B-140000, AUGUST 25, 1959, 39 COMP. GEN. 126

B-140000, AUGUST 25, 1959, 39 COMP. GEN. 126

MILITARY PERSONNEL - RETIRED OFFICERS - EMPLOYMENT WITH NATO - DOUBLE COMPENSATION LIMITATION APPLICABILITY A REGULAR COMMISSIONED OFFICER OF THE UNIFORMED SERVICES WHO, AFTER RETIREMENT FOR PHYSICAL DISABILITY NOT INCURRED IN COMBAT OR CAUSED BY AN INSTRUMENTALITY OF WAR, IS EMPLOYED BY THE DEPARTMENT OF STATE FOR DETAIL TO A POSITION WITH THE NORTH ATLANTIC TREATY ORGANIZATION AND WHO RECEIVES A SALARY FROM THE DEPARTMENT OF STATE, WHICH SALARY SUBSEQUENTLY RESULTS IN A CREDIT TO THE UNITED STATES AGAINST ITS SHARE OF THE EXPENSES, MUST HAVE THE NATO POSITION REGARDED AS AN APPOINTIVE ONE "UNDER THE UNITED STATES GOVERNMENT" AS USED IN SECTION 212 OF THE ECONOMY ACT OF 1932, 5 U.S.C. 59A, WHICH PRECLUDES CONCURRENT RECEIPT OF RETIRED AND CIVILIAN PAY IN EXCESS OF $10,000 A YEAR, IN VIEW OF THE CONDITIONS OF THE SERVICE AND SECTION 532 (B) OF THE MUTUAL SECURITY ACT OF 1954, WHICH PERMITS RETIRED MILITARY OFFICERS TO BE EMPLOYED IN INTERNATIONAL ORGANIZATIONS BUT SUBJECTS THEIR SALARY TO THE DOUBLE COMPENSATION LIMITATION IN 5 U.S.C. 59A.

TO THE SECRETARY OF DEFENSE, AUGUST 25, 1959:

REFERENCE IS MADE TO LETTER OF JUNE 23, 1959 FROM THE ASSISTANT SECRETARY OF DEFENSE ( COMPTROLLER), REQUESTING A DECISION AS TO WHETHER A REGULAR COMMISSIONED OFFICER OF THE ARMED FORCES RETIRED FOR PHYSICAL DISABILITY WHO, IT IS STATED, ACCEPTS AN APPOINTMENT TO A POSITION ON THE NATO INTERNATIONAL STAFF, IS SUBJECT TO THE DUAL COMPENSATION PROVISIONS OF SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, 5 U.S.C. 59A, UNDER THE CIRCUMSTANCES SET FORTH IN COMMITTEE ACTION NO. 245 OF THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

IT IS REPORTED THAT THE QUESTION CONCERNS THE APPLICABILITY OF SECTION 212 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED, IN CONNECTION WITH A SPECIFIC POSITION, IN THE CIRCUMSTANCES WHICH ARE DESCRIBED AS FOLLOWS:

THE NATO INTERNATIONAL STAFF POSITION HAS A SALARY RANGE OF $9890 TO $13,000 PER ANNUM ( NATO 13, $9900 PER ANNUM). * * * U.S. NATIONALS (APPARENTLY INCLUDING THE OFFICER HERE INVOLVED) ARE EMPLOYED FOR THE INTERNATIONAL STAFF BY THE STATE DEPARTMENT UPON THE RECOMMENDATION OF THE DEPARTMENT OF DEFENSE. SUCH POSITIONS ARE ASSIGNED NATO GRADES AND SALARIES BY AGREEMENT OF NATO. IN ACCORDANCE WITH THE OTTAWA AGREEMENT, THE UNITED STATES ARRANGED WITH THE NATO COUNCIL TO PAY SALARIES AND OTHER EMOLUMENTS TO U.S. NATIONALS EMPLOYED ON THE INTERNATIONAL STAFF AT RATES FIXED BY THE UNITED STATES GOVERNMENT AND FROM ITS OWN FUNDS. NATO THEN CREDITS THEU.S. WITH THE AMOUNTS OF SALARIES AND EMOLUMENTS WHICH WOULD OTHERWISE HAVE BEEN PAID BY NATO TO U.S. NATIONALS. THE DIFFERENCE BETWEEN NATO RATES FOR SALARIES AND EMOLUMENTS AND THOSE OF THE U.S. VARIES WITH BOTH THE GRADE OF THE POSITION AND THE CANDIDATE.

IT IS STATED THAT THE INVOLVED OFFICER'S DISABILITY WAS NOT INCURRED IN COMBAT AND THAT IT WAS NOT CAUSED BY AN INSTRUMENTALITY OF WAR IN LINE OF DUTY.

THE OTTAWA AGREEMENT ON THE STATUS OF THE NORTH ATLANTIC TREATY ORGANIZATION, NATIONAL REPRESENTATIVES, AND INTERNATIONAL STAFF, WAS SIGNED ON SEPTEMBER 20, 1951, ON BEHALF OF THE UNITED STATES AND THE OTHER PARTIES TO THE NORTH ATLANTIC TREATY. ARTICLE 19 OF THE AGREEMENT, 5 U.S. TREATIES AND OTHER INTERNATIONAL AGREEMENTS 1087, 1098, PROVIDES AS FOLLOWS:

OFFICIALS OF THE ORGANIZATION AGREED UNDER ARTICLE 17 SHALL BE EXEMPT FROM TAXATION ON THE SALARIES AND EMOLUMENTS PAID TO THEM BY THE ORGANIZATION IN THEIR CAPACITY AS SUCH OFFICIALS. ANY MEMBER STATE MAY, HOWEVER, CONCLUDE AN ARRANGEMENT WITH THE COUNCIL ACTING ON BEHALF OF THE ORGANIZATION WHEREBY SUCH MEMBER STATE WILL EMPLOY AND ASSIGN TO THE ORGANIZATION ALL OF ITS NATIONALS (EXCEPT, IF SUCH MEMBER STATE SO DESIRES, ANY NOT ORDINARILY RESIDENT WITHIN ITS TERRITORY) WHO ARE TO SERVE ON THE INTERNATIONAL STAFF OF THE ORGANIZATION AND PAY THE SALARIES AND EMOLUMENTS OF SUCH PERSONS FROM ITS OWN FUNDS AT A SCALE FIXED BY IT. THE SALARIES AND EMOLUMENTS SO PAID MAY BE TAXED BY SUCH MEMBER STATE BUT SHALL BE EXEMPT FROM TAXATION BY ANY OTHER MEMBER STATE. IF SUCH AN ARRANGEMENT IS ENTERED INTO BY ANY MEMBER STATE AND IS SUBSEQUENTLY MODIFIED OR TERMINATED, MEMBER STATES SHALL NO LONGER BE BOUND UNDER THE FIRST SENTENCE OF THIS ARTICLE TO EXEMPT FROM TAXATION THE SALARIES AND EMOLUMENTS PAID TO THEIR NATIONALS.

A SUPPLEMENTAL AGREEMENT WAS EXECUTED ON SEPTEMBER 29, 1951, 5 U.S. TREATIES AND OTHER INTERNATIONAL AGREEMENTS 1112, BETWEEN THE UNITED STATES AND THE NORTH ATLANTIC COUNCIL DEPUTIES, ACTING ON BEHALF OF THE NORTH ATLANTIC TREATY ORGANIZATION, AS FOLLOWS:

1. WHENEVER THE ORGANIZATION DESIRES THE SERVICES OF A UNITED STATES NATIONAL, IT WILL NOTIFY THE DEPUTY UNITED STATES REPRESENTATIVE, NORTH ATLANTIC COUNCIL OF: (A) THE NATURE OF THE POSITION TO BE FILLED, (B) THE QUALIFICATIONS WHICH AN INDIVIDUAL MUST

POSSESS TO FILL THE POSITION, AND (C) THE SALARY WHICH SUCH INDIVIDUAL WOULD RECEIVE IF EMPLOYED BY THE NORTH ATLANTIC TREATY ORGANIZATION. THE ORGANIZATION MAY NOTIFY THE GOVERNMENT OF THE UNITED STATES OF THE NAME/S) OF ANY INDIVIDUAL/S) IT DEEMS ACCEPTABLE FOR THE POSITION.

2. THE GOVERNMENT OF THE UNITED STATES MAY ASSIGN TO THE ORGANIZATION A UNITED STATES NATIONAL FROM ITS GOVERNMENT SERVICE WHO IS ACCEPTABLE TO THE ORGANIZATION. THE GOVERNMENT OF THE UNITED STATES WILL PROVIDE SECURITY CLEARANCE FOR THE INDIVIDUAL CONCERNED.

3. THE GOVERNMENT OF THE UNITED STATES WILL PAY ANY AND ALL SALARIES AND EMOLUMENTS OF UNITED STATES NATIONALS, WHO ARE EMPLOYED BY IT AND ASSIGNED TO THE ORGANIZATION, FROM ITS OWN FUNDS AT RATES DETERMINED BY THE GOVERNMENT OF THE UNITED STATES.

4. THE ORGANIZATION AGREES THAT IT WILL NOT PAY SALARIES AND EMOLUMENTS TO ANY CITIZEN OF THE UNITED STATES.

5. THE ORGANIZATION WILL CREDIT TO THE UNITED STATES THE AMOUNTS OF SALARIES AND EMOLUMENTS WHICH WOULD OTHERWISE HAVE BEEN PAID BY THE ORGANIZATION TO UNITED STATES NATIONALS AND WILL DEDUCT THE TOTAL OF SUCH CREDITS FOR EACH FISCAL YEAR FROM THE AMOUNT ASSESSED THE GOVERNMENT OF THE UNITED STATES BY THE ORGANIZATION, IN RESPECT OF THE ANNUAL CONTRIBUTION OF THE GOVERNMENT OF THE UNITED STATES FOR THE SUBSEQUENT FISCAL YEAR. ( ITALICS SUPPLIED.)

AUTHORITY FOR DETAIL OF PERSONNEL TO INTERNATIONAL ORGANIZATIONS CURRENTLY IS FOUND IN SECTION 529 OF THE MUTUAL SECURITY ACT OF 1954, 68 STAT. 858, 22 U.S.C. 1789. SUBSECTION 529 (A), 22 U.S.C. 1789 (A), PROVIDES THAT WHENEVER THE PRESIDENT DETERMINES IT TO BE CONSISTENT WITH AND IN FURTHERANCE OF THE PURPOSE OF THE ACT, THE HEAD OF ANY UNITED STATES GOVERNMENT AGENCY IS AUTHORIZED TO DETAIL, ASSIGN, OR OTHERWISE MAKE AVAILABLE TO ANY INTERNATIONAL ORGANIZATION ANY OFFICER OR EMPLOYEE OF HIS AGENCY TO SERVE WITH OR AS A MEMBER OF THE INTERNATIONAL STAFF OF SUCH ORGANIZATION. PRESUMABLY, THE OFFICER MENTIONED IN THE QUESTION SUBMITTED WAS HIRED BY THE DEPARTMENT OF STATE AND THEN DETAILED TO THE NATO INTERNATIONAL STAFF. SUBSECTION 529 (B) PROVIDES THAT ANY SUCH OFFICER OR EMPLOYEE, WHILE SO ASSIGNED OR DETAILED, SHALL BE CONSIDERED, FOR THE PURPOSE OF PRESERVING HIS ALLOWANCES, PRIVILEGES, RIGHTS, SENIORITY AND OTHER BENEFITS AS SUCH, AN OFFICER OR EMPLOYEE OF THE GOVERNMENT OF THE UNITED STATES AND OF THE GOVERNMENT AGENCY FROM WHICH DETAILED OR ASSIGNED, AND HE SHALL CONTINUE TO RECEIVE COMPENSATION, ALLOWANCES, AND BENEFITS FROM FUNDS AVAILABLE TO THAT AGENCY OR MADE AVAILABLE TO THAT AGENCY OUT OF FUNDS AUTHORIZED UNDER THAT ACT. SECTION 532 (B) OF THE MUTUAL SECURITY ACT OF 1954, 22 U.S.C. 1792 (B), PROVIDES IN PERTINENT PART THAT, NOTWITHSTANDING 5 U.S.C. 62, WHICH PROHIBITS CERTAIN RETIRED OFFICERS FROM HOLDING CERTAIN OFFICE, ANY RETIRED OFFICER OF ANY OF THE SERVICES MENTIONED IN THE CAREER COMPENSATION ACT OF 1949, 63 STAT. 802, MAY HOLD ANY OFFICE OR APPOINTMENT UNDER THAT ACT OR THE MUTUAL DEFENSE ASSISTANCE CONTROL ACT OF 1951, 65 STAT. 644, BUT THAT THE COMPENSATION OF ANY SUCH RETIRED OFFICER SHALL BE SUBJECT TO THE PROVISIONS OF 5 U.S.C. 59A,"WHICH DOES NOT PERMIT RETIRED PAY TO BE ADDED TO THE COMPENSATION RECEIVED AS A CIVILIAN OFFICER.'

