New York Municipal law required public contracts to provide that if a contractor refused to answer questions concerning a contract, the contract may be canceled and the contractor shall be disqualified from further public transactions. The defendants were subpoenaed to testify before a grand jury investigating charges of conspiracy. They refused to waive their right to remain silent. The state then initiated proceedings to terminate their current contracts.
Whether the government can compel public contractors to waive their right to be free from self-incrimination?
No. The government can only secure self-incriminating statements from witnesses if it first agrees that those statements will not be used in criminal prosecutions against the witnesses.
The purpose of the Fifth Amendment is to insure that persons are not compelled to give testimony that may prove that they were involved in criminal activity. While the state has a strong public interest in ferreting out fraud and other criminal activity as it relates to their contracts, it does not outweigh the importance of the selfincrimination clause. The Court further stated that a waiver of a right secured under threat of substantial economic sanction is not voluntarily made. If the state desires this testimony, it must ensure that any information gathered would not be used against the defendant in a criminal trial.
414 U.S. 70, 94 S. Ct. 316 (1973)