B-41449, APRIL 27, 1944, 23 COMP. GEN. 815

B-41449: Apr 27, 1944

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PROHIBITING PERSONS WHOSE ANNUAL COMPENSATION IN ONE OFFICE AMOUNTS TO $2500 OR MORE FROM HOLDING ANOTHER OFFICE TO WHICH COMPENSATION IS ATTACHED. IS APPLICABLE TO GOVERNMENT CORPORATIONS CREATED BY THE RECONSTRUCTION FINANCE CORPORATION AND OPERATES TO REMOVE THE RESTRICTION IN THE ACT OF 1894. PROHIBITING OFFICERS WHOSE ANNUAL COMPENSATION AMOUNTS TO $2500 OR MORE FROM HOLDING ANOTHER OFFICE TO WHICH COMPENSATION IS ATTACHED. 1944: I HAVE YOUR LETTER OF APRIL 17. COMMERCIAL COMPANY IS ENGAGED IN A PROGRAM OF PURCHASING NICKEL MATTE. THERE HAS THUS FAR BEEN FOUND ONLY ONE MAN WITH THE NECESSARY QUALIFICATIONS AND WHO IS FREE TO UNDERTAKE THIS ASSIGNMENT. HE IS COLONEL ROGER TAYLOR. WHO WAS RETIRED FROM THE ARMY ON JANUARY 1.

B-41449, APRIL 27, 1944, 23 COMP. GEN. 815

COMPENSATION - DOUBLE-RETIRED ARMY OFFICER EMPLOYED BY GOVERNMENT CORPORATION A RETIRED ARMY OFFICER'S EMPLOYMENT BY A GOVERNMENT CORPORATION CONSTITUTES THE HOLDING OF AN ,OFFICE" WITHIN THE MEANING OF SECTION 2 OF THE ACT OF JULY 31, 1894, AS AMENDED, PROHIBITING PERSONS WHOSE ANNUAL COMPENSATION IN ONE OFFICE AMOUNTS TO $2500 OR MORE FROM HOLDING ANOTHER OFFICE TO WHICH COMPENSATION IS ATTACHED. THE PROVISION IN SECTION 3 OF THE RECONSTRUCTION FINANCE CORPORATION ACT OF 1932, THAT NOTHING CONTAINED IN ANY ACT SHALL BE CONSTRUED TO PREVENT THE APPOINTMENT AND COMPENSATION AS AN EMPLOYEE OF THE CORPORATION OF ANY GOVERNMENT EMPLOYEE, IS APPLICABLE TO GOVERNMENT CORPORATIONS CREATED BY THE RECONSTRUCTION FINANCE CORPORATION AND OPERATES TO REMOVE THE RESTRICTION IN THE ACT OF 1894, PROHIBITING OFFICERS WHOSE ANNUAL COMPENSATION AMOUNTS TO $2500 OR MORE FROM HOLDING ANOTHER OFFICE TO WHICH COMPENSATION IS ATTACHED, AND, THEREFORE, A RETIRED ARMY OFFICER RECEIVING RETIREMENT PAY IN EXCESS OF $3000 PER ANNUM MAY BE APPOINTED TO A PAID POSITION IN SUCH A CORPORATION PROVIDED HE RELINQUISHES HIS RETIRED PAY DURING SUCH EMPLOYMENT, AS REQUIRED BY SECTION 212 OF THE ECONOMY ACT OF 1932.

ACTING COMPTROLLER GENERAL YATES TO THE ADMINISTRATOR, FOREIGN ECONOMIC ADMINISTRATION, APRIL 27, 1944:

I HAVE YOUR LETTER OF APRIL 17, 1944, AS FOLLOWS:

