Supreme Court Ruling Curbs Information Act : Law: Data may be secret if it becomes part of a crime inquiry. Suspects cannot learn of pending prosecutions.

The Supreme Court, substantially narrowing the Freedom of Information Act, ruled Monday that the government may keep secret the information it gathers during routine business if the information later becomes part of a criminal investigation.

Until now, government audits and routine reports had to be disclosed upon request. But after Monday’s 6-3 ruling, these reports and documents will be off limits to disclosure as soon as a federal prosecutor or investigator displays interest in them.

At the same time, the ruling protects criminal investigations by allowing authorities to hide the details of a pending prosecution from possible suspects.

The court majority, saying it sought a “workable balance” between the interest in public disclosure and the needs of prosecutors, came down squarely on the side of prosecutors. The three dissenters complained that the majority had rewritten the disclosure law in the process.

In a typical criminal probe, officials keep their case secret until it goes to trial. The Justice Department argued that criminal suspects should not be permitted to use the Freedom of Information Act as an end run to learn about a pending investigation.

Ironically, this Freedom of Information Act case was labeled by the court as “John Doe Agency and John Doe Government Agency vs. John Doe Corp., 88-1083.” But thanks to lower-court records, the parties were well-known. They were the Defense Contract Audit Agency and the Justice Department vs. the Grumman Corp., a major defense contractor.

In 1978, the defense audit agency, the Pentagon’s accounting arm, conducted a routine audit of Grumman. The agency and Grumman disagreed on how some costs should be allocated but no action was taken.

Seven years later, however, the U.S. attorney in New York began a criminal fraud investigation of Grumman. Lawyers for the company then submitted a request under the Freedom of Information Act for documents “related in any way” to the 1978 audit. The defense agency instead sent all the documents to the FBI.

Grumman sued the defense agency, and the U.S. 2nd Circuit Court of Appeals said the agency had to turn over the requested information. Although the law allows the government to withhold “records or information compiled for law enforcement purposes,” the court held that the 1978 audit was not compiled for such purposes.

The Justice Department appealed, contending that this decision could seriously undercut federal criminal investigations.

Justice Harry A. Blackmun, writing for the court, said the word “compiled” did not necessarily mean “originally compiled,” as the appeals court said, but could mean compiled at any time. By that interpretation, the FBI compiled the Grumman information in 1985 when it collected the audits. Therefore, it was then off limits to disclosure, Blackmun said.

Justices Antonin Scalia and John Paul Stevens filed dissents, with Thurgood Marshall joining Scalia’s dissent. Though long a critic of the Freedom of Information Act, Scalia said the language of the law does not permit the government to keep secret routinely compiled information “which it later shuffles into a law enforcement file.”

Eleanor Smith, a lawyer for the Public Citizen Litigation Project, which often fights for broader disclosure, said Monday’s ruling gives the government more authority to keep information hidden than Congress had intended. “This allows the government to swallow up any routine report that the FBI designates as useful,” she said.

Monday’s ruling followed a related decision earlier this year in which the high court restricted the Freedom of Information Act by allowing the government to shield public records of criminal arrests and convictions around the nation from disclosure when they are compiled by the FBI in Washington.

In other actions Monday, the court:

--Refused to reinstate the influence-peddling conviction of former White House aide Lyn Nofziger. In June, a federal appeals court here threw out Nofziger’s conviction under the Ethics in Government Act on a technicality.

Within a year after leaving office, Nofziger lobbied his former White House colleagues on behalf of the Wedtech Corp. A law prohibited some lobbying by former government employees of offices that had a “direct and substantial interest” in the issue at hand, and the appeals court ruled that it was not clear that Nofziger knew the White House had such an interest.

Congress has since amended the law, meaning a high court ruling on the matter would apply only to Nofziger. The appeal by independent counsel James C. McKay was denied without comment. (U.S. vs. Nofziger, 89-719.)

--Let stand a ruling that permitted a minority set-aside program developed by black workers and their employers to continue despite claims of reverse discrimination.

White government workers at Warner Robins Air Logistics Center near Macon, Ga., argued that the program set up more than 10 years ago discriminated against them because it reserved 240 promotions for black employees. The suit contended that the black employees needed to show solid evidence of previous discrimination rather than rely on statistics.

The Supreme Court recently has taken a dim view of affirmative action programs based on statistical imbalances of white and minority workers. But the justices rejected this appeal from the white workers without comment. (Robert Poss, et al. vs. Michael Howard, et al. 89-387.)