B-112724, JUL. 14, 1964

B-112724: Jul 14, 1964

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FOR REPAYABLE ASSISTANCE LOANS TO COOPERATIVE COMMISSARIES WHICH SUM YOUR DEPARTMENT IS HOLDING IN SPECIAL ACCOUNT 19X6875. IT IS STATED THAT THESE FUNDS REPRESENT PROFITS FROM A FORMER COMMISSARY ACTIVITY AT SEOUL. THAT ALL RECORDS OF THE ACTIVITY WERE DESTROYED BY FIRE OR LOST. THE FUNDS IN QUESTION WERE REMITTED TO THE DEPARTMENT OF STATE AND DEPOSITED INTO THE SPECIAL ACCOUNT FROM WHICH LEGITIMATE CLAIMS WOULD BE PAID. IT IS REPORTED THAT NO CLAIMS AGAINST THESE FUNDS HAVE BEEN RECEIVED. THE ASSISTANT SECRETARY FURTHER STATES THAT THE ACTIVITY WAS NOT A COMMISSARY WITHIN THE MEANING OF SECTION 921 OF THE FOREIGN SERVICE ACT OF 1946. NOR WERE ITS OPERATIONS LIMITED TO THOSE OF A COMMISSARY.

B-112724, JUL. 14, 1964

TO THE SECRETARY OF STATE:

WE REFER TO LETTER DATED APRIL 10, 1964, FROM THE ASSISTANT SECRETARY OF STATE FOR ADMINISTRATION REQUESTING THE OPINION OF THIS OFFICE AS TO THE LEGAL PROPRIETY OF MAKING AVAILABLE THE SUM OF $128,164.51, FOR REPAYABLE ASSISTANCE LOANS TO COOPERATIVE COMMISSARIES WHICH SUM YOUR DEPARTMENT IS HOLDING IN SPECIAL ACCOUNT 19X6875, SUSPENSE, DEPARTMENT OF STATE.

IT IS STATED THAT THESE FUNDS REPRESENT PROFITS FROM A FORMER COMMISSARY ACTIVITY AT SEOUL, KOREA, WHICH LIQUIDATED DUE TO EVACUATION OF THE POST IN 1950, AND THAT ALL RECORDS OF THE ACTIVITY WERE DESTROYED BY FIRE OR LOST. THE FUNDS IN QUESTION WERE REMITTED TO THE DEPARTMENT OF STATE AND DEPOSITED INTO THE SPECIAL ACCOUNT FROM WHICH LEGITIMATE CLAIMS WOULD BE PAID. IT IS REPORTED THAT NO CLAIMS AGAINST THESE FUNDS HAVE BEEN RECEIVED.

THE ASSISTANT SECRETARY FURTHER STATES THAT THE ACTIVITY WAS NOT A COMMISSARY WITHIN THE MEANING OF SECTION 921 OF THE FOREIGN SERVICE ACT OF 1946, AS AMENDED, NOR WERE ITS OPERATIONS LIMITED TO THOSE OF A COMMISSARY. THE BASIS FOR THIS STATEMENT IS THAT FROM INFORMATION OBTAINED FROM EMPLOYEES WHO WERE STATIONED AT SEOUL AND FROM OFFICIAL COMMUNICATIONS FROM PUSAN WHERE THE SEOUL EMBASSY WAS RELOCATED IT WAS DETERMINED THAT THE VENTURE WAS STARTED THROUGH THE COMBINED EFFORTS OF EMPLOYEES OF VARIOUS AGENCIES ASSIGNED TO KOREA PRIOR TO AND DURING THE KOREAN WAR; THAT NO FINANCIAL CONTRIBUTIONS WERE MADE BY EITHER THE UNITED STATES GOVERNMENT OR BY EMPLOYEES; THAT THE VENTURE WAS INITIATED BY A GROUP OF EMPLOYEES THROUGH THE PROCUREMENT OF EQUIPMENT AND SUPPLIES ON CREDIT AND ON CONSIGNMENT FROM VARIOUS SOURCES; THAT THE COMMISSARY WAS THE MAIN OPERATION, BUT IN ADDITION THIS GROUP OF EMPLOYEES OPERATED (1) A CIVILIAN GARAGE, (2) A SHOE REPAIR SHOP, (3) A BARBER SHOP, (4) A BEAUTY PARLOR, (5) A LIQUOR STORE, (6) A MESS SERVICE, (7) A SNACK BAR, (8) A MORTUARY, AND (9) A TAXICAB SERVICE.

