Authority of the Former Inspector General for the Federal Housing Finance Board to Act as Inspector General for the Federal Housing Finance Agency

Authority of the Former Inspector General for the
Federal Housing Finance Board to Act as Inspector
General for the Federal Housing Finance Agency
The Federal Housing Finance Board Inspector General did not by statute automatically
acquire authority to act as Inspector General for the Federal Housing Finance Agency
at the time of the enactment of the Federal Housing Finance Regulatory Reform Act of
2008.
The former Federal Housing Finance Board Inspector General cannot appoint employees
to the Office of Inspector General for the Federal Housing Finance Agency.
September 8, 2009
MEMORANDUM OPINION FOR THE GENERAL COUNSEL
FEDERAL HOUSING FINANCE AGENCY
The Federal Housing Finance Regulatory Reform Act of 2008 (“Re-
form Act”), which Congress passed as division A of the Housing and
Economic Recovery Act of 2008, Pub. L. No. 110-289, 122 Stat. 2654,
2659, abolished the Federal Housing Finance Board (“FHFB”), an inde-
pendent agency that oversaw the Federal Home Loan Banks, see 12
U.S.C. § 1422a (2006). The Reform Act established in place of the FHFB
a new entity called the Federal Housing Finance Agency (“FHFA”). The
FHFA now regulates and supervises “government sponsored enterprises”
(“GSEs”) supporting mortgage markets, and this responsibility extends
not only to the Federal Home Loan Banks, but also to the Federal Nation-
al Mortgage Association (commonly known as “Fannie Mae”) and the
Federal Home Loan Mortgage Corporation (commonly known as “Freddie
Mac”). See Reform Act §§ 1002, 1101, 1102, 1311.
You have asked for our opinion on three questions about the Office of
Inspector General of the FHFA: (1) whether by statute the former Inspec-
tor General for the FHFB at the time of the Reform Act’s enactment
automatically can act as Inspector General for the FHFA pending the
appointment of an Inspector General for the FHFA; (2) whether the for-
mer Inspector General for the FHFB has authority to appoint employees to
the Office of Inspector General for the FHFA; and (3) whether employees
of the Office of Inspector General for the FHFA are paid at FHFA pay
rates or general federal employee pay rates.
318
Authority of Former IG for FHFB to Act as IG for FHFA
For the reasons given below, we conclude that: (1) the FHFB Inspector
General at the time of the Reform Act’s enactment did not by statute
automatically acquire authority to act as Inspector General for the FHFA;
and, accordingly, (2) the former FHFB Inspector General cannot appoint
employees to the Office of Inspector General for the FHFA. In light of
these conclusions, we express no view as to what pay rates apply to em-
ployees of the FHFA Office of Inspector General.
I.
A.
Congress passed the Reform Act to ensure that the GSEs supporting
mortgage markets—specifically, Fannie Mae, Freddie Mac, and the
Federal Home Loan Banks—“operate in a safe and sound manner and
fulfill the missions assigned under their charters.” H.R. Rep. No. 110 -142,
at 87 (2007). Fannie Mae and Freddie Mac are congressionally chartered
entities that promote liquidity in residential mortgage markets by purchas-
ing residential mortgages from lenders. See 12 U.S.C.A. §§ 1451, 1452,
1454, 1455, 1717, 1718, 1719 (West 2001 & Supp. 2009); H.R. Rep.
No. 110-142, at 95. These GSEs, though established by statute and given
special privileges not available to private firms, may issue securities to
investors. See 12 U.S.C.A. §§ 1453, 1454, 1455, 1716, 1717, 1718, 1719
(West 2001 & Supp. 2009); H.R. Rep. No. 110-142, at 95. They generally
finance mortgage purchases either by issuing debt securities or by packag-
ing mortgages into so-called “mortgage-backed securities.” See H.R. Rep.
No. 110-142, at 95. The Federal Home Loan Banks are regional entities
cooperatively owned by member financial institutions. See 12 U.S.C.A.
§§ 1423, 1424, 1426 (West 2001 & Supp. 2009); H.R. Rep. No. 110 -142,
at 95. Like Fannie Mae and Freddie Mac, they were established by statute
to provide liquidity to residential mortgage lenders; they typically pursue
this objective by providing collateralized financing to member institu-
tions. See 12 U.S.C.A. §§ 1429, 1430, 1431 (West 2001 & Supp. 2009);
H.R. Rep. No. 110 -142, at 95.
Before the Reform Act, the Office of Federal Housing Enterprise Over-
sight (“OFHEO”), an office within the Department of Housing and Urban
Development (“HUD”) headed by a presidentially-appointed and Senate-
confirmed Director, oversaw the “safety and soundness” of Fannie Mae
319
33 Op. O.L.C. 318 (2009)
and Freddie Mac, while the HUD Secretary supervised these GSEs in
other respects, including compliance with certain affordable-housing
mandates. See 12 U.S.C. §§ 4502(6), 4511, 4512, 4513, 4541, 4563
(2006); H.R. Rep. No. 110 -142, at 95. The FHFB, an independent agency
within the executive branch, oversaw the Federal Home Loan Banks.
See 12 U.S.C. §§ 1422, 1422a, 1422b (2006).
In the Reform Act, Congress abolished OFHEO and the FHFB and
assigned regulatory and supervisory responsibility for Fannie Mae (and
any Fannie Mae affiliates), Freddie Mac (and any Freddie Mac affiliates),
and the Federal Home Loan Banks to a new independent agency, the
FHFA. See Reform Act §§ 1101, 1301, 1311; 12 U.S.C.A. § 4511 (West
Supp. 2009). The FHFA is headed by a “Director,” who receives advice
“with respect to overall strategies and policies” from a “Federal Housing
Finance Oversight Board” composed of the Director, the Secretary of
the Treasury, the Secretary of HUD, and the Chairman of the Securities
and Exchange Commission. Reform Act § 1101; 12 U.S.C.A. §§ 4512,
4513, 4513a (West Supp. 2009). The FHFA Director has substantial
regulatory powers over the covered GSEs, including the authority to place
regulated GSEs in receivership or conservatorship in certain circum-
stances. See, e.g., Reform Act §§ 1108, 1113, 1128, 1144, 1145, 1205;
12 U.S.C.A. §§ 1430c, 4513b, 4518, 4561, 4616, 4617 (West Supp.
2009). The Director also holds authority, subject to certain transition
provisions discussed below regarding FHFB, OFHEO, and HUD employ-
ees, to “appoint and fix the compensation of such officers and employees
of the Agency as the Director considers necessary to carry out the func-
tions of the Director and the Agency.” 12 U.S.C.A. § 4515(a) (West Supp.
2009). These officers and employees “may be paid without regard to the
provisions of chapter 51 and subchapter III of chapter 53 of Title 5 relat-
ing to classification and General Schedule pay rates.” Id. Although the
FHFA Director “shall be appointed by the President, by and with the
advice and consent of the Senate,” the Reform Act provides that in the
event of a vacancy in this position on the Act’s effective date, “the person
serving as the Director of the Office of Federal Housing Enterprise Over-
sight of the Department of Housing and Urban Development on that
effective date shall act for all purposes as, and with the full powers of,
the Director” until an initial Director is appointed. Reform Act § 1101;
12 U.S.C.A. § 4512(b)(1), (5).
320
Authority of Former IG for FHFB to Act as IG for FHFA
B.
The Reform Act also provides for the appointment of an Inspector Gen-
eral for the FHFA. Specifically, the statute amends the Inspector General
Act of 1978 (“IG Act”), 5 U.S.C.A. app. (West 2007 & Supp. 2009), to
include the FHFA among the federal “establishments” in which “an office
of Inspector General” “is established.” Reform Act § 1105(c); IG Act
§§ 2, 12(2). The Reform Act also specifies that “[t]here shall be within
the [FHFA] an Inspector General, who shall be appointed in accordance
with section 3(a) of the Inspector General Act of 1978,” Reform Act
§ 1105(a)(5), which provides that the Inspector General “shall be appoint-
ed by the President, by and with the advice and consent of the Senate,”
IG Act § 3(a). Under the Inspector General Act, the Inspectors General
for “establishments” like the FHFA have broad authority to conduct
investigations with respect to programs and operations of the establish-
ment. Id. §§ 4, 5. To carry out their functions, Inspectors General may
select, appoint, and employ such officers and employees as may be
necessary for carrying out the functions, powers, and duties of the
Office subject to the provisions of Title 5, United States Code, gov-
erning appointments in the competitive service, and the provisions of
chapter 51 and subchapter III of chapter 53 of such title relating to
classification and General Schedule pay rates.
