documents withheld are the notes and preliminary evaluations of the individual panelists as well as their identities. The Complainant waited until the hearing date to challenge the ETA's claim of deliberative process privilege in response to its discovery request for detailed information concerning the panel constitution and process. (Hearing Transcript ("TR") 74-84, 119). I conditionally denied the Complainant's motion to strike all evidence related to the review panel from the record because I found the motion had come too late and the Complainant had not made an earlier motion to compel the discovery of the material. (TR 84, 125, 278).

   As I stated in the Interim Order, the constitution of the review panel was a proper subject for inquiry in this proceeding. 20 C.F.R. § 667.800(a) permits challenges for "alleged violations of the Act, its regulations, grant or other agreement under the Act fairly raised in the determination . . ." The SGA itself specifies the requisite qualifications panel members. While the United Tribe's hearing request challenged the constitution of the review panel, the Complainant lacked sufficient facts to support any allegations concerning panelist's lack of requisite qualifications at the time of requesting the hearing and thus sought discovery. The ETA, relying on the deliberative process privilege, consistently refused to identify the panel members, both during discovery and at the hearing. Absent, identifying information or discovery responses, the Complainant could neither have ascertained the impartiality or experience of the review panel or effectively raised an allegation much less proven it. At the hearing, the ETA then provided testimony concerning the review panel's qualifications, but the ETA witnesses could answer few, if any detailed questions, on cross- examination about those individuals.

   20 C.F.R. § 667.800(c) provides that "[O]nly alleged violations of the Act, its regulations, grant or other agreement under the Act fairly raised in the determination, and the request for hearing are subject to review."

   In Cline v. Westmoreland Coal Co., 21 B.L.R. 1-69 (BRB No. 96-0603, Oct. 17, 1997), the Benefits Review Board, U.S. Department of Labor, found the Administrative Procedures Act contains no provision for pretrial discovery in the administrative process.

   The Complainant places great reliance on FRCP 37(c)(1) and its mandate that "[A] party that without substantial justification fails to disclose information required by FRCP 26(a) or 26(e)(1) shall not, unless such failure is harmless, be permitted to use as evidence at a trial, at a hearing, or on a motion any witness or information not so disclosed." The Complainant cited a number of cases in which the privilege against self- incrimination or the attorney-client privilege were involved. However, FRCP 26(b)(5) and 26(c) provide a special scheme when claims of privilege are invoked. That scheme is comparable to the regulatory scheme, under 29 C.F.R. § 18.21, for motions to compel discovery. Under the FRCP 37(c)(1), evidence preclusion only is applicable when the non-responding party lacks "substantial justification".

   The privilege rests on a policy of affording reasonable security to the decision making process within a government agency. See NLRB v. Sears, Roebuck & Co., 421 U.S. 132, 150, 95 S.Ct. 1504, 1516, 44 L.Ed.2d 29 (1975). Its rationale is to facilitate the free expression, integrity, and independence of those responsible for making the determinations which enable the government to operate. U.S. v. Hooker Chemicals & Plastics Corp., 114 F.R.D. 100, 102 (W.D.N.Y. 1987). "'. . . human experience teaches that those who expect public dissemination of their remarks may well temper candor with a concern for appearances. . . to the detriment of the decision making process.'" Smith v. F.T.C., 403 F.Supp. 1000 at 1002 (D. Del. 1975) quoting from U.S. v. Nixon, 418 U.S. 683, 705, 94 S.Ct. 3090, 3106, 41 L.Ed.2d 1039 (1974); see also AFGE v. HHS, 63 F.Supp. 2d 104 (D. Mass. 1999) and Dudman Communications Corp. v. Dept. of the Air Force, 815 F.2d 1565 (D.C. Cir. 1987). As the ETA points out, the cases show the privilege also protects against premature disclosure of less than fully developed agency policy and guards against confusion of issues which could result from disclosure of agency predecisional discussions. See Coastal States Corp. v. Department of Energy, 617 F.2d 854 (D.C. 1980) and Jordan v. Dept. of Justice, 591 F.2d 753 (D.C. Cir. 1978).

   The deliberative process privilege is "a discretionary one." In re Franklin Nat'l Bank Sec. Litig., 478 F.Supp. 577, 582 (E.D.N.Y.1979). It is to be narrowly construed. J.R. Norton Co., Inc. v. Arizmendi, 108 F.R.D. 647 (D.C. Cal. 1985). In deciding how to exercise its discretion, an inquiring court should consider, among other things, the interests of the litigants, society's interest in the accuracy and integrity of fact finding, and the public's interest in honest, effective government. See Warner Communications, 742 F.2d at 1162. Consequently, "where the documents sought may shed light on alleged government malfeasance," the privilege is routinely denied. Franklin, 478 F.Supp. at 582; see also Bank of Dearborn v. Saxon, 244 F.Supp. 394, 401-03 (E.D. Mich.1965) ("the real public interest under such circumstances is not the agency's interest in its administration but the citizen's interest in due process"), aff'd, 377 F.2d 496 (6th Cir.1967).