SINCE THE FUNDS ARE NOT IDENTIFIABLE WITH ANY INDIVIDUAL EMPLOYEE AND NO FINANCIAL CONTRIBUTION WAS MADE BY THE UNITED STATES AND SINCE THE FUNDS WERE RAISED BY THE COMMISSARY AND OTHER ACTIVITIES OPERATED BY THE GROUP OF EMPLOYEES IN THE VENTURE SHOWN ABOVE, YOUR DEPARTMENT PROPOSES WITH THE APPROVAL OF THIS OFFICE TO MAKE THE FUNDS IN QUESTION AVAILABLE AS LOANS TO EMPLOYEES OF THE FOREIGN SERVICE IN GENERAL TO ASSIST THEM IN FURTHERING THEIR CONTINUING COOPERATIVE COMMISSARY AND RELATED ENTERPRISES. THE LETTER ALSO POINTS OUT THE BENEFITS FLOWING TO YOUR DEPARTMENT AND OTHER AGENCIES AND THAT YOUR DEPARTMENT WOULD SUPERVISE THE LOANING OF THE FUNDS FOR THE PURPOSE OF ASSISTING NONGOVERNMENTAL COMMISSARIES.

SECTION 921 (B) OF THE FOREIGN SERVICE ACT OF 1946, AS AMENDED, PROVIDES THAT THE SECRETARY OF STATE MAY AUTHORIZE AND ASSIST IN THE ESTABLISHMENT, MAINTENANCE, AND OPERATION OF NONGOVERNMENT-OPERATED COMMISSARIES AT POSTS ABROAD. THUS APPROPRIATED FUNDS FOR SALARIES AND EXPENSES OF THE DEPARTMENT OF STATE ARE AVAILABLE FOR USE AS REPAYABLE LOANS IN ESTABLISHING, MAINTAINING, AND OPERATING COOPERATIVE COMMISSARIES ABROAD. THE SUGGESTED DISPOSITION BY THE ASSISTANT SECRETARY OF MAKING THE FUNDS AVAILABLE AS LOANS TO ASSIST OTHER COOPERATIVE COMMISSARIES WOULD RESULT IN THEIR USE FOR THE SAME PURPOSE AS THAT FOR WHICH APPROPRIATED FUNDS ARE PROVIDED. THE CONCLUSION IS, THUS, UNESCAPABLE THAT SUCH USE OF FUNDS IN QUESTION WOULD CONSTITUTE AN AUGMENTATION OF APPROPRIATED FUNDS. UNLESS SANCTIONED BY THE CONGRESS WE BELIEVE SUCH AUGMENTATION WOULD BE UNLAWFUL.

IN CHECKING THE FILES OF YOUR DEPARTMENT WE FOUND EVIDENCE THAT THE COMMISSARY WAS FURNISHED $650,000 WORTH OF GOODS BY THE ARMY ON CONSIGNMENT FOR WHICH $400,000 WAS REIMBURSED; THAT $150,000 WAS ADJUSTED TO COVER SPOILED AND UNSALEABLE GOODS; AND THAT THE REMAINING $100,000 WAS WRITTEN OFF BY THE ARMY WHEN SEOUL WAS EVACUATED. THESE FACTS SUPPORT THE RECOGNITION THAT ASSISTANCE WAS GIVEN THE ACTIVITY BY THE GOVERNMENT THUS PROVIDING A BASIS FOR THE ASSERTION OF SOME CLAIM OF RIGHT TO THESE FUNDS. SINCE A SUFFICIENT PERIOD OF TIME HAS EXPIRED FOR THE PRESENTATION OF CLAIMS AGAINST THE FUNDS IN QUESTION AND WE ARE NOT AWARE OF ANY STATUTORY AUTHORITY TO EXPEND THESE FUNDS FOR ANY PURPOSE, WE SUGGEST THAT THE FUNDS BE DEPOSITED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS.

ACCORDINGLY FOR THE REASONS SET FORTH ABOVE, IN THE ABSENCE OF CONGRESSIONAL APPROVAL BY THE ENACTMENT OF LAW THEREFOR, THIS OFFICE IS UNABLE TO GIVE CONSENT TO THE USE OF THE FUNDS IN THE MANNER SUGGESTED BY THE ASSISTANT SECRETARY IN HIS LETTER OF APRIL 10, 1964.