B-237915, May 4, 1990

B-237915, May 4, 1990

APPROPRIATIONS/FINANCIAL MANAGEMENT - Appropriation Availability - Amount availability - Augmentation - Gifts/donations - Advertising DIGEST: The Chairman, Committee on Government Operations, House of Representatives, is advised that we have no legal objection to a memorandum of understanding entered into by the National Archives and Records Administration (NARA) with Philip Morris Companies Inc., in connection with the bicentennial of the United States Constitution during the period of 1989-91, in view of the broad statutory authority granted NARA to solicit and accept gifts. 44 U.S.C. Sec. 2112(g)(1), 2305 (Supp. V 1987).

Honorable John Conyers

Chairman, Committee on Government Operations

House of Representatives:

This is in further response to your letter of November 9, 1989, which requested the General Accounting Office to review the legality and propriety of a memorandum of understanding entered into by the National Archives and Records Administration (NARA) with the Philip Morris Companies Inc., in connection with the Bicentennial of the United States Constitution during the period of 1989-91.

The enclosure to this letter addresses the specific questions you asked and responds to several additional questions raised by members of your staff. In summary, we conclude that the memorandum of understanding and related arrangements between NARA and the Philip Morris Companies Inc., are within NARA's legal authority in view of the broad statutory authority granted it by Congress.

We trust that this is responsive to your inquiry.

LEGAL ANALYSIS OF MEMORANDUM OF UNDERSTANDING AND RELATED ARRANGEMENTS BETWEEN NARA AND PHILIP MORRIS COMPANIES INC.

BACKGROUND

In connection with the Bicentennial of the Bill of Rights of the United States Constitution, NARA contacted 25 companies, including Philip Morris, about fund raising. With the exception of Philip Morris, all declined to participate. The NARA also initially declined to participate with Philip Morris U.S.A. (the cigarette company) in its support of the Bill of Rights celebration because of a concern that such participation would lead to a negative public response. Later the NARA agreed to solicit and accept a gift of money from Philip Morris Companies Inc., which includes Kraft- General Foods, and Miller Brewing in its corporate makeup, based on that company's history of large cash donations to various components of the Smithsonian Institution. In addition, the information furnished us by NARA indicates that Philip Morris donated $250,000 in 1989 to the Capitol Presentation Fund to sponsor a gala for the Bicentennial of the House Ways and Means Committee in conjunction with the Bicentennial of Congress.

In August 1989, NARA and the Philip Morris Companies Inc., entered into a memorandum of understanding in connection with the Bicentennial of the Bill of Rights of the United States Constitution during the period 1989- 91. The memorandum provides that Philip Morris will donate $600,000 to NARA, through the NARA Trust Fund, to be used for one or more of the following:

(1) "The first charter membership in an association that National Archives is planning to establish, designed to involve the private sector in supporting the work of the National Archives.

(2) "Various programs and/or promotions, mutually agreeable to the parties, to promote interest in and awareness of the Bill of Rights, including an historical exhibition on the Bill of Rights."

The memorandum further provides that Philip Morris may publish or broadcast announcements, promotional materials, brochures and similar materials referring to NARA, and NARA may do likewise referring to Philip Morris, but only if prior to such publication or broadcast, both parties consult and agree upon the form and content of the material. Finally, the memorandum provides that NARA will assist Philip Morris in securing any permission that may be required for its use of the voices of leading Americans, including former American Presidents, in connection with their public service announcements promoting the Bill of Rights Bicentennial.

In response to our request for further information on the funding of the gift, the NARA advised that it anticipates that the $600,000 donation from Philip Morris will be used to: (1) fund an exhibit in the Circular Gallery of the NARA Building ($470,000), (2) examine the feasibility of establishing a "Friends" organization to help the NARA with future fund- raising efforts ($100,000), and (3) fund special research and exhibit functions at six Presidential Libraries ($30,000).

In addition to the $600,000 donation, Philip Morris Companies Inc., has produced a series of television and other announcements about the Bicentennial of the Bill of Rights which, among other things, encourage people to write to Philip Morris for a free copy of the Bill of Rights. These ads originally contained the following credit line:

"Join Philip Morris and the National Archives in celebrating the 200th anniversary of the Bill of Rights."