   On November 13, 2000, the Complainant responded through counsel. It combined a response to the Motion for Reconsideration with its final argument. It argues that the ETA may not assert the deliberative process privilege in advance of the hearing and then selectively waive it to produce portions of the "privileged" information at the hearing. It argues the United Tribes have been denied a fair hearing, in violation of their due process rights, by the ETA' conduct. The Complainant encapsulates its argument by stating, "[T]he United Tribes cannot possibly challenge a Government which simultaneously proclaims itself to be correct, refuses to reveal the bases for its decision, and asks a court to affirm its correctness on the basis of the secret information." It argues that: once asserted the privilege may not be waived at the hearing; a motion to compel discovery was wholly irrelevant to the matter; that the rules of procedure, i.e., at 20 C.F.R. § 667.810(d), dealing with pre-hearing disclosure of evidence, were violated; and, that matters submitted for in camera review cannot resolve their lack of opportunity to "combat" the information.

   Since the Complainant raised only two issues concerning the review panel, prior to the hearing, , i.e., whether use of a panel process was proper and panelist qualifications, and agreed with my listing of review panel issues, which was limited to whether choosing to use the panel was proper and whether panelists had the requisite qualifications, I find any inquiry into privileges related to matters beyond these issues irrelevant. These were also the only issues to which privilege may have applied addressed in my Interim Order.

   In the WIA, the Congress authorized the Secretary of Department of Labor to establish regulations to carry out the Act. 29 U.S.C. § 2911(h)(2)(A). The Department of Labor has chosen through its regulations to provide complainants with the right to challenge WIA grant awards. The ETA's argument claiming the privilege, under these circumstances, would make that right in great part meaningless.

   The Complainant, by not raising the matter of potential conflict of interest on the part of the panelists as an issue in this case arguably may have waived the right to do so at either the hearing or this late juncture. However, I recognize without having the panelist's identities raising the issue would have been impossible. Thus, I allow the Complainant to develop and present evidence on the matter should the ETA disclose the panelist's identities. Having reviewed in camera the documents provided by the ETA, I suspect no evidence of any conflict or bias will be found.

1. Panel Qualifies Under Privilege

2. Waiver of Privilege

   The question whether the ETA waived any deliberative process privilege with respect to the documentation related to the panel, as well as information concerning potential conflicts of interest and qualifications remains. The documents submitted for in camera review do not apply to the waiver issue. In Assembly of the State of California v. U.S. Dept. of Commerce, 968 F.2d 916 (9th Cir. 1992), the Court observed "[A]gencies should not be punished for openness." It also noted that, at the time, every court to examine the issue of whether prior substantial voluntary disclosure by the agency waives the deliberative process privilege has avoided basing its decision on waiver. Id. at 922. The rule is that "[I]f the government cannot make out a prima facie case at trial except by disclosing secret materials, then of course, at that stage it must waive its privilege as to those materials or lose its case." 4 Moore's Federal Practice § 26.60[6] (1989). In order to meet its burden of proof here, the ETA need not have revealed the identities of the panelists or established they were free from conflicts. Further, the government may waive its privilege by conduct, such as by permitting its witnesses to testify as to portions of privileged matters. 4 Moore's Federal Practice § 26.61[6.-4 n. 3] (1989) citing Smith v. F.T.C., 403 F.Supp. 1000 (D.C. D. Del. 1975)(holding privilege is waived by allowing witness to respond to prior questions in which the substance of the privileged matter were divulged).

