B-53478, DECEMBER 29, 1945, 25 COMP. GEN. 467

B-53478: Dec 29, 1945

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THE DUTIES AND RESPONSIBILITIES OF SUCH A BOARD ARE THE DUTIES AND RESPONSIBILITIES OF ALL OF THE MEMBERS OF THE BOARD ACTING AS A BODY AND NO ONE MEMBER MAY EXERCISE ANY GREATER AUTHORITY THAN THAT EXERCISED BY THE OTHER MEMBERS WITH RESPECT TO THE MANAGEMENT. IS THE HEAD OF SUCH A GOVERNMENT AGENCY. SO THAT THE ENTIRE BOARD IS EXCLUDED FROM THE BENEFITS THEREOF. AS FOLLOWS: YOUR OPINION IS SOLICITED IN CONNECTION WITH THE MATTERS SET FORTH IN THIS LETTER. AT THE PRESENT TIME BOARD MEMBERS ARE BEING COMPENSATED AT THE RATE OF $9. APPLICATION OF THE PAY ACT PROVISIONS WOULD HAVE THE EFFECT OF INCREASING SUCH COMPENSATION TO $9. WE BELIEVE THAT SUCH AN INCREASE IS STRONGLY SUGGESTED BY GOOD MANAGEMENT.

B-53478, DECEMBER 29, 1945, 25 COMP. GEN. 467

DEPARTMENTS AND ESTABLISHMENTS - HEADS - BOARDS OF DIRECTORS; STATUS OF BOARD OF DIRECTORS OF SMALLER WAR PLANTS CORPORATION UNDER FEDERAL EMPLOYEES PAY ACT OF 1945 WHERE THE MANAGEMENT AND CONTROL OF A PARTICULAR GOVERNMENT ACTIVITY HAS BEEN VESTED BY STATUTE IN A BOARD OF DIRECTORS, THE DUTIES AND RESPONSIBILITIES OF SUCH A BOARD ARE THE DUTIES AND RESPONSIBILITIES OF ALL OF THE MEMBERS OF THE BOARD ACTING AS A BODY AND NO ONE MEMBER MAY EXERCISE ANY GREATER AUTHORITY THAN THAT EXERCISED BY THE OTHER MEMBERS WITH RESPECT TO THE MANAGEMENT, CONTROL, AND POLICIES OF THE PARTICULAR ACTIVITY, EVEN THOUGH HE MAY OCCUPY A PARTICULAR STATUS ON THE BOARD SUCH AS CHAIRMAN OR PRESIDENT, AND, THEREFORE, THE BOARD ITSELF, AND NOT MERELY THE PRESIDENT OR CHAIRMAN THEREOF, IS THE HEAD OF SUCH A GOVERNMENT AGENCY. IN VIEW OF THE PROVISIONS OF SECTION 4 (C) OF THE ACT OF JUNE 11, 1942, AS AMENDED, THAT THE MANAGEMENT OF THE SMALLER WAR PLANTS CORPORATION "SHALL BE VESTED IN A BOARD OF FIVE DIRECTORS," ALL OF THE MEMBERS OF THE BOARD--- NOT THE CHAIRMAN ALONE, EVEN THOUGH DESIGNATED BY THE PRESIDENT, BY AND WITH THE ADVICE AND CONSENT OF THE SENATE, AND COMPENSATED AT A RATE IN EXCESS OF THAT AUTHORIZED FOR THE OTHER MEMBERS OF THE BOARD--- CONSTITUTE THE "HEAD" OF THE CORPORATION WITHIN THE MEANING OF SECTION 102 (A) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, SO THAT THE ENTIRE BOARD IS EXCLUDED FROM THE BENEFITS THEREOF.

COMPTROLLER GENERAL WARREN TO THE CHAIRMAN, BOARD OF DIRECTORS, AND GENERAL MANAGER, SMALLER WAR PLANTS CORPORATION, DECEMBER 29, 1945:

THERE HAS BEEN CONSIDERED YOUR LETTER OF OCTOBER 22, 1945, AS FOLLOWS:

YOUR OPINION IS SOLICITED IN CONNECTION WITH THE MATTERS SET FORTH IN THIS LETTER.

THE BASIC PROBLEM ARISES FROM OUR DESIRE TO COMPENSATE MEMBERS OF THE BOARD OF DIRECTORS OF THE SMALLER WAR PLANTS CORPORATION, EXCEPT THE CHAIRMAN, AT INCREASED SALARY RATES PROVIDED BY THE FEDERAL EMPLOYEES PAY ACT OF 1945. AT THE PRESENT TIME BOARD MEMBERS ARE BEING COMPENSATED AT THE RATE OF $9,000 PER ANNUM. APPLICATION OF THE PAY ACT PROVISIONS WOULD HAVE THE EFFECT OF INCREASING SUCH COMPENSATION TO $9,800 PER ANNUM.

WE BELIEVE THAT SUCH AN INCREASE IS STRONGLY SUGGESTED BY GOOD MANAGEMENT. THE BOARD OF DIRECTORS IS THE PRIME POLICY-MAKING BODY OF THE CORPORATION. TO THAT EXTENT, ALL BUREAU, OFFICE, AND DIVISION HEADS ARE SUBJECT TO THE POLICY DIRECTION OF THE BOARD OF DIRECTORS AND TO THE ADMINISTRATIVE DIRECTION OF THE CHAIRMAN. SINCE THE FEDERAL EMPLOYEES PAY ACT OF 1945 HAS GONE INTO EFFECT, WE HAVE BEEN CONFRONTED WITH THE IMPROPER CONDITION IN WHICH SOME OF THE SUBORDINATE OFFICERS ARE ACTUALLY COMPENSATED AT RATES IN EXCESS OF THE PAY OF BOARD MEMBERS. THE MANAGEMENT PSYCHOLOGY OF SUCH A SITUATION IS NEGATIVE.

WHETHER THE BOARD MEMBERS MAY RECEIVE THE INCREASED COMPENSATION PROVIDED BY THE PAY ACT DEPENDS, IT APPEARS TO US, UPON YOUR DECISION IN TWO POINTS. THE FIRST POINT INVOLVES A DETERMINATION OF THE HEAD OF THE DEPARTMENT AS APPLIED TO THE SMALLER WAR PLANTS CORPORATION AND THE SECOND REQUIRES AN INTERPRETATION OF THE WORDING IN THE APPROPRIATIONS ACT WHICH PROVIDES THE COMPENSATION OF BOARD MEMBERS SHALL BE "NOT TO EXCEED $9,000 PER ANNUM" ( ITALICS SUPPLIED.)

IN REGARD TO THE FIRST POINT, OUR OPERATING HISTORY HAS LEFT LITTLE ROOM FOR DOUBT THAT THE CHAIRMAN AND GENERAL MANAGER IS, TO ALL INTENTS AND PURPOSES, THE HEAD OF THE DEPARTMENT. IT IS OUR UNDERSTANDING THAT THE TERM "HEAD OF THE DEPARTMENT" AS USED IN FEDERAL REGULATIONS AND BASIC STATUTES, IS PRIMARILY OF ADMINISTRATIVE SIGNIFICANCE. ADMINISTRATIVE RESPONSIBILITY MAY NOT BE DIFFUSED AND STILL BE EFFECTIVELY EXERCISED.

THE CHAIRMAN AND GENERAL MANAGER OF THE CORPORATION HAS ALWAYS BEEN REGARDED AS THE ADMINISTRATIVE HEAD OF THE AGENCY. ANY DOUBT ON THIS POINT, EVEN FROM AN ACADEMIC ANGLE, WOULD APPEAR TO BE DISSIPATED BY THE RESOLUTION OF THE BOARD OF DIRECTORS PASSED UPON THE ASSUMPTION OF OFFICE BY THE PRESENT CHAIRMAN:

"IN WAR PRODUCTION BOARD GENERAL ADMINISTRATIVE ORDER NO. 2-86 THE CHAIRMAN OF THE WAR PRODUCTION BOARD AUTHORIZED THE VICE CHAIRMAN OF THE WAR PRODUCTION BOARD FOR SMALLER WAR PLANTS TO EXERCISE, AMONG OTHER THINGS, THE POWER, DUTIES, AND FUNCTIONS ASSIGNED TO THE CHAIRMAN OF THE WAR PRODUCTION BOARD UNDER SECTIONS 1 AND 2 OF PUBLIC LAW 603--- 77TH CONGRESS.

" PUBLIC LAW 603--- 77TH CONGRESS UNDER SECTION 4 ASSIGNS CERTAIN POWERS, DUTIES, AND FUNCTIONS TO THE SMALLER WAR PLANTS CORPORATION. IN ORDER THAT THE POWERS, DUTIES, AND FUNCTIONS ASSIGNED TO THE CORPORATION MAY BE MOST EFFECTIVELY EXERCISED TO ACHIEVE THE OBJECTIVES OUTLINED IN PUBLIC LAW 603--- 77TH CONGRESS, THE BOARD OF DIRECTORS OF SMALLER WAR PLANTS CORPORATION NOW CHARGE THEIR CHAIRMAN AS GENERAL MANAGER OF THE CORPORATION WITH THE DUTY OF SO COORDINATING THE VARIOUS POWERS, DUTIES AND FUNCTIONS REFERRED TO ABOVE. WITH THIS IN VIEW, HE SHALL THEREFORE DIRECT AND BE ACCOUNTABLE FOR THE GENERAL ADMINISTRATIVE AND MANAGEMENT FUNCTIONS, INCLUDING THE DIRECTION OF FISCAL ACCOUNTS RELATING TO SAME, THE DELEGATION OF APPROPRIATE DUTIES, AND APPOINTMENT AND DISPOSITION OF QUALIFIED PERSONNEL TO NECESSARY POSITIONS IN ACCORDANCE WITH THE CLASSIFICATION ACT OF 1923, AS AMENDED, THE CIVIL SERVICE ACT, AND APPLICABLE RULES OF THE CIVIL SERVICE ACT, AND APPLICABLE RULES OF THE CIVIL SERVICE COMMISSION, EXCEPT IN ALL SUCH CASES REQUIRING POLICY DETERMINATION BY THE BOARD OF DIRECTORS.'

ACTS REQUIRING SIGNATURE OR APPROVAL OF THE HEAD OF THE DEPARTMENT HAVE BEEN PERFORMED BY THE CHAIRMAN AND GENERAL MANAGER OR HAVE BEEN DELEGATED BY HIM WHEN APPLICABLE STATUTES PERMITTED. HIS CAPACITY IN THIS REGARD HAS NOT BEEN CHALLENGED.

PRIOR TO APRIL 27, 1945, THERE WAS ROOM FOR THE CONTENTION THAT THE ADMINISTRATIVE HEAD OF THE SMALLER WAR PLANTS CORPORATION WAS ACTUALLY THE CHAIRMAN OF THE WAR PRODUCTION BOARD. THIS CONSTRUCTION LOGICALLY EVOLVES FROM AN INTERPRETATION OF PUBLIC LAW 603 APPROVED JUNE 11, 1942. THE CHAIRMAN OF THE WAR PRODUCTION BOARD HAD THE APPOINTING AUTHORITY WITH RESPECT TO THE BOARD OF DIRECTORS OF THE SMALLER WAR PLANTS CORPORATION.

BY THE TERMS OF PUBLIC LAW 42, 79TH CONGRESS, APPROVED APRIL 27, 1945, HOWEVER, THE APPOINTING POWER WAS TRANSFERRED FROM THE CHAIRMAN OF THE WAR PRODUCTION BOARD TO THE PRESIDENT AND THE AMENDMENT FURTHER PROVIDED THAT THE PRESIDENT SHOULD DESIGNATE ONE OF THE MEMBERS AS CHAIRMAN.

IT IS OUR BELIEF THAT, NOTWITHSTANDING THE FACT THAT THE STATUTES ( PUBLIC LAW 603, 77TH CONGRESS, AND PUBLIC LAW 42, 79TH CONGRESS) VEST THE MANAGEMENT OF THE CORPORATION IN A BOARD OF FIVE DIRECTORS, THE ADDITIONAL STATUTORY PROVISION THAT ONE OF THE DIRECTORS SHALL BE DESIGNATED AS CHAIRMAN BY THE APPOINTING AUTHORITY AND ALL PRACTICAL OPERATING CONSIDERATIONS CLEARLY REPOSE IN THE CHAIRMAN ALL OF THE ADMINISTRATIVE RESPONSIBILITIES ORDINARILY ASSOCIATED WITH THE HEAD OF DEPARTMENT.

FURTHER SUPPORT FOR THIS BELIEF IS FOUND IN PUBLIC LAW 156, 79TH CONGRESS, WHICH ESTABLISHED THE SALARY OF THE CHAIRMAN AT $12,000 PER ANNUM, WHILE THE SALARIES OF FOUR MEMBERS OF THE BOARD WERE SET AT$9,000 PER ANNUM. AN OBVIOUS DISTINCTION HAS BEEN MADE BY CONGRESS BETWEEN THE POSITION OF CHAIRMAN AND THE POSITIONS OF OTHER BOARD MEMBERS AND WE HOLD THIS TO BE AN INDICATION THAT THE CHAIRMAN IS TO BE REGARDED AS THE ADMINISTRATIVE HEAD OF THE AGENCY.

THIS DETERMINATION IS IMPORTANT BECAUSE IF THE BOARD MEMBERS INDIVIDUALLY AND COLLECTIVELY ARE HELD TO BE THE HEAD OF THE AGENCY, ALL OF THE POSITIONS ARE OUTSIDE THE FEDERAL EMPLOYEES PAY ACT OF 1945. IF, AS WE BELIEVE PROPER, THE CHAIRMAN AND GENERAL MANAGER IS THE HEAD OF THE AGENCY, THE REMAINING FOUR DIRECTORS WOULD FALL WITHIN THE PURVIEW OF THE PAY ACT.

