena.