A-3817, FEBRUARY 25, 1927, 6 COMP. GEN. 551

A-3817, FEBRUARY 25, 1927, 6 COMP. GEN. 551

VETERANS' BUREAU - DISABILITY COMPENSATION - ILLEGAL PAYMENTS THE STATUS OF "BENEFICIARY" UNDER THE WORLD WAR VETERANS' ACT OR THE WAR RISK INSURANCE ACT MUST FIRST BE ESTABLISHED BEFORE THERE MAY BE APPLIED THE PROVISIONS OF SECTION 28 OF THE ACT OF JUNE 7, 1924, 43 STAT. 615, AS AMENDED BY THE ACT OF JULY 2, 1926, 44 STAT. 792, AUTHORIZING THE DIRECTOR OF THE VETERANS' BUREAU TO WAIVE RECOVERIES OF DISABILITY COMPENSATION PAID "ANY BENEFICIARY" UNDER CERTAIN CONDITIONS, AND A DISBURSING OFFICER MAY NOT BE RELIEVED THEREBY OF ILLEGAL PAYMENTS MADE TO ONE NOT PROPERLY IN THE STATUS OF A BENEFICIARY.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, FEBRUARY 25, 1927:

THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 4, 1926, REQUESTING RECONSIDERATION OF SO MUCH OF DECISION OF NOVEMBER 10, 1926, WHICH SUSTAINED DISALLOWANCE IN THE ACCOUNTS OF WILLIAM H. HOLMES, DISBURSING CLERK, UNITED STATES VETERANS' BUREAU, OF CREDIT FOR $480 PAID TO EDWIN D. PEASLEY, AS DISABILITY COMPENSATION DURING A PERIOD HE WAS A TRANSFERRED MEMBER OF THE FLEET NAVAL RESERVE AND IN RECEIPT OF RETAINER PAY.

THE PAYMENT WAS MADE BY THE DISBURSING OFFICER SUBSEQUENT TO AND CONTRARY TO A DECISION OF THIS OFFICE DATED MAY 10, 1923, 2 COMP. GEN. 743, HOLDING THAT DISABILITY COMPENSATION WAS NOT PAYABLE TO A MEMBER OF THE FLEET NAVAL RESERVE IN RECEIPT OF RETAINER PAY. SEE ALSO 6 COMP. GEN. 223. THE DISBURSING OFFICER CLAIMED CREDIT IN HIS ACCOUNTS, NOTWITHSTANDING SAID DECISION, ON THE BASIS THAT THE DIRECTOR OF THE VETERANS' BUREAU HAD TAKEN ACTION UNDER SECTION 28 OF THE WORLD WAR VETERANS' ACT AND WAIVED RECOVERY OF THE AMOUNT PAID TO PEASLEY AS A "BENEFICIARY.'

IN THE DECISION OF NOVEMBER 10, 1926, IT WAS HELD THAT THE DISBURSING OFFICER WAS NOT ENTITLED TO CREDIT FOR THE UNLAWFUL PAYMENTS FOR THE STATED REASON THAT PEASLEY, THE PERSON TO WHOM THE UNLAWFUL PAYMENTS WERE MADE, WAS NOT A "BENEFICIARY" WITHIN THE MEANING OF SECTION 28 OF THE STATUTE SUBSEQUENT TO THE DATE OF THE DECISION OF THIS OFFICE.

YOU SUGGEST THAT THERE IS A CONFLICT BETWEEN SAID DECISION AND TWO PRIOR DECISIONS DATED FEBRUARY 27, 1926, 5 COMP. GEN. 667, AND APRIL 27, 1926, 5 COMP. GEN. 864. THE FIRST DECISION HELD THAT THE DIRECTOR WAS AUTHORIZED UNDER THE SAID SECTION 28 TO WAIVE RECOVERY FROM PERSONS WHO WERE BENEFICIARIES EITHER BEFORE OR AFTER THE ACT OF JUNE 7, 1924, THE DATE OF THE STATUTE IN WHICH THE PROVISION APPEARED. THE SECOND DECISION SUGGESTED THAT THE RECOVERY OF PAST PAYMENTS OF INSURANCE INSTALLMENTS MADE UNDER REGULATIONS OF THE VETERANS' BUREAU CONSIDERED LAWFUL WHEN PROMULGATED AND DURING THE PERIOD PAYMENTS THEREUNDER WERE MADE, BUT HELD UNLAWFUL BY SAID DECISION, WOULD BE FOR CONSIDERATION OF THE DIRECTOR UNDER SAID SECTION 28 OF THE STATUTE. BOTH OF THESE DECISIONS DEALT WITH THE AUTHORITY OF THE DIRECTOR TO WAIVE RECOVERY DIRECTLY FROM THE PERSON TO WHOM THE UNLAWFUL PAYMENTS WERE MADE.

