B-145896, JUN. 28, 1961

B-145896: Jun 28, 1961

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SS-N-579 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE. 5 U.S.C. 62 PROVIDES AS FOLLOWS: "NO PERSON WHO HOLDS AN OFFICE THE SALARY OR ANNUAL COMPENSATION ATTACHED TO WHICH AMOUNTS TO THE SUM OF TWO THOUSAND FIVE HUNDRED DOLLARS SHALL BE APPOINTED TO OR HOLD ANY OTHER OFFICE TO WHICH COMPENSATION IS ATTACHED UNLESS SPECIALLY AUTHORIZED THERETO BY LAW. OR COAST GUARD WHO HAVE BEEN RETIRED FOR INJURIES RECEIVED IN BATTLE OR FOR INJURIES OR INCAPACITY INCURRED IN LINE OF DUTY SHALL NOT. BE CONSTRUED TO HOLD OR TO HAVE HELD AN OFFICE DURING SUCH RETIREMENT.'. IT IS REPORTED THAT IN ACCORDANCE WITH PUBLIC LAW 86-155. COMMANDER LEE WAS RETIRED JULY 1. THAT NO PHYSICAL DISABILITY WAS INVOLVED IN HIS CASE.

B-145896, JUN. 28, 1961

TO THE SECRETARY OF THE NAVY:

ON MAY 16, 1961, THE ADMINISTRATIVE ASSISTANT TO THE SECRETARY OF THE NAVY REQUESTED A DECISION CONCERNING THE EFFECT OF THE LIMITATION ON DUAL EMPLOYMENT AND DUAL COMPENSATION IMPOSED BY THE ACT OF JULY 31, 1894, AS AMENDED, 5 U.S.C. 62; AND SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C. 59A. PARTICULARLY, THE QUESTION CONCERNS THE ENTITLEMENT OF COMMANDER ANDREW W. LEE, SC, UNITED STATES NAVY, RETIRED, TO HIS RETIRED PAY CONCURRENTLY WITH THE COMPENSATION OF HIS CIVILIAN POSITION SHOULD HE BE EMPLOYED BY THE DIVISION OF EXAMINATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM AT A SALARY OF $8,340 PER YEAR. THIS REQUEST HAS BEEN ASSIGNED SUBMISSION NO. SS-N-579 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

5 U.S.C. 62 PROVIDES AS FOLLOWS:

"NO PERSON WHO HOLDS AN OFFICE THE SALARY OR ANNUAL COMPENSATION ATTACHED TO WHICH AMOUNTS TO THE SUM OF TWO THOUSAND FIVE HUNDRED DOLLARS SHALL BE APPOINTED TO OR HOLD ANY OTHER OFFICE TO WHICH COMPENSATION IS ATTACHED UNLESS SPECIALLY AUTHORIZED THERETO BY LAW; BUT THIS SHALL NOT APPLY TO RETIRED OFFICERS OF THE ARMY, NAVY, AIR FORCE, MARINE CORPS, OR COAST GUARD WHENEVER THEY MAY BE ELECTED TO PUBLIC OFFICE OR WHENEVER THE PRESIDENT SHALL APPOINT THEM TO OFFICE BY AND WITH THE ADVICE AND CONSENT OF THE SENATE. RETIRED ENLISTED MEN OF THE ARMY, NAVY, AIR FORCE, MARINE CORPS, OR COAST GUARD RETIRED FOR ANY CAUSE, AND RETIRED OFFICERS OF THE ARMY, NAVY, AIR FORCE, MARINE CORPS, OR COAST GUARD WHO HAVE BEEN RETIRED FOR INJURIES RECEIVED IN BATTLE OR FOR INJURIES OR INCAPACITY INCURRED IN LINE OF DUTY SHALL NOT, WITHIN THE MEANING OF THIS SECTION, BE CONSTRUED TO HOLD OR TO HAVE HELD AN OFFICE DURING SUCH RETIREMENT.'

