A-13749, JUNE 10, 1926, 5 COMP. GEN. 968

A-13749: Jun 10, 1926

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THE HIRE OF A STENOGRAPHIC REPORTER BY CONTRACT TO REPORT AN ADMINISTRATIVE CONFERENCE OR HEARING AT THE SEAT OF GOVERNMENT IS NOT AUTHORIZED. NOTWITHSTANDING THE REGULAR EMPLOYEES OF THE PARTICULAR OFFICE INVOLVED MAY NOT HAVE BEEN QUALIFIED TO PERFORM THE DESIRED SERVICE. THE CIRCUMSTANCES UNDER WHICH THE REPORTING SERVICE WAS HIRED IN THIS CASE ARE STATED BY THE SECRETARY AS FOLLOWS: THE TAX LIABILITY CASES IN QUESTION. IT DEVELOPED THAT THE QUESTION OF VALUATION OF CERTAIN ZINC MINES WAS SO INTERMINGLED WITH THE QUESTION OF FRAUD IN CONNECTION WITH CERTAIN TRANSACTIONS OF THE TAXPAYERS THAT IT WAS ADVISABLE AND ESSENTIAL THAT THE CONFERENCE BE TRANSFERRED TO THE PENAL DIVISION OF THE OFFICE OF THE SOLICITOR OF INTERNAL REVENUE.

A-13749, JUNE 10, 1926, 5 COMP. GEN. 968

PERSONAL SERVICES AT SEAT OF GOVERNMENT - STENOGRAPHIC REPORTERS IN THE ABSENCE OF A SPECIFIC APPROPRIATION PROVIDING THEREFOR, THE HIRE OF A STENOGRAPHIC REPORTER BY CONTRACT TO REPORT AN ADMINISTRATIVE CONFERENCE OR HEARING AT THE SEAT OF GOVERNMENT IS NOT AUTHORIZED, NOTWITHSTANDING THE REGULAR EMPLOYEES OF THE PARTICULAR OFFICE INVOLVED MAY NOT HAVE BEEN QUALIFIED TO PERFORM THE DESIRED SERVICE.

DECISION BY COMPTROLLER GENERAL MCCARL, JUNE 10, 1926:

REVIEW HAS BEEN REQUESTED BY THE SECRETARY OF THE TREASURY OF SETTLEMENT OF MARCH 3, 1926, DISALLOWING THE CLAIM OF A. F. GALLAGHER FOR $108.50 FOR REPORTING AND FURNISHING TWO COPIES OF A HEARING BEFORE THE SOLICITOR OF INTERNAL REVENUE, NOVEMBER 23, 1925, IN RE THE TAX LIABILITY OF O. J. MCCONNELL AND W. B. THOMPSON. THE CIRCUMSTANCES UNDER WHICH THE REPORTING SERVICE WAS HIRED IN THIS CASE ARE STATED BY THE SECRETARY AS FOLLOWS:

THE TAX LIABILITY CASES IN QUESTION, INVOLVING A TOTAL ADDITIONAL TAX OF APPROXIMATELY $400,000, HAD BEEN UNDER DISCUSSION IN THE SPECIAL ADJUSTMENT SECTION OF THE INCOME TAX UNIT OF THE BUREAU OF INTERNAL REVENUE ON THE MORNING OF NOVEMBER 23, 1925. IT DEVELOPED THAT THE QUESTION OF VALUATION OF CERTAIN ZINC MINES WAS SO INTERMINGLED WITH THE QUESTION OF FRAUD IN CONNECTION WITH CERTAIN TRANSACTIONS OF THE TAXPAYERS THAT IT WAS ADVISABLE AND ESSENTIAL THAT THE CONFERENCE BE TRANSFERRED TO THE PENAL DIVISION OF THE OFFICE OF THE SOLICITOR OF INTERNAL REVENUE, INASMUCH AS THAT DIVISION WOULD EVENTUALLY BE CALLED UPON TO PASS UPON THE QUESTION OF FRAUD. THE CASES WERE OF UNUSUAL IMPORTANCE BECAUSE OF THE LARGE AMOUNTS OF TAXES INVOLVED, AS WELL AS THE INTRICATE TECHNICAL QUESTIONS WHICH NECESSARILY WOULD HAVE TO BE DETERMINED IN REACHING A PROPER CONCLUSION, AND FOR THE ADDED REASON THAT THESE CASES HAD BEEN SINGLED OUT FOR CRITICISM BY THE SENATE COMMITTEE INVESTING THE BUREAU OF INTERNAL REVENUE. THE COMMITTEE HAD RAISED THE QUESTION OF THE INTEGRITY OF CERTAIN OFFICERS OF THE BUREAU OF INTERNAL REVENUE IN CONNECTION WITH THEIR PREVIOUS CONSIDERATION OF THE CASES.

