B-215491 June 13, 1984

B-215491 June 13, 1984

The Honorable John Tower Chairman, Committee on Armed Services United States Senate

Dear Mr. Chairman:

In recent discussions with Mr. Drew Harker of your staff, we have learned that consideration is being given to a proposed amendment to the 1985 Department of Defense authorization bill which would permit the compensation of American nationals who have incurred losses as a result of the establishment of a Regional Military Training Center in Honduras ("RMTC"). The purpose of this letter is to express our reservations as to the necessity for the proposed amendment, assign to the General Accounting Office.

According to the draft furnished to us, the proposed amendment would authorize the Comptroller General to "receive, investigate, review, settle, and certify for payment claims against the United States" for all losses (including consequential losses) incurred by nationals of the United States as a result of the establishment or operation of the RMTC in Honduras. Upon receipt of a claim, we would be required to determine, within 45 days, (1) whether there had been a loss, (2) whether the loss was incurred as a result of the establishment or operation of the RMTC, and (3) if so, the amount of the loss. We would then certify the validity of the claim and the amount to be paid to the Secretary of Defense, who would make payment form Defense Department appropriations.

The RMTC, a security assistance-fund project, was establish in mid-1983 to provide military training (by U.S. Green Beret personnel) to Honduras and Salvadoran soldiers. Although the U.S. Department of Defense has been extensively involved in the design, construction, and operation of the project, the Department has apparently taken the position that the RMTC is a Honduran, and not an American, facility. The facility, near Trujillo, Honduras, is situated on a tract of land owned (through several Honduran and Puerto Rican corporations) by Temistocles Ramirez de Arleen, a United States citizen. Mr. Ramirez has asserted that establishment and operation of the RMTC on his property has been without proper authority or compensation (either by the U.S. or Honduran Governments); it is this specific claim that the proposed amendment apparently has been designed to resolve.

We express no opinion here as to the merits of Mr. Ramirez's claim, although his allegations appear substantial enough to warrant consideration in an appropriate adjudicative forum. Well-established administrative and judicial mechanisms, however, are already available to resolve the matter. Consequently, it is our view that creation of additional settlement authority, as proposed in the amendment, is unnecessary.

The Congress has established, through the Military Claims Act, 10 U.S.C. Sec. 2731 et seq., administrative claims settlement authority within the Department of Defense for any claim against the United States for damage to, or loss of, real or personal property caused by noncombat activities of the armed forces. 10 U.S.C. Sec. 2734 (a) (1)-(2). Similar authority exists under the Foreign Claims Act for damage to, or loss of, property of an "inhabitant of a foreign country" In either case, the Department is given authority to settle the full amount of such a claim, although it may make payment of only $25,000 or less; recommended payment of any amount in excess of $25,00 may be paid upon certification by the Comptroller General, from the permanent judgement appropriation. 31 U.S.C. Sec. 1304(a). The Department's settlement authority to DOD, the broad settlement powers of this Office do not ordinarily apply to such matters. 62 Comp.Gen. 280 (1983).

We recognize that Mr. Ramirez may be hesitant to pursue existing administrative remedies with the Defense Department in light of statements by officials of that department that his claim should be against the Government of Honduras, rather than against the United States. We believe, however, that settlement authority within GAO could more effectively remedy Mr. Ramirez's concerns. One possibility, for example would be to permit the claimant to utilize existing claims settlement authority within DOD, but specifically require DOD to consider, solely for purposes of settlement, the RMTC to be an American facility. /1/

Apart from his administrative remedies with DOD, Mr. Ramirez may institute a Claims Court action against the United Stated Government for monetary relief for a Fifth Amendment taking without just compensation under the Tucker Act, 28 U.C.S. Sec. 1491. The availability of this course of action, in fact, was emphasized by the U.S. Court of Appeals for the District of Columbia Circuit in a recent decision rejecting a suit by Mr. Ramirez for injunctive and declaratory relied against DOD. See Ramirez v. Weinberger, 724 F.2d 143, 150-54 (D.C. Cir. 1983). Claims (now the Claims Court). See, e.g. Seery v. United States, 127 F. Supp. 601, 603 (Ct. C1. 1955) U.S. may be held liable for seizure of U.S. national's property in Austris for a military officers' club0; Turney v. United States, 115 F. Supp. 457, 463-64 (Ct. C1. 1953) (U.S. held liable for "taking" of radar equipment owned by American citizen where held by Philippines government under "irresistible pressure" by U.S. Army).

It is our understanding that Mr. Ramirez has not yet formally sought monetary damages from the United States in connection with the establishment or operation of the RMTC, preferring first to seek injunctive and declarative relief from the courts. (The denial of that relief by a panel of the U.S. Court of Appeals for the District of Columbia Circuit has been reheard by the full court, which is due to render a decision in the near future.) It is our view that, if and when Mr. Ramirez chooses to pursue a monetary claim, adequate administrative and judicial remedies are available to him without enactment of additional claims settlement authority in this office.

In addition to the foregoing, we are concerned with the proposed legislation's establishment of GAO in the role of final arbiter of the amount of "just compensation" for the taking of private property. This office has, in exercising our overall claims settlement authority, generally declined to make such determinations, based principally on a lack of technical expertise. Where the applicable agency's estimate has a reasonable basis, we have accepted that estimate as the proper measure of recovery. See B-157405, August 30, 1965. In other cases, we have declined to make any settlement of the claim, but have left the claimant to his judicial remedy. See, for example, B-152725, February 19, 1964, in which we noted the statement of the Court of Claims in American Hawaiian Steamship Co. v. United States, that such determinations are judicial, and not administrative, functions. See 124 F. Supp 378, 382 (Ct. C1. 1954), cert. denied, 350 U.S. 863. In the present case, we believe that the existing adjudicatory forums (i.e. the agency and the courts are well equipped to make such determinations, and that establishment of settlement authority for such a claim in GAO would not be beneficial.

Finally, with respect to GAO's role as set out in the proposed legislation, we would strongly suggest that, if the amendment is accepted (which we do mot advise), it be amended to delete the requirement that GAO settle claims submitted under the legislation within 45 days of the time they are filed. Because of the complexity of arriving at a satisfactory determination of extent and valuation of "losses" (including consequential losses under this settlement authority, it is our view that a 45-day limitation is extremely unrealistic.

In view of the foregoing, we must recommend against the favorable consideration of the proposed amendment in its present form. We hope that our views are assistance to you in your consideration of this matter

Sincerely yours,

Comptroller General of the United States

1. Thus, an alternative to the proposed amendment could take such from as this:

"Sec. ___. any claim filed with the department of Defense under authority of 10 U.S.C. Secs. 2733 or 2734 for damage to the property of the United States citizen in connection with the establishment or operation of a regional military training center in Honduras shall be determined and settled as not a Honduran, facility."

In addition, the Congress may wish to consider preserving Mr. Ramirez's right of judicial review of a determination by DOD by expressly providing for such review "notwithstanding 10 U.S.C. Sec. 2735." The courts are split as to whether the latter provision prohibits judicial review of agency determinations under the Military Claims Act. Compare Towery v. United States, 459 F. Supp. 101 (E. D. La. 1978), aff'd 620 F.2d 568 (5th Cir. 1980), cert. denied 449 U.S. 1078 (1981), with Welsh v. United States, 446 F Supp. 75 (D. Conn. 1978).