   In 1995, the First Circuit Court of Appeals, comparing Clark v. Township of Falls, 124 F.R.D. 91, 93-94 (E.D. Pa. 1988)(holding privilege waived by prior disclosure) and Redland Soccer Club, Inc., v. Dept. of the Army, 55 F.3d 827, 855-56 (3d Cir. 1995)(holding prior "inadvertent" disclosure did not constitute a voluntarily waiver of the privilege), observed that the question of waiver of the deliberative process privilege was apparently unsettled. Texaco Puerto Rico, Inc., v. Department of Consumer Affairs, 60 F.3d 867 (1st Cir. 1995). In In re Sealed Case, 116 F.3d 550 (D.C. Cir. 1997), the Court observed that unlike waiver of the attorney-client privilege, release of documents subject to the deliberative process privilege does not waive the privilege as to all other communications on the same subject matter. "[R]elease of a document only waives these privileges for the document or information specifically released. Id. citing, Mobil Oil Corp. v. U.S. EPA, 879 F.2d 698, 700-703 (9th Cir. 1989); Mehl v. U.S. EPA, 797 F.Supp. 43, 47-48 (D.D.C. 1992); Larkin, § 5.05 at 5-114.7-5-114.14; and, cf, Russell v. USAF, 682 F.2d 1045, 1048-49 (D.C. Cir. 1982). This limited approach to waiver of the (executive) privilege is "designed to ensure that agencies do not forgo voluntarily disclosing some privileged material out of the fear that by doing so they are exposing other, more sensitive documents." In re Sealed Case, 116 F.3d 550 at 562; see also, Allstate Insurance Co. v. Serio, Superintendent, 1998 WL 477961 (S.D.N.Y. 1998) and cases cited therein, i.e., Marisol v. Guiliani, 1998 WL 132810, at 7 (S.D.N.Y. Mar. 23, 1998).

   However, a privilege holder may waive it by permitting a breach of the privilege in his presence, but the scope of any waiver is defined by and coextensive with the breadth of the prior disclosure. Harris v. Phildelphia, 1995 WL 350296 (E.D. Pa. 1995) citing Matter of Certain Complaints Under Investigation, 783 F.2d at 1523 n. 32 and Nissen Foods v. NLRB, 540 F.Supp. 584, 586 (E.D. Pa. 1982). In Shell Oil Co. v. I.R.S., 772 F. Supp. 202 (D.C. D. Delaware 1991), the Court, in thoroughly discussing waiver of the deliberative process privilege, held that the intent of the government official making a disclosure of privileged information is normally irrelevant and that a waiver does not depend on release of a physical document, rather oral disclosures may constitute waivers. Id. citing North Dakota v. Andrus, 581 F.2d 177 (8th Cir. 1978)(prior disclosure of privileged information to a third party waives the privilege, even if the latter promised confidentiality); Mead Data Central v. U.S. Dept. of the Air Force, 566 F.2d 242 (D.C. Cir. 1977)(suggesting sharing of privileged information with third party waives privilege), and Lawyers Committee for Human Rights v. I.N.S., 721 F.Supp. 552 (S.D.N.Y. 1989)(disclosure of privileged information outside the government waives privilege despite official's intent).

   The application of waiver of the deliberative process to the identification", "qualifications" and "conflict of interest" matters must be resolved. In order for the panel process to be valid, the panelists must have been free of conflicts of interest and qualified to serve in accordance with the SGA criteria. The ETA recognized this and chose to question Mr. DeLuca and the Grant Officer about it, on direct examination, in order to establish a rational basis for the latter's award decision. Moreover, at the hearing, the ETA admitted, by eliciting testimony on direct examination regarding the panelist's qualifications "within the constraints imposed by the privilege", that it "address(ed) an issue which is raised by this proceeding which is specifically that of whether the members of the panel could be shown to have the experience or expertise that would qualify them to serve on the panel . . ." (TR 78). Although, in my Interim Order I found this questioning constituted a waiver of the privilege, I now reverse that determination. Although opening this inquiry into necessary elements, the ETA did not waive the privilege, if any, on matters related to the panelist's identity, any possible conflicts of interest by panelists and concerning their qualifications to serve because of the narrowly limited scope of the testimony. Although there is some authority, set forth above, that disclosures of this nature may constitute a waiver of the privilege, I believe the better view is that waiver applies in a more limited manner only to matters directly within the scope and coextensive with the breadth of the earlier disclosure.

3. Application of Ad Hoc Balancing Test

   Finally, had the privilege been properly invoked, applied and not been waived, as to certain information, I would have applied the ad hoc balancing tests comparing the ETA's need for non-disclosure because of harm against the Complainant's need, if any. For the reasons set forth below, had the privilege been properly invoked, I would now find that the Complainant's need for the information for which the ETA claims privilege outweighs the potential harm to the government by virtue of its release.

   The factors I consider are: (1) the relevance of the information sought to be protected; (2) the availability of other evidence; (3) the seriousness of the litigation and the issues involved; (4) the role of the government and the interests of the parties in the litigation; and, (5) the possibility of the timidity by government employees who will be forced to recognize their secrets are violable. Other matters of consideration include: the nature of the case; the availability of protective measures; society's interest in the accuracy and integrity of fact finding; and, the public's interest in honest, effective government which includes whether the documents and information sought may shed light on alleged government malfeasance.

