From the Super Mario Wiki
The item is a very well hidden document located in the minor league locker room at the Glitz Pit, accessible by breaking the large block with the Super Hammer and then fluttering across the gap with Mini-Yoshi. It contains the schematics for a machine (used by Grubba) to suck the energy out of any fighter on the stage. It is powered by the Gold Crystal Star. As soon as Mario finds the paper, Miss Jolene confiscates it. Later on, Mario finds a very similar paper in Grubba's desk, and so he discovers that Grubba is responsible for the disappearances of various fighters. It is later revealed that Jolene is actually well aware of the schematics and in fact has Mario find them under the alias "X."