Appeal from the Orders of the Commonwealth Court of Pennsylvania dated January 14, 1986, at Nos. 50 and 51 C.D. 1986. Pa. Commw. Ct. , A.2d (1986).
Charles F. Scarlata, Pittsburgh, for appellants.
Reizdan B. Moore, Pa. House of Representative, Harrisburg, for appellee.
Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. Hutchinson, J., filed a concurring opinion. Zappala, J., filed a concurring opinion which is joined by Larsen and Papadakos, JJ.
Opinion ANNOUNCING THE JUDGMENT OF THE COURT
The instant case arises as a test of the validity of certain subpoenas duces tecum issued in the course of a legislative investigation of improprieties involved in the construction of the Capitol Addition Project for the Capitol Complex in Harrisburg, Pennsylvania. The Commonwealth Court, via memorandum opinions and orders, denied motions to quash the subpoenas. The instant consolidated appeal ensued.
In 1981, when the Commonwealth initiated the Capitol Addition Project, the appellants, Carl Lunderstadt and John E. Scott, were asked to serve as consultants on the use of granite stone in the Project. Appellants were the owners of a firm known as North American Industries. In 1983, North American Industries was awarded a lucrative no-bid contract to supply granite for the Project, and, in 1984, North American Industries received further benefit when it received a substantial "commission" when a general construction contract was awarded to a firm which selected as its granite fabricators a consortium assembled by North American Industries.
It was to investigate these matters that subpoenas duces tecum were issued to appellants by the appellee legislative committee, the Pennsylvania Select Committee to Investigate Compliance with the Steel Products Procurement Act (hereinafter Select Committee). The Select Committee had initially been formed to investigate compliance with legislation limiting the use of foreign steel products in the Capitol Addition Project, but later the scope of its investigation was broadened to include matters relating to improprieties connected with this as well as other state construction projects. Specifically, at the time the subpoenas were issued, the Select Committee was acting pursuant to House of Representatives Resolution 17 of 1985 (Printer's Number 307), which provided that the Select Committee should investigate not only compliance with legislation limiting the use of foreign steel but also "other matters relating to compliance with State Law in the performance of State construction projects . . . ."
It is well established that a function of legislative committees is to find facts and to make recommendations to the legislature for remedial legislation and other appropriate action. Commonwealth v. Brandamore, 459 Pa. 48, 53-54, 327 A.2d 1, 3-4 (1974) ("The power to investigate is an essential corollary of the power to legislate. The scope of this power of inquiry extends to every proper subject of legislative action."). As stated in McGinley v. Scott, 401 Pa. 310, 320,
A.2d 424, 429 (1960), "The right to investigate in order to acquire factual knowledge concerning particular subjects which will, or may, aid the legislators in their efforts to determine if, or in what manner, they should exercise their powers, is an inherent right of a legislative body, ancillary to, but distinct from, such powers." It was pursuant to this power that the instant legislative committee investigation was being conducted, ostensibly in an effort to propose remedial measures to protect the Commonwealth's interests in not being victimized by those who would perpetrate improprieties in matters relating to state construction projects.
During its investigation, the Select Committee received sworn testimony indicating that officials of the Commonwealth's Department of General Services had knowingly issued orders to quarry granite for the Capitol Addition Project without first obtaining the requisite authorizations, met with members of the fabricating consortium assembled by North American Industries several months prior to receipt of bids for that work, and that appellants had allegedly solicited "payoffs" from prospective suppliers to "take care of people" so as to influence the award of contracts for work on the Capitol Addition Project. Testimony was also presented to the Select Committee that appellants attempted to conceal these payments by having them made to family members and business associates or creditors, and by mischaracterizing the purpose of cash withdrawals from accounts over which they had control.
In an effort to discern further details regarding these alleged schemes to subvert governmental decision making and bidding procedures, the Select Committee issued the instant subpoenas to appellants commanding them to produce broad categories of financial records covering the period 1981-1985, such being the period during which appellants worked on various aspects of the design and construction of the Capitol Addition Project. The subpoena issued to Carl Lunderstadt was identical in scope to the one issued to John E. Scott, and it read as follows:
WE FURTHER COMMAND YOU, At such place and time, to bring with you the following for calendar years 1981, 1982, 1983, 1984, and 1985:
1. Monthly statements of any and all checking accounts indicating receipts, disbursements and balances, including cancelled checks for accounts of Carl Lunderstadt, his wife and dependent children;
2. Monthly statements of any and all savings accounts indicating receipts, disbursements and balances for Carl Lunderstadt, his wife and dependent children;
3. All other monthly financial statements indicating receipts, disbursements and balances of accounts of Carl Lunderstadt, his wife and immediate family;
4. Records of all acquisition (by gift, purchase or otherwise) and sales or transfers (indicating the date and transferee thereof) of money market certificates, certificates of deposit, notes, bonds or stock owned by Carl Lunderstadt, his wife and immediate family.
Appellants assert that they are unable to comply with the subpoenas, in that the language of the subpoenas requires production not only of their own records but also the records of third parties, to wit appellants' wives, dependent children, etc. It is claimed that the subpoenas should therefore be quashed, so that contempt sanctions will not be incurred for failure to produce materials that are not within appellants' possession, custody, or control, and so that the rights of these third parties will not be determined by means other than through issuance of subpoenas directly to such third parties. During the hearing before the Commonwealth Court, however, counsel for the parties agreed and stipulated that appellants would be relieved from complying with that portion of the subpoenas which required them to produce records for accounts, etc. that were in the sole control of their family members; the Select Committee reserved the right to issue direct subpoenas for the records of such persons at a later date. The agreement was approved by the court and entered into the record. In view of this stipulation, appellants' argument is without merit.
Appellants also contend that the subpoenas fail to satisfy established standards by which such subpoenas are to be tested for validity. The scope of judicial inquiry in subpoena enforcement actions has evolved, to date, to include an examination of whether the inquiry is within the authority of the issuing party, whether the demand is too indefinite, and whether the information sought is reasonably relevant to the investigation. United States v. Morton Salt Co., 338 U.S. 632, 652, 70 S.Ct. 357, 369, 94 L.Ed. 401, 416 (1950); Annenberg v. Roberts, 333 Pa. 203, 2 A.2d 612 (1938).
Applying the first of the criteria, there can be no doubt that the legislature has authority to inquire into whether state construction projects have become victimized by schemes to subvert existing procedures governing the award of construction contracts. Nevertheless, appellants claim that the particular resolution which created the instant Select Committee conveyed authority for the Select Committee to investigate only compliance with legislation pertaining to use of foreign steel products in the construction of the Capitol Addition Project, and that the instant investigation is therefore outside the scope of authority of the investigating body. We regard this claim as patently without merit, in view of the express language of the enabling resolution, Resolution 17 of 1985 (Printer's Number 307), supra., which in clear terms authorized the Select Committee to investigate not only the foreign steel issue but also "other matters relating to compliance with State law in the performance of State construction projects . . . ."
As to the second and third criteria by which subpoenas are to be evaluated, appellants allege that the instant subpoenas are too indefinite and too broad in their coverage, in that the subpoenas allegedly require production of a mass of books and papers that are so insufficiently described and identified as to render the inquiry a mere "fishing expedition" that would result in an unnecessary disclosure of ...