THE U.S. COMMERCIAL COMPANY IS ENGAGED IN A PROGRAM OF PURCHASING NICKEL MATTE, METALLURGICAL CHROME ORE AND OTHER STRATEGIC MINERALS IN NEW CALEDONIA, AND HAS HAD STATIONED THERE A METALLURGICAL ENGINEER WHO, FOR PERSONAL REASONS, MUST NOW RETURN TO THE UNITED STATES. AFTER EXTENSIVE RECRUITMENT FOR A REPLACEMENT, THERE HAS THUS FAR BEEN FOUND ONLY ONE MAN WITH THE NECESSARY QUALIFICATIONS AND WHO IS FREE TO UNDERTAKE THIS ASSIGNMENT. HE IS COLONEL ROGER TAYLOR, WHO WAS RETIRED FROM THE ARMY ON JANUARY 1, 1944, AS BEING PAST THE STATUTORY ARMY AGE LIMIT. COLONEL TAYLOR IS NOW DRAWING RETIRED PAY AT THE RATE OF APPROXIMATELY $5,000 PER ANNUM, AND HE IS WILLING TO UNDERTAKE THIS ASSIGNMENT ONLY IF HE IS FULLY COMPENSATED FOR ALL ADDITIONAL EXPENSES WHICH MIGHT BE INVOLVED.

IT HAS, THEREFORE, BEEN PROPOSED THAT THE U.S. COMMERCIAL COMPANY EMPLOY HIM AT AN ANNUAL RATE OF ABOUT $6,500 PLUS TRANSPORTATION TO AND FROM HIS HOME AND NEW CALEDONIA, WITH THE UNDERSTANDING THAT DURING THE PERIOD OF HIS INCUMBENCY IN THAT POSITION, HE WOULD, OF COURSE, RELINQUISH HIS RETIRED PAY, AS PERMITTED BY SECTION 212 OF THE ECONOMY ACT OF 1932 (5 U.S.C. 59A). THE ONLY QUESTION THEN IS WHETHER SUCH AN ARRANGEMENT WOULD BE IN CONTRAVENTION OF THE ACT OF JULY 31, 1894, (5 U.S.C. 62), PROHIBITING THE HOLDING OF TWO GOVERNMENT OFFICES.

IN THIS CONNECTION, I CALL TO YOUR ATTENTION THE FACT THAT WHILE THE U.S. COMMERCIAL COMPANY IS A WHOLLY-OWNED GOVERNMENT CORPORATION, IT HAS THE POWER OF ACTION OF ANY PRIVATE CORPORATION, INCLUDING THE POWER TO EMPLOY WITHOUT REGARD TO THE FEDERAL LAWS APPLICABLE TO THE EMPLOYMENT OR COMPENSATION OF OFFICERS OR EMPLOYEES OF THE UNITED STATES (SEE SECTION 4, ACT OF JANUARY 22, 1932, AS AMENDED, 47 STAT., CHAP. 8; AND SECTION 5D (3), 54 STAT. 961-962, 55 STAT. 249-250, PURSUANT TO WHICH THE COMPANY WAS ORGANIZED. IT WAS TRANSFERRED TO THIS ADMINISTRATION BY EXECUTIVE ORDER 9380, SEPTEMBER 25, 1943). YOU WILL NOTE, ALSO, THAT THIS COMPANY OBTAINS ITS FUNDS EITHER FROM THE SALE OF CAPITAL STOCK TO, OR LOANS FROM, THE RECONSTRUCTION FINANCE CORPORATION, AND, OF COURSE, FROM ITS EARNINGS.

I AM INFORMED THAT A DECISION OF THE COURT OF CLAIMS, DALTON VS. UNITED STATES, 71 CT. CLS. 421 (1931), INVOLVING THE EMERGENCY FLEET CORPORATION, AND TWO MANUSCRIPT DECISIONS OF YOUR OFFICE, A-95379, DATED JUNE 7, AND JULY 11, 1938, ARE TO THE EFFECT THAT EMPLOYMENT WITH SUCH A GOVERNMENT CORPORATION DOES NOT CONSTITUTE HOLDING AN OFFICE WITHIN THE MEANING OF THE AFORESAID LAW. HOWEVER, IN VIEW OF THE IMPORTANCE OF THIS QUESTION TO COLONEL TAYLOR IN TERMS OF POSSIBLE JEOPARDY TO HIS RETIRED STATUS, AND BECAUSE OF ITS POSSIBLE RECURRENCE IN THE LIGHT OF THE GROWING MANPOWER SHORTAGE, I WOULD APPRECIATE RECEIVING YOUR FORMAL RULING.

