A-56617, JULY 25, 1934, 14 COMP. GEN. 70

A-56617: Jul 25, 1934

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IT MUST BE REGARDED THAT THE TERM "EXPERTS" IS INTENDED TO INCLUDE ONLY THOSE SPECIALLY QUALIFIED BY EDUCATION AND EXPERIENCE IN A PARTICULAR LINE TO PERFORM A SPECIAL SERVICE ESSENTIAL TO THE ACCOMPLISHMENT OF THE LEGISLATIVE PURPOSE. - AND WHO ARE NOT. " ARE SUBJECT TO THE CIVIL-SERVICE LAWS AND REGULATIONS. PROVIDES AS FOLLOWS: "THE COMMISSION IS AUTHORIZED TO APPOINT AND FIX THE COMPENSATION OF SUCH OFFICERS. APPOINT SUCH OTHER OFFICERS AND EMPLOYEES AS ARE NECESSARY IN THE EXECUTION OF ITS FUNCTIONS AND FIX THEIR SALARIES IN ACCORDANCE WITH THE CLASSIFICATION ACT OF 1923. THE SECURITIES AND EXCHANGE COMMISSION INTERPRETS THIS LEGISLATION TO MEAN THAT THE COMMISSION IS AUTHORIZED TO APPOINT THE "OFFICERS.

A-56617, JULY 25, 1934, 14 COMP. GEN. 70

OFFICERS AND EMPLOYEES - EXPERTS - SECURITIES AND EXCHANGE COMMISSION WHERE A STATUTE AUTHORIZES THE EMPLOYMENT OF BOTH "EXPERTS" AND OTHER "OFFICERS AND EMPLOYEES," SUCH AS THE ACT OF JUNE 5, 1934, 48 STAT. 881, CREATING THE SECURITIES AND EXCHANGE COMMISSION, IT MUST BE REGARDED THAT THE TERM "EXPERTS" IS INTENDED TO INCLUDE ONLY THOSE SPECIALLY QUALIFIED BY EDUCATION AND EXPERIENCE IN A PARTICULAR LINE TO PERFORM A SPECIAL SERVICE ESSENTIAL TO THE ACCOMPLISHMENT OF THE LEGISLATIVE PURPOSE--- AND WHO ARE NOT, GENERALLY, OBTAINABLE UNDER OPERATION OF THE CIVIL-SERVICE LAWS AND REGULATIONS. ALL OFFICERS AND EMPLOYEES OF THE SECURITIES AND EXCHANGE COMMISSION, OTHER THAN THOSE QUALIFYING AS "EXPERTS," ARE SUBJECT TO THE CIVIL-SERVICE LAWS AND REGULATIONS, THE CLASSIFICATION ACT, AND SECTION 203 OF THE ECONOMY ACT, REQUIRING THE APPROVAL OF THE PRESIDENT TO THE FILLING OF VACANCIES, INCLUDING THE FILLING OF ALL NEWLY-CREATED POSITIONS.

COMPTROLLER GENERAL MCCARL TO THE CHAIRMAN, SECURITIES AND EXCHANGE COMMISSION, JULY 25, 1934:

THERE HAS BEEN RECEIVED YOUR LETTER OF JULY 13, 1934, AS FOLLOWS:

SECTION 4 (B) OF THE "SECURITIES EXCHANGE ACT OF 1934," APPROVED JUNE 5, 1934 (PUBLIC NO. 291, 73D CONGRESS), PROVIDES AS FOLLOWS:

"THE COMMISSION IS AUTHORIZED TO APPOINT AND FIX THE COMPENSATION OF SUCH OFFICERS, ATTORNEYS, EXAMINERS, AND OTHER EXPERTS AS MAY BE NECESSARY FOR CARRYING OUT ITS FUNCTIONS UNDER THIS ACT, WITHOUT REGARD TO THE PROVISIONS OF OTHER LAWS APPLICABLE TO THE EMPLOYMENT AND COMPENSATION OF OFFICERS AND EMPLOYEES OF THE UNITED STATES, AND THE COMMISSION MAY, SUBJECT TO THE CIVIL-SERVICE LAWS, APPOINT SUCH OTHER OFFICERS AND EMPLOYEES AS ARE NECESSARY IN THE EXECUTION OF ITS FUNCTIONS AND FIX THEIR SALARIES IN ACCORDANCE WITH THE CLASSIFICATION ACT OF 1923, AS AMENDED.'

