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Mr. MANELLI. The alleged leak?
Mr. GOLDSMITH. The improper acts; yes, sir.
The CHAIRMAN. That will be all, Mr. Goldsmith.
Thank you for giving us the benefit of your views.
Mr. Paglin.

Mr. Counsel, you may proceed with your questions of the witness. TESTIMONY OF MAX D. PAGLIN, ASSISTANT FOR REVIEW, OFFICE

OF OPINIONS AND REVIEW, FEDERAL COMMUNICATIONS COMMISSION

Mr. MANELLI. Would you state your full name and present position at the FCC?

Mr. Paglin. My name is Max D. Paglin. I am presently an assistant for review in the office of Opinions and Reviews in the Federal Communications Commission.

Mr. MANELLI. How long have you held that position?
Mr. Paglin. Since September of 1971.

Mr. MANELLI. In February of 1970 you were, were you not, the Executive Director of the Commission?

Mr. PAGLIN. Yes.

Mr. MANELLI. And you have also served—would you outline the capacities in which you have served at the FCC? You were Chief Counsel at one time, and you have served in other capacities?

Mr. PAGLIN. I have served the Federal Communications Commission since December 1942, in various staff positions in the Common Carrier Bureau and the Broadcast Bureau; as Legal Assistant to Commissioner Robert Bartley; and as Assistant General Counsel in charge of litigation.

In 1961 I was appointed General Counsel of the Commission and served until the middle of 1964 when I resigned from the Commission and went into practice. I came back in March of 1966 as Executive Director and served until the end of January 1971, in that post.

Mr. MANELLI. Mr. Goldsmith testified about the information he had received, and a subsequent conversation with you as to the possibility of putting in an extension phone, or a hidden tape recorder, to try and verify the information--at least I believe that was his testimony.

Do you recall that conversation with Mr. Goldsmith ?
Mr. PAGLIx. Yes, I do.

Mr. MANELLI. It was to the effect that he had been informed there was a specific leak, identifying an employee; and he suggested or recommended alternative ways of attempting to verify whether this was going on. Was that what he told you?

Mr. Paglix. Generally speaking, ves, that it had been reported to him by this employee that he had observed an outsider coming into Commission offices after hours and in, shall I say, consultation with one of our attorneys, a staff employee, as he indicated. He observed that, in violation of our regulations, agenda materials were openly displayed on the desk and he observed the outsider and our employee reviewing these materials, discussing them and he observed the outsider using the telephone and apparently overheard the outsider apparently discussing the contents of our agenda items on the telephone.

Mr. MANELLI. The informant was supposed to have relayed this information to Mr. Goldsmith ?

Mr. Paglin. I was advised of that by Mr. Goldsmith.

Mr. MANELLI. And he recommended alternative ways this might be checked out.

Mr. PAGLIN. I do not recall he recommended various alternative ways I remember he recommended that in order for us to determine whether or not there was any substance to the statements which had been given to him by the witness, one of the appropriate ways, one of the feasible ways of doing it would be to attempt to install an extension on this telephone which would then go to his office, in an effort to see whether or not there was any basis for this information, whether it in fact was true.

Mr. MANELLI. Did he also suggest an alternative might be installing a secret microphone attached to a tape recorder in the office?

Mr. PAGLIN. Yes.
Mr. VIAXELLI. Were there any others?
Mr. Paglix. None that I can call to mind.
Mr. MANELLI. Just the extension or a hidden microphone?
Mr. PAGLIX. Yes.
Mr. MANELLI. What did you do about this at the time?

Mr. Paglix. I then went and informed the Chairman of these facts. I also gave him some of the background of the situation, since he had just recently come on board as Chairman of the Commission.

I believe he had only been in the office 2 or 3 months at the time.

I described to the Chairman the situation which we had been experiencing at the Commission for sometime—a number of years.

If I may volunteer, this entire incident, even though it was isolated, was by myself considered in terms of the climate of the times, if you will, to wit, as I told your staff when I was called up for an interview, and described to them the circumstances. We had been plagued over a number of years with these leaks, these unauthorized and premature disclosures of Commission business, Commission documents.

