Personal Information
Agencies and Resellers Vary in Providing Privacy Protections Gao ID: GAO-06-609T April 4, 2006Federal agencies collect and use personal information for various purposes from information resellers--companies that amass and sell data from many sources. GAO was asked to testify on its report being issued today on agency use of reseller data. For that report, GAO was asked to determine how the Departments of Justice, Homeland Security, and State and the Social Security Administration use personal data from resellers and to review the extent to which information resellers' policies and practices reflect the Fair Information Practices, a set of widely accepted principles for protecting the privacy and security of personal data. GAO also examined agencies' policies and practices for handling personal data from resellers to determine whether these reflect the Fair Information Practices.
In fiscal year 2005, the Departments of Justice, Homeland Security, and State and the Social Security Administration reported that they used personal information obtained from resellers for a variety of purposes, including performing criminal investigations, locating witnesses and fugitives, researching assets held by individuals of interest, and detecting prescription drug fraud. The agencies spent approximately $30 million on contractual arrangements with resellers that enabled the acquisition and use of such information. About 91 percent of the planned fiscal year 2005 spending was for law enforcement (69 percent) or counterterrorism (22 percent). The major information resellers that do business with the federal agencies GAO reviewed have practices in place to protect privacy, but these measures are not fully consistent with the Fair Information Practices. For example, the principles that the collection and use of personal information should be limited and its intended use specified are largely at odds with the nature of the information reseller business, which is based on obtaining personal information from many sources and making it available to multiple customers for multiple purposes. Resellers believe it is not appropriate for them to fully adhere to these principles because they do not obtain their information directly from individuals. Nonetheless, in many cases, resellers take steps that address aspects of the Fair Information Practices. For example, resellers reported that they have taken steps recently to improve their security safeguards, and they generally inform the public about key privacy principles and policies. However, resellers generally limit the extent to which individuals can gain access to personal information held about themselves, as well as the extent to which inaccurate information contained in their databases can be corrected or deleted. Agency practices for handling personal information acquired from information resellers did not always fully reflect the Fair Information Practices. That is, for some of these principles, agency practices were uneven. For example, although agencies issued public notices when they systematically collected personal information, these notices did not always notify the public that information resellers were among the sources to be used. This practice is not consistent with the principle that individuals should be informed about privacy policies and the collection of information. Contributing to the uneven application of the Fair Information Practices are ambiguities in guidance from the Office of Management and Budget regarding the applicability of privacy requirements to federal agency uses of reseller information. In addition, agencies generally lack policies that specifically address these uses.
GAO-06-609T, Personal Information: Agencies and Resellers Vary in Providing Privacy Protections
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United States Government Accountability Office:
GAO:
Testimony:
Before the Subcommittee on Commercial and Administrative Law and the
Subcommittee on the Constitution, Committee on the Judiciary, House of
Representatives:
For Release on Delivery:
Expected at 12 p.m. EST Tuesday, April 4, 2006:
Personal Information:
Agencies and Resellers Vary in Providing Privacy Protections:
Statement of Linda D. Koontz:
Director, Information Management Issues:
GAO-06-609T:
GAO Highlights:
Highlights of GAO-06-609T, a report to the Subcommittee on Commercial
and Administrative Law and the Subcommittee on the Constitution,
Committee on the Judiciary, House of Representatives:
Why GAO Did This Study:
Federal agencies collect and use personal information for various
purposes from information resellers”companies that amass and sell data
from many sources. GAO was asked to testify on its report being issued
today on agency use of reseller data. For that report, GAO was asked to
determine how the Departments of Justice, Homeland Security, and State
and the Social Security Administration use personal data from resellers
and to review the extent to which information resellers‘ policies and
practices reflect the Fair Information Practices, a set of widely
accepted principles for protecting the privacy and security of personal
data. GAO also examined agencies‘ policies and practices for handling
personal data from resellers to determine whether these reflect the
Fair Information Practices.
What GAO Found:
In fiscal year 2005, the Departments of Justice, Homeland Security, and
State and the Social Security Administration reported that they used
personal information obtained from resellers for a variety of purposes,
including performing criminal investigations, locating witnesses and
fugitives, researching assets held by individuals of interest, and
detecting prescription drug fraud. The agencies spent approximately $30
million on contractual arrangements with resellers that enabled the
acquisition and use of such information. About 91 percent of the
planned fiscal year 2005 spending was for law enforcement (69 percent)
or counterterrorism (22 percent).
The major information resellers that do business with the federal
agencies GAO reviewed have practices in place to protect privacy, but
these measures are not fully consistent with the Fair Information
Practices. For example, the principles that the collection and use of
personal information should be limited and its intended use specified
are largely at odds with the nature of the information reseller
business, which is based on obtaining personal information from many
sources and making it available to multiple customers for multiple
purposes. Resellers believe it is not appropriate for them to fully
adhere to these principles because they do not obtain their information
directly from individuals. Nonetheless, in many cases, resellers take
steps that address aspects of the Fair Information Practices. For
example, resellers reported that they have taken steps recently to
improve their security safeguards, and they generally inform the public
about key privacy principles and policies. However, resellers generally
limit the extent to which individuals can gain access to personal
information held about themselves, as well as the extent to which
inaccurate information contained in their databases can be corrected or
deleted.
Agency practices for handling personal information acquired from
information resellers did not always fully reflect the Fair Information
Practices. That is, for some of these principles, agency practices were
uneven. For example, although agencies issued public notices when they
systematically collected personal information, these notices did not
always notify the public that information resellers were among the
sources to be used. This practice is not consistent with the principle
that individuals should be informed about privacy policies and the
collection of information. Contributing to the uneven application of
the Fair Information Practices are ambiguities in guidance from the
Office of Management and Budget regarding the applicability of privacy
requirements to federal agency uses of reseller information. In
addition, agencies generally lack policies that specifically address
these uses.
What GAO Recommends:
In its report, GAO suggests that the Congress consider the extent to
which resellers should adhere to the Fair Information Practices. In
addition, GAO is making recommendations to the Office of Management and
Budget and the four agencies to establish policy to address agency use
of personal information from commercial sources. Agency officials
generally agreed with the content of the report. Resellers questioned
the applicability of the Fair Information Practices, especially with
regard to public records.
www.gao.gov/cgi-bin/getrpt?GAO-06-609T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Linda Koontz at (202)
512- 6240 or koontzl@gao.gov.
[End of section]
Mr. Chairmen and Members of the Subcommittees:
I appreciate the opportunity to discuss critical issues surrounding the
federal government's purchase of personal information[Footnote 1] from
businesses known as information resellers. As you are aware, the ease
and speed with which people's personal information can be collected by
information resellers from a wide variety of sources and made available
to government and other customers has accelerated with technological
advances in recent years. Recent security breaches at large information
resellers such as ChoicePoint and LexisNexis have raised questions
about how resellers and their federal customers handle people's
personal information--especially whether their practices are fully
consistent with widely accepted practices for protecting the privacy
and security of personal information.