Id. § 6(a)(7). Although each such Inspector General “shall report to and
be under the general supervision of the head of the establishment” (here
the FHFA Director) or, if this power is delegated, “the officer next in rank
below such head,” id. § 3(a), only the President may remove the Inspector
General, id. § 3(b), and “[n]either the head of the establishment nor the
officer next in rank below such head shall prevent or prohibit the Inspec-
tor General from initiating, carrying out, or completing any audit or
investigation, or from issuing any subpena during the course of any audit
or investigation,” id. § 3(a).*
* The Inspector General Act also includes special provisions, not relevant here, gov-
erning the powers and duties of Inspectors General at particular agencies. See, e.g., IG
Act §§ 8–8K.
321
33 Op. O.L.C. 318 (2009)
C.
Despite “abolish[ing]” OFHEO and the FHFB effective one year after
the statute’s enactment, the Reform Act guarantees that each employee of
these agencies “shall be transferred to the [FHFA] for employment” in “a
position with the same status, tenure, grade, and pay as that held on the
day immediately preceding the transfer.” Reform Act §§ 1301, 1303,
1311, 1313. Permanent employees transferred under this provision “may
not be involuntarily separated or reduced in grade or compensation during
the 12-month period beginning on the date of transfer, except for cause.”
Id. §§ 1303(b)(2), 1313(b)(2). Similarly, a temporary employee may be
separated only “in accordance with the terms of the appointment of the
employee.” Id.
The Reform Act likewise provides that certain HUD employees—those
“whose position responsibilities primarily involve the establishment and
enforcement of the housing goals under subpart B of part 2 of subtitle A
of the Federal Housing Enterprises Financial Safety and Soundness Act
of 1992 (12 U.S.C. 4561 et seq.)”—“shall be transferred to the [FHFA]
for employment.” Id. § 1133(a). The Act gives these employees equiva-
lent protections against involuntary separation or reduction in grade or
compensation as are applied to transferred OFHEO and FHFB personnel.
Id. § 1133.
II.
You have taken the view that because the position of FHFA Inspector
General is a new office requiring presidential nomination and Senate
confirmation under the Reform Act, this office must remain vacant until
an Inspector General for the FHFA is properly appointed. Under your
view, because the President has not designated the former FHFB Inspector
General to act as Inspector General for the FHFA, the former Inspector
General may not exercise the powers and duties of the FHFA Inspector
General. The former FHFB Inspector General argues, in contrast, that
he automatically assumed these powers and duties by operation of the
Reform Act. We do not understand the former FHFB Inspector General
to assert that the Reform Act made him the Inspector General for the
FHFA. But he does assert that, by virtue of the Reform Act’s transition
provisions, he may exercise the powers of the FHFA Inspector General
322
Authority of Former IG for FHFB to Act as IG for FHFA
“in trust until the President of the United States appoints a new Inspector
General.” Memorandum for Edward DeMarco, Deputy Director, FHFA,
from Edward Kelley, Re: Inspector General Authority at 2 (July 7, 2009).
In defense of this view, he contends that “the Congress clearly intended
the continuation of the Office of Inspector General within the [FHFA]”
and that “[t]he senior official of the FHFA Office of Inspector General
has the duty and responsibility to conduct the affairs of the Office of
Inspector General as envisioned by Congress.” Id. at 3. The former FHFB
Inspector General thus asserts that, in the capacity of acting head of
the FHFA Office of Inspector General, he may hire personnel for that
office and that he may employ such personnel at FHFA-specific pay rates,
without regard to the General Schedule applicable to most federal em-
ployees.
In our judgment, the applicable statutes do not enable the former FHFB
Inspector General to exercise the authority he claims. By its terms, the
Reform Act nowhere expressly empowers the former FHFB Inspector
General—or, for that matter, any other specific official—to perform the
functions and duties of the FHFA Inspector General before an appoint-
ment of an FHFA Inspector General by the President. The Reform Act,
rather, incorporates the relevant provisions of the Inspector General Act
of 1978 and so provides for the appointment of the FHFA Inspector
General by the President with the advice and consent of the Senate. See
Reform Act § 1105(a)(5); IG Act § 3(a). By contrast, the Inspector Gen-
eral of the FHFB was appointed by the agency head. See IG Act § 8G.