IF YOU CONCUR WITH THE REASONING THUS FAR ADVANCED, THERE REMAINS ONLY FOR CONSIDERATION THE POINT OF WHETHER THE PHRASE "NOT TO EXCEED $9,000 PER ANNUM" AS CONTAINED IN PUBLIC LAW 156, 79TH CONGRESS, WOULD CONSTITUTE IN ITSELF A BAR TO AN INCREASE IN THE SALARIES OF THE BOARD MEMBERS CONSISTENT WITH THE TERMS OF THE FEDERAL PAY ACT OF 1945. WE HAVE BEEN INFORMALLY ADVISED BY YOUR OFFICE THAT THE LANGUAGE OF THE STATUTE IS NOT RESTRICTIVE. IN OTHER WORDS, WE HAVE BEEN GIVEN TO UNDERSTAND THAT THERE WOULD BE NO OBJECTION TO INCREASING THE SALARIES OF BOARD MEMBERS IN ACCORDANCE WITH ANY SPECIFIC PAY INCREASE LEGISLATION SUCH AS THE PAY ACT. YOUR OFFICE HAS REPEATEDLY RULED, HOWEVER, THAT ONLY A FORMAL DECISION IS BINDING UPON YOUR JUDGMENTS AND AFFIRMATION OF THIS POINT IS ACCORDINGLY REQUESTED.

IN CONCLUSION WE WOULD AGAIN MENTION THE DESIRABILITY OF AFFIRMATIVE HOLDINGS TO OVERCOME A SITUATION IN WHICH OFFICERS SUBORDINATE TO THE BOARD OF DIRECTORS ACTUALLY RECEIVE COMPENSATION IN EXCESS OF THE BOARD MEMBERS. THE MEMBERS OF THE BOARD ARE SELECTED FROM IMPORTANT POSTS IN INDUSTRY OR IN BUSINESS PROFESSIONS AND BECAUSE OF BOARD EXPERIENCE IN THESE FIELDS. THE RATE OF COMPENSATION IS NOT A MATTER, THEREFORE, WHICH CONCERNS THE BOARD OF DIRECTORS PERSONALLY FROM AN EARNINGS STANDPOINT, BUT IS RATHER INVOLVED IN THE NEED OF MAKING THE LEVEL OF COMPENSATION CONSISTENT WITH THE LEVEL AND DIGNITY OF COMPARABLE POSITIONS IN GOVERNMENT ORGANIZATIONS.

SECTION 102 (A) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, 59 STAT. 295, 296, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

SEC. 102. (A) THIS ACT SHALL NOT APPLY TO (1) ELECTED OFFICIALS; (2)FEDERAL JUDGES; (3) HEADS OF DEPARTMENTS OR OF INDEPENDENT ESTABLISHMENTS OR AGENCIES OF THE FEDERAL GOVERNMENT, INCLUDING GOVERNMENT -OWNED OR CONTROLLED CORPORATIONS * * *.

PUBLIC LAW 603, APPROVED JUNE 11, 1942, 56 STAT. 353, CREATING THE SMALLER WAR PLANTS CORPORATION, PROVIDES:

SEC. 4. (A) THERE IS HEREBY CREATED A BODY CORPORATE UNDER THE NAME " SMALLER WAR PLANTS CORPORATION" (HEREAFTER REFERRED TO AS THE " CORPORATION"). THE PRINCIPAL OFFICE OF THE CORPORATION SHALL BE LOCATED IN THE DISTRICT OF COLUMBIA, BUT THE CORPORATION MAY ESTABLISH SUCH BRANCH OFFICES IN OTHER PLACES IN THE UNITED STATES AS MAY BE DETERMINED BY THE BOARD OF DIRECTORS.

(C) THE MANAGEMENT OF THE CORPORATION SHALL BE VESTED IN A BOARD OF FIVE DIRECTORS, DEEMED TO BE FAMILIAR WITH THE PROBLEMS OF SMALL BUSINESS, TO BE APPOINTED BY THE CHAIRMAN OF THE WAR PRODUCTION BOARD. THE BOARD OF DIRECTORS SHALL SELECT A CHAIRMAN AND A VICE CHAIRMAN FROM AMONG THE MEMBERS OF THE BOARD.

(D) THE CORPORATION SHALL NOT HAVE SUCCESSION, BEYOND JULY 1, 1945, EXCEPT FOR PURPOSES OF LIQUIDATION, UNLESS ITS LIFE IS EXTENDED BEYOND SUCH DATE PURSUANT TO AN ACT OF CONGRESS. IT SHALL HAVE POWER TO ADOPT, ALTER, AND USE A CORPORATE SEAL, WHICH SHALL BE JUDICIALLY NOTICED; TO MAKE CONTRACTS; TO LEASE SUCH REAL ESTATE AS MAY BE NECESSARY FOR THE TRANSACTION OF ITS BUSINESS; TO SUE AND BE SUED, TO COMPLAIN AND TO DEFEND, IN ANY COURT OF COMPETENT JURISDICTION, STATE OR FEDERAL; TO SELECT, EMPLOY, AND FIX THE COMPENSATION OF SUCH OFFICERS, EMPLOYEES, ATTORNEYS, AND AGENTS AS SHALL BE NECESSARY FOR THE TRANSACTION OF THE BUSINESS OF THE ORPORATION; TO DEFINE THEIR AUTHORITY AND DUTIES, REQUIRE BONDS OF THEM, AND FIX THE PENALTIES THEREOF; AND TO PRESCRIBE, AMEND, AND REPEAL, BY ITS BOARD OF DIRECTORS, BYLAWS, RULES, AND REGULATIONS GOVERNING THE MANNER IN WHICH ITS GENERAL BUSINESS MAY BE CONDUCTED AND THE POWERS GRANTED TO IT BY LAW MAY BE EXERCISED AND ENJOYED. THE BOARD OF DIRECTORS OF THE CORPORATION SHALL DETERMINE AND PRESCRIBE THE MANNER IN WHICH ITS OBLIGATIONS SHALL BE INCURRED AND ITS EXPENSES ALLOWED AND PAID. * * *

