B-151979, NOVEMBER 6, 1963, 43 COMP. GEN. 431

B-151979, NOVEMBER 6, 1963, 43 COMP. GEN. 431

FUNDS - NONAPPROPRIATED - INDEBTEDNESS OF MILITARY PERSONNEL THE DEBT OWING A COMMISSIONED OFFICER'S MESS BY AN ENLISTED MAN OF THE MARINE CORPS, THE SITUATION GIVING RISE TO THE DEBT HAVING OCCASIONED HIS BAD CONDUCT DISCHARGE UPON CONVICTION BY SPECIAL COURT MARTIAL THAT HE HAD VIOLATED ARTICLE 121 OF THE UNIFORM CODE OF MILITARY JUSTICE, MAY NOT BE OFFSET AGAINST THE FINAL PAY DUE THE MEMBER, AN INDEBTEDNESS TO A COMMISSIONED OFFICER'S MESS--- A NONAPPROPRIATED FUND ACTIVITY--- NOT BEING EQUIVALENT TO AN INDEBTEDNESS DUE THE UNITED STATES THERE IS NO BASIS FOR WITHHOLDING THE MEMBER'S FINAL PAY AS AN INVOLUNTARY SET-OFF AGAINST THE DEBT IN THE ABSENCE OF A STATUTORY PROVISION AUTHORIZING DEDUCTIONS FROM PAY THAT IS SIMILAR TO THE AUTHORITY IN 37 U.S.C. 1007 (C) AND (D) GRANTED TO THE DEPARTMENTS OF THE ARMY AND AIR FORCE.

TO MAJOR JOHN A. RAPP, UNITED STATES MARINE CORPS, NOVEMBER 6, 1963:

BY FIRST INDORSEMENT DATED JULY 3, 1963, THE COMMANDANT OF THE MARINE CORPS FORWARDED YOUR LETTER OF JULY 2, 1963, CDH/JR, REQUESTING A DECISION AS TO WHETHER PAYMENT OF AN ATTACHED VOUCHER IN THE AMOUNT OF $39.84 MAY BE MADE TO THE COMMISSIONED OFFICER'S MESS, MARINE CORPS COLD WEATHER TRAINING CENTER, BRIDGEPORT, CALIFORNIA. THIS AMOUNT WAS WITHHELD FROM THE FINAL PAY OF PRIVATE DOUGLAS J. BLOOMQUIST, 1913630, U.S. MARINE CORPS, TO LIQUIDATE AN ALLEGED INDEBTEDNESS. THE REQUEST FOR DECISION HAS BEEN ASSIGNED NO. DO-MC-715 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

IT IS STATED THAT ON JANUARY 9, 1963, PRIVATE BLOOMQUIST WAS CONVICTED BY SPECIAL COURT-MARTIAL OF VIOLATING ARTICLE 121 OF THE UNIFORM CODE OF MILITARY JUSTICE IN THAT HE, IN CONJUNCTION WITH ANOTHER ENLISTED MEMBER, DID "STEAL ABOUT 23 BOTTLES OF LIQUOR, OF A VALUE OF ABOUT $120, THE PROPERTY OF COMMISSIONED OFFICER'S MESS.' HIS SENTENCE INCLUDED A BAD CONDUCT DISCHARGE. IT IS FURTHER STATED THAT PURSUANT TO SECTION 0137, MANUAL OF THE JUDGE ADVOCATE GENERAL OF THE NAVY, THE CONVENING AUTHORITY OF THE SPECIAL COURT-MARTIAL STATED THAT "THE AMOUNT OF $79.68 IS DETERMINED TO BE A LOSS TO THE GOVERNMENT AND AS SUCH CONSTITUTES AN INDEBTEDNESS TO THE UNITED STATES," ONE-HALF OF WHICH ($39.84) WAS REQUIRED TO BE SET OFF AGAINST THE FINAL PAY OF PRIVATE BLOOMQUIST.

YOU STATE FURTHER THAT PRIVATE BLOOMQUIST WAS GIVEN A BAD CONDUCT DISCHARGE FROM THE MARINE CORPS ON JUNE 21, 1963. ON THE DATE OF HIS DISCHARGE, HE HAD $3 IN HIS POSSESSION AND AN UNPAID BALANCE OF $46.02 ON HIS MILITARY PAY RECORD. THIS BALANCE WAS REDUCED BY $39.84, LEAVING A NET BALANCE OF $6.18. HE WAS ENTITLED TO A DISCHARGE GRATUITY UNDER 10 U.S.C. 6297 (B) (3) AND PARAGRAPH 044180, NAVY COMPTROLLER MANUAL, IN THE AMOUNT OF $25 LESS $9.18 ($3 IN HIS POSSESSION PLUS A BALANCE OF $6.18), A SUM OF $15.82. HE WAS PAID $22 ON DISCHARGE, THIS SUM REPRESENTING HIS BALANCE OF $6.18 PLUS THE DISCHARGE GRATUITY OF $15.82.