THE SECURITIES AND EXCHANGE COMMISSION INTERPRETS THIS LEGISLATION TO MEAN THAT THE COMMISSION IS AUTHORIZED TO APPOINT THE "OFFICERS, ATTORNEYS, EXAMINERS, AND OTHER EXPERTS" MENTIONED IN THE FIRST PART OF THE PARAGRAPH WITHOUT REGARD TO SECTION 203 OF THE ECONOMY ACT AS AMENDED, WHICH PROVIDES THAT THE FILLING OF POSITIONS MUST BE AUTHORIZED OR APPROVED IN WRITING BY THE PRESIDENT OF THE UNITED STATES.

THE COMMISSION IS NOW CONSIDERING THE ORGANIZATION OF ITS STAFF OF EMPLOYEES AND REQUESTS THAT YOU RENDER AN OPINION AS TO WHETHER THE COMMISSION IS CORRECT IN ITS INTERPRETATION OF SECTION 4 (B) OF THE SECURITIES EXCHANGE ACT OF 1934.

IT WILL BE GREATLY APPRECIATED IF THIS MATTER CAN BE EXPEDITED.

THERE IS STATED IN THE QUOTED STATUTORY PROVISIONS THE AUTHORITY FOR APPOINTING AND FIXING THE RATES OF COMPENSATION OF TWO SEPARATE AND DISTINCT CLASSES OF PERSONNEL, VIZ: (1) "OFFICERS, ATTORNEYS, EXAMINERS, AND OTHER EXPERTS," I.E., OFFICERS, ATTORNEYS, EXAMINERS, ETC., WHEN THE DUTIES INVOLVED REQUIRE THE SERVICES OF PERSONS QUALIFYING AS "EXPERT" IN THE PARTICULAR LINE; AND (2) "OTHER OFFICERS AND EMPLOYEES.' THAT THE TWO CLASSES ARE NOT INTENDED TO BE REGARDED ON THE BASIS OF THE SAME DUTIES AND RESPONSIBILITIES IS CLEARLY SHOWN FROM THE FACT THAT THE CONGRESS HAS AUTHORIZED SEPARATE PROCEDURES FOR THEIR EMPLOYMENT AND FOR FIXING THEIR RATES OF COMPENSATION. WHERE A STATUTE AUTHORIZES THE EMPLOYMENT OF BOTH "EXPERTS" AND OTHER "OFFICERS AND EMPLOYEES," IT MUST BE REGARDED THAT THE TERM "EXPERTS" IS INTENDED TO INCLUDE ONLY THOSE EXCEPTIONALLY QUALIFIED BY EDUCATION AND EXPERIENCE IN A PARTICULAR LINE TO PERFORM A SPECIAL SERVICE ESSENTIAL TO ACCOMPLISHMENT OF THE LEGISLATIVE PURPOSE--- AND WHO ARE NOT, GENERALLY, OBTAINABLE UNDER OPERATION OF THE CIVIL-SERVICE LAWS AND REGULATIONS.

ALL OFFICERS AND EMPLOYEES OF THE COMMISSION, OTHER THAN THOSE QUALIFYING AS "EXPERTS" IN THE PERFORMANCE OF SOME SPECIAL LINE OR CLASS OF DUTIES REQUIRED OF THE COMMISSION, ARE SUBJECT TO THE CIVIL SERVICE LAWS AND REGULATIONS, THE CLASSIFICATION ACT, SECTION 203 OF THE ECONOMY ACT (REQUIRING THE APPROVAL OF THE PRESIDENT IN THE FILLING OF VACANCIES, INCLUDING THE FILLING OF ALL NEWLY CREATED POSITIONS), ETC. IN CASES IN WHICH IT IS ESTABLISHED THAT EMPLOYMENT OF EXPERTS IS NECESSARY IN CARRYING OUT THE FUNCTIONS OF THE COMMISSION, OFFICERS, ATTORNEYS, EXAMINERS, AND OTHERS SO QUALIFYING AS ABOVE INDICATED MAY BE EMPLOYED "WITHOUT REGARD TO THE PROVISIONS OF OTHER LAWS APPLICABLE TO THE EMPLOYMENT AND COMPENSATION OF OFFICERS AND EMPLOYEES OF THE UNITED TES," INCLUDING SECTION 203 OF THE ECONOMY ACT.