Federal agency use of such information is governed primarily by the
Privacy Act of 1974,[Footnote 2] which requires that the use of
personal information be limited to predefined purposes and involve only
information germane to those purposes. The provisions of the Privacy
Act, in turn, are largely based on a set of principles for protecting
the privacy and security of personal information, known as the Fair
Information Practices, which were first proposed in 1973 by a U.S.
government advisory committee.[Footnote 3] These principles, now widely
accepted, include:
1. collection limitation,
2. data quality,
3. purpose specification,
4. use limitation,
5. security safeguards,
6. openness,
7. individual participation, and:
8. accountability.[Footnote 4]
These principles, with some variation, are used by organizations to
address privacy considerations in their business practices and are also
the basis of privacy laws and related policies in many countries,
including the United States, Germany, Sweden, Australia, New Zealand,
and the European Union.
My testimony is based on a report that we are issuing today.[Footnote
5] In that report, we analyzed fiscal year 2005 contracts and other
vehicles for the acquisition of personal information from information
resellers by the Departments of Justice, Homeland Security (DHS), and
State and the Social Security Administration (SSA). We also compared
relevant agency guidelines and management policies and procedures to
the Fair Information Practices.
We also identified the extent to which reseller[Footnote 6] polices and
procedures were consistent with the key privacy principles of the Fair
Information Practices and assessed the potential effect of any
inconsistencies. However, we did not attempt to determine whether or
how information reseller practices should change. Such determinations
are a matter of policy based on balancing the public's right to privacy
with the value of services provided by resellers to customers such as
government agencies. Our work was performed in accordance with
generally accepted government auditing standards.
Today, after a brief summary and a discussion of how the selected
agencies use the personal information that they buy from resellers, my
remarks will focus on the extent to which the agencies and resellers
have policies and practices that reflect the Fair Information
Practices.
Results in Brief:
In fiscal year 2005, Justice, DHS, State, and SSA reported that they
planned to spend a combined total of approximately $30 million[Footnote
7] to purchase personal information from resellers. The vast majority-
-approximately 91 percent--of the planned spending was for purposes of
law enforcement (69 percent) or counterterrorism (22 percent). For
example, components of the Department of Justice (the largest user of
resellers) used the information for criminal investigations, locating
witnesses and fugitives, researching assets held by individuals of
interest, and detecting fraud in prescription drug transactions. DHS
acquired personal information to aid its immigration fraud detection
and border screening programs. SSA and State purchased personal
information from information resellers to detect and investigate fraud,
verify identities, and determine benefit eligibility.
The major information resellers that do business with the agencies
reviewed have measures in place to protect privacy, but the measures
are not always fully consistent with the Fair Information Practices.
For example, the nature of the information reseller business is largely
at odds with the principles of collection limitation, data quality,
purpose specification, and use limitation. These principles center on
limiting the collection and use of personal information, and they link
data quality (for example, accuracy) requirements to these limitations.
Resellers said they believe that it may not be appropriate or practical
for them to fully adhere to these principles because they do not obtain
their information directly from individuals. In fact, the information
reseller industry is based on the multi-purpose collection and use of
personal information from multiple sources.[Footnote 8] In many cases,
resellers take steps that address aspects of the Fair Information
Practices. For example, resellers reported that they have taken steps
recently to improve their security safeguards, and they generally
inform the public about key privacy principles and policies. However,
resellers generally limit the extent to which individuals can gain
access to their own personal information and the extent to which
inaccurate information contained in reseller databases can be corrected
or deleted.
Agency practices for handling personal information acquired from
information resellers reflected four of eight principles established by
the Fair Information Practices. Agency practices generally reflected
the collection limitation, data quality, use limitation, and security
safeguards principles. For example, law enforcement agencies (including
the Federal Bureau of Investigation and the U.S. Secret Service)
generally reported that they corroborate information obtained from
resellers to ensure that it is accurate when it is used as part of an
investigation, reflecting the data quality principle that data should
be accurate, current, and complete, as needed for the defined purpose.
However, agencies did not always have practices for handling reseller
information to fully address the purpose specification, individual
participation, openness, and accountability principles. For example:
* Although agencies notify the public through Federal Register notices
and published privacy impact assessments that they collect personal
information from various sources, they do not always indicate
specifically that information resellers are among those sources.
* Some agencies lack robust audit mechanisms to ensure that use of
personal information from information resellers is for permissible
purposes, reflecting an uneven application of the accountability
principle.
Contributing to agencies' uneven application of the Fair Information
Practices are ambiguities in guidance from OMB on how privacy
requirements apply to federal agency uses of reseller information. In
addition, agencies generally lack policies that specifically address
these uses.
We made recommendations to OMB to revise privacy guidance and to the
four agencies to develop specific policies for the use of personal
information from resellers, and suggested that Congress consider the
extent to which information resellers should adhere to the Fair
Information Practices. The five agencies generally agreed with the
report and described actions initiated to address our recommendations.
We also obtained comments on excerpts of our draft report from the five
information resellers we reviewed. Several resellers raised concerns
regarding the version of the Fair Information Practices we used to
assess their practices. As discussed in our report, the version of the
Fair Information Practices we used has been widely adopted and cited
within the federal government as well as internationally. Further, we
use it as an analytical framework for identifying potential privacy
issues for further consideration by Congress--not as criteria for
strict compliance.
Background:
Before advanced computerized techniques, obtaining people's personal
information usually required visiting courthouses or other government
facilities to inspect paper-based public records, and information
contained in product registrations and other business records was not
generally available at all. Automation of the collection and
aggregation of multiple-source data, combined with the ease and speed
of its retrieval, have dramatically reduced the time and effort needed
to obtain such information. Information resellers provide services
based on these technological advances.
We use the term "information resellers" to refer to businesses that
vary in many ways but have in common the fact that they collect and
aggregate personal information from multiple sources and make it
available to their customers. These businesses do not all focus
exclusively on aggregating and reselling personal information. For
example, Dun & Bradstreet primarily provides information on commercial
enterprises for the purpose of contributing to decision making
regarding those enterprises. In doing so, it may supply personal
information about individuals associated with those commercial
enterprises. To a certain extent, the activities of information
resellers may also overlap with the functions of consumer reporting
agencies, also known as credit bureaus--entities that collect and sell
information about individuals' creditworthiness, among other things. To
the extent that information resellers perform the functions of consumer
reporting agencies, they are subject to legislation specifically
addressing that industry, particularly the Fair Credit Reporting Act.
Information resellers have now amassed extensive amounts of personal
information about large numbers of Americans. They supply it to
customers in both government and the private sector, typically via a
centralized online resource. Generally, three types of information are
collected:
* Public records such as birth and death records, property records,
motor vehicle and voter registrations, criminal records, and civil case
files.
* Publicly available information not found in public records but
nevertheless publicly available through other sources, such as
telephone directories, business directories, classified ads or
magazines, Internet sites, and other sources accessible by the general
public.
* Nonpublic information derived from proprietary or nonpublic sources,
such as credit header data, product warranty registrations, and other
application information provided to private businesses directly by
consumers.