ALSO, IN THE ALTERNATIVE, ASSUMING EMPLOYMENT BY THE U.S. COMMERCIAL COMPANY TO CONSTITUTE HOLDING AN "OFFICE" WITHIN THE 1894 LAW, I SHOULD LIKE TO BE ADVISED WHETHER THE COMPANY COULD CONTRACT TO EMPLOY COLONEL TAYLOR WITHOUT COMPENSATION, BUT TO REIMBURSE HIM FOR ALL ACTUAL EXPENSES (BOTH LIVING AND BUSINESS, INCLUDING NECESSARY TRANSPORTATION) INCURRED INCIDENT TO SUCH EMPLOYMENT, OR IN LIEU OF ACTUAL EXPENSES, TO PAY HIM A FIXED PER DIEM ALLOWANCE OF APPROXIMATELY $15.00, AS MAY BE ADMINISTRATIVELY DETERMINED TO REFLECT SUCH EXPENSES.

THE ACT OF JULY 31, 1894, AS AMENDED, 5 U.S.C. 62, TO WHICH YOU REFER, READS 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, 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, MARINE CORPS, OR COAST GUARD RETIRED FOR ANY CAUSE, AND RETIRED OFFICERS OF THE ARMY, NAVY, 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 UNDERSTOOD THE CIRCUMSTANCES OF COLONEL TAYLOR'S RETIREMENT AND OF HIS CONTEMPLATED EMPLOYMENT WITH THE U.S. COMMERCIAL COMPANY ARE NOT WITHIN THE SEVERAL EXCEPTIONS WHICH APPEAR IN THE STATUTE ABOVE QUOTED. UPON THE QUESTION WHETHER THE PROPOSED EMPLOYMENT BY SUCH A GOVERNMENT CORPORATION WOULD CONSTITUTE THE HOLDING OF AN "OFFICE" WITHIN THE PURPOSE AND SCOPE OF THE ACT OF 1894, YOUR ATTENTION IS INVITED TO A DECISION OF THIS OFFICE DATED NOVEMBER 5, 1943, B-37559 (HOLDING THAT CERTAIN EMPLOYEES OF GOVERNMENT CORPORATIONS SERVING IN FOREIGN COUNTRIES ARE ELIGIBLE FOR AN ADJUSTMENT OF PAY DUE TO LOSS IN EXCHANGE PROVIDED FOR "EMPLOYEES OF THE UNITED STATES" BY A GENERAL ACT OF 1934, 5 U.S. C. 118C), WHERE IT WAS SAID:

IN THE LIGHT OF SUCH COURT DECISIONS AS UNITED STATES V. STRANG, 254 U.S. 491; PIERCE V. UNITED STATES, 314 U.S. 306; POSEY V. TENNESSEE VALLEY AUTHORITY ( C.C.A. 5, 1937), 93 F.2D 726; COMMONWEALTH V. ROUSE ( VA. 1935), 178 S.E. 37 (AND COMPARE 1 COMP. GEN. 14; 34 OPS. ATTY. GEN. 363, 369), THERE CAN NOT BE STATED ANY BROAD GENERALITY THAT PERSONS EMPLOYED BY THE GOVERNMENT'S CORPORATIONS ARE OR ARE NOT EMPLOYEES OF THE UNITED STATES FOR ALL PURPOSES. IN THE MORE RECENT YEARS IT IS THE RULE RATHER THAN THE EXCEPTION THAT CONGRESSIONAL LEGISLATION ON PERSONNEL MATTERS EXPRESSLY REFERS TO GOVERNMENT CORPORATION EMPLOYEES, AND EITHER INCLUDES THEM WITHIN THEIR SCOPE OR AUTHORIZES ADMINISTRATIVE ACTION TO THAT END. SEE, FOR EXAMPLE, THE RECENT STATUTES WITH RESPECT TO THE CIVIL SERVICE, CLASSIFICATION, ANNUAL LEAVE, SICK LEAVE, RETIREMENT, OVERTIME PAY, CITIZENSHIP, AND THE ADMINISTRATION OF THE OATH OF FEDERAL OFFICE. (ACTS OF NOVEMBER 26, 1940, 54 STAT. 1211, 1212, SECTIONS 1 AND 3 (A); MARCH 14, 1936, 49 STAT. 1161 AND 1162; JANUARY 24, 1942, 56 STAT. 13; MARCH 7, 1942, 56 STAT. 143; JUNE 26, 1943, PUBLIC LAW 90, SECTIONS 205-6.) THAT UNANIMITY OF EXPRESSION MANIFESTS A CLEAR CONGRESSIONAL INTENT THAT, FOR PURPOSES OF THE SAME GENERAL CHARACTER, GOVERNMENT CORPORATION EMPLOYEES COVERED BY THOSE ACTS ARE TO BE TREATED AND REGARDED AS GOVERNMENT EMPLOYEES * * *.

