B-210176(2), OCT 4, 1984, OFFICE OF GENERAL COUNSEL

B-210176(2): Oct 4, 1984

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DEPARTMENT OF ENERGY: THE COMMENTS WHICH FOLLOW ARE IN RESPONSE TO PORTIONS OF RULING 1984 1. THE SUBJECT OF THE RULING IS "RESTITUTIONARY AUTHORITY AVAILABLE TO THE DEPARTMENT OF ENERGY UNDER THE STATUTES AND REGULATIONS IT ADMINISTERS.". ITS PURPOSE IS TWOFOLD: TO SET FORTH THE DEPARTMENT OF ENERGY'S (ENERGY) INTERPRETATION OF THE SCOPE OF ITS REMEDIAL AUTHORITY UNDER THE EMERGENCY PETROLEUM ALLOCATION ACT AND REGULATIONS PROMULGATED UNDER IT. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS RAISED IN THE RULING. IT CONSISTENTLY HAS BEEN OUR POSITION THAT ENERGY'S AUTHORITY TO DISTRIBUTE OVERCHARGE SETTLEMENT FUNDS IS A LIMITED. IMPLIED AUTHORITY TO EFFECT RESTITUTION BY DISTRIBUTING THESE FUNDS ONLY TO CONSUMERS OR CLASSES OF CONSUMERS WHO CAN SHOW THAT THEY WERE OVERCHARGED OR.

B-210176(2), OCT 4, 1984, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

THEODORE J. GARRISH, GENERAL COUNSEL, DEPARTMENT OF ENERGY:

THE COMMENTS WHICH FOLLOW ARE IN RESPONSE TO PORTIONS OF RULING 1984 1, ISSUED BY YOUR OFFICE, AND PUBLISHED IN THE FEDERAL REGISTER, 49 FED. REG. 22063, MAY 25, 1984. THE SUBJECT OF THE RULING IS "RESTITUTIONARY AUTHORITY AVAILABLE TO THE DEPARTMENT OF ENERGY UNDER THE STATUTES AND REGULATIONS IT ADMINISTERS." ITS PURPOSE IS TWOFOLD: TO SET FORTH THE DEPARTMENT OF ENERGY'S (ENERGY) INTERPRETATION OF THE SCOPE OF ITS REMEDIAL AUTHORITY UNDER THE EMERGENCY PETROLEUM ALLOCATION ACT AND REGULATIONS PROMULGATED UNDER IT; AND TO ADDRESS SPECIFICALLY THE FOLLOWING OPINIONS AND DECISIONS ISSUED BY THIS OFFICE ON THAT SUBJECT: 63 COMG.GEN. 189 (1984); 62 COMG.GEN. 379 (1983); B-200170, APRIL 1, 1981; AND 60 COMG.GEN. 15 (1980).

PART I OF THE RULING PROVIDES SOME BACKGROUND INFORMATION WHICH LED TO THE DIFFERENCES BETWEEN THE DEPARTMENT AND THE GAO. PART II OF THE RULING ADDRESSES ENERGY'S REGULATIONS ON REMEDIES, AND THE QUESTION OF WHETHER ENERGY MUST USE ITS SUBPART V PROCEDURES (10 C.F.R. PART 205, SUBPART V) IN EVERY INSTANCE WHERE THOSE INJURED BY ALLEGED VIOLATIONS OF THE FORMER PROGRAM OF PETROLEUM PRICE AND ALLOCATION CONTROLS, AND THE AMOUNTS INVOLVED, CANNOT BE READILY DETERMINED. PART III OF THE RULING ADDRESSES ENERGY'S STATUTORY AUTHORITY TO EFFECT RESTITUTION, AND THE QUESTION OF APPROPRIATE DISPOSITIONS OF OVERCHARGE REFUNDS WHEN INJURED PURCHASERS CANNOT BE IDENTIFIED.