Figure 1 illustrates how these types of information are collected and
aggregated into reports that are ultimately accessed by customers,
including government agencies, through contractual agreements.
Figure 1: Typical Information Flow through Resellers to Government
Customers:
[See PDF for image]
[End of figure]
Federal Laws and Guidance Govern Use of Personal Information in Federal
Agencies:
No single federal law governs all use or disclosure of personal
information. The major requirements for the protection of personal
privacy by federal agencies come from the Privacy Act of 1974 and the
privacy provisions of the E-Government Act of 2002.
Federal use of personal information is governed primarily by the
Privacy Act of 1974,[Footnote 9] which places limitations on agencies'
collection, disclosure, and use of personal information maintained in
systems of records. The act describes a "record" as any item,
collection, or grouping of information about an individual that is
maintained by an agency and contains his or her name or another
personal identifier. It also defines "system of records" as a group of
records under the control of any agency from which information is
retrieved by the name of the individual or by an individual identifier.
The Privacy Act requires that when agencies establish or make changes
to a system of records, they must notify the public by placing a notice
in the Federal Register identifying, among other things, the type of
data collected, the types of individuals about whom information is
collected, the intended uses of data, and procedures that individuals
can use to review and correct personal information. Additional
provisions of the Privacy Act are discussed in the report we are
issuing today.
The E-Government Act of 2002 requires that agencies conduct privacy
impact assessments (PIA). A PIA is an analysis of how personal
information is collected, stored, shared, and managed in a federal
system. Under the E-Government Act and related OMB guidance, agencies
must conduct PIAs (1) before developing or procuring information
technology that collects, maintains, or disseminates information that
is in a personally identifiable form; (2) before initiating any new
data collections involving personal information that will be collected,
maintained, or disseminated using information technology if the same
questions are asked of 10 or more people; or (3) when a system change
creates new privacy risks, for example, by changing the way in which
personal information is being used.
OMB is tasked with providing guidance to agencies on how to implement
the provisions of the Privacy Act and the E-Government Act and has done
so, beginning with guidance on the Privacy Act, issued in
1975.[Footnote 10] OMB's guidance on implementing the privacy
provisions of the E-Government Act of 2002 identifies circumstances
under which agencies must conduct PIAs and explains how to conduct
them.
The Fair Information Practices Are Widely Agreed to Be Key Principles
for Privacy Protection:
The Privacy Act of 1974 is largely based on a set of internationally
recognized principles for protecting the privacy and security of
personal information known as the Fair Information Practices. A U.S.
government advisory committee first proposed the practices in 1973 to
address what it termed a poor level of protection afforded to privacy
under contemporary law.[Footnote 11] The Organization for Economic
Cooperation and Development (OECD)[Footnote 12] developed a revised
version of the Fair Information Practices in 1980 that has, with some
variation, formed the basis of privacy laws and related policies in
many countries, including the United States, Germany, Sweden,
Australia, New Zealand, and the European Union.[Footnote 13] The eight
principles of the OECD Fair Information Practices are shown in table 1.
Table 1: The OECD Fair Information Practices:
Principle: Collection limitation;
Description: The collection of personal information should be limited,
should be obtained by lawful and fair means, and, where appropriate,
with the knowledge or consent of the individual.
Principle: Data quality;
Description: Personal information should be relevant to the purpose for
which it is collected, and should be accurate, complete, and current as
needed for that purpose.
Principle: Purpose specification;
Description: The purposes for the collection of personal information
should be disclosed before collection and upon any change to that
purpose, and its use should be limited to those purposes and compatible
purposes.
Principle: Use limitation;
Description: Personal information should not be disclosed or otherwise
used for other than a specified purpose without consent of the
individual or legal authority.
Principle: Security safeguards;
Description: Personal information should be protected with reasonable
security safeguards against risks such as loss or unauthorized access,
destruction, use, modification, or disclosure.
Principle: Openness;
Description: The public should be informed about privacy policies and
practices, and individuals should have ready means of learning about
the use of personal information.
Principle: Individual participation;
Description: Individuals should have the following rights: to know
about the collection of personal information, to access that
information, to request correction, and to challenge the denial of
those rights.
Principle: Accountability;
Description: Individuals controlling the collection or use of personal
information should be accountable for taking steps to ensure the
implementation of these principles.
Source: OECD.
[End of table]
The Fair Information Practices are not precise legal requirements.
Rather, they provide a framework of principles for balancing the need
for privacy with other public policy interests, such as national
security, law enforcement, and administrative efficiency. Ways to
strike that balance vary among countries and according to the type of
information under consideration.
Agencies Use Governmentwide Contracts to Obtain Personal Information
from Information Resellers for a Variety of Purposes:
The Departments of Justice, Homeland Security, State, and the Social
Security Administration reported approximately $30 million in
contractual arrangements with information resellers in fiscal year
2005.[Footnote 14] The agencies reported using personal information
obtained from resellers for a variety of purposes including law
enforcement, counterterrorism, fraud detection/prevention, and debt
collection. In all, approximately 91 percent of agency uses of reseller
data were in the categories of law enforcement (69 percent) or
counterterrorism (22 percent). Figure 2 details contract values
categorized by their reported use.
Figure 2: Fiscal Year 2005 Contractual Vehicles Enabling the Use of
Personal Information from Information Resellers, Categorized by
Reported Use:
[See PDF for image]
[End of figure]
The Department of Justice, which accounted for about 63 percent of the
funding, mostly used the data for law enforcement and counterterrorism.
DHS also used reseller information primarily for law enforcement and
counterterrorism. State and SSA reported acquiring personal information
from information resellers for fraud prevention and detection, identity
verification, and benefit eligibility determination.
Justice and DHS Use Information Resellers Primarily for Law Enforcement
and Counterterrorism:
In fiscal year 2005, the Department of Justice and its components
reported approximately $19 million in acquisitions from a wide variety
of information resellers, primarily for purposes related to law
enforcement (75 percent) and counterterrorism (18 percent). The Federal
Bureau of Investigation (FBI), which is Justice's largest user of
information resellers, uses reseller information to, among other
things, analyze intelligence and detect terrorist activities in support
of ongoing investigations by law enforcement agencies and the
intelligence community. In this capacity, resellers provide the FBI's
Foreign Terrorist Tracking Task Force with names, addresses, telephone
numbers, and other biographical and demographical information as well
as legal briefs, vehicle and boat registrations, and business ownership
records.[Footnote 15]
The Drug Enforcement Administration (DEA), the second largest Justice
user of information resellers in fiscal year 2005, obtains reseller
data primarily to detect fraud in prescription drug transactions.
[Footnote 16] Agents use reseller data to detect irregular prescription
patterns for specific drugs and trace this information to the pharmacy
and prescribing doctor.[Footnote 17]
DHS and its components reported that they used information reseller
data in fiscal year 2005 primarily for law enforcement purposes, such
as developing leads on subjects in criminal investigations and
detecting fraud in immigration benefit applications (part of enforcing
the immigration laws). DHS's largest investigative component, the U.S.