   I conclude that I was wrong finding the ETA had waived the deliberative process privilege as to the identity, qualifications and potential conflicts of interest of the review panelists through its limited disclosures. This information may arguably come under the privilege. However, I continue to believe non-disclosure of that information, based upon a claim of privilege, would violate the Complainant's due process rights. The Secretary, under the Act, has given complainants a right to challenge the award process under which the panelists serve. Although the scope of my review is narrow, that does not preclude complainants from discovering information which might impugn the integrity of the process. After permitting such challenges such as this by regulation, I believe the Secretary may not then shield the process from scrutiny by asserting this privilege; to do so would render the right to challenge awards meaningless, in large part. Even if the privilege were to apply, I believe, on balance, that any potential harm from disclosure, as no actual harm is established, is outweighed by the Complainant's need for discovery of this information which is not elsewhere available. The potential for harm is further outweighed by the public's right to scrutinize the government process by which this award was made. Specifically, the Complainant's right to know that the panelists were qualified and conflict-free outweighs any potential harm of disclosure. Finally, I observe that a decision not to disclose the information discussed herein may alone result in the setting aside of an otherwise valid grant, for which there is a valid basis in the record.

   WHEREFORE, IT IS ORDERED THAT:

    1. The Motion for Reconsideration of the Interim Order is GRANTED, in part.

   2. The finding in the Interim Order that the government waived the deliberative process privilege as to the identity and qualifications, including potential conflicts, of the review panel members is REVERSED, however the finding that permitting the ETA to rely on the privilege and not disclose the information discussed herein would amount to a due process violation is AFFIRMED.

    3. The ETA shall, within fourteen (14) calendar days of the issuance date of this Ruling and Order, either:

A. Provide the Complainants with the identity of the panel members along with any written materials concerning or related to their qualifications, potential conflicts of interest and how they may be contacted; or,

B. Persist in its assertion of a deliberative process privilege, and, if so, it will so inform the Complainant and me and will meet the three procedural requirements, to properly invoke the privilege, that is, provide an affidavit from the head of the agency or a high ranking subordinate with proper delegation authority:

(1) Who has personally reviewed the subject material and invoked the privilege;

(2) Specifically describe the material covered; and,

(3) Articulate the reasons for preserving the confidentiality of the requested information.

   4. If the ETA wholly releases said information, the Complainant will have fourteen (14) calendar days from receipt of said information within which to provide me and the ETA's counsel with post-hearing evidence which provides the foundation for an allegation that any of the panel members did not meet the qualifications of the SGA or had demonstrable conflicts of interest. That will require "a strong showing . . ." See, i.e., Citizens to Preserve Overton Park v. Volpe, 401 U.S. at 420, 91 S.Ct. at 825.

   5. If the Complainant makes such a strong showing, i.e., conflict or lack of requisite qualifications, the ETA will have an additional seven (7) calendar days from the date such information is received within which to provide me with post- hearing evidence to rebut the Complainant's evidence.

   6. Should the Complainant establish the requisite preliminary strong showing of a lack of qualifications or a conflict of interest on the part of one or more of the panelists, and the ETA has not or cannot rebut the same, then an additional fourteen (14) days, is allowed the Complainant to submit more fully-developed post-hearing evidence to support their initial showing. The ETA will thereafter have an additional seven (7) calendar days within which to submit post-hearing evidence to rebut the same.

   7. The parties are encouraged to act expeditiously, cooperatively and to utilize facsimiles to exchange documents and other correspondence whenever possible. Absent the express permission of the undersigned for good cause shown, depositions, if any, shall be conducted telephonically or by video conference. I so limit the method given the potential burden and expense of live depositions, the locations of the parties and potential deponents, the needs of the case, the amount in controversy, the parties resources, the need for a speedy resolution of the matter, and the likely outcome of discovery. The deadlines set forth herein are in calendar days and the rules respecting additional time for mailing and response to motions are not applicable. Stipulations of Expected Testimony will be preferred over deposition testimony.

   8. If the ETA discloses the identity of the panel members it will also ensure they cooperate in making themselves and the review panelists available for telephonic interviews and/or depositions by the Complainant's attorney at reasonable times and places, as limited above, to facilitate the speedy resolution of this matter. The subject matter of depositions, if any, is limited to inquiry into qualifications and potential conflicts of interest of the panelists.

   9. If so disclosed, the identity of the panel members, their qualifications and evidence concerning their dealings will not be disclosed beyond the litigants and their counsel, without prior permission on written request.

   10. If the ETA persists in its assertion of the privilege, as to the matters discussed herein, and the privilege is properly raised, I do not intend to re-evaluate this opinion, and will issue a final decision. Given the fact I have granted reconsideration once, further motions for reconsideration would be inappropriate and, if made, will be considered to be final arguments.

       RICHARD A. MORGAN
       Administrative Law Judge

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