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Highlights

The Panama Canal Commission asked whether the Fly America Act prohibits the Commission from paying the travel expenses of Panamanian nationals who are members of its supervisory board and who fly to board meetings on Air Panama carriers. Members of the board serve without compensation, but are allowed travel or transportation expenses while on official business in the same manner as persons employed intermittently in Government service. The Panamanian board members plan to fly to the next board meeting on Air Panama even though two U.S. air carriers have daily service between Panama and the United States. These plans ostensibly conflict with the Act. The Act provides that all Government-financed foreign air travel must be by U.S. air carriers to the extent that service by such carriers is available. The Republic of Panama requires its governmental officials to use Panamanian air lines while traveling on official duty. Failure to use a Panamanian carrier would subject the Panamanian board members to severe criticism at home and could be detrimental to the overall objectives of the Commission. GAO believed that the considerations in this case were essentially political and that the Commission might reasonably conclude that these political considerations are so sensitive as to make necessary the use of Air Panama carriers by the Panamanian board members. Thus, there may be sufficient basis upon which the Commission could conclude that use of U.S. air carriers by the Panamanian board members would not accomplish the Commission's mission. Under these unusual circumstances, the Comptroller General would not take action to disallow expenditures for travel on Air Panama carriers by the Panamanian board members if the Commission were to determine that such travel is necessary.

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