[Application and Limitations of Article I of Constitution and P.L. 95-105]

The Department of Defense (DOD) requested a decision concerning the limitations of Article I, section 9, clause 8, of the Constitution, and the application of P.L. 95-105, section 509, to a military retiree employed by a private corporation to direct a joint business venture with the People's Republic of China. DOD noted that about half of the corporation's stock was controlled by an automotive firm which was almost entirely owned by the French government. The member had neither requested nor received the approval of the Secretaries of State and of his service to receive compensation from foreign governments. GAO stated that a corporation is a legal entity separate and distinct from its shareholders, parent company, and subordinate companies which only can be disregarded when such a unity of interest and ownership exists that it can no longer be described as separate and distinct. GAO held that the member's employment was wholly directed and controlled by the domestic corporation the identity of which was distinct from its parent corporation and the Chinese and the French governments. Accordingly, GAO believes that neither the constitutional provision nor the public law was applicable to this case.