A general provision in the Reform Act does guarantee that each former
FHFB employee “shall be transferred to the [FHFA] for employment”
in “a position with the same status, tenure, grade, and pay as that held on
the day immediately preceding the transfer.” Reform Act §§ 1313(a),
(b)(1). We do not believe, however, that this section supports the former
FHFB Inspector General’s argument. As this Office has indicated in a
prior opinion, transitional protections like these provisions of the Reform
Act may be suitable where, as here, an agency is empowered to hire
employees without regard to usual civil service protections. See Appli-
cability of the Civil Service Provisions of Title 5 of the United States
Code to the United States Enrichment Corporation, 17 Op. O.L.C. 27, 29
(1993). We thus concluded in our prior opinion that a provision guaran-
teeing the same “compensation, benefits, and other terms and conditions
of employment in effect immediately prior to” an employee’s transfer to
323
33 Op. O.L.C. 318 (2009)
the new agency “reflect[ed] Congress’s assumption that [the agency in
question] would be free to set the terms and conditions of employment for
its employees [without regard to civil service laws], because if [the agen-
cy] were bound by civil service statutes Congress would not have needed
to guarantee transferred employees their existing employment terms and
conditions.” Id. By the same token, we understand the Reform Act’s
guarantee of identical “status, tenure, grade, and pay” to ensure that,
despite the FHFA Director’s authority to “appoint and fix the compensa-
tion of” FHFA officers and employees without regard to generally appli-
cable federal pay rates, see 12 U.S.C.A. § 4515(a), employees transferred
from the FHFB to the FHFA arrive with the same overall terms and condi-
tions of employment that they enjoyed previously. The companion provi-
sion barring involuntary separation or reduction in “grade or compensa-
tion” without cause then ensures that—again despite the FHFA Director’s
appointment authority and general exemption from usual federal pay
scales—the Director may not reassign such employees or reclassify their
positions in a manner that results in a reduction in grade or pay during
their first year at the FHFA. See Reform Act § 1313(b)(2). Consistent
with this interpretation, the House Financial Services Committee’s report
on an earlier version of this legislation referred to comparable language
as ensuring that former FHFB employees “will be guaranteed a position
with the [FHFA] and will retain their benefits for one year following the
transfer.” H.R. Rep. No. 110-142, at 147.
Accordingly, even assuming the terms “status” and “tenure” might oth-
erwise be given a broader construction, we do not understand these terms
in this context to guarantee any specific title, duties, or responsibilities
to transferred employees. See, e.g., Dolan v. U.S. Postal Serv., 546 U.S.
481, 486 (2006) (“Interpretation of a word or phrase depends upon read-
ing the whole statutory text, considering the purpose and context of the
statute, and consulting any precedents or authorities that inform the analy-
sis.”). To the contrary, as you have suggested (and as the FHFB Inspector
General does not dispute), we understand the terms “status, tenure, grade,
and pay” to refer to the transferred employee’s prior competitive or ex-
cepted-service status, cf. 5 C.F.R. § 212.301 (2009) (defining “competi-
tive status”), permanent or temporary tenure, pay grade, and compensa-
tion. This interpretation gives the four conjoined terms—“status, tenure,
grade, and pay”—a consistent overall meaning: all refer to general terms
and conditions of employment relating to compensation, seniority, and
324
Authority of Former IG for FHFB to Act as IG for FHFA
job security. See, e.g., Dole v. Steelworkers, 494 U.S. 26, 36 (1990)
(“words grouped in a list should be given related meaning” (internal
quotation marks omitted)). In addition, while construing “status” and
“tenure” to encompass job duties and responsibilities might severely
constrain the FHFA Director’s authority over the organization of the
Agency, our interpretation preserves the Director’s broad authority, ex-
pressly provided by Congress, to determine functions within the FHFA
by “delegat[ing] to officers and employees of the Agency any of the
functions, powers, or duties of the Director.” Reform Act § 1102(a);
12 U.S.C.A. § 4513(b); see also Reform Act § 1101; 12 U.S.C.A.
§ 4512(c), (d), (e) (establishing Deputy FHFA Directors for “enterprise
regulation,” “federal home loan bank regulation,” and “housing mission
and goals,” but providing that, within these broad subject-matter domains,
the Deputy Directors “shall have such functions, powers, and duties . . .