IT IS REPORTED THAT IN ACCORDANCE WITH PUBLIC LAW 86-155, APPROVED AUGUST 11, 1959, 73 STAT. 333, 335, COMMANDER LEE WAS RETIRED JULY 1, 1960, ON THE BASIS OF 20 YEARS' SERVICE AS A REGULAR OFFICER, AND THAT NO PHYSICAL DISABILITY WAS INVOLVED IN HIS CASE.

THE WELL-ESTABLISHED RULE IS THAT A RETIRED REGULAR COMMISSIONED OFFICER- -- NOT RETIRED FOR INJURIES RECEIVED IN BATTLE OR INCAPACITY INCURRED IN LINE OF DUTY--- HOLDS AN OFFICE WITHIN THE MEANING OF THE 1894 ACT AND THAT HE MAY NOT AVOID THE PROHIBITION OF THE STATUTE BY RETAINING HIS RETIRED OFFICE AND WAIVING HIS RETIRED PAY DURING THE PERIOD OF HIS OCCUPANCY OF "ANY OTHER OFFICE TO WHICH COMPENSATION IS ATTACHED UNLESS SPECIFICALLY AUTHORIZED THERETO BY LAW.' SEE, IN THAT CONNECTION, 21 COMP. GEN. 1129, AND 14 COMP. GEN. 289. IT FOLLOWS THAT UNLESS THE OFFICER'S CIVILIAN EMPLOYMENT WOULD NOT CONSTITUTE THE HOLDING OF "ANY OTHER OFFICE" WITHIN THE PURVIEW OF THE 1894 ACT, THE PROVISIONS OF THAT ACT OPERATE AS A BAR TO THE OFFICER'S CIVILIAN EMPLOYMENT.

10 U.S.C. 241 PROVIDES THAT THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM SHALL BE COMPOSED OF SEVEN MEMBERS, APPOINTED BY THE PRESIDENT BY AND WITH THE ADVICE AND CONSENT OF THE SENATE. SECTION 243 AUTHORIZES THE BOARD TO LEVY SEMIANNUALLY UPON THE FEDERAL RESERVE BANKS, IN PROPORTION TO THEIR CAPITAL STOCK AND SURPLUS, AN ASSESSMENT SUFFICIENT TO PAY ITS ESTIMATED EXPENSES AND THE SALARIES OF ITS MEMBERS AND EMPLOYEES FOR THE HALF YEAR SUCCEEDING THE LEVYING OF SUCH ASSESSMENT, TOGETHER WITH ANY DEFICIT CARRIED FORWARD FROM THE PRECEDING HALF YEAR. SECTION 244 PROVIDES THAT THE BOARD SHALL DETERMINE AND PRESCRIBE THE MANNER IN WHICH ITS OBLIGATION SHALL BE INCURRED AND ITS DISBURSEMENTS AND EXPENSES ALLOWED AND PAID, AND MAY LEAVE ON DEPOSIT IN THE FEDERAL RESERVE BANKS THE PROCEEDS OF ASSESSMENTS LEVIED UPON THEM TO DEFRAY ITS ESTIMATED EXPENSES AND THE SALARIES OF ITS MEMBERS AND EMPLOYEES, WHOSE EMPLOYMENT, COMPENSATION, LEAVE, AND EXPENSES SHALL BE GOVERNED SOLELY BY THE PROVISIONS OF THE FEDERAL RESERVE ACT AND THE RULES AND REGULATIONS OF THE BOARD NOT INCONSISTENT THEREWITH, AND THAT THE FUNDS DERIVED FROM SUCH ASSESSMENTS "SHALL NOT BE CONSTRUED TO BE GOVERNMENT FUNDS OR APPROPRIATED MONEYS.' SECTION 248 ENUMERATES THE POWERS OF THE BOARD AS A GOVERNMENT INSTRUMENTALITY. SECTION 248 (1) PROVIDES THAT THE BOARD MAY EMPLOY SUCH ATTORNEYS, EXPERTS, ASSISTANTS, CLERKS, OR OTHER EMPLOYEES AS MAY BE DEEMED NECESSARY TO CONDUCT THE BUSINESS OF THE BOARD AND THAT "ALL SALARIES AND FEES SHALL BE FIXED IN ADVANCE BY SAID BOARD AND SHALL BE PAID IN THE SAME MANNER AS THE SALARIES OF THE MEMBERS OF SAID BOARD.' APPEARS THAT THE PROVISIONS OF SECTION 248 (1) WHICH PREVIOUSLY AUTHORIZED APPOINTMENT OF ATTORNEYS, EXPERTS, ASSISTANTS, CLERKS, AND OTHER EMPLOYEES "WITHOUT REGARD TO THE PROVISIONS OF CHAPTER 12 OF TITLE 5 (RELATING TO THE CLASSIFIED CIVIL SERVICE) OR ANY RULE OR REGULATION MADE IN PURSUANCE THEREOF," WERE OMITTED IN THE 1958 EDITION OF THE UNITED STATES CODE. IS OF SOME SIGNIFICANCE IN THE MATTER UNDER CONSIDERATION HERE, THAT SERVICE AS AN EMPLOYEE OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM IS AUTHORIZED TO BE CREDITED FOR RETIREMENT PURPOSES UNDER THE CIVIL SERVICE RETIREMENT SYSTEM.