Immigration and Customs Enforcement, is also its largest user of
personal information from resellers. It collects data such as address
and vehicle information for criminal investigations and background
security checks. U.S. Customs and Border Protection conducts queries on
people, businesses, property, and corresponding links via a secure
Internet connection. The Federal Emergency Management Agency uses an
information reseller to detect fraud in disaster assistance
applications.
DHS also reported using information resellers in its counterterrorism
efforts. For example, the Transportation Security Administration (TSA)
used data obtained from information resellers as part of a test
associated with the development of its domestic passenger prescreening
program, called "Secure Flight."[Footnote 18] TSA plans for Secure
Flight to compare domestic flight reservation information submitted to
TSA by aircraft operators with federal watch lists of individuals known
or suspected of activities related to terrorism.
SSA and State Use Information Resellers Primarily for Fraud Prevention
and Detection:
In an effort to ensure the accuracy of Social Security benefit
payments, the Social Security Administration and its components
reported approximately $1.3 million in contracts with information
resellers in fiscal year 2005 for purposes relating to fraud prevention
(such as skiptracing),[Footnote 19] confirming suspected fraud related
to workers compensation payments, obtaining information on criminal
suspects for follow-up investigations, and collecting debts. For
example, the Office of the Inspector General (OIG), the largest user of
information reseller data at SSA, uses several information resellers to
assist investigative agents in detecting benefit abuse by Social
Security claimants and to assist agents in locating claimants. Regional
office agents may also use reseller data in investigating persons
suspected of claiming disability fraudulently.
The Department of State and its components reported approximately
$569,000 in contracts with information resellers for fiscal year 2005,
mainly to support investigations of passport-related activities. For
example, several components accessed personal information to validate
familial relationships, birth and identity data, and other information
submitted on immigrant and nonimmigrant visa petitions. State also uses
reseller data to investigate passport and visa fraud cases.
Resellers Take Steps to Protect Privacy, but These Measures Are Not
Fully Consistent With the Fair Information Practices:
Although the information resellers that do business with the federal
agencies we reviewed have taken steps to protect privacy, these
measures were not fully consistent with the Fair Information Practices.
Most significantly, the first four principles, relating to collection
limitation, data quality, purpose specification, and use limitation,
are largely at odds with the nature of the information reseller
business. These principles center on limiting the collection and use of
personal information and require data accuracy based on that limited
purpose and limited use of the information. However, the information
reseller industry presupposes that the collection and use of personal
information is not limited to specific purposes, but instead can be
made available to multiple customers for multiple purposes. Resellers
make it their business to collect large amounts of personal
information[Footnote 20] and to combine that information in new ways so
that it serves purposes other than those for which it was originally
collected. Further, they are limited in their ability to ensure the
accuracy, currency, or relevance of their holdings, because these
qualities may vary based on customers' varying uses.
Information reseller policies and procedures were consistent with
aspects of the remaining four Fair Information Practices. Large
resellers reported implementing a variety of security safeguards, such
as stringent customer credentialing, to improve protection of personal
information. Resellers also generally provided public notice of key
aspects of their privacy policies and practices (relevant to the
openness principle), and reported taking actions to ensure internal
compliance with their own privacy policies (relevant to the
accountability principle). However, while information resellers
generally allow individuals limited access to their personal
information, they generally limit the opportunity to correct or delete
inaccurate information contained in reseller databases (relevant to the
individual participation principle).
In brief, reseller practices compare with the Fair Information
Practices as follows:
Collection limitation. Resellers do not limit collections to specific
purposes but collect large amounts of personal information. In
practice, resellers are limited in the personal information that they
can obtain by laws that apply to specific kinds of information (for
example, the Fair Credit Reporting Act and the Gramm-Leach-Bliley Act,
which restrict the collection, use, and disclosure of certain consumer
and financial data). However, beyond specific legal restrictions,
information resellers generally attempt to aggregate large amounts of
personal information so as to provide useful information to a broad
range of customers. Resellers do not make provisions to notify the
individuals involved when they obtain personal data from their many
sources, including public records. Concomitantly, individuals are not
afforded an opportunity to express or withhold their consent when the
information is collected. Resellers said they believe it is not
appropriate or practical for them to provide notice or obtain consent
from individuals because they do not collect information directly from
them.
Under certain conditions, some information resellers offer consumers an
"opt-out" option--that is, individuals may request that information
about themselves be suppressed from selected databases. However,
resellers generally offer this option only with respect to certain
types of information, such as marketing products, and only under
limited circumstances, such as if the individual is a law enforcement
officer or a victim of identity theft. Two resellers stated their
belief that under certain circumstances it may not be appropriate to
provide consumers with opportunities for opting out, such as when
information products are designed to detect fraud or locate criminals.
These resellers stated that if individuals were permitted to opt out of
fraud prevention databases, some of those opting out could be
criminals, which would undermine the effectiveness and utility of these
databases.
Data quality. Information resellers reported taking steps to ensure
that they generally receive accurate data from their sources and that
they do not introduce errors in the process of transcribing and
aggregating information. However, they generally provide their
customers with exactly the same data they obtain and do not claim or
guarantee that the information is accurate for a specific purpose. Some
resellers' privacy policies state that they expect their data to
contain some errors. Further, resellers varied in their policies
regarding correction of data determined to be inaccurate as obtained by
them. One reseller stated that it would delete information in its
databases that was found to be inaccurate. Another stated that even if
an individual presents persuasive evidence that certain information is
in error, the reseller generally does not make changes if the
information comes directly from an official public source (unless
instructed to do so by that source). Because they are not the original
source of the personal information, information resellers generally
direct individuals to the original sources to correct any errors.
Several resellers stated that they would correct any identified errors
introduced through their own processing and aggregation of data.
Purpose specification. While information resellers specify purpose in a
general way by describing the types of businesses that use their data,
they generally do not designate specific intended uses for each of
their data collections. Resellers generally obtain information that has
already been collected for a specific purpose and make that information
available to their customers, who in turn have a broader variety of
purposes for using it. For example, personal information originally
submitted by a customer to register a product warranty could be
obtained by a reseller and subsequently made available to another
business or government agency, which might use it for an unrelated
purpose, such as identity verification, background checking, or
marketing. It is difficult for resellers to provide greater specificity
because they make their data available to many customers for a wide
range of legitimate purposes. As a result, the public is made aware
only of the broad range of potential uses to which their personal
information may be put, rather than a specific use, as envisioned in
the Fair Information Practices.
Use limitation. Because information reseller purposes are specified
very broadly, it is difficult for resellers to ensure that use of the
information in their databases is limited. As previously discussed,
information reseller data may have many different uses, depending on
the types of customers involved. However, resellers do take steps to
ensure that their customers' use of personal information is limited to
legally sanctioned purposes. Information resellers pass this
responsibility to their customers through licensing agreements and
contract terms and agreements. Customers are usually required to
certify that they will only use information obtained from the reseller
in ways permissible under laws such as the Gramm-Leach-Bliley Act and
the Driver's Privacy Protection Act. The information resellers used by
the federal agencies we reviewed generally also reported taking steps
to ensure that access to certain sensitive types of personally
identifiable information--particularly Social Security numbers--is
limited to certain customers and uses.