UNDER THESE CIRCUMSTANCES IT BECAME VITALLY NECESSARY TO HAVE A COMPLETE AND ACCURATE RECORD OF THE TESTIMONY GIVEN BY ONE OF THE TAXPAYERS, MR. MCCONNELL, AND HIS SEVERAL WITNESSES, ALSO TO ACCURATELY AND FULLY RECORD THE COMMENTS MADE BY VARIOUS REPRESENTATIVES OF THE BUREAU PRESENT AT THE CONFERENCE. AN EXPERT SHORTHAND REPORTER WAS EMPLOYED TO REPORT THE CONFERENCE, FOR THE REASON THERE WAS NO PERSON EMPLOYED IN THE OFFICE OF THE SOLICITOR OF INTERNAL REVENUE WHO WAS COMPETENT TO MAKE A VERBATIM STENOGRAPHIC REPORT THEREOF. BY REASON OF THIS FACT AND THE IMPORTANCE OF HAVING THE CONFERENCE ACCURATELY AND FULLY REPORTED A REQUEST WAS MADE BY TELEPHONE TO THE CLAIMANT'S OFFICE TO FURNISH A COMPETENT COURT REPORTER TO MAKE THE VERBATIM REPORT. IT WOULD, OF COURSE, HAVE BEEN IMPOSSIBLE TO HAVE ADVERTISED FOR PROPOSALS FOR PERFORMING THIS PARTICULAR SERVICE, INASMUCH AS THE NECESSITY FOR THE REPORT OF THE CONFERENCE WAS NOT APPARENT UNTIL LATE IN THE MORNING OF THE DAY ON WHICH THE CONFERENCE WAS HELD. IT IS THUS APPARENT THAT THERE WAS AN EMERGENCY SITUATION WHICH COULD BE MET IN NO OTHER WAY THAN BY EMPLOYING A PRIVATE PERSON TO REPORT THE PROCEEDINGS.

IT IS THE PRACTICE OF THE BUREAU OF INTERNAL REVENUE TO UTILIZE ITS REGULAR STENOGRAPHIC HELP WHENEVER IT IS POSSIBLE IN CONNECTION WITH CONFERENCES, BUT NONE OF THEM CAN BE CONSIDERED AS BEING SUFFICIENTLY EXPERT TO MAKE VERBATIM REPORTS OF IMPORTANT AND TECHNICAL TAX LIABILITY CASES REQUIRING SUCH REPORTS. SHORTHAND REPORTERS ARE HIGHLY TRAINED AND SKILLED EXPERTS OF A DISTINCTIVE GROUP, DISTINGUISHED FROM THAT OF OFFICE STENOGRAPHERS WHO USUALLY HAVE NOT THE TRAINING OR SKILL TO COMPETENTLY PERFORM SHORTHAND WORK REQUIRING VERBATIM REPORTS OF IMPORTANT TECHNICAL DISCUSSIONS AND ARGUMENTS. THE APPROPRIATION "COLLECTING THE INTERNAL REVENUE" PROVIDES FOR THE EMPLOYMENT OF NECESSARY EXPERTS, BUT SINCE THE SERVICES OF EXPERT SHORTHAND REPORTERS ARE NOT CONTINUOUSLY REQUIRED SUCH EXPERTS ARE EMPLOYED ONLY FOR PARTICULAR CASES WHEN VERBATIM REPORTS ARE CONSIDERED VITALLY ESSENTIAL TO THE INTERESTS OF THE GOVERNMENT.