IN PARTS II AND III, ENERGY HAS ATTEMPTED TO REFUTE THE VALIDITY OF THE ANALYSES AND CONCLUSIONS SET FORTH IN OUR DECISIONS. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS RAISED IN THE RULING, JUST AS WE DID WHEN ENERGY MADE THESE SAME POINTS IN RESPONSE TO OUR REQUESTS FOR ITS VIEWS. BRIEF, IT CONSISTENTLY HAS BEEN OUR POSITION THAT ENERGY'S AUTHORITY TO DISTRIBUTE OVERCHARGE SETTLEMENT FUNDS IS A LIMITED, IMPLIED AUTHORITY TO EFFECT RESTITUTION BY DISTRIBUTING THESE FUNDS ONLY TO CONSUMERS OR CLASSES OF CONSUMERS WHO CAN SHOW THAT THEY WERE OVERCHARGED OR, BECAUSE OF THE NATURE OF THE OVERCHARGES, WERE LIKELY TO HAVE BEEN HARMED BY THEM. WHENEVER APPROPRIATE CONSUMERS OR CLASSES OF CONSUMERS CANNOT BE READILY IDENTIFIED BY ENERGY (OR ON OCCASION BY AN OIL COMPANY), OR THE AMOUNTS OF REFUNDS CANNOT BE DETERMINED, WE BELIEVE THAT ENERGY MUST FOLLOW ITS OWN REGULATIONS FOR THE DISTRIBUTION OF OVERCHARGE FUNDS IN THESE CIRCUMSTANCES (10 C.F.R. PART 105, SUBPART V). 63 COMG.GEN., SUPRA AT 191; 62 COMG.GEN. SUPRA AT 381-382; AND 60 COMG.GEN., SUPRA AT 26. ANY DISTRIBUTIONS MADE TO CLASSES OF CONSUMERS OR TO STATES AS A RESULT OF SUBPART V PROCEEDINGS STILL MUST BE MADE ON A RESTITUTIONARY BASIS. ONLY IF NO RESTITUTIONARY BASIS FOR PAYMENTS CAN BE FOUND, THEN, AS A LAST RESORT, ENERGY MUST DEPOSIT THE FUNDS INTO THE MISCELLANEOUS RECEIPTS ACCOUNT OF THE U.S. TREASURY. 62 COMG.GEN., SUPRA AT 391.

WE BELIEVE THAT OUR DECISIONS WERE AND ARE CORRECT, AND THAT THEY SPEAK FOR THEMSELVES. TO ATTEMPT ONCE AGAIN TO ADDRESS EXHAUSTIVELY EACH POINT RAISED IN PARTS II AND III OF THE RULING WOULD BE UNNECESSARILY TIME CONSUMING. THEREFORE, THESE COMMENTS INCORPORATE BY REFERENCE THE CONCLUSIONS AND SUPPORTING ARGUMENTS SET FORTH IN OUR PRIOR DECISIONS ON THIS TOPIC.

PART IV OF THE RULING DISCUSSES ENERGY'S VIEW OF THE WEIGHT TO BE ACCORDED TO THE COMPTROLLER GENERAL'S OPINIONS, AND CONCLUDES THAT THE FOUR CITED OPINIONS ARE "NOT ENTITLED TO ANY DEFERENCE." RULING, AT 22068. IN REACHING ITS CONCLUSION, ENERGY REFERRED TO SEVERAL FEDERAL COURT DECISIONS WHICH ADDRESSED THE QUESTION OF THE WEIGHT TO BE GIVEN BY A COURT TO AN OPINION OF THE COMPTROLLER GENERAL INTERPRETING AN AGENCY'S STATUTORY AUTHORITY WHERE, THE COURTS SAID, THIS OFFICE POSSESSED NO TECHNICAL EXPERTISE WITH RESPECT TO THE AGENCY OPERATIONS AT ISSUE. SEE E.G., INNER CITY BROADCASTING CORP. V. CARDENAS, 554 F. SUPP. 42 (D.C.C. 1982), AND CASES CITED IN RULING, AT 22068.

THE RELEVANT QUESTION, IN OUR OPINION, IS NOT THE WEIGHT A COURT SHOULD GIVE TO OUR DECISIONS, BUT WHETHER OUR DECISIONS ARE CONCLUSIVE AND BINDING ON ENERGY, ABSENT A SUBSEQUENT JUDICIAL DECISION TO THE CONTRARY. WE THINK THAT THEY ARE CONCLUSIVE AND BINDING.

OUR AUTHORITY WITH RESPECT TO ENERGY'S DISPOSITION OF THE ESCROW FUNDS DERIVES FROM THE SOURCE AND NATURE OF THE FUNDS, THEIR CURRENT STATUS WITHIN THE U.S. TREASURY, AND THE COMPTROLLER GENERAL'S RESPONSIBILITY AS THE CHIEF ACCOUNTING OFFICER OF THE UNITED STATES GOVERNMENT, AS WILL BE DISCUSSED BELOW.