IT IS EVIDENT THAT THE STATUTORY PROVISIONS RELATING TO DUAL COMPENSATION MAY BE FULLY APPLICABLE TO THE CORPORATION EMPLOYEES BECAUSE SECTION 212 OF THE ECONOMY ACT OF 1932, 47 STAT. 406, 5 U.S.C. 59A (WHICH, AS YOU STATE, IS THE BASIS FOR THE RELINQUISHMENT OF RETIRED PAY IN THE CASE OF A RETIRED OFFICER GIVEN CIVILIAN EMPLOYMENT), IN SPECIFIC TERMS INCLUDES EMPLOYMENT UNDER ANY GOVERNMENT CORPORATION. ACCORDINGLY, IN THE LIGHT OF THE CONSISTENT CONGRESSIONAL POLICY IN MATTERS OF PERSONNEL LEGISLATION, FOLLOWED SINCE THE USE OF GOVERNMENTAL CORPORATIONS BECAME COMMON, IT CANNOT BE ASSUMED THAT CORRESPONDING PROVISIONS OF EARLIER ACTS AS OBVIOUSLY BROAD IN SCOPE AS THE ACT OF 1894 AND ENACTED AT A TIME WHEN THERE WAS NO OCCASION TO SPECIFY THEIR APPLICATION TO CORPORATE PERSONNEL, ARE NOT FULLY APPLICABLE TO EMPLOYEES OF CORPORATIONS OF THE GOVERNMENT. ALSO, THE CIRCUMSTANCE IS NOTED THAT, ACCORDING TO THE BY-LAWS OF THE U.S. COMMERCIAL COMPANY, ITS DIRECTORS, OFFICERS, AND CERTAIN EMPLOYEES SUBSCRIBE TO THE OATH OF OFFICE PRESCRIBED BY SECTION 1757 OF THE REVISED STATUTES.

THE CASE OF GENERAL DALTON TO WHICH YOU REFER (1931, 71 C.1CLS. 421), MIGHT BE DISTINGUISHABLE UPON THE BASIS OF THE CHANGING CONCEPTS AND POLICIES WHICH HAVE DEVELOPED SINCE ITS DATE, AS ILLUSTRATED ABOVE; BUT, IN ANY EVENT, ITS AUTHORITY AS AN INDICATION OF THE INTENT OF THE CONGRESS IS MADE INDECISIVE BY THE ACTION OF THE CONGRESS IN DISAPPROVING THAT PARTICULAR JUDGMENT AND DECLINING TO APPROPRIATE THEREFOR. SEC. 47 STAT. 28. THE DECISIONS OF THIS OFFICE CITED BY YOU UNDER REFERENCE A-95379 PERTAIN TO EMPLOYMENT UNDER A PRODUCTION CREDIT CORPORATION, WHERE AN EXCEPTION WAS FOUND TO THE ACT OF 1894, SUPRA, IT APPEARING THAT THE APPOINTING AUTHORITIES WERE, IN PART, PERSONS IN PRIVATE LIFE, AND IT BEING NOTED, ALSO, THAT THE CONGRESS SPECIFICALLY HAD EXCLUDED EMPLOYEES OF THE GROUP THERE CONSIDERED FROM CERTAIN OTHER PERSONNEL LEGISLATION.