as the Director shall prescribe”). Finally, our interpretation harmonizes
the meaning of the FHFB transition provision with a related statute,
5 U.S.C. § 3503, referenced in the transition provision itself. Reform Act
section 1313(a) states that a transfer of employees under this provision
“shall be deemed a transfer of function for purposes of” this statute, which
provides that “[w]hen a function is transferred from one agency to anoth-
er, each competing employee in the function shall be transferred to the
receiving agency for employment in a position for which he is qualified
before the receiving agency may make an appointment from another
source to that position,” 5 U.S.C. § 3503(a) (2006). In accordance with
our construction of section 1313 here, the language of section 3503 has
been construed to require only that “an employee is entitled to ‘a job’ for
which he is qualified,” not “the position most similar to [the employee’s]
former job.” Ross v. United States, 566 F. Supp. 1024, 1027–28 & n.5
(D.D.C. 1982).
In contrast with the general transition provisions of section 1313, which
do not expressly purport to assign duties, the Reform Act contains one
provision about transition that does expressly assign duties. Section 1101
of the Reform Act provides that the former OFHEO Director may act as
FHFA Director in the event of an initial vacancy in that post. See Reform
Act § 1101; 12 U.S.C.A. § 4512(b)(5). That discrete transition provision
would have been superfluous if section 1133(b)(1) by itself constituted a
general assignment of identical duties to all former FHFB employees and
thus to the FHFB Inspector General. That provision also shows that Con-
325
33 Op. O.L.C. 318 (2009)
gress recognized the possibility of initial vacancies in positions at the
FHFA, yet made no provision for an interim acting Inspector General.
“‘[W]here Congress includes particular language in one section of a
statute but omits it in another section of the same Act, it is generally
presumed that Congress acts intentionally and purposely in the disparate
inclusion or exclusion.’” Russello v. United States, 464 U.S. 16, 23 (1983)
(quoting United States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir.
1972)); see also, e.g., General Motors Corp. v. United States, 496 U.S.
530, 538 (1990) (reading statute not to impose a specific deadline on a
certain regulatory action because “the statutory language does not ex-
pressly impose a . . . deadline and Congress expressly included other
deadlines in the statute”); TRW Inc. v. Andrews, 534 U.S. 19, 28 (2001)
(holding that “[t]he most natural reading” of a statute is “that Congress
implicitly excluded a general . . . rule by explicitly including a more
limited one”).
The absence of an express provision providing for such an assignment
of duties is also significant in light of the Federal Vacancies Reform Act
of 1998 (“Vacancies Reform Act”), Pub. L. No. 105-277, div. C, § 151,
112 Stat. 2681, 2681- 611 (as amended). The Vacancies Reform Act
provides that, absent a recess appointment or an “express[]” statutory
provision to the contrary, it is “the exclusive means for temporarily au-
thorizing an acting official to perform the functions and duties of any
office of an Executive agency . . . for which appointment is required to be
made by the President, by and with the advice and consent of the Senate.”
5 U.S.C. § 3347(a) (2006). Yet the Vacancies Reform Act provides only
that “[i]f an officer of an Executive agency . . . whose appointment to
office is required to be made by the President, by and with the advice and
consent of the Senate, dies, resigns, or is otherwise unable to perform the
functions and duties of the office,” either the “first assistant to the office”
or another officer designated by “the President (and only the President)”
may, within certain time limits, “perform the functions and duties of the
office temporarily in an acting capacity.” Id. §§ 3345, 3346. We have
doubts that the Vacancies Reform Act authorizes interim assignments to
fill initial vacancies. If, as in this case, no one has previously been ap-
pointed to an office, there is no officer who has “die[d]” or “resign[ed]”
or “is otherwise unable to perform the functions and duties of office,” and
there thus is no vacancy that the Vacancies Reform Act allows to be
filled. Cf. Olympic Fed. Sav. & Loan Ass’n v. Office of Thrift Supervision,
326
Authority of Former IG for FHFB to Act as IG for FHFA
732 F. Supp. 1183, 1195 (D.D.C.) (construing term “required by law to be
appointed” in prior vacancies statute to permit temporary filling of vacan-
cies only where the officer vacating the position was properly appointed
and had thus “take[n] office”), appeal dismissed as moot, 903 F.2d 837(D.C. Cir. 1990). But even assuming that the Vacancies Reform Act
would permit someone to be named acting FHFA Inspector General in this
case, the former FHFB Inspector General’s own submission shows that he
is neither a properly appointed first assistant nor an officer designated by
the President to act as FHFA Inspector General.