THE ELEMENT GIVING RISE TO THE QUESTION PRESENTED FOR DECISION IS THAT THE COMMISSIONED OFFICER'S MESS IS A NONAPPROPRIATED FUND ACTIVITY OF THE GOVERNMENT. IN THIS RESPECT, IT IS STATED THAT IF THE COMMISSIONED OFFICERS MESS CANNOT RECOVER THE AMOUNT OF ITS LIQUOR LOSS THROUGH THE MEANS OF SET-OFF AGAINST PRIVATE BLOOMQUIST'S FINAL PAY, THEN IT MUST--- LIKE PRIVATE, NON-FEDERAL CONCERNS--- ABSORB THE LOSS OR INCUR EXPENSES IN PURSUING COLLECTION BY OTHER MEANS.

YOU REFER TO AN OPINION OF THE JUDGE ADVOCATE GENERAL OF THE NAVY DATED MAY 22, 1963, IN PRIVATE BLOOMQUIST'S CASE, WHEREIN IT WAS CONCLUDED "THAT INDEBTEDNESS TO A NONAPPROPRIATED FUND ACTIVITY SHOULD BE DEEMED TO BE EQUIVALENT TO INDEBTEDNESS TO THE "UNITED STATES" FOR THE PURPOSES INDICATED AND SET-OFF AGAINST FINAL PAY OF AN INDIVIDUAL CONVICTED BY COURT-MARTIAL OF LARCENY OF NONAPPROPRIATED FUNDS OR PROPERTY IS AUTHORIZED UNDER JAG MANUAL, SECTION 0137.' THE PRINCIPAL BASIS FOR THIS CONCLUSION APPEARS TO BE THAT THE SUPREME COURT HELD IN STANDARD OIL COMPANY OF CALIFORNIA V. JOHNSON, 316 U.S. 481 (1942), THAT NONAPPROPRIATED FUND ACTIVITIES ARE INSTRUMENTALITIES OF THE FEDERAL GOVERNMENT. ALSO, IN SUPPORT OF THE CONCLUSION IN PRIVATE BLOOMQUIST'S CASE, THE JUDGE ADVOCATE GENERAL OF THE NAVY CITES TWO OPINIONS OF THE JUDGE ADVOCATE GENERAL OF THE ARMY (OPJAGA 1952/4354, MAY 27, 1952, 2 DIG.OPS., PAY, 101.9; OPJAGA 1953/5314 SEPTEMBER 1, 1954, 5 DIG.OPS., PAY 101.9) HOLDING THAT AN INDEBTEDNESS TO A NONAPPROPRIATED FUND ACTIVITY IS TO BE REGARDED AS BEING EQUIVALENT TO INDEBTEDNESS TO THE UNITED STATES FOR PURPOSES OF SET-OFF OF FINAL PAY. THOSE OPINIONS, HOWEVER, INVOLVE STATUTORY PROVISIONS NOT APPLICABLE TO ENLISTED MEN OF THE NAVY AND MARINE CORPS, AND WE FIND NO BASIS FOR APPLYING THEM TO THE INSTANT CASE.

IN THIS CONNECTION, THE STATUTORY AUTHORITY FOR DEDUCTIONS FROM THE CURRENT AND FINAL PAY OF AN ENLISTED MAN OF THE ARMY OR AIR FORCE FOR DEBTS ADMINISTRATIVELY DETERMINED TO BE OWED THE "UNITED STATES OR ANY OF ITS INSTRUMENTALITIES" IS CONTAINED IN SECTION 1007 (C) AND (D) OF TITLE 37, U.S.C. THIS AUTHORITY IS DERIVED FROM THE ACT OF MAY 22, 1928, 45 STAT. 698. BOTH THE DEPARTMENT OF THE ARMY AND THE DEPARTMENT OF THE AIR FORCE HAVE RECOGNIZED THAT UNDER SUCH AUTHORITY AN INDEBTEDNESS DUE A NONAPPROPRIATED FUND ACTIVITY MAY BE DEDUCTED FROM A MEMBER'S PAY IN THE ORDER OF PRECEDENCE SET FORTH IN PARAGRAPH 13-11, ARMY REGULATIONS 37-104, AND PARAGRAPH 31301, AIR FORCE MANUAL 177-105. WHILE THE REMISSION OF INDEBTEDNESS AUTHORITY OF THE 1928 ACT WAS EXTENDED TO THE SECRETARY OF THE NAVY BY THE ACT OF JUNE 11, 1960, 74 STAT. 207, 10 U.S.C. 6161, WE KNOW OF NO STATUTORY AUTHORITY VESTING IN THE SECRETARY OF THE NAVY THE INDEBTEDNESS COLLECTION AUTHORITY APPLICABLE TO ENLISTED MEN OF THE ARMY AND AIR FORCE EXCEPT IN THE CASE OF MARINE CORPS EXCHANGES. AS TO SUCH EXCHANGES CONGRESS ENACTED LEGISLATION TO AUTHORIZE THE SECRETARY OF THE NAVY TO PRESCRIBE REGULATIONS TO PAY OUT OF MARINE CORPS APPROPRIATIONS ANY INDEBTEDNESS TO MARINE CORPS EXCHANGES OF MEMBERS OF THE MARINE CORPS WHO ARE DISCHARGED, WHO DESERT, OR WHO ARE SENTENCED TO PRISON. SEE 10 U.S.C. 6032 AND PARAGRAPHS 044660-044665 OF THE NAVY COMPTROLLER MANUAL. THIS AUTHORITY, HOWEVER, IS BY ITS OWN TERMS, LIMITED TO MARINE CORPS EXCHANGES.