The credit line was later revised to read:

"Join Philip Morris in support of the National Archives' celebration of the 200th anniversary of the Bill of Rights."

In accordance with the memorandum of understanding, NARA approved the form and content of the ads.

LEGAL ANALYSIS

In 1984 Congress enacted Pub.L. No. 98-497, effective April 1, 1985, 44 U.S.C. Secs. 2101-2118, et seq. (Supp. V 1987), which established NARA as an independent agency in the executive branch of the government, under the supervision and direction of the Archivist. 44 U.S.C. Sec. 2102 (Supp. V 1987). Prior to this time the National Archives was administered under the direction of the Administrator of General Services. 44 U.S.C. Sec. 2104 (1982).

The NARA property and funds are administered by a National Archives Trust Fund Board which consists of the Archivist as Chairman, and the Secretary of the Treasury and the Chairman of the National Endowment for the Humanities as members. 44 U.S.C. Sec. 2301 (Supp. V 1987).

The passage of Pub.L. No. 98-497 broadened the authority of the Trust Fund Board since the Board could now both "solicit" and accept gifts or bequests of money, securities, or other personal property for the benefit of NARA activities. 44 U.S.C. Sec. 2305 (Supp. V 1987). Prior to this time the Board's statutory authority provided only for the Archives to accept gifts and not to actively solicit them. 44 U.S.C. Sec. 2305 (1982). The Congress also extended authority to the Archivist himself, when he considers it to be in the public interest, to solicit and accept gifts or bequests of money or other property for the purpose of maintaining, operating, protecting, or improving a Presidential archival depository. Presidential Libraries Act of 1986, Pub.L. No. 99-323, 100 Stat. 495, 497, 44 U.S.C. Sec. 2112(g)(1) (Supp. V 1987).

The statutory provisions also provide for the establishment of a trust fund account in the Treasury of the United States. 44 U.S.C. Secs. 2305, 2307 (Supp. V 1987).

Against this background, the specific questions raised by the Committee and our responses follow.

Question 1

"Does the National Archives have the legal authority to agree to allow a private company to use the name and facilities of the National Archives to promote a private interest?"

It is NARA counsel's opinion that Philip Morris could have used the name without receiving NARA's permission as long as the advertisement did not suggest a commercial endorsement by NARA of a company or product. We have found no statutory or regulatory restrictions on the use of the NARA name, and, therefore, we see no basis to disagree with NARA in this regard. any event, we see no legal basis to object to NARA's agreement to permit Philip Morris to use its name for the purposes and in the manner outlined here, promoting awareness of the Bill of Rights Bicentennial.

Concerning whether the NARA name is being used to promote a private interest, we believe that there probably is some promotion of private interest inherent in corporate sponsorship. However, this is a necessary incident to the statutory authority granted to NARA to "solicit and accept gifts." 44 U.S.C. Secs. 2112(g)(1), 2305 (Supp. V 1987).

The NARA has an internal directive entitled "Special Exhibition Policy for Corporate Contributors." The directive is modeled after a similar regulation adopted by the Smithsonian Institution, and states that NARA cannot be perceived as endorsing, either implicitly or explicitly, either the products of a corporation or a point of view on any particular issue. The directive provides certain examples of an agreed-upon customary format for recognition of a donor such as: "This exhibition is supported by a grant from ..." and provides that in no case will a corporation be referred to as the sponsor or presenter of the exhibition.

The Smithsonian Institution, likewise, has the authority to accept gifts for the use of its activities. 20 U.S.C. Sec. 55 (1988). The Smithsonian has extensive internal regulations in the form of an Office Memorandum (OM) concerning the use of its name. The Memorandum also states that advertising and promotional materials may make no reference to specific corporate brands, products or services or make use of advertising slogans concerning such products or services. OM 841-3B (Sept. 2, 1987).