Security safeguards. While we did not evaluate the effectiveness of
resellers' information security programs, resellers we spoke with said
they employ various safeguards to protect consumers' personal
information. They implemented these safeguards in part for business
reasons but also because federal laws require such protections.
Resellers describe these safeguards in various policy statements, such
as online and data privacy policies or privacy statements posted on
Internet sites. Given recent incidents, large information resellers
also reported having recently taken steps to improve their safeguards
against unauthorized access. Two resellers reported that they had taken
steps to improve their procedures for authorizing customers to have
access to sensitive information, such as Social Security numbers. For
example, one reseller established a credentialing task force with the
goal of centralizing its customer credentialing process. In addition to
enhancing safeguards on customer access authorizations, resellers have
instituted a variety of other security controls. For example, three
large information resellers have implemented physical safeguards at
their data centers, such as continuous monitoring of employees entering
and exiting facilities, monitoring of activity on customer accounts,
and strong authentication of users entering and exiting secure areas
within the data centers.
Openness. To address openness, information resellers took steps to
inform the public about key aspects of their privacy policies. They
used means such as company Web sites and brochures to inform the public
of specific policies and practices regarding the collection and use of
personal information. Reseller Web sites also generally provided
information about the types of information products the resellers
offered--including product samples--as well as general descriptions
about the types of customers served.
Individual participation. Although information resellers allow
individuals access to their personal information, this access is
generally limited. Resellers may provide an individual a report
containing certain types of information--such as compilations of public
records information--however, the report may not include all
information maintained by the resellers about that individual. Further,
because they obtain their information from other sources, most
resellers have limited provisions for correcting or deleting inaccurate
information contained in their databases. If individuals find
inaccuracies in such reports, they generally cannot have these
corrected by the resellers.[Footnote 21] Resellers, as a matter of
policy, do not make corrections to data obtained from other sources,
even if the individual provides evidence that the data are wrong.
Instead, they direct individuals wishing to make corrections to contact
the original sources of the data. Several resellers stated that they
would correct any identified errors resulting from their own processing
and aggregation of data (for example, transposing numbers or letters or
incorrectly aggregating information).
Accountability. Although information resellers' overall application of
the Fair Information Practices varied, each reseller we spoke with
reported actions to ensure compliance with its own privacy policies.
For example, resellers reported designating chief privacy officers to
monitor compliance with internal privacy policies and applicable laws.
Information resellers reported that these officials had a range of
responsibilities aimed at ensuring accountability for privacy policies,
such as establishing consumer access and customer credentialing
procedures, monitoring compliance with federal and state laws, and
evaluating new sources of data (for example, cell phone records).
Although there are no industrywide standards requiring resellers to
conduct periodic audits of their compliance with privacy policies, one
information reseller reported using a third party to conduct privacy
audits on an annual basis. Using a third party to audit compliance with
privacy policies further helps to ensure that an information reseller
is accountable for the implementation of its privacy practices.
In commenting on excerpts of our draft report, several resellers raised
concerns regarding the version of the Fair Information Practices we
used to assess their practices, stating their view that it applied more
appropriately to organizations that collect information directly from
consumers and that they were not legally bound to adhere to the Fair
Information Practices. As discussed in our report, the version of the
Fair Information Practices we used has been widely adopted and cited
within the federal government as well as internationally. Further, we
use it as an analytical framework for identifying potential privacy
issues for further consideration by Congress--not as criteria for
strict compliance. Resellers also stated that the draft did not take
into account their view that public record information is open to all
for any use not prohibited by state or federal law. However, we believe
it is not clear that individuals give up all privacy rights to personal
information contained in public records, and we believe it is important
to assess the status of privacy protections for all personal
information being offered commercially to the government so that
informed policy decisions can be made about the appropriate balance
between resellers' services and the public's right to privacy. In our
report we suggest that Congress consider the extent to which
information resellers should adhere to the Fair Information Practices.
Agencies Lack Policies on Use of Reseller Data, and Practices Do Not
Consistently Reflect the Fair Information Practices:
Agencies generally lacked policies that specifically address their use
of personal information from commercial sources (although DHS Privacy
Office officials have reported that they are drafting such a policy),
and agency practices for handling personal information acquired from
information resellers did not always fully reflect the Fair Information
Practices. Specifically, agency practices generally reflected four of
the eight Fair Information Practices.
As table 2 shows, the collection limitation, data quality, use
limitation, and security safeguards principles were generally reflected
in agency practices. For example, several agency components
(specifically, law enforcement agencies such as the FBI and the U.S.
Secret Service) reported that in practice, they generally corroborate
information obtained from resellers when it is used as part of an
investigation. This practice is consistent with the principle of data
quality.
Agency policies and practices with regard to the other four principles
were uneven. Specifically, agencies did not always have policies or
practices in place to address the purpose specification, openness, and
individual participation principles with respect to reseller data. The
inconsistencies in applying these principles as well as the lack of
specific agency policies can be attributed in part to ambiguities in
OMB guidance regarding the applicability of the Privacy Act to
information obtained from resellers. Further, privacy impact
assessments, a valuable tool that could address important aspects of
the Fair Information Practices, are not conducted often. Finally,
components within each of the four agencies did not consistently hold
staff accountable by monitoring usage of personal information from
information resellers and ensuring that it was appropriate; thus, their
application of the accountability principle was uneven.
Table 2: Application of Fair Information Practices to the Reported
Handling of Personal Information from Data Resellers at Four Agencies:
Principle: Collection limitation. The collection of personal
information should be limited, should be obtained by lawful and fair
means, and, where appropriate, with the knowledge or consent of the
individual;
Agency application of principle: General;
Agency practices: Agencies limited personal data collection to
individuals under investigation or their associates.
Principle: Data quality. Personal information should be relevant to the
purpose for which it is collected, and should be accurate, complete,
and current as needed for that purpose;
Agency application of principle: General;
Agency practices: Agencies corroborated information from resellers and
did not take actions based exclusively on such information.
Principle: Purpose specification. The purpose for the collection of
personal information should be disclosed before collection and upon any
change to that purpose, and its use should be limited to that purpose
and compatible purposes;
Agency application of principle: Uneven;
Agency practices: Agency system of records notices did not generally
reveal that agency systems could incorporate information from data
resellers. Agencies also generally did not conduct privacy impact
assessments for their systems or programs that involve use of reseller
data.
Principle: Use limitation. Personal information should not be disclosed
or otherwise used for other than a specified purpose without consent of
the individual or legal authority;
Agency application of principle: General;
Agency practices: Agencies generally limited their use of personal
information to specific investigations (including law enforcement,
counterterrorism, fraud detection, and debt collection).
Principle: Security safeguards. Personal information should be
protected with reasonable security safeguards against risks such as
loss or unauthorized access, destruction, use, modification, or
disclosure;
Agency application of principle: General;
Agency practices: Agencies had security safeguards such as requiring
passwords to access databases, basing access rights on need to know,
and logging search activities (including "cloaked logging," which
prevents the vendor from monitoring search content).