PUBLIC LAW 42, APPROVED APRIL 27, 1945, 59 STAT. 95, 96, AMENDED THE SAID ACT OF JUNE 11, 1942, AS FOLLOWS:

THAT THE FIRST SENTENCE OF SECTION 4 (D) OF THE ACT ENTITLED "AN ACT TO MOBILIZE THE PRODUCTIVE FACILITIES OF SMALL BUSINESS IN THE INTERESTS OF SUCCESSFUL PROSECUTION OF THE WAR, AND FOR OTHER PURPOSES," APPROVED JUNE 11, 1942, AS AMENDED, IS AMENDED TO READ AS FOLLOWS: "THE CORPORATION SHALL NOT HAVE SUCCESSION BEYOND DECEMBER 31, 1946, EXCEPT FOR PURPOSES OF LIQUIDATION, UNLESS ITS LIFE IS EXTENDED BEYOND SUCH DATE PURSUANT TO AN ACT OF CONGRESS.'

SEC. 2. (A) SECTION 4 (C) OF SUCH PUBLIC LAW 603 IS AMENDED TO READ AS FOLLOWS:

"/C) THE MANAGEMENT OF THE CORPORATION SHALL BE VESTED IN A BOARD OF FIVE DIRECTORS WHO SHALL BE APPOINTED BY THE PRESIDENT, BY AND WITH THE ADVICE AND CONSENT OF THE SENATE, FROM AMONG INDIVIDUALS WHO ARE FAMILIAR WITH THE PROBLEMS OF SMALL BUSINESS. THE PRESIDENT SHALL DESIGNATE ONE OF THE MEMBERS AS CHAIRMAN.'

THE TERM,"HEADS OF DEPARTMENTS," AS USED IN STATUTES PERTAINING TO THE FEDERAL GOVERNMENT HAS A WELL-DEFINED MEANING. AS EARLY AS 1876, IT WAS STATED BY THE SUPREME COURT OF THE UNITED STATES, IN THE CASE OF UNITED STATES V. GERMAINE, 99 U.S. 508, THAT THE PHRASE,"HEADS OF DEPARTMENTS," APPEARING IN ARTICLE 2, SECTION 2 OF THE FEDERAL CONSTITUTION, HAS REFERENCE TO THE PERSON "WHO IS IN LAW" THE HEAD OF ONE OF THE EXECUTIVE DEPARTMENTS OF THE GOVERNMENT SUCH AS THE SECRETARY OF WAR, THE SECRETARY OF STATE, THE SECRETARY OF THE TREASURY, ETC. ALSO, SEE UNITED STATES V. MOUAT, 124 U.S. 303, AND BURNAP V. UNITED STATES, 252 U.S. 512, TO THE SAME EFFECT.