IT IS EVIDENT THAT THE AUTHORITY OF THE U.S. COMMERCIAL COMPANY TO EMPLOY OFFICERS, AGENT, ET CETERA, WITHOUT REGARD TO LAWS APPLICABLE TO THE EMPLOYMENT OF OFFICERS OR EMPLOYEES OF THE UNITED STATES, AS CITED IN YOUR LETTER, WOULD NOT VALIDATE THE PAYMENT OF ARMY RETIRED PAY OR PRESERVE COLONEL TAYLOR'S STATUS AS A RETIRED OFFICER IF OTHER LAWS WOULD JEOPARDIZE THE RETIRED STATUS AND PAY UPON HIS ACCEPTANCE OF CIVILIAN EMPLOYMENT. HOWEVER, SECTION 3 OF THE RECONSTRUCTION FINANCE CORPORATION ACT, APPROVED JANUARY 22, 1932, 47 STAT. 5, 15 U.S.C. 603, PROVIDES:

* * * NOTHING CONTAINED IN THIS CHAPTER OR IN ANY ACT SHALL BE CONSTRUED TO PREVENT THE APPOINTMENT AND COMPENSATION AS AN EMPLOYEE OF THE CORPORATION OF ANY OFFICER OR EMPLOYEE OF THE UNITED STATES IN ANY BOARD, COMMISSION, INDEPENDENT ESTABLISHMENT, OR EXECUTIVE DEPARTMENT THEREOF * *

THE CHARTER OF THE U.S. COMMERCIAL COMPANY, WHICH WAS ORGANIZED BY THE RECONSTRUCTION FINANCE CORPORATION UNDER THE SPECIFIC AUTHORITY OF SECTION 5D OF THE ABOVE ACT, AS AMENDED, 15 U.S.C. 606B, INVESTS THE NEW CORPORATION WITH THE PRIVILEGES AND IMMUNITIES CONFERRED UPON THE PARENT CORPORATION BY THE RECONSTRUCTION FINANCE CORPORATION ACT AS AMENDED, 7 FED. REG. 2426. SUCH A CHARTER PROVISION RECENTLY HAS BEEN HELD TO APPLY SPECIFICALLY TO THE POWERS OF THE RECONSTRUCTION FINANCE CORPORATION WITH RESPECT TO THE EMPLOYMENT OF PERSONNEL. B-38773, DECEMBER 23, 1943. THE STATUTORY PROVISION JUST QUOTED PLAINLY MUST HAVE BEEN IN CONTEMPLATION OF THE DUAL COMPENSATION STATUTES, AND ITS SWEEPING GENERALITY EXCLUDES ANY INFERENCE OF AN EXCEPTION WITH REFERENCE TO THE ACT OF 1894, OR WITH SPECIFIC REFERENCE TO RETIRED OFFICERS (FOR WHOM, IT IS NOTED, THE SAME CONGRESS, IN THE ACT OF JUNE 30, 1932, SUPRA, MADE PROVISION FOR LIMITING THEIR RETIRED PAY WHEN CALLED TO UNDERTAKE CIVILIAN EMPLOYMENT UNDER THE UNITED STATES). ACCORDINGLY, SO FAR AS CONCERNS COLONEL TAYLOR'S RIGHT TO SALARY AND EXPENSES OTHERWISE ACCRUING FROM AN EMPLOYMENT WITH YOUR COMPANY, THIS OFFICE PERCEIVES NO OBJECTION TO THE PROPOSED ARRANGEMENT, PROVIDED, OF COURSE, THAT NO RETIRED PAY BE DRAWN CONCURRENTLY. YOU WILL UNDERSTAND, HOWEVER, THAT THE JURISDICTION OF THIS OFFICE EXTENDS ONLY TO THE LEGAL QUESTIONS INVOLVED WITH RESPECT TO THE PAYMENTS MADE AND TO BE MADE; AND THAT, UNDER THE CIRCUMSTANCES, THERE WOULD BE NO DIRECT JURISDICTION IN THIS OFFICE EITHER TO VALIDATE COLONEL TAYLOR'S RETIRED STATUS OR TO PLACE IT IN JEOPARDY.

IN VIEW OF THE FOREGOING, NO DECISION UPON YOUR SECOND QUESTION APPEARS NECESSARY BUT, FOR A RULING ON A COMPARABLE MATTER, THERE MAY BE FOUND OF INTEREST THE DECISION OF A FORMER COMPTROLLER GENERAL REPORTED IN 14 COMP. GEN. 355.