Principle: Openness. The public should be informed about privacy
policies and practices, and individuals should have ready means of
learning about the use of personal information;
Agency application of principle: Uneven;
Agency practices: See Purpose specification above. Agencies did not
have established policies specifically addressing the use of personal
information obtained from resellers.
Principle: Individual participation. Individuals should have the
following rights: to know about the collection of personal information,
to access that information, to request correction, and to challenge the
denial of those rights;
Agency application of principle: Uneven;
Agency practices: See Purpose specification above. Because agencies
generally did not disclose their collections of personal information
from resellers, individuals were often unable to exercise these rights.
Principle: Accountability. Individuals controlling the collection or
use of personal information should be accountable for taking steps to
ensure the implementation of these principles;
Agency application of principle: Uneven;
Agency practices: Agencies do not generally monitor usage of personal
information from information resellers to hold users accountable for
appropriate use; instead, they rely on users to be responsible for
their behavior. For example, agencies may instruct users in their
responsibilities to use personal information appropriately, have them
sign statements of responsibility, and have them indicate what
permissible purpose a given search fulfills.
Legend:
General = policies or procedures to address all major aspects of a
particular principle.
Uneven = policies or procedures addressed some but not all aspects of a
particular principle or some but not all agencies and components had
policies or practices in place addressing the principle.
Source: GAO analysis of agency-supplied data.
Note: We did not independently assess the effectiveness of agency
information security programs. Our assessment of overall agency
application of the Fair Information Practices was based on the policies
and management practices described by the Department State and SSA as a
whole and by major components of Justice and DHS. We did not obtain
information on smaller components of Justice and DHS.
[End of table]
Agency procedures generally reflected the collection limitation, data
quality, use limitation, and security safeguards principles. Regarding
collection limitation, for most law-enforcement and counterterrorism
purposes (which accounted for 90 percent of usage in fiscal year 2005),
agencies generally limited their personal data collection in that they
reported obtaining information only on specific individuals under
investigation or associates of those individuals. Regarding data
quality, agencies reported taking steps to mitigate the risk of
inaccurate information reseller data by corroborating information
obtained from resellers. Agency officials described the practice of
corroborating information as a standard element of conducting
investigations. Likewise, for non-law-enforcement use, such as debt
collection and fraud detection and prevention, agency components
reported that they mitigated potential problems with the accuracy of
data provided by resellers by obtaining additional information from
other sources when necessary. As for use limitation, agency officials
said their use of reseller information was limited to distinct
purposes, which were generally related to law enforcement or
counterterrorism. Finally, while we did not assess the effectiveness of
information security at any of these agencies, we found that all four
had measures in place intended to safeguard the security of personal
information obtained from resellers.[Footnote 22]
Limitations in the Applicability of the Privacy Act and Ambiguities in
OMB Guidance Contribute to an Uneven Adherence to the Purpose
Specification, Openness, and Individual Participation Principles:
The purpose specification, openness, and individual participation
principles stipulate that individuals should be made aware of the
purpose and intended uses of the personal information being collected
about them, and, if necessary, have the ability to access and correct
their information. These principles are reflected in the Privacy Act
requirement for agencies to publish in the Federal Register, "upon
establishment or revision, a notice of the existence and character of a
system of records." This notice is to include, among other things, the
categories of records in the system as well as the categories of
sources of records.[Footnote 23]
In a number of cases, agencies using reseller information did not
adhere to the purpose specification or openness principles in that they
did not notify the public that they were using such information and did
not specify the purpose for their data collections. Agency officials
said that they generally did not prepare system-of-records notices that
would address these principles because they were not required to do so
by the Privacy Act. The act's vehicle for public notification--the
system-of-records notice--becomes binding on an agency only when the
agency collects, maintains, and retrieves personal data in the way
defined by the act or when a contractor does the same thing explicitly
on behalf of the government. Agencies generally did not issue system-
of-records notices specifically for their use of information resellers
largely because information reseller databases were not considered
"systems of records operated by or on behalf of a government agency"
and thus were not considered subject to the provisions of the Privacy
Act.[Footnote 24] OMB guidance on implementing the Privacy Act does not
specifically refer to the use of reseller data or how it should be
treated. According to OMB and other agency officials, information
resellers operate their databases for multiple customers, and federal
agency use of these databases does not amount to the operation of a
system of records on behalf of the government. Further, agency
officials stated that merely querying information reseller databases
did not amount to agency "maintenance" of the personal information
being queried and thus also did not trigger the provisions of the
Privacy Act. In many cases, agency officials considered their use of
resellers to be of this type--essentially "ad hoc" querying or
"pinging" of reseller databases for personal information about specific
individuals, which they believed they were not doing in connection with
a formal system of records.
In other cases, however, agencies maintained information reseller data
in systems for which system-of-records notices had been previously
published. For example, law enforcement agency officials stated that,
to the extent they retain the results of reseller data queries, this
collection and use is covered by the system of records notices for
their case file systems. However, in preparing such notices, agencies
generally did not specify that they were obtaining information from
resellers. Among system of records notices that were identified by
agency officials as applying to the use of reseller data, only one--
TSA's system of records notice for the test phase of its Secure Flight
program--specifically identified the use of information reseller
data.[Footnote 25]
In several of these cases, agency sources for personal information were
described only in vague terms, such as "private organizations," "other
public sources," or "public source material," when information was
being obtained from information resellers.
The inconsistency with which agencies specify resellers as a source of
information in system-of-records notices is due in part to ambiguity in
OMB guidance, which states that "for systems of records which contain
information obtained from sources other than the individual to whom the
records pertain, the notice should list the types of sources
used."[Footnote 26] Although the guidance is unclear what would
constitute adequate disclosure of "types of sources," OMB and DHS
Privacy Office officials agreed that to the extent that reseller data
is subject to the Privacy Act, agencies should specifically identify
information resellers as a source and that merely citing public records
information does not sufficiently describe the source.
Aside from certain law enforcement exemptions[Footnote 27] to the
Privacy Act, adherence to the purpose specification and openness
principles is critical to preserving a measure of individual control
over the use of personal information. Without clear guidance from OMB
or specific policies in place, agencies have not consistently reflected
these principles in their collection and use of reseller information.
As a result, without being notified of the existence of an agency's
information collection activities, individuals have no ability to know
that their personal information could be obtained from commercial
sources and potentially used as a basis, or partial basis, for taking
action that could have consequences for their welfare.
Privacy Impact Assessments Could Address Openness and Purpose
Specification Principles but Often Are Not Conducted:
PIAs can be an important tool to help agencies to address openness and
purpose specification principles early in the process of developing new
information systems. To the extent that PIAs are made publicly
available,[Footnote 28] they provide explanations to the public about
such things as the information that will be collected, why it is being
collected, how it is to be used, and how the system and data will be
maintained and protected.