IT SEEMS CLEAR, IN THE LIGHT OF THE FOREGOING JUDICIAL PRECEDENTS THAT FROM THE EARLIEST HISTORY OF THE GOVERNMENT THE PHRASE,"HEADS OF DEPARTMENTS," CONSISTENTLY HAS BEEN VIEWED AS HAVING REFERENCE TO THE INDIVIDUAL WHO, IN CONTEMPLATION OF LAW, IS THE "HEAD" OF THE DEPARTMENT. THAT IS TO SAY, SUCH TERM UNIFORMLY HAS BEEN CONSTRUED AS RELATING TO THE PERSON CHARGED BY LAW WITH THE RESPONSIBILITY FOR THE PROPER EXERCISE OF THE FUNCTIONS AND DUTIES FOR WHICH HIS PARTICULAR DEPARTMENT WAS CREATED. OBVIOUSLY, WHILE THE HEAD OF AN EXECUTIVE DEPARTMENT OF THE GOVERNMENT LEGALLY IS RESPONSIBLE FOR THE MANAGEMENT AND CONTROL OF HIS DEPARTMENT, THE MANIFOLD DUTIES INHERENT IN THE CONDUCT OF THE AFFAIRS OF SUCH AN ESTABLISHMENT CANNOT BE ATTENDED TO BY HIM PERSONALLY AND THE COURTS AND THE ACCOUNTING OFFICERS LONG HAVE RECOGNIZED THE AUTHORITY OF THE HEADS OF THE DEPARTMENTS TO DELEGATE TO OTHER OFFICERS OF THEIR DEPARTMENTS CERTAIN ADMINISTRATIVE FUNCTIONS--- OTHER THAN THOSE REQUIRING THE EXERCISE OF THE DISCRETIONARY POWERS VESTED SOLELY IN THE DEPARTMENT HEAD. HOWEVER, WHILE THE ACTS OF SUCH SUBORDINATES WITH RESPECT TO FUNCTIONS SPECIFICALLY DELEGATED TO THEM ARE ACCEPTED AS SATISFYING THE PROVISIONS OF VARIOUS STATUTES REQUIRING ACTION BY THE HEAD OF A DEPARTMENT, THE ACCEPTABILITY THEREOF IS NOT PREDICATED UPON ANY CONSIDERATION OF THEIR BEING THE HEADS OF DEPARTMENTS FOR THAT PARTICULAR FUNCTION BUT, RATHER, IS BASED UPON THE FACT THAT, PURSUANT TO THE AUTHORITY DELEGATED TO THEM TO ACT FOR THE HEAD OF THE DEPARTMENT IN SUCH MATTERS, THE ACTS OF THE SUBORDINATES ARE, IN CONTEMPLATION OF LAW, THE ACTS OF THE HEADS OF THE DEPARTMENTS. FROM TIME TO TIME, AS THE ACTIVITIES OF THE FEDERAL GOVERNMENT HAVE EXPANDED, THERE HAVE BEEN CREATED VARIOUS INDEPENDENT ESTABLISHMENTS, AGENCIES, AND GOVERNMENT-CONTROLLED CORPORATIONS, MANY OF WHICH OPERATE INDEPENDENTLY OF THE ESTABLISHED DEPARTMENTS OF THE GOVERNMENT. IT HAS BEEN THE SETTLED PRACTICE OF THE CONGRESS, WHEN LEGISLATING WITH RESPECT TO THE HEADS OF THE VARIOUS DEPARTMENTS AND THEIR ADMINISTRATIVE COUNTERPARTS IN THE SAID INDEPENDENT ESTABLISHMENTS, AGENCIES, ETC., TO EMPLOY LANGUAGE SIMILAR TO THAT APPEARING IN SECTION 102 (A) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, SUPRA. SINCE THE TERM,"HEADS OF DEPARTMENTS," HAS REFERENCE ONLY TO THE PERSON WHO IS RECOGNIZED AS THE LEGAL HEAD OF THE RESPECTIVE DEPARTMENTS OF THE GOVERNMENT, AND NOT TO OFFICERS THEREOF SPECIFICALLY AUTHORIZED TO PERFORM CERTAIN ADMINISTRATIVE FUNCTIONS, THERE CAN BE LITTLE DOUBT THAT THE CONGRESS, WHEN LEGISLATING WITH RESPECT TO THE HEADS OF INDEPENDENT ESTABLISHMENTS, AGENCIES, AND CORPORATIONS, IN CONJUNCTION WITH HEADS OF DEPARTMENTS, HAS REFERENCE TO THE PERSON OR PERSONS OCCUPYING A SIMILAR STATUS WITH RESPECT TO SUCH INDEPENDENT ESTABLISHMENT, AGENCY, OR CORPORATION--- THAT IS, THE PERSON "WHO IS IN LAW" THE HEAD OF SUCH ESTABLISHMENT, AGENCY, OR CORPORATION.

SECTION 4 (C) OF THE ACT OF JUNE 11, 1942, SUPRA, SPECIFICALLY PROVIDES THAT THE "MANAGEMENT OF THE CORPORATION SHALL BE VESTED IN A BOARD OF FIVE DIRECTORS," AND, WHILE THE SAID AMENDATORY ACT OF APRIL 27, 1945, PROVIDES THAT THE MEMBERS OF THE BOARD OF DIRECTORS SHALL BE APPOINTED BY THE PRESIDENT--- RATHER THAN BY THE CHAIRMAN OF THE WAR PRODUCTION BOARD AS THERETOFORE PROVIDED--- AND THAT THE PRESIDENT SHALL DESIGNATE ONE OF THE SAID MEMBERS THEREOF AS CHAIRMAN, IT IS SIGNIFICANT THAT NO CHANGE WAS MADE WITH RESPECT TO THE DUTY AND RESPONSIBILITY IMPOSED BY THE CONGRESS ON THE SAID BOARD OF DIRECTORS RELATIVE TO THE MANAGEMENT OF THE CORPORATION.