SECTION 212 OF THE ECONOMY ACT, AS AMENDED, IS, IN PERTINENT PART, AS FOLLOWS (QUOTING FROM 5 U.S.C. 59A, 1958 EDITION):

(A) AFTER JUNE 30, 1932, NO PERSON HOLDING A CIVILIAN OFFICE OR POSITION APPOINTIVE OR ELECTIVE, UNDER THE UNITED STATES GOVERNMENT OR THE MUNICIPAL GOVERNMENT OF THE DISTRICT OF COLUMBIA OR UNDER ANY CORPORATION, THE MAJORITY OF THE STOCK OF WHICH IS OWNED BY THE UNITED STATES, SHALL BE ENTITLED, DURING THE PERIOD OF SUCH INCUMBENCY, TO RETIRED PAY FROM THE UNITED STATES FOR OR ON ACCOUNT OF SERVICES AS A COMMISSIONED OFFICER IN ANY OF THE SERVICES MENTIONED IN TITLE 37, AT A RATE IN EXCESS OF AN AMOUNT WHICH WHEN COMBINED WITH THE ANNUAL RATE OF COMPENSATION FROM SUCH CIVILIAN OFFICE OR POSITION, MAKES THE TOTAL RATE FROM BOTH SOURCES MORE THAN $10,000; AND WHEN THE RETIRED PAY AMOUNTS TO OR EXCEEDS THE RATE OF $10,000 PER ANNUM SUCH PERSON SHALL BE ENTITLED TO THE PAY OF THE CIVILIAN OFFICE OR POSITION OR THE RETIRED PAY, WHICHEVER HE MAY ELECT. * * *

IN THE LIGHT OF THE CIRCUMSTANCES OF THE APPOINTMENT INVOLVED HERE, THE CONDITIONS OF SERVICE PROVIDED BY SECTION 529 OF THE MUTUAL SECURITY ACT OF 1954, AND THE PROVISION IN SECTION 532 (B) OF THAT ACT RELATING TO THE APPLICABILITY OF 5 U.S.C. 59A, THERE APPEARS TO BE NO SOUND ALTERNATIVE BUT TO HOLD THAT THE CIVILIAN POSITION IN QUESTION IS AN APPOINTIVE ONE "UNDER THE UNITED STATES GOVERNMENT" AND, THEREFORE, WITHIN THE PURVIEW OF SECTION 212 OF THE ECONOMY ACT. THE HOLDING IN 25 COMP. GEN. 38, THAT ACCEPTANCE OF EMPLOYMENT WITH THE INTERNATIONAL ORGANIZATION THERE MENTIONED WOULD NOT CONTRAVENE THE CITED DUAL COMPENSATION STATUTES, WAS EXPRESSLY LIMITED TO SITUATIONS WHERE A DETAIL OF THE OFFICER BY THE WAR DEPARTMENT TO THAT ORGANIZATION WAS NOT INVOLVED. IT APPEARS THAT THE OFFICER HERE INVOLVED IS AN EMPLOYEE OF THE DEPARTMENT OF STATE WHO HAS BEEN DETAILED TO THE NATO ORGANIZATION. HIS SALARY IS PAID BY THE DEPARTMENT OF STATE AND IT IS IMMATERIAL THAT SUCH PAYMENTS RESULT IN A CREDIT TO THE UNITED STATES AGAINST ITS SHARE OF THE EXPENSES OF THAT ORGANIZATION. SEE, IN THIS CONNECTION, SECTION 529 (C) (4) OF THE 1954 ACT.