SOURCE, NATURE, AND MANAGEMENT OF FUNDS

THE FUNDS AT ISSUE WERE OBTAINED BY ENERGY UNDER CONSENT ORDERS WITH OIL COMPANIES AND OTHERS IN SETTLEMENT OF ALLEGED VIOLATIONS OF PETROLEUM PRICE AND ALLOCATION REGULATIONS. WITH RESPECT TO THESE FUNDS, THE CONSENT ORDERS DID NOT SET FORTH APPROPRIATE DISPOSITIONS NOR DID THEY IDENTIFY THE APPROPRIATE PARTIES TO RECEIVE THEM. THE GAO AND ENERGY AGREE THAT THOSE PURCHASERS AND CLASSES OF PURCHASERS MOST LIKELY TO HAVE BEEN INJURED BY THE ALLEGED VIOLATIONS AND RESULTING OVERCHARGES SHOULD BE THE ONES TO RECEIVE THE REFUNDS, WHENEVER POSSIBLE.

RECOGNIZING THAT THE PROCESS OF IDENTIFYING THESE INDIVIDUALS IS DIFFICULT AND TIME-CONSUMING, ENERGY HAS DEPOSITED THE FUNDS IN AN INTEREST-BEARING ESCROW ACCOUNT WITHIN THE U.S. TREASURY UNTIL THE TERMS OF THE CONSENT ORDERS CAN BE SATISFIED, AND THE FUNDS CAN BE DISTRIBUTED TO THOSE WHO WERE LIKELY TO HAVE BEEN INJURED BY OVERCHARGES.

IN OUR FIRST PUBLISHED OPINION ON THIS SUBJECT, WE INDICATED THAT WHEN ENERGY HOLDS SETTLEMENT FUNDS PENDING THEIR ULTIMATE RESTITUTIONARY DISTRIBUTION TO OVERCHARGED PURCHASERS, THE MONEYS ARE HELD IN A TRUST CAPACITY, AND NOT FOR THE USE OR BENEFIT OF THE GOVERNMENT. 60 COMG.GEN. SUPRA, AT 26-27. ALTHOUGH THE ESCROW ACCOUNT FOR THE OVERCHARGE SETTLEMENT FUNDS WAS ESTABLISHED BY ENERGY AND NOT BY THE CONGRESS, IN OUR OPINION, THE PURPOSE OF THE ACCOUNT IS A PUBLIC ONE, AND THUS MAY NOT BE USED FOR ANY OTHER PURPOSE WITHOUT FOLLOWING THE PROCEDURES ESTABLISHED IN SUBPART V.

ON THE BASIS OF INFORMATION OBTAINED INFORMALLY FROM ENERGY'S OFFICE OF THE COMPTROLLER, IT IS CLEAR THAT THE ESCROW ACCOUNT IS MANAGED AS IS ANY APPROPRIATION ACCOUNT FOR WHICH ENERGY IS RESPONSIBLE. THERE ARE CERTAIN PERSONS AUTHORIZED BY ENERGY TO FORWARD A DECISION AND ORDER (D&O) PERTAINING TO THE DISPOSITION OF OVERCHARGE FUNDS TO ITS OFFICE OF THE COMPTROLLER, ACCOMPANIED BY A REQUEST FOR THE DISBURSEMENT OF THE FUNDS IN ACCORDANCE WITH THE TERMS OF THE D&O. IN THE COMPTROLLER'S OFFICE, A CERTIFYING OFFICER VERIFIES THAT THE DISBURSEMENT REQUEST WAS SIGNED BY AN AUTHORIZED PERSON, AND THEN PREPARES AND CERTIFIES A REQUEST FOR PAYMENT WHICH IS SENT TO THE TREASURY FOR ISSUANCE OF A CHECK IN THE APPROPRIATE AMOUNT AGAINST THE FUNDS IN THE ESCROW ACCOUNT. AS A CERTIFYING OFFICER, THIS OFFICIAL IS RESPONSIBLE FOR THE LEGALITY OF THE PROPOSED PAYMENT UNDER THE ESCROW ACCOUNT, AND MAY BE PERSONALLY LIABLE FOR REPAYMENT OF AN ILLEGAL OR IMPROPER PAYMENT. 31 U.S.C. SEC. 3528(A)(3) AND (A)(4). CT. B-200170, APRIL 1, 1981 (GOVERNMENT OFFICIAL IS ACCOUNTABLE FOR PRIVATE FUNDS HE ACCEPTS AND HOLDS IN HIS OFFICIAL CAPACITY); B-200108, B-198558, JANUARY 23, 1981 (PRIVATE FUNDS HELD IN TRUST BY THE UNITED STATES ARE FUNDS FOR WHICH AN OFFICER OF THE UNITED STATES MAY BE ACCOUNTABLE).

