Application of the Emoluments Clause of the Constitution and the Foreign Gifts and Decorations Act ( 1982 )

Application of the Emoluments Clause of the Constitution and
the Foreign Gifts and Decorations Act
T he E m olum ents C lause o f the Constitution prohibits governm ent em ployees from accepting any sort
o f paym ent from a foreign governm ent, except w ith the consent of C ongress Congress has
consented to the receipt o f minimal g ifts from a foreign state, 5 U .S .C . § 7342, but has not
consented to receipt o f com pensation for services rendered.
T he fact that an em ployee o f the N uclear R egulatory C om m ission would be paid by an A m erican
consulting firm fo r services he rendered in connection w ith construction of a nuclear power plant in
M exico w ould not, under the circum stances presented h ere, avoid the Em olum ents Clause, since
the M exican governm ent would be th e actual source o f the paym ent
February 24, 1982
M EM ORANDUM OPINION FOR THE
ASSISTANT GENERAL COUNSEL,
U NITED STATES NUCLEAR REGULATORY COMMISSION
This responds to your letter asking for an interpretation of the Emoluments
Clause of the Constitution, A rticle I, § 9, cl. 8, and the Foreign Gifts and
Decorations A ct, 5 U .S .C . § 7342 (Supp. Ill 1979).
A ccording to your letter and subsequent conversations with Nuclear Regulato­
ry Com m ission (NRC) staff, an employee of the NRC is seeking authorization to
work on his leave tim e for an Am erican consulting firm. In that capacity he would
review the design of a nuclear power plant being constructed in Mexico. The
plant is being built by the M exican governm ent through its Federal Electrical
Com m ission.
The A m erican consulting firm would be under contract to the Federal Elec­
trical C om m ission; that firm would com pensate the NRC employee for his
expenses and services. The A m erican firm has no other nuclear contracts and
would be relying solely on the experience of this employee in securing the
contract. The em ployee’s work at NRC involves the assessment of operating
reactors. This is the sam e job he will perform in Mexico. The consulting firm is a
small firm that has three other engineers in unrelated fields. It has not been
created for the purpose of securing this particular contract or. insulating the
em ployee from the Mexican governm ent. The employee would be paid from the
funds received from the Mexican governm ent in connection with the proposed
contract, although not all of th e proceeds from the contract will go to him.
156
The employee expects to spend from seven to ten work days on the contract.
He has worked previously on this project in an official capacity when he was
made available for a year to work on it under the auspices of the State Department
and the International Atomic Energy Agency. As a result, when the em ployee,
together with others from the NRC, circulated a proposal to act as consultants,
the Mexican government initiated discussions with him personally. Subsequent
negotiations, we understand, have been conducted through the consulting firm.
At the outset we note that your agency has concluded that the proposed activity
is permissible under the NRC conflict of interest regulations governing outside
employment by NRC employees. 10 C.F.R. § 0 .7 3 5-50 (1981). We have not
been asked for our views concerning these regulations and therefore take no
position as to them.
The Foreign Gifts and Decorations Act, 5 U .S.C . § 7342 (Supp. Ill 1979),
generally prohibits employees from requesting or otherwise encouraging the
tender of a gift or decoration, or from accepting or retaining a gift of more than
minimal value. That section defines “ g ift” as “ a tangible or intangible present
(other than a decoration) tendered by, or received from, a foreign goverment.” It
seems clear that this Act only addresses itself to gratuities, rather than com pensa­
tion for services actually performed, as would be the case here. We therefore
conclude that 5 U .S.C . § 7342 is not applicable to the conduct contemplated.
The Emoluments Clause presents more difficult problems. Article 1, § 9, cl. 8
provides:
No Title of Nobility shall be granted by the United States: And
no Person holding any Office of Profit or Trust under them, shall,
without the Consent of the Congress, accept of any present,
Emolument, Office, or Title, of any kind whatever, from any
King, Prince, or foreign State.