AS PREVIOUSLY NOTED, THE STATUTES OCCUPIED BY COMMANDER LEE--- AS A RETIRED NAVY OFFICER--- IS WITHIN THE DEFINITION OF "OFFICE" AS THAT TERM IS USED IN THE 1894 ACT. THE PROHIBITION IN THE ACT IS NOT AGAINST THE RECEIPT OF COMPENSATION OF A SECOND OFFICE BUT IS AGAINST THE HOLDING OF ,ANY OTHER OFFICE" IF COMPENSATION IS ATTACHED THERETO, AND IT WOULD APPEAR TO BE IMMATERIAL WHETHER THE COMPENSATION ATTACHED TO THE SECOND OFFICE IS PAID FROM APPROPRIATED FUNDS. SEE 19 COMP. GEN. 751, CF. 28 COMP. GEN. 588, 590. THE TERM "OFFICE," AS USED IN THE 1894 ACT, HAS BEEN HELD TO COVER ANY POSITION HAVING FEDERAL FUNCTIONS AND DUTIES AND HAVING, ALSO, THE ELEMENTS OF APPOINTMENT, TENURE, DURATION, AND SALARY, RECOGNIZED AS CHARACTERISTIC OF AN OFFICE, AS DISTINGUISHED FROM A MERE CONTRACT FOR THE PERFORMANCE OF PERSONAL SERVICES. SEE 36 COMP. GEN. 309, 310, AND THE CASES CITED IN THAT DECISION. THE FEDERAL RESERVE BOARD OWES ITS EXISTENCE TO THE FEDERAL RESERVE ACT OF DECEMBER 23, 1913, 38 STAT. 251, AS AMENDED, WHICH INSTITUTED THE BOARD AS A GOVERNMENT INSTRUMENTALITY TO PERFORM A FUNCTION OF GOVERNMENT IN EXERCISING CONTROL OVER THE FEDERAL RESERVE SYSTEM AS PROVIDED IN THE ACTS OF CONGRESS. APPEARS THAT, IN HIS CIVILIAN POSITION, THE OFFICER WOULD BE ENGAGED IN THE PERFORMANCE OF DUTIES OF A FEDERAL NATURE AUTHORIZED BY FEDERAL STATUTES AND WOULD BE SUPERVISED BY A FEDERAL OFFICIAL. OUR VIEW IS THAT, UNDER THE CIRCUMSTANCES, IF APPOINTED TO THE POSITION IN QUESTION, COMMANDER LEE WOULD HOLD A SECOND OFFICE WITHIN THE PURVIEW OF THE 1894 ACT.

SINCE COMMANDER LEE MAY NOT LEGALLY BE EMPLOYED IN THE POSITION IN QUESTION, IT IS UNNECESSARY TO CONSIDER HOW HIS RIGHTS WOULD BE AFFECTED BY THE DUAL COMPENSATION PROVISIONS OF 5 U.S.C. 59A.