THIS DEPARTMENT BELIEVES THE AUTHORITY TO HIRE EXPERTS IN THE APPROPRIATION REFERRED TO INCLUDES THE TEMPORARY HIRE OF THE SERVICE OF AN EXPERT SHORTHAND REPORTER WHEN IN THE OPINION OF THE COMMISSIONER OF INTERNAL REVENUE THE INTEREST OF THE GOVERNMENT WILL BE OTHERWISE JEOPARDIZED BY THE LACK OF THE SERVICES OF SUCH AN EXPERT, AN ELEMENT PRESENT IN THE CASE HEREIN UNDER CONSIDERATION. ACCORDINGLY THE ACTION OF THE GENERAL ACCOUNTING OFFICE IN DISALLOWING THE CLAIM IN QUESTION FOR THE REASONS INDICATED IS RESPECTFULLY REFERRED TO YOU FOR REVIEW AND DETERMINATION WHETHER SUCH EXPERT SERVICE IS ALLOWABLE UNDER THE CIRCUMSTANCES AND THE AUTHORITY CONTAINED IN THE APPROPRIATION; ALSO WHETHER THE TEMPORARY HIRE OF AN EXPERT SHORTHAND REPORTER IS PERSONAL SERVICE WITHIN THE PURVIEW OF SECTION 3709 OF THE REVISED STATUTES.

THE ACT OF AUGUST 5, 1882, 22 STAT. 255, PROHIBITS THE EMPLOYMENT AT THE SEAT OF GOVERNMENT OF ANY EMPLOYEES EXCEPT PURSUANT TO SPECIFIC APPROPRIATIONS FOR SUCH PERSONAL SERVICES, AND PROHIBITS THE PAYMENT FOR PERSONAL SERVICES AT THE SEAT OF GOVERNMENT FROM ANY CONTINGENT EXPENSES, SPECIFIC OR GENERAL APPROPRIATION, UNLESS SUCH EMPLOYMENT IS AUTHORIZED AND PAYMENT THEREFOR PROVIDED IN THE LAW GRANTING THE APPROPRIATION. ORDER TO AUTHORIZE THE CONTRACTING FOR STENOGRAPHIC REPORTING SERVICE IN THE DISTRICT OF COLUMBIA, THERE MUST FIRST BE AN APPROPRIATION AVAILABLE FOR SUCH WORK, AND, SECOND, THE HEARINGS MUST NECESSARILY BE OF SUCH NATURE AS TO PRECLUDE AN INTENT THAT THE REPORTING BE DONE BY THE REGULAR FORCE OF STENOGRAPHERS PROVIDED FOR THE ESTABLISHMENT.

THE APPROPRIATION SOUGHT TO BE CHARGED IN THIS CASE,"COLLECTING THE INTERNAL REVENUE, 1926," ACT OF JANUARY 22, 1925, 43 STAT. 770, PROVIDES:

FOR EXPENSES OF ASSESSING AND COLLECTING THE INTERNAL-REVENUE TAXES, INCLUDING THE EMPLOYMENT OF THE NECESSARY OFFICERS, ATTORNEYS, EXPERTS, AGENTS, ACCOUNTANTS, INSPECTORS, DEPUTY COLLECTORS, CLERKS, JANITORS, AND MESSENGERS IN THE DISTRICT OF COLUMBIA AND THE SEVERAL COLLECTION DISTRICTS, TO BE APPOINTED AS PROVIDED BY LAW * * *.

THE AUTHORITY GIVEN IN THE APPROPRIATION FOR PERSONAL SERVICES OF THE NATURE THEREIN SPECIFICALLY ENUMERATED DOES NOT AUTHORIZE SUCH EMPLOYMENT IN THE DISTRICT OF COLUMBIA BY CONTRACT AT RATES OTHER THAN AS PRESCRIBED IN THE CLASSIFICATION ACT, AS THEY MUST BE APPOINTED "AS PROVIDED BY LAW.' NO SPECIFIC APPROPRIATION WAS MADE FOR THE EXPENSES OF THE CONFERENCE OR HEARING, NOR DOES IT APPEAR TO HAVE BEEN A HEARING EXPRESSLY AUTHORIZED BY LAW. THEREFORE, THE FACT THAT THE EMPLOYEES REGULARLY PROVIDED FOR THAT BUREAU OR OFFICE MAY NOT HAVE BEEN QUALIFIED TO PERFORM THE SERVICES DESIRED COULD NOT OPERATE TO AUTHORIZE THE EMPLOYMENT OF PERSONAL SERVICES BY CONTRACT IN CONTRAVENTION OF THE ACT OF AUGUST 5, 1882, SUPRA, AND THE CLASSIFICATION ACT. 26 COMP. DEC. 243; ID. 800; APPEAL 32189, APRIL 1, 1920.