It had gone back to a point many years before and it was beginning to build up in intensity. Specifically, one of the benchmarks was a memorandum from the President to the heads of all agencies, expressing his concern about leaks, premature unauthorized leaks of agency business and he wanted a report from each of the agencies as to what has been going on and what is being done to stop it.

We did render such a report ; this was early 1967. As I say, over this period we began to be plagued by this buildup of leaks, some were serious adjudicatory leaks, some involved turning over of Commission documents. We attempted in a great many ways to try to stop this. We informed the Bureau chiefs and our employees and in the early part of 1969

Mr. MAVELLI. I do not want to interrupt you but in the interest of time I think my question was a little more limited than that. If you wish, perhaps you could submit a statement as to the prevalence of leaks or the seriousness of the problems.

Mr. Paglin. The matter is covered fully in the Chairman's statement.

Mr. MANELLI. The fact is, you did go to the Chairman and told him leaks were a serious problem.

82-092—72

Mr. Paglin. I emphasized to the Chairman that all through these years, in my experience this was the first time someone came forward as an eye witness, stating that he had seen the unauthorized disclosure of our agenda materials to an outsider.

This was immediately after there had been a specific amendment of our regulations calling the attention of all employees to the prohibition of such activities.

That was what impressed itself on me and this is what I impressed on the Chairman and told him we had been advised of these facts and I recommended we should take certain steps to follow through to determine whether or not this, in fact, was true.

Mr. MANELLI. What were the steps you said you should use to follow through specifically!

Mr. Paglin. I told him I had been advised by our security officer that there were two means by which this might be detected, in the sense of trying to find out what was going on. As you indicated in your earlier question, one was by the telephone extension and one was by the hidden mike. My recollection is the Chairman said, “Check it out with general counsel. I would prefer, if it be appropriate, that it be a telephone extension."

We, thereafter, went and checked with the general counsel as to its propriety and were advised that, in the circumstances, there was nothing improper about it, and we made the necessary arrangements and went ahead as Mr. Goldsmith described it.

Mr. MANELLI. You say he said he would prefer the extension to the microphone? Very briefly, was there any discussion as to why one would be preferred?

Mr. PAGLIN. None that I recall.

Mr. MANELLI. Was there discussion or concern on your part, or the Chairman's, that the extension telephone would require bringing in the C. & P. Telephone Co. into the operation since they would have to wire up the extension ?

Mr. PAGLIN. Your question was concern”?
Mr. MANELLI. Yes.
Mr. Paglin. I was aware this would have to be done.

Mr. MANELLI. You were aware the telephone company would have to do this.

Mr. PAGLIN. So I was advised.
Mr. MANELLI. The telephone company did do this?
Mr. PAGLIN. They did in fact.

Mr. MANELLI. After the conversation you contacted the telephone company?

Mr. PagLin. Yes, sir.
Mr. MANELLI. They did arrange, in fact, did come in and wire

up

the extension?

Mr. PAGLIN. They did.
Mr. MANELLI. This was done, as already testified, after hours?

Mr. Paglin. I had no personal knowledge of that at the time. I have since been advised.

Mr. MANELLI. Who personally supervised the installation for the Commission ?

Mr. PAGLIN. I assume it was Mr. Goldsmith.

Mr. MANELLI. And then did you advise the Chairman once the phone was installed ?

Mr. Paglin. I have no recollection that I advised him specifically; I may have but I have no recollection that I did. We got our permission to go ahead and we went ahead. I do not recall I went to him specifically

and said "It is done now." I do not recall that. Mr. MANELLI. You said you discussed this with the Chief Counsel, that would be Mr. Geller at that time?

Mr. Paglin. Mr. Henry Geller, right.

Mr. MANELLI. After the extension had been in place for probably a month or 5 weeks, did you then go to the Chairman and advise him you were planning to remove the extension?

Mr. PAGLIN. Yes, I believe I did go to him and indicated to him that nothing of any substance had been disclosed by this installation.

We prepared a report to him to that effect and I believe a copy of it is in our files which you have. We recommended that in the circumstances now, in order to make sure and follow through, as one would normally do on an investigation, the two people involved should be interviewed.

We recommended that the two people, our staff employee and the outsider, be interviewed. The Chairman approved that procedure. Then Mr. Goldsmith, in conjunction with an attorney from general counsel's office, proceeded to interview them.