A threshold question is presented as to whether the NRC employee is a “ Person
holding any Office of Profit or Trust” under the United States. We understand that
he is not employed in a supervisory capacity. In past opinions, this Office seems
to have assumed without discussion that the only persons covered by the Emolu­
ments Clause were those holding an “ Office” in the sense used in the Appoint­
ments Clause, Article II, § 2, cl. 2. We so stated in a letter from Deputy Assistant
Attorney General Ulman to the General Counsel of your agency on July 26,
1976. It is not clear, however, that the words “ any Office of Profit or T rust,” as
used in the Emoluments Clause, should be limited to persons considered “ Of­
ficers” under the Appointments Clause. Both the language and the purpose of the
two provisions are significantly different.
The latter finds its roots in separation of powers principles. The Supreme Court
has said that “ any appointee exercising significant authority pursuant to the laws
of the United States” is an officer under the Appointments Clause and must be
appointed in the manner prescribed by that Article. Employees are “ lesser
functionaries” subordinate to officers. Buckley v. Valeo, 424 U .S. 1, 126 & n.
162 (1976). See generally 424 U .S. at 124—137. The Emoluments Clause, on the
157
other hand, is designed “ to exclude corruption and foreign influence.” 3 M.
Farrand, The Records c f the Federal Convention c fl7 8 7 , 327 (Gov. Randolph at
the V irginia C onvention) (rev. ed. 1937, 1966 reprint). Even though the Framers
may have had the exam ple of high officials such as “ foreign M inisters” in mind
when discussing the clause, 2 id. 389, its policy would appear to be just as
im portant as applied to subordinates. The problem o f divided loyalties can arise
at any level. This may be particularly true in a field where, as here, secrecy is
pervasive.
It is presum ably for this reason that Congress, in enacting the Foreign Gifts
and D ecorations A ct, assumed without discussion that under the Emoluments
Clause its consent was necessary for any employee to accept a gift from a foreign
governm ent. 5 U .S .C . § 7342(a). E .g ., H .R . Rep. No. 2052, 89th C ong., 2d
Sess. (1966). Although the view of Congress is not, by itself, conclusive, we are
persuaded that the interpretation suggestion by the Foreign Gifts and Decorations
Act is appropriate here. It is not necessary therefore for us to decide whether the
NRC em ployee in this case m ust be considered an officer in the Appointments
Clause sense.
The next issue presented under the Em olum ents Clause is whether the payment
in this case is “ from any King, Prince, or foreign State.” As noted, Congress has
consented only to the receipt of m inim al gifts from any foreign state as provided
by 5 U .S .C . § 7342. Therefore, any other em olum ent stands forbidden unless
the conclusion can be reached that the paym ent is not “ from ” a foreign govern­
m ent at all. We m ust thus decide whether payment through the consulting firm, in
effect, shields the employee from payment by the Mexican government.
The question of w hen a foreign government, as opposed to an intermediary, is
the actual source of a gift or paym ent has, as far as we know, only been discussed
in w riting once before. In 1980, this Office noted that no relevant opinion or
com m entary addressed this issue. We considered a proposed contract under
w hich a large university provided expert consultants to a foreign government.
The foreign governm ent had no control over the selection of the experts and their
paym ent and in the years in which the consulting relationship has been in effect,
had never sought to influence the selection of experts. These matters were within
the discretion of the university. This Office concluded therefore that the payment
o f an individual consultant could not be said to be “ from ” a foreign government.
In the present case, the retention of the NRC employee by the consulting firm
appears to be the principal reason for selection of the consulting firm by the
M exican governm ent. He is the firm ’s sole source of expertise and was, at least in
part, selected because of prior experience gained while working on the same
project in an official capacity. A s we understand the situation, it seems clear that
ultim ate control, including selection of personnel, remains with the Mexican
governm ent. It is difficult to state what the outer limits of our earlier opinion may
be. Each situation m ust, of course, be judged on its facts. Under the circum ­
stances presented here, however, we cannot conclude that the interposition of the
158
American corporation relieves the NRC employee of the obligations imposed by
the Emoluments Clause.
Ro bert B . S hanks
Deputy Assistant Attorney General
Office cf Legal Counsel