GAO AUTHORITY WITH RESPECT TO ENERGY'S PAYMENT FROM THE ESCROW ACCOUNT.

AS NOTED EARLIER, THE COMPTROLLER GENERAL IS THE CHIEF ACCOUNTING OFFICER OF THE GOVERNMENT AND IS REQUIRED TO SETTLE ALL ACCOUNTS OF THE UNITED STATES. 31 U.S.C. SEC. 3526(A). IN CARRYING OUT THIS DUTY, HE RESOLVES QUESTIONS ABOUT THE LEGALITY OF PAYMENT DISBURSING OFFICERS OR HEADS OF AGENCIES MAY MAKE, OR OF VOUCHERS PRESENTED TO CERTIFYING OFFICERS FOR CERTIFICATION. 31 U.S.C. SEC. 3529(A). THESE DECISIONS COMMONLY ARE REQUESTED IN ADVANCE BY THE OFFICIALS CONCERNED, BUT MAY RESULT FROM THE EXERCISE OF THE COMPTROLLER GENERAL'S IMPLICIT AUTHORITY TO APPROVE THESE PAYMENTS. SEE UNITED STATES V. STEWART, 234 F. SUPP. 94, 100 (D.D.C. 1964).

IT HAS LONG BEEN RECOGNIZED THAT DECISIONS OF THE COMPTROLLER GENERAL ON MATTERS INVOLVING THE PAYMENT OF FUNDS ARE BINDING ON THE EXECUTIVE BRANCH.

"THE QUESTION OF THE JURISDICTION OF THE COMPTROLLER GENERAL IS NOT A QUESTION AS TO BOOKKEEPING MERELY. THE DECISION OF THE COMPTROLLER GENERAL UPON THE ALLOWANCE OF ACCOUNTS WITHIN HIS JURISDICTION IS CONCLUSIVE UPON THE EXECUTIVE BRANCH OF THE GOVERNMENT. (CITATIONS OMITTED.) SAVE IN CASES WHERE RESORT IS HAD TO THE COURTS, THEREFORE, THE COMPTROLLER IS THE FINAL ARBITER AS TO THE LEGALITY OF EXPENDITURES." SKINNER & EDDY CORP. V. MCCARL, 275 U.S. 1, 4-5 N.2 (1927). ALSO SEE 54 COMG.GEN. 921, 926 (1975), QUOTING AN OPINION TO THE SAME EFFECT BY THE ATTORNEY GENERAL (33 OP. ATT. GEN. 268 (1922)).

IN OUR VIEW, OPINIONS OF THE COMPTROLLER GENERAL CONCERNING EXPENDITURES BY ENERGY OF THE ESCROW ACCOUNT FUNDS ARE BINDING ON THE DEPARTMENT, REGARDLESS OF THE SOURCE OF THE REQUEST FOR HIS OPINION. THE ESCROW ACCOUNT IS A FEDERAL TRUST FUND, IS MANAGED AND SUPERVISED BY FEDERAL OFFICIALS, AND THE MONEYS IN THE ACCOUNT MAY BE USED ONLY FOR THE BENEFIT OF OVERCHARGED CONSUMERS. THIS ACCOUNT, THEREFORE, IS WITHIN THE SETTLEMENT JURISDICTION OF THE COMPTROLLER GENERAL, AND OUR DECISIONS WITH RESPECT TO ENERGY'S DISPOSITIONS OF THE ESCROW ACCOUNT FUNDS ARE BINDING AND CONCLUSIVE ON ENERGY, AND ON ITS CERTIFYING OFFICERS.

WE DO NOT ASSERT THAT OUR DECISIONS IN THIS AREA ALSO ARE BINDING ON THE COURTS. IN ACCORDANCE WITH OUR USUAL POLICY WE WILL DEFER TO JUDICIAL DECISIONS CONCERNING PROPER DISTRIBUTIONS OF CONSENT ORDER SETTLEMENT FUNDS CURRENTLY IN THE ESCROW ACCOUNT WHEN THEY ARE RENDERED. UNTIL SUCH TIME AS THE COURTS RESOLVE THIS ISSUE, HOWEVER, OUR DECISIONS ON THE SUBJECT ARE CONCLUSIVE AND BINDING ON ENERGY AND ITS CERTIFYING OFFICERS.

AT THE REQUEST OF THE CHAIRMAN OF THE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, HOUSE COMMITTEE ON ENERGY AND COMMERCE, WE ARE SENDING HIM A COPY OF THESE COMMENTS, AND ONE TO ENERGY'S OFFICE OF THE COMPTROLLER.