Mr. MANELLI. In the interest of time, I would like to summarize the results—you can correct me. Is it not correct that the aftermath was the employee was contacted and confronted with the information and denied any wrongdoing, and the Commission dropped the proceeding or dropped the matter—is that the way it came out?

Mr. PAGLIN. Yes, he denied it, as did the outsider who was also interviewed. It was our feeling in the circumstances, particularly considering the state of health of the employee and the fact they were then made aware of the fact that we were aware of what was going on, at least what was alleged to have been going on, and that obviously the steps we took would stop all this, our feeling was there was no need to pursue it further.

Mr. MANELLI. That is all, Mr. Chairman.
The CHAIRMAN. Mr. Pickle.

Mr. PICKLE. Mr. Paglin, do you consider Mr. Goldsmith an expert in matters pertaining to his job, security of the Commission?

Mr. Paglix. Yes; I hired him, or it was my recommendation that he be hired as security officer for the Commission.

Mr. PICKLE. Do you think he would know the difference between wiretapping and monitoring a telephone extension ?

Mr. Paglin. I cannot answer that in the affirmative. It may involve a legal distinction, as Mr. Goldsmith indicated to you. He is not a lawyer. Now, whether there was some physical distinction, I am not aware.

Mr. MANELLI. Is he an expert in the field to which he is assigned? Do you think he would be knowledgeable as to what is and is not wiretapping?

Mr. Paglin. I would assume, if that was one of the techniques used, I would assume he knew some of the physical characteristics of it and how one would denominate it.

Mr. PICKLE. This problem was so serious
Mr. PAGLIN. Yes.

Mr. PICKLE. That Mr. Goldsmith recommended one of two courses, either a microphone or an extension to another floor

Mr. Paglin. Right.
Mr. PICKLE. Or to another office. Now, you are a lawyer.
Mr. PAGLIN. Yes.
Mr. PICKLE. You have been with the Commission 42 years-
Mr. PAGLIN. Not 42 years.
Mr. PICKLE. Since 1942.
Mr. PAGLIN. Yes.

Mr. PICKLE. Do you consider the extension of a telephone from one specific desk on one floor to another floor as merely an extension and not monitoring or wiretapping?

Mr. PAGLIN. Excuse me. You have several terms in there. I do not consider an extension on your own telephone, in this case the Commission's telephone, in light of the circumstances that an outsider was making what was an illegal use of our telephone, for the purpose of determining whether our own regulations were being violated and our own property was being misused, to be wiretapping, as you call it. I do not regard it as wiretapping.

Mr. PICKLE. Are you familiar with the wiretapping law the Chairman read to the previous witness.

Mr. Paglin. I am not intimately familiar with it even now. I might volunteer by saying I was not aware in my own mind of the relevance of that act at the time that this matter was being considered. It may be a matter of hindsight now and I suspect it is. Certainly at the time we were considering this I had no inkling there was anything unlawful and improper in what we were doing.

Mr. Pickle. As an attorney and employee of the FCC for 30 years, is it your testimony that you do not have a strong opinion as between the difference between wiretapping and a telephone extension, monitoring a telephone extension?

Mr. PAGLIN. I am not in a position to give you a legal opinion now. We have a memorandum, a legal opinion from our General Counsel that goes into that distinction and discusses that distinction in depth. I will abide by that memorandum.

Mr. PICKLE. In your interpretation of the wiretapping lawMr. Paglin. I am not prepared to give a personal interpretation, I will rest on the General Counsel's opinion in the matter.

Mr. Pickle. I would ask your personal opinion.

Mr. Paglin. I have given you my opinion at the time it took place, that was it was not an unlawful matter in the action we took.

Mr. PICKLE. When Mr. Goldsmith talked to the Chairman-
Mr. PAGLIN. I spoke with the Chairman.

Mr. PICKLE (continuing). And you said the Chairman said, he authorized us to do "what you think has to be done. If you have to do anything, I would prefer the extension telephone method.”

When you made this statement to our staff earlier, there was no reference at all that there was a question in anyone's mind that this was proper or not.

Mr. Paglin. Because there was none in my mind at the time.

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