B-228755, Nov 17, 1987, 67 Comp.Gen. 90

B-228755, Nov 17, 1987, 67 Comp.Gen. 90

APPROPRIATIONS/FINANCIAL MANAGEMENT - Appropriations Availability - Amount Availability - Augmentation - Gifts/Donations - Advertising DIGEST: The United States Information Agency (USIA) is authorized to accept donations of radio programs from private syndicators for broadcast over Voice of America facilities in view of its broad statutory discretion to accept conditional gifts. And in the absence of any statutory prohibition on broad casting commercials, we cannot say it is unlawful that a gift of programs is conditioned on the broadcast of commercial advertising. However, GAO notes longstanding federal policy concerns against this practice and suggests that before adopting a policy that would permit acceptance of advertising without explicit authority, USIA consider consulting with appropriate committees of Congress.

United States Information Agency:

The General Counsel of the United States Information Agency (USIA) has requested our opinion regarding the validity of certain "barter agreements" entered into by the USIA with three radio programming syndicators. These agreements provide for the furnishing of radio programs by the syndicators to the USIA's Voice of America (VOA) service to Europe, at no cost to the USIA. Commercials of up to 6 minutes per hour may be included in the programs, at the option of the syndicators, and the revenues generated as a result of the commercials would go to the syndicators.

For the reasons given below, we find that USIA has authority to accept donations of radio programs from private syndicators for broadcast over VOA, and that it is not unlawful that such donations are conditioned on the broadcast of commercial advertising. We agree, however, with the USIA's General Counsel, who raised a number of serious policy considerations which stem from the broadcasting of commercial advertising, in a memorandum dated December 11, 1986, addressed to the Director, VOA, for discussion purposes only.

BACKGROUND

A key authority of the Director, USIA is the discretion to provide, when he deems it appropriate, for the preparation and dissemination abroad of information about the United States, its people and its policies. U.S.C. Sec. 1461. VOA is the global radio network of the USIA which seeks to further that USIA initiative through direct radio communication abroad. The USIA administers the VOA program in accordance with the VOA charter which provides the governing principles of quality in VOA broadcasting. 22 U.S.C. Sec. 1463. Finally, USIA has broad authority to acquire materials and equipment through purchase or rental (22 U.S.C. Sec. 1472) or through donations of money, real or personal property (22 U.S.C. Sec. 2697). This authority has been delegated to the Director, VOA. Delegation Order No. 85-6, Oct. 31, 1985.

All three of the agreements entered into by USIA with the syndicators contain essentially the same provisions. The agreements provide that the syndicators may include commercial advertising in the donated programs which the syndicators have been paid to carry by the sponsors of such advertising. The syndicators are to retain all proceeds from the commercials included in the donated programs. All programming and commercial content in the programs is subject to the prior approval by VOA. VOA is to use its best efforts to broadcast programs received at least once within 7 days of their receipt, and to verify such broad casts.

According to the submission, the programming involved consists primarily of quality contemporary music along with some American sporting events. We are informed that without the contribution of these programs, VOA would be unable to provide this type of programming because of the high cost of acquiring performing rights and packaging the programs. We have also been informed that although the syndicators are permitted under the agreements to include commercials, none of the programs provided thus far have included any commercials. We understand that one of the syndicators has specifically stated that it has no intention of including any commercials.

LEGAL DISCUSSION

The statutory language referred to above gives the USIA broad discretion in administering the VOA program and specifically in choosing the types of programs for broadcast. There is also no question that the USIA may accept gifts, both unconditional and conditional, although acceptance of conditional gifts must be approved by the Director, USIA. /1/ Moreover, we know of no statutory prohibition in the VOA charter or any other legislation which would prohibit VOA from broadcasting commercial advertising. Therefore, we conclude that the Director, VOA has authority to accept a gift of programs for broadcast abroad, and we cannot say that it is unlawful that the gift is conditioned on the periodic broadcast of commercial advertising.

POLICY CONSIDERATIONS

As the USIA General Counsel pointed out, "Federal policy, as distinct from Federal law, has traditionally opposed or discouraged commercial advertising in government publications and programs." We note that the Government Printing and Binding Regulations explicitly state that commercial advertising is not an authorized function of the government. See Government Printing and Binding Regulations, Joint Committee on Printing, U.S. Congress, Title III, sec. 13, p. 13 (reprinted 1986). the case of the Corporation for Public Broadcasting, which has analogous functions, legislation has been enacted which specifically prohibits public broadcast networks or stations from making their facilities available to broadcast commercial advertising. See 47 U.S.C. Sec. 399b(b)(2). These restrictions appear to be based on concern that the publication of advertisements might provide an unfair commercial advantage to a particular private firm by creating an impression that the government was endorsing that firm or its product. The General Counsel also suggests that the government might be seen as competing with private sector firms, the advertising content might distract the public from the mission of the agency, or, in some cases, might be inappropriate to maintain the dignity of the government. /2/

The USIA suggests in its submission that the GAO has already approved this type of "barter arrangement" in 63 Comp.Gen. 459 (1984). In that case, the Federal Communications Commission (FCC) accepted rent-free exhibition space and other free services at an industry trade show offered by the trade show promoters to set up a booth to provide the public with radio technology information. We did approve the arrangement as a reasonable quid pro quo. The FCC's exhibitions were regarded as popular drawing cards by the promoters but it lacked sufficient funds to accept many invitations to exhibit without the free services. To that extent, there is an analogy with the VOA situation. The submission states that without the donated materials "the agency USIA would be unable to provide this type of programming because of the high cost of acquiring performance rights and packaging the programs." However, the FCC decision is not really pertinent to the question before us; the FCC was not asked to include any commercial content in its exhibitions.

CONCLUSION

In sum, we find that the Director of VOA has authority to accept a gift of programs for broadcast abroad and we are aware of no statutory prohibition against the inclusion of commercial advertising in such donated programs. However, in view of the traditional federal policy against commercial advertising in government programs, we suggest that USIA consider consulting with appropriate committees of Congress before adopting a policy which would permit the inclusion of advertising in VOA broadcasts without explicit authority to do so.

/1/ Subsection (a) of 22 U.S.C. Sec. 2697 refers to acceptance of gifts by the Secretary of State. However, subsection (f) of that section confers the same authorities exercised by the Secretary on the Director of the USIA for his agency.

/2/ In answer to a question raised informally by a staff member in the USIA General Counsel's Office, a broadcast acknowledgement of the name of a donor is distinguishable from commercial advertising. No product is being "sold" to the public and there is no implication that the United States is endorsing the sponsor's product. See 47 U.S.C. Sec. 399a, which permits the broadcast of "business or institutional logograms" by public radio and television stations in appropriate circumstances.