However, few agency components reported developing PIAs for their
systems or programs that make use of information reseller data. As with
system-of-records notices, agencies often did not conduct PIAs because
officials did not believe they were required. Current OMB guidance on
conducting PIAs is not always clear about when they should be
conducted. According to guidance from OMB, a PIA is required by the E-
Government Act when agencies "systematically incorporate into existing
information systems databases of information in identifiable form
purchased or obtained from commercial or public sources."[Footnote 29]
However, the same guidance also instructs agencies that "merely
querying a database on an ad hoc basis does not trigger the PIA
requirement." Reported uses of reseller data were generally not
described as a "systematic" incorporation of data into existing
information systems; rather, most involved querying a database and in
some cases retaining the results of these queries. OMB officials stated
that agencies would need to make their own judgments on whether
retaining the results of searches of information reseller databases
constituted a "systematic incorporation" of information.
The DHS Privacy Office[Footnote 30] has been working to clarify
guidance on the use of reseller information in general as well as the
specific requirements for conducting PIAs. DHS recently issued guidance
requiring PIAs to be conducted whenever reseller data are involved.
However, although the DHS guidance clearly states that PIAs are
required when personally identifiable information is obtained from a
commercial source, it also states that "merely querying such a source
on an ad hoc basis using existing technology does not trigger the PIA
requirement."[Footnote 31] Like OMB's guidance, the DHS guidance is not
clear, because agency personnel are left to make individual
determinations as to whether queries are "on an ad hoc basis."
Until PIAs are conducted more thoroughly and consistently, the public
is likely to remain incompletely informed about agency purposes and
uses for obtaining reseller information.
In our report we recommended that the Director, OMB, revise privacy
guidance to clarify the applicability of requirements for public
notices and privacy impact assessments to agency use of personal
information from resellers and direct agencies to review their uses of
such information to ensure it is explicitly referenced in privacy
notices and assessments. Further, we recommended that agencies develop
specific policies for the use of personal information from resellers.
Agencies Often Did Not Have Practices in Place to Ensure Accountability
for Proper Handling of Information Reseller Data:
According to the accountability principle, individuals controlling the
collection or use of personal information should be accountable for
ensuring the implementation of the Fair Information Practices. This
means that agencies should take steps to ensure that they use personal
information from information resellers appropriately.
Agencies described using activities to oversee their use of reseller
information that were largely based on trust in the individual user to
use the information appropriately, rather than management oversight of
usage details. For example, in describing controls placed on the use of
commercial data, officials from component agencies identified measures
such as instructing users that reseller data are for official use only,
and requiring users to sign statements attesting 1) to their need to
access information reseller databases and 2) that their use will be
limited to official business. Additionally, agency officials reported
that their users are required to select from a list of vendor-defined
"permissible purposes" (for example, law enforcement, transactions
authorized by the consumer) before conducting a search on reseller
databases.
While these practices appear consistent with the accountability
principle, they are focused on individual user responsibility instead
of monitoring and oversight. Agencies did not have practices in place
to obtain reports from resellers that would allow them to monitor usage
of reseller databases at a detailed level. Although agencies generally
receive usage reports from the information resellers, these reports are
designed primarily for monitoring costs. Further, these reports
generally contained only high-level statistics on the number of
searches and databases accessed, not the contents of what was actually
searched, thus limiting their utility in monitoring usage.
To the extent that federal agencies do not implement methods such as
user monitoring or auditing of usage records, they provide limited
accountability for their usage of information reseller data and have
limited assurance that the information is being used appropriately.
In summary, services provided by information resellers are important to
federal agency functions such as law enforcement and fraud protection
and identification. Resellers have practices in place to protect
privacy, but these practices are not fully consistent with the Fair
Information Practices, which resellers are not legally required to
follow. Among other things, resellers collect large amounts of
information about individuals without their knowledge or consent, do
not ensure that the data they make available are accurate for a given
purpose, and generally do not make corrections to the data when errors
are identified by individuals. Information resellers believe that
application of the relevant principles of the Fair Information
Practices is inappropriate or impractical in these situations. However,
given that reseller data may be used for a variety of purposes,
determining the appropriate degree of control or influence individuals
should have over the way in which their personal information is
obtained and used--as envisioned in the Fair Information Practices--is
critical. As Congress weighs various legislative options, adherence to
the Fair Information Practices will be an important consideration in
determining the appropriate balance between the services provided by
information resellers to customers such as government agencies and the
public's right to privacy.
While agencies take steps to adhere to Fair Information Practices such
as the collection limitation, data quality, use limitation, and
security safeguards principles, they have not taken all the steps they
could to reflect others--or to comply with specific Privacy Act and e-
Government Act requirements--in their handling of reseller data.
Because OMB privacy guidance does not clearly address information
reseller data, agencies are left largely on their own to determine how
to satisfy legal requirements and protect privacy when acquiring and
using reseller data. Without current and specific guidance, the
government risks continued uneven adherence to important, well-
established privacy principles and lacks assurance that the privacy
rights of individuals are adequately protected.
Mr. Chairmen, this concludes my testimony today. I would be happy to
answer any questions you or other members of the subcommittees may
have.
Contacts and Acknowledgements:
If you have any questions concerning this testimony, please contact
Linda Koontz, Director, Information Management, at (202) 512-6240, or
koontzl@gao.gov. Other individuals who made key contributions to this
testimony were Mathew Bader, Barbara Collier, John de Ferrari,
Pamlutricia Greenleaf, David Plocher, Jamie Pressman, and Amos Tevelow.
FOOTNOTES
[1] For purposes of this statement, the term personal information
encompasses all information associated with an individual, including
both identifying and nonidentifying information. Personally identifying
information, which can be used to locate or identify an individual,
includes such things as names, aliases, and agency-assigned case
numbers. Nonidentifying personal information includes such things as
age, education, finances, criminal history, physical attributes, and
gender.
[2] The Privacy Act of 1974, Pub. L. No. 93-579, 88 Stat. 1896
(codified as amended at 5 U.S.C. § 552a) provides safeguards against an
invasion of privacy through the misuse of records by federal agencies
and allows citizens to learn how their personal information is
collected, maintained, used, and disseminated by the federal
government.
[3] Congress used the committee's final report as a basis for crafting
the Privacy Act of 1974. See Records, Computers and the Rights of
Citizens: Report of the Secretary's Advisory Committee on Automated
Personal Data Systems (Washington, D.C.: U.S. Department of Health,
Education, and Welfare, July 1973).
[4] Descriptions of these principles are shown in table 1.
[5] GAO, Personal Information: Agency and Reseller Adherence to Key
Privacy Principles, GAO-06-421 (Washington, D.C; Apr. 4, 2006).
[6] The five information resellers we reviewed were ChoicePoint,
LexisNexis, Acxiom, Dun & Bradstreet, and West. Our results may not
apply to other resellers who do very little or no business with the
federal agencies we reviewed.
