7 FSM Intrm. 261-267

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, 7 FSM Intrm. 261, 265 (Chk. S. Ct. Tr. 1995).

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, 7 FSM Intrm. 261, 265 (Chk. S. Ct. Tr. 1995).

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, 7 FSM Intrm. 261, 265 (Chk. S. Ct. Tr. 1995).

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, 7 FSM Intrm. 261, 266 (Chk. S. Ct. Tr. 1995).

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, 7 FSM Intrm. 261, 267 (Chk. S. Ct. Tr. 1995).

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.

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 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.

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 the issue is the 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 of privacy under Article III, 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.

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, 354 U.S. 178, 188-98, 77 S. Ct. 1173, 1179-85, 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 . . . Government to expose corruption, 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 probe corruption in the executive branch were unduly hampered." Id. at 194-95, 77 S. Ct. at 1183, 1 L. Ed. 2d at 1288 [citing Sinclair v. United States, 279 U.S. 263, 49 S. Ct. 268, 73 L. Ed. 692 (1929); McGrain v. Daugherty, 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.

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 . . .[legislature] does not unjustifiably encroach on an individual's right to privacy . . ." Watkins, 354 U.S. at 198-99, 77 S. Ct. at 1185, 1 L. Ed. 2d at 1290.

The legislature's investigative powers and its interest are greatest when it is 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 Governor is such an official.

The Governor as the Chief Executive Officer of the state is the public official ultimately responsible for implementing 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 public officer, is a trustee and owes the duty of utmost good faith in dealing with the finances of the state. Id. He is required to perform his duties "honestly, faithfully" and in a manner 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. Further, the Governor "may not use his official power to further his own interest." Id. See also Chk. Const. art. VI, § 9 [prohibiting the governor from holding any other "public office or public or private employment or occupation"].

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

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). Additionally, under American law the individual's constitutional expectation of privacy in bank records is minimal. See United States v. Miller,.

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.

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.

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.

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, 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.