Privacy issue; where do we stand?;

              THE PRIVACY ISSUE: WHERE DO WE STAND?
by DONALD R. WOOD/Partner, Chicago
A serious question faces our society today: can it guarantee
each citizen's constitutional right to privacy, given the
magnitude of information that is routinely collected in the
files of both government and business?
In the public's mind, this concern is linked to a
developing technology that enables one's personal history
to be flashed on a screen at the touch of a button.
What is the role of the computer in this issue of
information privacy? Are the public's concerns valid?
Traditionally, such fear has centered on the federal
government and information that a citizen has no choice
but to provide: tax returns, census forms, medical records,
welfare and unemployment applications, and so on. But it is
being compounded by recent headlines:
• The Internal Revenue Service is planning a billion-dollar
tax administration system that by 1985 will enable
authorized employees to obtain access through 8,300
terminals to tax returns of any U.S. citizen within seconds.
• By 1979, the Social Security Administration and the
Internal Revenue Service will be required by law to share
incoming tax data on all W-2 forms; it is anticipated that this
computerized information pool will contain more informa­tion
on individual citizens than has ever been possessed by
any single federal agency.
In the past decade, moreover, private organizations have
developed their own information systems that can influ­ence
an individual's life to a degree that only the
government could achieve in the past. Thus, given past
breaches of confidentiality in regard to medical records,
legislative concern arose recently with news that several
insurance companies and private hospitals would have
access by computer terminals to the Social Security
Administration's data and response system. And given its
sensitivity to credit information, more concern was prompt­ed
by news that banks would soon be linked with the Fed­eral
Reserve Board's electronic funds transfer (EFT) system.
As a result of such headlines, executive and legislative
bodies on both the federal and state levels have proposed
various methods to control the availability of private
information to external users. And given that these
concerns have arisen under a conservative federal adminis­tration,
they are not likely to disappear under a more liberal
administration.
What has been this governmental response? To some it
has been excessive, to others reasoned.
• The Federal Information Privacy Act of 1974 was
passed, stating the rights of individuals and establishing
regulations governing the collection and use of informa­tion
by federal agencies. Implementation began in 1976,
and the results thus far are inconclusive.
• An omnibus bill, HR 1984—the Orwellian title is
deliberate—was sponsored by congressmen Edward Koch
(D-New York) and Barry Goldwater, Jr. (R-California).
Essentially, their bill would extend the Privacy Act of 1974 to
cover the information in private sector data systems.
Strongly criticized by business, its fate is hard to predict at
this writing, given the shifting political moods of a new
congress.
• The U.S. Privacy Protection Study Commission—
established by the Privacy Act of 1974—is scheduled to
deliver its report to the president and congress in July. At
this writing, it is expected to recommend regulations and
guidelines that will protect the privacy of individuals and
yet recognize the need of government and business for
accurate information. Its recommendations will propose
not omnibus legislation, but regulations directed toward
specific industries.
In addition, more than 30 state legislatures are actively
considering some type of privacy bill. (Abroad, West
Germany and Sweden have already enacted privacy laws,
and a privacy policy is in an advanced state of preparation in
nine Common Market nations.)
Finally, the Domestic Council on the Right to Privacy, a
presidential advisory group, recently called for a coordi­nated
national information policy. It cited how the use of
increasingly complex technology in the business and
economic worlds has impacted the individual's ability to
control information about himself.
Are computers across this nation waiting for a signal to
print confidential data on anyone who has a Social Security
number, an employment record, or a credit card? That
appears to be the public understanding, even though little
such information has yet been entered into computer
systems by either large companies or small. In other words,
the confidentiality that has been breached to date has
primarily been through manual rather than computer
transgressions.
Such facts, however, have not hampered the speculation
by proponents of a privacy law. The Office of Technology
Assessment, an arm of congress, tries to anticipate the
implications of major new scientific developments. It has
concluded that the IRS tax administrative system could
pose "a threat to the civil liberties, privacy, and due process
of taxpayers" and ultimately bring "surveillance, harass­ment,
or political manipulation of files." (One sees here the
influence of Watergate.)
Representatives John Moss (D-California) and Charles
Rose (D-North Carolina) have suggested that the IRS be
denied funds for its new system, because it would probably
result in "some kind of hookup between IRS computers
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