[7] This figure may include uses that do not involve personal
information. Except for instances where the reported use was primarily
for legal research, agency officials were unable to separate the dollar
values associated with use of personal information from uses for other
purposes (for example, LexisNexis and West provide news and legal
research in addition to public records). The four agencies obtained
personal information from resellers primarily through two general-
purpose governmentwide contract vehicles--the Federal Supply Schedule
of the General Services Administration and the Library of Congress's
Federal Library and Information Network.
[8] In certain circumstances, laws restrict the collection and use of
specific kinds of personal information. For example, the Fair Credit
Reporting Act regulates access to and use of consumer information under
certain circumstances.
[9] The Privacy Act of 1974, Pub. L. No. 93-579, 88 Stat. 1896
(codified as amended at 5 U.S.C. § 552a) provides safeguards against an
invasion of privacy through the misuse of records by federal agencies
and allows citizens to learn how their personal information is
collected, maintained, used, and disseminated by the federal
government.
[10] OMB, "Privacy Act Implementation: Guidelines and
Responsibilities," Federal Register, Volume 40, Number 132, Part III,
pages 28948-28978 (Washington, D.C.: July 9, 1975). Since the initial
Privacy Act guidance of 1975, OMB periodically has published additional
guidance. Further information regarding OMB Privacy Act guidance can be
found on the OMB Web site at
http://www.whitehouse.gov/omb/inforeg/infopoltech.html.
[11] Records, Computers and the Rights of Citizens: Report of the
Secretary's Advisory Committee on Automated Personal Data Systems
(Washington, D.C.: U.S. Department of Health, Education, and Welfare,
July 1973).
[12] OECD, Guidelines on the Protection of Privacy and Transborder Flow
of Personal Data (Sept. 23, 1980). The OECD plays a prominent role in
fostering good governance in the public service and in corporate
activity among its 30 member countries. It produces internationally
agreed-upon instruments, decisions, and recommendations to promote
rules in areas where multilateral agreement is necessary for individual
countries to make progress in the global economy.
[13] European Union Data Protection Directive ("Directive 95/46/EC of
the European Parliament and of the Council of 24 October 1995 on the
Protection of Individuals with Regard to the Processing of Personal
Data and the Free Movement of Such Data") (1995).
[14] This figure comprises contracts and task orders with information
resellers that included the acquisition and use of personal
information. However, some of these funds may have been spent on uses
that do not involve personal information; we could not omit all such
uses because agency officials were not always able to separate the
amounts associated with use of personal information from those for
other uses (for example, LexisNexis and West provide news and legal
research in addition to public records). In some instances, where the
reported use was primarily for legal research, we omitted these funds
from the total.
[15] GAO, Data Mining: Agencies Have Taken Key Steps to Protect Privacy
in Selected Efforts, but Significant Compliance Issues Remain, GAO-05-
866 (Washington, D.C.: Aug. 15, 2005).
[16] DEA's mission involves enforcing laws pertaining to the
manufacture, distribution, and dispensing of legally produced
controlled substances.
[17] The personal information contained in this information reseller
database is limited to the prescribing doctor and does not contain
personal patient information.
[18] For an assessment of privacy issues associated with the Secure
Flight commercial data test, see GAO, Aviation Security: Transportation
Security Administration Did Not Fully Disclose Uses of Personal
Information during Secure Flight Program Testing in Initial Privacy
Notices, but Has Recently Taken Steps to More Fully Inform the Public,
GAO-05-864R (Washington, D.C.: July 22, 2005).
[19] Skiptracing is the process of locating people who have fled in
order to avoid paying debts.
[20] Resellers are constrained from collecting certain types of
information and aggregating it with other personal information. For
example, the Fair Credit Reporting Act and the Gramm-Leach-Bliley Act
constrain the collection and use of personal information, such as
financial information.
[21] One reseller reported that, for certain products, it will delete
information that has been identified as inaccurate. For example, if the
reseller is able to verify that data contained within its directory or
fraud products are inaccurate, it will delete the inaccurate data and
keep a record of this in a maintenance file so the erroneous data are
not reentered at a future date.
[22] Although we did not assess the effectiveness of information
security at any agency as part of this review, we have previously
reported on weaknesses in almost all areas of information security
controls at 24 major agencies, including Justice, DHS, State, and SSA.
For additional information see GAO, Information Security: Weaknesses
Persist at Federal Agencies Despite Progress Made in Implementing
Related Statutory Requirements, GAO-05-552 (Washington, D.C.: July 15,
2005) and Information Security: Department of Homeland Security Needs
to Fully Implement Its Security Program, GAO-05-700 (Washington, D.C.:
June 17, 2005).
[23] 5 U.S.C. § 552a(e)(4)(C) & (I). The Privacy Act allows agencies to
claim an exemption from identifying the categories of sources of
records for records compiled for criminal law enforcement purposes, as
well as for a broader category of investigative records compiled for
criminal or civil law enforcement purposes.
[24] The act provides for its requirements to apply to government
contractors when agencies contract for the operation by or on behalf of
the agency, a system of records to accomplish an agency function. 5
U.S.C. § 552a(m).
[25] As we previously reported, this notice did not fully disclose the
scope of the use of reseller data during the test phase. See GAO,
Aviation Security: Transportation Security Administration Did Not Fully
Disclose Uses of Personal Information during Secure Flight Program
Testing in Initial Privacy Notices, but Has Recently Taken Steps to
More Fully Inform the Public, GAO-05-864R (Washington, D.C.: July 22,
2005).
[26] OMB, "Privacy Act Implementation: Guidelines and
Responsibilities," Federal Register, Volume 40, Number 132, Part III,
p. 28964 (Washington, D.C.: July 9, 1975).
[27] The Privacy Act allows agencies to claim exemptions if the records
are used for certain purposes. 5 U.S.C. § 552a (j) and (k). For
example, records compiled for criminal law enforcement purposes can be
exempt from the access and correction provisions. In general, the
exemptions for law enforcement purposes are intended to prevent the
disclosure of information collected as part of an ongoing investigation
that could impair the investigation or allow those under investigation
to change their behavior or take other actions to escape prosecution.
In most cases where officials identified system-of-record notices
associated with reseller data collection for law enforcement purposes,
agencies claimed this exemption.
[28] The E-Government Act requires agencies, if practicable, to make
privacy impact assessments publicly available through agency Web sites,
publication in the Federal Register, or by other means. Pub. L. No. 107-
347, § 208 (b)(1)(B)(iii).
[29] OMB, Guidance for Implementing the Privacy Provisions of the E-
Government Act of 2002, Memorandum M-03-22 (Washington, D.C.: Sept. 26,
2003).
[30] The DHS Privacy Officer position was created by the Homeland
Security Act of 2002, Pub. L. No 107-296, § 222, 116 Stat. 2155. The
Privacy Officer is responsible for, among other things, "assuring that
the use of technologies sustain[s], and do[es] not erode privacy
protections relating to the use, collection, and disclosure of personal
information, and assuring that personal information contained in
Privacy Act systems of records is handled in full compliance with Fair
Information Practices as set out in the Privacy Act of 1974."
[31] Department of Homeland Security Privacy Office, Privacy Impact
Assessments: Official Guidance (March 2006), p. 34.