SECTION 28 OF THE WORLD WAR VETERANS' ACT OF JUNE 7, 1924, 43 STAT. 615, AND AS AMENDED BY THE ACT OF JULY 2, 1926, 44 STAT. 792, PROVIDES AS FOLLOWS:

THERE SHALL BE NO RECOVERY OF PAYMENTS FROM ANY BENEFICIARY WHO, IN THE JUDGMENT OF THE DIRECTOR, IS WITHOUT FAULT ON HIS PART, AND WHERE, IN THE JUDGMENT OF THE DIRECTOR, SUCH RECOVERY WOULD DEFEAT THE PURPOSE OF BENEFITS OTHERWISE AUTHORIZED OR WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE.

THE PROVISION CLEARLY LIMITS THE AUTHORITY OF THE DIRECTOR TO WAIVE RECOVERIES FROM "ANY BENEFICIARY.' THIS FURTHER APPEARS FROM THE REFERENCE TO RECOVERY DEFEATING THE PURPOSE OF BENEFITS OTHERWISE AUTHORIZED OR BEING AGAINST EQUITY AND GOOD CONSCIENCE. IF THE INTENT HAD BEEN TO AUTHORIZE WAIVER OF RECOVERIES FROM ANY PERSON TO WHOM AN UNLAWFUL PAYMENT UNDER THE STATUTE HAD BEEN MADE, IRRESPECTIVE OF STATUS AS BENEFICIARY, THE CONGRESS WOULD HAVE EXPRESSED ITSELF IN MORE APT LANGUAGE AND NOT HAVE ADDED THE CONCLUDING PHRASES, WHICH INDICATE THE RESTRICTIVE SENSE IN WHICH THE TERM BENEFICIARY WAS USED IN THE ENACTMENT. THERE MUST FIRST BE ESTABLISHED THE STATUS OF A PERSON AS A "BENEFICIARY" BEFORE THE SECTION MAY BE INVOKED OR APPLIED. FOR INSTANCE, THE STATUTE MIGHT BE APPLIED, IN THE JUDGMENT OF THE DIRECTOR, TO AN OVERPAYMENT MADE TO A BENEFICIARY. SEE 5 COMP. GEN. 540.

IN THE FIRST DECISION, 5 COMP. GEN. 667, WHEREIN YOU SUGGEST A CONFLICT WITH THE DECISION OF NOVEMBER 10, 1926, THERE WAS AT ISSUE SIMPLY THE TIME WHEN THE PERSON WAS A BENEFICIARY, WHETHER UNDER THE WAR RISK INSURANCE ACT OR THE WORLD WAR VETERANS' ACT. IN THE SECOND DECISION, 5 COMP. GEN. 864, WHEREIN YOU ALSO SUGGEST A CONFLICT WITH THE DECISION OF NOVEMBER 10, 1926, THE PERSONS TO WHOM THE PAYMENTS WERE MADE WERE BENEFICIARIES UNDER THE ADMINISTRATIVE VIEW OF THE STATUTE AS EXPRESSED IN REGULATIONS PROMULGATED BY THE BUREAU. THAT IS TO SAY, AT THE TIME THE PAYMENTS WERE MADE, THE PERSONS MAY BE CONSIDERED AS HAVING BEEN BENEFICIARIES WITHIN THE MEANING OF SECTION 28. HAD THE DISBURSING OFFICER OF THE BUREAU CONTINUED PAYMENTS UNDER THE TERMS OF THE ILLEGAL REGULATIONS SUBSEQUENT TO THE DATE OF THE DECISION WHEREIN WAS SET FORTH THE ILLEGALITY OF THE REGULATIONS AND PAYMENTS MADE PURSUANT THERETO, AS WAS DONE IN THE PEASLEY CASE CONSIDERED IN THE DECISION OF NOVEMBER 10, 1926, SECTION 28 OF THE STATUTE AUTHORIZING WAIVER OF RECOVERIES COULD NOT HAVE APPLIED. PEASLEY WAS HELD NOT TO HAVE BEEN A BENEFICIARY BECAUSE HE WAS A MEMBER OF THE FLEET NAVAL RESERVE AND IN RECEIPT OF RETAINER PAY. NOTWITHSTANDING SAID DECISION, DATED MAY 10, 1923, THE DISBURSING OFFICER CONTINUED TO MAKE PAYMENTS OF DISABILITY COMPENSATION TO HIM. THERE IS NO CONFLICT APPARENT BETWEEN THE DECISION OF NOVEMBER 10, 1926, AND THE TWO PRIOR DECISIONS WHICH YOU HAVE CITED.