WE HAVE HELD THAT DEBTS DUE ARMY POST EXCHANGES (NONAPPROPRIATED FUND ACTIVITIES) ARE NOT DEBTS DUE THE UNITED STATES AND THAT THERE IS NO AUTHORITY TO SET OFF DEBTS DUE AN EXCHANGE AGAINST THE AMOUNT DUE A CIVILIAN EMPLOYEE AS REFUND OF RETIREMENT DEDUCTIONS. SEE 9 COMP. GEN. 353; 9 ID. 411; 11 ID. 161; AND 31 ID. 363. AS POINTED OUT BY YOU IN YOUR LETTER, AT ONE TIME CERTAIN NONAPPROPRIATED FUND INDEBTEDNESS WAS DEDUCTED FROM THE PAY OF MEMBERS WITH AND WITHOUT THEIR CONSENT. SEE 19 COMP. DEC. 496; ID. 515; AND 21 COMP. DEC. 109. HOWEVER, IN KENNY V. UNITED STATES, 62 CT.CL. 328, THE COURT OF CLAIMS HELD THAT MONEY WHICH WAS THE PROPERTY OF AN ARMY POST EXCHANGE, A NONAPPROPRIATED FUND INSTRUMENTALITY, WAS NOT THE PROPERTY OF THE GOVERNMENT. THE COURT ALSO HELD IN TAGGART V. UNITED STATES, 17 CT.CL. 322, THAT NO PUBLIC OFFICER COULD MAKE THE GOVERNMENT EITHER AGENT OR TRUSTEE FOR THE COLLECTION OF PRIVATE DEBTS. OUR OFFICE CITED THE KENNY AND TAGGART RULINGS WITH ACCEPTANCE IN 11 COMP. GEN. 161, WHEREIN IT WAS HELD (QUOTING FROM THE SYLLABUS) THAT:

THE ADMINISTRATOR OF VETERANS' AFFAIRS IS NOT AUTHORIZED TO WITHHOLD RETIRED PAY OTHERWISE DUE AN OFFICER ON THE SEPARATE EMERGENCY OFFICERS' RETIRED LIST OF THE ARMY TO SATISFY A DEBT FOUND IN THE WAR DEPARTMENT TO BE OWING FROM SUCH RETIRED OFFICER TO AN ARMY POST EXCHANGE.

ALSO, THE SYLLABUS OF 9 COMP. GEN. 353 STATES THAT:

SINCE THE DEBT OF A CIVILIAN EMPLOYEE OF THE WAR DEPARTMENT TO A POST EXCHANGE IS NOT A DEBT DUE THE UNITED STATES, THERE IS NO AUTHORITY OF LAW TO OFFSET AGAINST THE AMOUNT OF COMPENSATION DUE SUCH AN EMPLOYEE AT THE TERMINATION OF HIS SERVICE THE AMOUNT OF HIS INDEBTEDNESS TO THE POST EXCHANGE.

AND THE SYLLABUS OF 9 COMP. GEN. 411 STATES THAT:

SINCE THE DEBT OF A CIVILIAN EMPLOYEE OF THE WAR DEPARTMENT TO A POST EXCHANGE OR A POST RESTAURANT IS NOT A DEBT DUE THE UNITED STATES THERE IS NO AUTHORITY TO OFFSET AGAINST THE AMOUNT DUE SUCH EMPLOYEE AS REFUND OF RETIREMENT DEDUCTIONS AT THE TERMINATION OF HIS SERVICE THE AMOUNT OF HIS INDEBTEDNESS TO A POST EXCHANGE OR A POST RESTAURANT.