Also, other agencies' practices are similar. For example, the Library of Congress Trust Fund Board has the authority to accept, receive, and administer gifts for the benefit of the Library (2 U.S.C. Sec. 156 (1988)), and has established rather detailed instructions in connection with the use of its name in connection with the gift. In addition to written approval requirements, 36 C.F.R. Sec. 701.35(c) (1988) provides that:

"(c) Where the contemplated activity or intended use of the Library's name is designed to raise gift funds for the Library, there shall be three (3) additional requirements:

"(1) Publicity associated with the intended use shall clearly state the objective for such funds, shall be consistent with the policy expressed in paragraph (a) of this section, and, if the funds are to benefit a specific program in the Library, the publicity shall describe that program; and

"(2) No individual(s) shall financially profit from such fund-raising endeavor.

"(d) Any permissions granted shall apply only to the specific use for which granted. There shall be no blanket or open-ended permissions granted; each intended use shall be individually considered."

The Archivist also has the authority to make a seal of office and to prescribe regulations authorizing its use, and the seal is to be given judicial notice. 44 U.S.C. Secs. 2104(a) and (e) (Supp. V 1987). Although the use of NARA's seal does not appear to have been involved here, the regulations concerning its use may be of interest.

The Archivist has published regulations concerning the use of the NARA seal in 36 C.F.R. part 1200, which provides that the use of the seal by any person or organization outside NARA may be made only with prior written approval by NARA. 36 C.F.R. Sec. 1200.6(b) (1988). The NARA regulations further state that the seal may not be used on any article or in any manner which may discredit the seal or reflect unfavorably upon NARA or which implies NARA endorsement of commercial products or services, or of the user's policies or activities. 36 C.F.R. Sec. 1200.6(e) (1988). There are also criminal statutes pertaining to the falsification or wrongful use of government seals. 18 U.S.C. Secs. 506, 1017 (1988).

In summary, so long as NARA adheres to these principles in exercising its content approval authority-- i.e., NARA's name is not used in a manner which discredits the agency or suggests its endorsement of commercial products or services or the user's policies or activities-- we do not see any prohibited promotion of private interest in its arrangement with Philip Morris. As far as we can determine, NARA has adhered to these principles.

Question 2

"Can the National Archives rent its facilities to a private company in exchange for a payment made to the National Archives Trust Fund? Should the funds received be returned to the Treasury?"

The NARA has published regulations in 36 C.F.R. part 1280 pertaining to the use of NARA facilities by outside organizations. The regulations apply to the use of the National Archives Theater, conference rooms, and Archivist's Reception Room. Generally, the regulations stipulate that the use by private individuals and groups must be for the benefit of or in connection with the archival and records activities administered by NARA, and must be consistent with the public perception of NARA as a research and cultural institution. The facility shall not be used to promote commercial enterprises or products or for political, sectarian, or similar purposes. 36 C.F.R. Secs. 1280.18, 1280.22 (1988). The use of the Archivist's Reception Room by an outside organization requires a donation to the NARA Trust Fund in order to cover costs. If food and beverages are to be furnished by an outside organization, the use of a caterer is subject to prior approval by NARA. 36 C.F.R. Secs. 1280.22, 1280.24(f) (1988).

It is our understanding that the above question arose out of concerns by the Committee that NARA may have rented its facilities to Philip Morris for a Bill of Rights reception that was held on September 24, 1989. The NARA has advised us that the event in question was a formal opening of the National Archives' Bill of Rights Bicentennial Celebration held in the Rotunda of the National Archives Building. The commemoration consisted of a series of exhibits, educational programs, publications and lists of special events scheduled to take place between 1989 and 1991.

The guest list was jointly selected by NARA and Philip Morris with an expected attendance of 150 guests which consisted of members of Congress, the judiciary, academic, legal, and museum communities. The Honorable Dick Thornburgh, Attorney General of the United States, was the guest speaker. A reception followed the program.

The estimated cost of the reception was between $14,000 and $16,000. Nara reports that the bill from the caterer was received by NARA and forwarded directly to Philip Morris for payment. Also, there was no rental of NARA facilities, and the use of the facilities appears to have been consistent with NARA regulations.

Question 3

"The National Archives has agreed to make Philip Morris a charter member in a yet-to-be-established association to support the work of the National Archives. What will this association do? How will it be structured? there any existing administrative or statutory guidance on the operation, activities, expenditures, or financing of such an association?"