WHERE, AS IN THE INSTANT MATTER, THE CONGRESS, BY STATUTE, SPECIFICALLY HAS VESTED THE MANAGEMENT AND CONTROL OF A PARTICULAR FEDERAL ACTIVITY IN A BOARD OF DIRECTORS, THE DUTIES AND RESPONSIBILITIES THUS IMPOSED UPON THE BOARD ARE THE DUTIES AND RESPONSIBILITIES OF ALL OF THE MEMBERS OF THE BOARD ACTING AS A BODY. CLEARLY, UNDER SUCH CIRCUMSTANCES, THE AUTHORITY VESTED IN EACH MEMBER OF THE BOARD AND THE RESPONSIBILITIES ASSUMED BY HIM ARE, UNDER THE STATUTE, EQUAL TO, BUT NO GREATER THAN, THE AUTHORITY AND RESPONSIBILITY ASSUMED BY THE OTHER MEMBERS. THAT IS TO SAY, IN CONTEMPLATION OF LAW, NO ONE MEMBER MAY EXERCISE ANY GREATER AUTHORITY THAN THAT EXERCISED BY THE OTHER MEMBERS WITH RESPECT TO THE MANAGEMENT, CONTROL, AND POLICIES OF THE PARTICULAR ACTIVITY, NOTWITHSTANDING THE FACT THAT HE MAY OCCUPY A PARTICULAR STATUS ON THE BOARD SUCH AS THE CHAIRMAN OR PRESIDENT THEREOF. HENCE, THE BOARD ITSELF, AND NOT MERELY THE PRESIDENT OR CHAIRMAN THEREOF, IS THE HEAD OF SUCH A FEDERAL AGENCY. WHILE NOT NECESSARILY CONCLUSIVE OF THE PRESENT MATTER, IT IS AT LEAST PERSUASIVE TO NOTE THAT SIMILAR CONSTRUCTION CONSISTENTLY HAS BEEN GIVEN BY THE CIVIL SERVICE COMMISSION TO THE PROVISIONS OF SECTION 3 (A) OF THE CIVIL SERVICE RETIREMENT ACT, 46 STAT. 470, EXEMPTING FROM THE PROVISIONS OF THAT ACT HEADS OF EXECUTIVE DEPARTMENTS, INDEPENDENT ESTABLISHMENTS, AGENCIES, AND CORPORATIONS OF THE FEDERAL GOVERNMENT.

WHILE, FOR PURPOSES OF FACILITATING ADMINISTRATION, IT IS THE USUAL PRACTICE TO DESIGNATE, OR TO AUTHORIZE THE MEMBERS OF A BOARD TO SELECT, ONE OF THE MEMBERS AS THE CHAIRMAN, AND WHILE SUCH OFFICER USUALLY IS VESTED WITH BROAD AUTHORITY OVER CERTAIN FUNCTIONS OF THE PARTICULAR ACTIVITY, THE MEMBER SO DESIGNATED OR SELECTED DOES NOT THEREBY BECOME THE "HEAD" OF THE ACTIVITY--- THAT IS, SUCH DESIGNATION OR SELECTION DOES NOT CONSTITUTE HIM THE PERSON WHO IS, BY LAW, THE PRINCIPAL OFFICER THEREOF. RATHER, THE PERSON TO WHOM SUCH FUNCTIONS ARE DELEGATED--- WHETHER HE BE THE CHAIRMAN OR SOME SUBORDINATE OFFICERS SUCH AS THE SECRETARY OF THE CORPORATION--- ACTS MERELY AS THE AGENT OF THE BOARD--- THE LEGAL HEAD--- IN THE PERFORMANCE OF SUCH DUTIES. IN FACT, IT WOULD APPEAR THAT WHERE THE MANAGEMENT AND CONTROL OF AN ACTIVITY OF THE FEDERAL GOVERNMENT IS VESTED BY STATUTE IN A BOARD OF DIRECTORS ANY PURPORTED DELEGATION TO ONE MEMBER, ONLY, OF THE STATUTORY OBLIGATIONS THUS IMPOSED, WOULD BE IN CONTRAVENTION OF THE EXPRESSED WILL OF THE CONGRESS, AND, THEREFORE, WOULD BE WITHOUT LEGAL EFFECT.