THE COURT OF CLAIMS HELD IN A RECENT DECISION OF JANUARY 11, 1963, G. L. CHRISTIAN AND ASSOCIATES V. UNITED STATES, 312 F.2D 418, THAT "CONTRACTS OF CONVENTIONAL NONAPPROPRIATED FUND ACTIVITIES OF ARMED FORCES SUCH AS POST EXCHANGES, SHIPS' STORES, AND OFFICERS' CLUBS DO NOT BIND APPROPRIATED FUNDS, DO NOT CREATE A UNITED STATES DEBT, AND MAY NOT BE VINDICATED IN THE UNITED STATES COURT OF CLAIMS, EVEN THOUGH MADE BY GOVERNMENT OFFICERS.' CITED IN THIS CONNECTION, WERE BORDEN V. UNITED STATES, 126 CT.CL. 902 (1953); PULASKI CAB CO. V. UNITED STATES, 141 CT.CL. 160 (1958); AND STANDARD OIL COMPANY OF CALIFORNIA V. JOHNSON, 316 U.S. 481 (1942).

THIS CONCEPT OF NONAPPROPRIATED FUND ACTIVITIES BEING INSTRUMENTALITIES OF THE GOVERNMENT FOR SOME PURPOSES BUT NOT FOR ALL PURPOSES WAS ALSO RECENTLY APPLIED BY THE COURT OF CLAIMS IN THE CASE OF GRADALL V. UNITED STATES, CT.CL. NO. 4-60, DECIDED MAY 10, 1963, WHEREIN THE COURT HELD THAT THE PLAINTIFF'S EMPLOYMENT IN THE ARMY AND AIR FORCE EXCHANGE SERVICE--- A FEDERAL NONAPPROPRIATED FUND INSTRUMENTALITY--- DID NOT CONSTITUTE HOLDING A CIVILIAN OFFICE UNDER THE UNITED STATES GOVERNMENT WITHIN THE MEANING OF SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, 5 U.S.C. 59A. CITING THE GRADALL CASE, THE COURT, ALSO ON MAY 10, 1963, FOUND FOR THE PLAINTIFF IN THE CASE OF COCKRILL V. UNITED STATES, CT.CL. NO. 315-58, WHERE PLAINTIFF, IN ADDITION TO RECEIVING HIS RETIRED PAY FROM THE ARMY, ALSO RECEIVED A SALARY FROM THE FORT SAM HOUSTON GOLF CLUB, AN INSTRUMENTALITY OF THE UNITED STATES. IN A THIRD CASE, JACKSON V. UNITED STATES, CT.CL. NO. 98- 62, SIMILAR TO THE GRADALL AND COCKRILL CASES, AN ORDER OF THE COURT DATED JUNE 14, 1963, HELD THAT PLAINTIFF WAS ENTITLED TO RECOVER WITHHELD RETIRED PAY.

IN DECISION OF JUNE 27, 1938, A-95605, CITED BY YOU, IT WAS HELD THAT FUNDS EMBEZZLED BY AN ARMY RESERVE OFFICER FROM THE "CONSERVANCY BEACH FLY CAMP, CIVILIAN CONSERVATION CORPS, COMPANY FUND," SHOULD BE CHECKED AGAINST HIS ACCRUED PAY AND ALLOWANCES BEFORE THE BALANCE OF PAY AND ALLOWANCES WERE FORFEITED UNDER A GENERAL COURT-MARTIAL SENTENCE. THAT DECISION INVOLVED AN ARMY RESERVE OFFICER AND THERE IS NOTHING TO INDICATE THAT CONSIDERATION WAS GIVEN TO WHETHER THE CIVILIAN CONSERVATION CORPS COMPANY FUND WAS A NONAPPROPRIATED FUND ACTIVITY.

IT IS OUR VIEW THAT IN THE ABSENCE OF A STATUTORY PROVISION OR REGULATION WHICH WOULD REQUIRE DEDUCTION FROM THE FINAL PAY OF AN ENLISTED MEMBER OF THE MARINE CORPS FOR AN INDEBTEDNESS OWED A NONAPPROPRIATED FUND ACTIVITY, LIKE THE COMMISSIONED OFFICER MESS IN THIS CASE, THERE WOULD APPEAR TO BE NO BASIS FOR WITHHOLDING ANY PART OF THE MEMBER'S FINAL PAY.

ACCORDINGLY, IN VIEW OF THE FOREGOING, INVOLUNTARY SET-OFF AGAINST ANY AMOUNT WHICH MIGHT BE DUE PRIVATE BLOOMQUIST WOULD BE IMPROPER AND WITHOUT AUTHORITY. THE VOUCHER SUBMITTED WITH YOUR REQUEST FOR DECISION IS NOT AUTHORIZED FOR PAYMENT AND WILL BE RETAINED HERE.