Applicability of Federal Advisory Committee Act and Federal Conflict of Interest Laws to United States-Japan Consultative Group on Economic Relations

Opinion

August 10, 1979

79-59 MEMORANDUM OPINION FOR THE COUNSEL TO THE PRESIDENT

Federal Advisory Committee Act (5 U.S.C. App. I)—United States-Japan Consultative Group on Economic Relations

This responds to your request that we summarize the advice we have provided you by telephone concerning two questions that involve the U .S.-Japan Consultative G roup on Economic Relations (the G roup). The questions are the following: (1) is the G roup covered by the Federal A d­ visory Committee Act; and (2) would an individual appointed to serve as the chief of staff for the American members o f the G roup be subject to the Federal conflict o f interest statutes? Given the facts as we understand them, the answer to the first question is no, and the answer to the second question is yes.

The United States-Japan Consultative G roup on Economic Relations has been established by agreement between the President and the Prime Minister o f Japan. It is to be composed o f eight members, with four serv­ ing from each country; to date, only the lead representatives o f each na­ tion have been appointed. The G roup is to meet at regular intervals for a total o f a few days per year. Its mission, in the broadest terms, is to pro­ vide a forum for discussion o f m ajor economic issues—involving trade, finance, commerce, and related matters—o f significance to both nations and, ultimately, to bilateral relations between them.

There are to be two chiefs o f staff, one for the G roup’s Japanese members and one for the American members. The American chief o f staff is to be formally appointed either by the President or by the Secretary of State. The actual work o f the staff director would include the identifica­ tion, analysis, and m onitoring o f economic issues crucial to the Govern­ ment’s economic policy vis-a-vis Japan.

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The Federal Advisory Committee Act

It is our opinion that as a m atter o f statutory construction Congress did not intend the Federal Advisory Committee Act (FACA), 5 U.S.C. App. (Supp. Ill, 1979), to apply to such a body created jointly by the United States and another nation. The FA C A ’s definition o f an advisory commit­ tee, in § 3(2), does not specifically mention international bodies. A broad and literal reading o f the definition might encompass an international commission, assuming that it has the function o f advising the President or a Federal agency. But, as we concluded in 1976 in the context of interna­ tional joint commissions in which the United States participates, such a reading would be inappropriate.

First, it should not be assumed, absent clear evidence to the contrary, that Congress intended the FACA to apply, in this country or abroad, to groups created jointly by, and serving jointly, the United States and another sovereign state. For to conclude otherwise would in effect impose certain duties on the members o f the group who are citizens o f a foreign nation, and would empower U.S. officials to take control o f aspects o f the group’s operation as required by the FACA. See, e.g., FACA, § 10(d)-(f). Such a consequence might prove offensive to the foreign nation and its members, and would violate the accepted principle o f statutory construc­ tion that, absent contrary indication, Federal legislation will not extend beyond the boundaries o f the United States in order to avoid offending the “ dignity or right o f sovereignty” o f other nations. Vermilya-Brown Co. v. Connell, 335 U.S. 377, 381 (1948); Steele v. Bulova Watch C o., 344 U.S. 280, 285 (1952). In addition, substantial issues o f constitutionality con­ cerning the extent o f the President’s power to conduct foreign relations should be avoided in the construction o f statutes. See, e.g., United States v. Vuitch, 402 U.S. 62, 70 (1971). For these reasons, we conclude that the FACA should not be viewed as applying to the U .S.-Japan Consultative G roup.'

Conflict o f Interest Statutes

The second question you have raised is whether the staff director for the American members o f the G roup should be considered an “ officer” or “ employee” o f the United States, and thereby subject to the conflict o f in­ terest restrictions imposed on such persons. As you know, there are basic­ ally two types o f Government employees for purposes o f the conflict o f in­ terest statutes: regular employees, and “ special Government employees.” If one fits within either category, he or she must meet certain standards set down by the conflict o f interest statutes; however, the standards applicable

'It should be noted that there is a second ground upon which it might be concluded that the FACA is inapplicable. The Act applies only to groups whose functions are “ advisory” in nature, and this group—serving as an instrument o f U .S. foreign policy—might be regarded as “ operational” rather than advisory. Because we think the result clear for the alternative reason stated above, we have not studied in detail this second ground.

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to special Government employees, who are appointed to perform services (with or without compensation) for not more than 130 o f the succeeding 365 days, are somewhat less stringent. For both categories, the threshold test is whether a person is an “ officer” or “ employee” o f the United States.

In light o f the facts as explained to us, there seems to be little doubt that the staff director would be an officer or employee o f the Government for present purposes. First, such an individual would be appointed to his posi­ tion. Thus, there will be a clear formal relationship between the individual and the Government. In addition, the staff director is to perform func­ tions that would appear plainly to be governmental in character. He will, for instance, assist in identifying issues o f sensitivity to the U.S. Govern­ ment in its economic relations with Japan. He will call upon officials in the Government with expertise in this area—such as in the Department of State and Commerce—and may ask them for background papers on m at­ ters o f importance to the Nation. He will help assemble information needed in formulating advice to the President. He will also m onitor Japanese responses to the G roup’s activities. Furtherm ore, he is to be directly supervised by the lead American representative among the G roup’s members, who is himself a full-time, regular Government employee. These facts, in their totality, lead us to conclude, on the basis of the tests we have applied in other circumstances, that the staff director would be at least a special Government employee, if not a regular Govern­ ment employee.2 The designation o f an officer or employee o f the United States as a special Government employee, as that term is defined in 18 U.S.C. § 202, depends on a good faith estimate by the employing agency, made at the time o f appointm ent, that the individual concerned will not actually per­ form services on all or part o f more than 130 o f the succeeding 365 days. The designation o f a special Government employee remains in effect for the entire 365 days, even if it should turn out that the individual in fact serves for more than 130 days. See, Federal Personnel Manual, Chapter 735, Appendix C, at 2.

L arry A . H ammond

Acting Assistant A ttorney General Office o f Legal Counsel

‘See also B. M anning, Federal Conflict o f Interest Law 27, 34 (1964).