IT IS NOTED THAT THE RESOLUTION, QUOTED IN YOUR LETTER, WHEREBY THE BOARD OF DIRECTORS OF THE SMALLER WAR PLANTS CORPORATION AUTHORIZED THE CHAIRMAN OF THE BOARD, AS GENERAL MANAGER OF THE CORPORATION, TO DIRECT, AND TO BE ACCOUNTABLE FOR THE GENERAL ADMINISTRATIVE AND MANAGEMENT FUNCTIONS OF THE CORPORATION, SPECIFICALLY EXCEPTS FROM THE BROAD AUTHORITY THEREIN DELEGATED TO THE CHAIRMAN "ALL SUCH CASES REQUIRING POLICY DETERMINATION BY THE BOARD OF DIRECTORS.' THUS, RATHER THAN FORMING A BASIS FOR THE VIEW EXPRESSED IN YOUR LETTER THAT THE CHAIRMAN AND GENERAL MANAGER IS THE HEAD OF THE SAID CORPORATION, THE LANGUAGE OF THE SAID RESOLUTION EVIDENCES A CLEAR RECOGNITION ON THE PART OF THE MEMBERS OF THE BOARD OF THEIR LACK OF AUTHORITY TO CONSTITUTE SUCH OFFICER AS THE "HEAD" OF THE CORPORATION INASMUCH AS IT EXPRESSLY RESERVES TO THE BOARD OF DIRECTORS ALL DETERMINATIONS RESPECTING MATTERS OF CORPORATE POLICY--- ONE OF THE PRIME REQUISITES NECESSARY TO CONSTITUTE AN INDIVIDUAL THE "HEAD" OF A FEDERAL ACTIVITY.

FURTHERMORE, ALTHOUGH THE CHAIRMAN OF THE SMALLER WAR PLANTS CORPORATION WAS DESIGNATED DIRECTLY BY THE PRESIDENT, AND THE CONGRESS HAS AUTHORIZED COMPENSATION FOR THAT POSITION IN EXCESS OF THAT AUTHORIZED FOR THE OTHER MEMBERS OF THE BOARD OF DIRECTORS, IN VIEW OF THE PLAIN TERMS OF THE STATUTE CREATING THE SAID CORPORATION, SUCH FACTS WOULD NOT WARRANT A DETERMINATION BY THIS OFFICE THAT THE CHAIRMAN AND GENERAL MANAGER, ALONE, IS THE HEAD OF THE CORPORATION.

IN THE LIGHT OF THE FOREGOING, I HAVE TO ADVISE THAT ALL OF THE MEMBERS OF THE BOARD OF DIRECTORS OF THE SMALLER WAR PLANTS CORPORATION -- NOT THE CHAIRMAN ALONE--- CONSTITUTE THE HEAD OF THE CORPORATION WITHIN THE MEANING OF SECTION 102 (A) OF THE SAID FEDERAL EMPLOYEES PAY ACT OF 1945, AND, THEREFORE, ALL OF THE MEMBERS OF THE BOARD OF DIRECTORS, INCLUDING THE CHAIRMAN AND GENERAL MANAGER, ARE EXEMPT FROM THE PROVISIONS OF THAT ACT. CONSEQUENTLY, IT IS UNNECESSARY TO ANSWER THE ADDITIONAL QUESTION PRESENTED IN YOUR LETTER RESPECTING THE EFFECT OF THE PROVISIONS OF THAT ACT UPON THE APPROPRIATION LIMITATION IMPOSED UPON THE SALARIES OF THE MEMBERS OF THE BOARD OF DIRECTORS OTHER THAN THE CHAIRMAN.

IN ARRIVING AT THE ABOVE CONCLUSION THERE HAS NOT BEEN OVERLOOKED THE DECISION OF THIS OFFICE DATED JUNE 16, 1943, B-34850, TO THE LIAISON OFFICER, OFFICE FOR EMERGENCY MANAGEMENT, WHEREIN IT WAS HELD THAT, IN VIEW OF THE FACT THAT THE SMALLER WAR PLANTS CORPORATION WAS UNDER THE DIRECTION AND CONTROL OF THE CHAIRMAN OF THE WAR PRODUCTION BOARD--- A CONSTITUENT AGENCY OF THE OFFICE FOR EMERGENCY MANAGEMENT--- THE MEMBERS OF THE BOARD OF DIRECTORS OF SAID CORPORATION WERE NOT TO BE REGARDED AS COMING WITHIN THE EXCEPTION CONTAINED IN SECTION 1 (C) OF THE WAR OVERTIME PAY ACT OF 1943, 57 STAT. 75, 76, EXEMPTING FROM THE PROVISIONS OF THAT ACT "HEADS OF DEPARTMENTS, INDEPENDENT ESTABLISHMENTS, AND AGENCIES.' WHILE THE CONDITIONS UNDER WHICH THE CORPORATION OPERATED AT THE TIME THE SAID DECISION OF JUNE 16, 1943, WAS RENDERED WARRANTED THE CONCLUSION THEREIN REACHED, IT IS BELIEVED THAT--- IN CONSONANCE WITH THE VIEWS EXPRESSED IN YOUR LETTER, SUPRA--- THE EFFECT OF THE SAID AMENDATORY ACT OF APRIL 27, 1945, IS SUCH AS NOW TO CONSTITUTE THE SMALLER WAR PLANTS CORPORATION A SEPARATE FEDERAL ACTIVITY ACCOUNTABLE DIRECTLY TO THE PRESIDENT AND THE CONGRESS.