In response to our request, the Archivist provided us with information about the proposed NARA "Friends" organization. The purpose of the proposed organization is to assist NARA in obtaining additional private monetary support in the future. The Archivist says that there are very few details about this organization now since $100,000 of the Philip Morris donation is intended to be used to examine the feasibility of forming such an organization. In fact, NARA has contracted with a professional fund-raising counsel, Brakely, John Price Jones, Inc., to examine ways in which it can systematically pursue fund raising in the future. An association of some sort with both corporate and individual members, similar to that used by the Smithsonian Institution, is one approach that will be explored. However, the Archivist stresses that the program is only in the planning stages now, no specifics are available, and he anticipates it will be about a year before the plan is developed.

The Archivist and the NARA Trust Fund Board have authority to solicit and accept gifts on behalf of NARA and its activities. 44 U.S.C. Secs. 2112(g)(1), 2305 (Supp. V 1987). This authority appears broad enough to allow NARA to form an organization, made up of individual and corporate donors, for the purpose of raising funds to expand its activities.

As NARA indicates, the planned organization appears to be similar to the Smithsonian Resident and National Associate Program, Friends of the Kennedy Center, and Friends of the National Zoo. Associate members of the "Friends" and the Smithsonian receive a magazine or newsletter in return for their contribution, as well as other privileges. The Smithsonian Institution has established detailed instructions on financial support from outside the Smithsonian in its OM 722 (Sept. 12, 1986).

Question 4

"Are there any legal or administrative restrictions or rules regulating the ability of the National Archives to provide historical materials for commercial or other nongovernmental uses?"

The Archivist has broad statutory authority to exhibit and make available to the public records, documentary material, motion-picture films, still pictures, and sound recordings pertaining to and illustrative of the historical development of the United States Government and its activities. 44 U.S.C. Secs. 2109, 2114 (Supp. V 1987). The NARA has published extensive regulations governing the public use and availability of NARA administrative, informational, and donated historical records, as well as restrictions on their use, and fees for reproduction of materials. 36 C.F.R. parts 1250, 1252, 1253, 1254, 1256, and 1258.

There are certain restrictions as to use and withdrawal that apply to the Archivist as custodian of records that are transferred to him. Thus, if records of an agency are subject to statutory limitations and restrictions, the Archivist accepts custody of the records with the same restrictions that applied to the head of the agency from which the records were transferred. 44 U.S.C. Sec. 2108 (Supp. V 1987). There are also certain restrictions on access to Presidential records. 44 U.S.C. Sec. 2204 (1982 and Supp. V 1987). There are also the usual Freedom of Information Act exemptions (5 U.S.C. Sec. 552 (1988)), and restrictions as to access to national security information. Executive Order 12356, Apr. 2, 1982.

In addition to the statutory and Executive order restrictions mentioned above, the NARA has placed certain restrictions on the use of records by regulation. These include restrictions on trade secrets and commercial or financial information, information which would invade the privacy of an individual, and information related to law enforcement investigations. C.F.R. Secs. 1256.14, 1256.16, 1256.18 (1988).

We conclude that NARA has the statutory authority to make certain historical records available to the public, subject to the restrictions outlined above. Further, NARA has provided extensive guidance in this area through publication of its regulations in the Code of Federal Regulations.

As to the use of the voices of great Americans, past presidents, etc., in the television messages, NARA states that there was some question as to whether the "voices" were in the public domain, and thus permission for their use may not have been necessary. However, NARA contacted representatives of the various historical figures in order to obtain permission for use of the recordings, and the permission was granted.

As noted previously, the NARA has also undertaken with Philip Morris to change the credit line in the television advertisement advertising the Bill of Rights from "Join us and the National Archives ..." to read "Join us in supporting the National Archives celebration of the 200th anniversary of the Bill of Rights." This language appears to closely follow the suggested credit format outlined in the Smithsonian Institution's instructions on the recognition of financial donations. 841 (Sept. 2, 1987), supra. Further, it comports with NARA's Special Exhibition Policy for Corporate Contributors.