To be sure, the Inspector General Act, as amended by the Reform Act,
provides that “there is established” within the FHFA “an office of Inspec-
tor General.” IG Act § 2. But even assuming that this entity has inherent
functions that its personnel may perform even without a properly appoint-
ed or designated Inspector General or acting Inspector General at the head
of the office, neither the Reform Act nor the Inspector General Act sup-
ports the former FHFB Inspector General’s view that the FHFA Office of
Inspector General was automatically populated with former personnel of
the FHFB Office of Inspector General by operation of the Reform Act’s
transition provisions. To the contrary, in the Reform Act, Congress “abol-
ished” the FHFB, including its Office of Inspector General, and estab-
lished a new agency, the FHFA, with its own Inspector General. See
Reform Act §§ 1101, 1301, 1311. And while Congress provided for the
transfer of FHFB personnel to the FHFA, the statute, as noted, does not
guarantee these employees any particular substantive responsibilities.
See id. § 1313; cf. Ross, 566 F. Supp. at 1028. Accordingly, although the
FHFA Office of Inspector General might well be the natural place for
transferred former employees of the FHFB Inspector General, the statute
does not provide for the automatic transformation of the abolished FHFB
Office of Inspector General into a new FHFA Office of Inspector General.
Finally, our conclusion that the Reform Act should not be construed
to have authorized the former FHFB Inspector General to act as FHFA
Inspector General draws support from the fact that the offices of FHFB
Inspector General and FHFA Inspector General do not have essentially
equivalent jurisdiction. The Supreme Court has held that Congress may
assign new duties to an officer without creating a new office, provided the
new duties are “germane to the office[] already held by” the incumbent,
Shoemaker v. United States, 147 U.S. 282, 301 (1893); see also The
Constitutional Separation of Powers Between the President and Congress,
327
33 Op. O.L.C. 318 (2009)
20 Op. O.L.C. 124, 157–59 (1996), but this Office has indicated that the
Constitution may require a new appointment when the addition of new
duties—even duties “germane” to an existing office—is “considerable.”
Status of the Director of Central Intelligence Under the National Security
Intelligence Reform Act of 2004, 29 Op. O.L.C. 28, 36 n.2 (2005); see
also Constitutional Separation of Powers, 20 Op. O.L.C. at 158 (indicat-
ing that whether Congress has created a new office depends on “the
reasonableness of assigning the new duties ‘in terms of efficiency and
institutional continuity’” and on “whether ‘it could be said that [the offic-
ers’] functions . . . [with the additional duties] were within the contem-
plation of those who were in the first place responsible for their appoint-
ment and confirmation’” (quoting Legislation Authorizing the Transfer of
Federal Judges from One District to Another, 4B Op. O.L.C. 538, 541
(1980))); Olympic Fed. Sav. & Loan Ass’n, 732 F. Supp. at 1193. Without
deciding the constitutional issue here, we note that the FHFA Inspector
General holds materially broader statutory responsibility than did the
FHFB Inspector General. While the FHFB oversaw only the Federal
Home Loan Banks, the FHFA also regulates Fannie Mae and Freddie
Mac—two major financial institutions, see H.R. Rep. No. 110-142, at 96.
As the Reform Act itself indicates, oversight of Fannie Mae and Freddie
Mac may raise different regulatory concerns from oversight of the Federal
Home Loan Banks; the Reform Act thus requires the FHFA Director to
“consider the differences between the Federal Home Loan Banks and
[these] enterprises” before issuing any regulations or general guidance
affecting the Federal Home Loan Banks. See Reform Act § 1201; 12
U.S.C.A. § 4513(f). Furthermore, the FHFA appears to hold broader
powers than OFHEO or the FHFB expressly had, including the power to
place GSEs in receivership in certain circumstances. See Reform Act
§ 1145; 12 U.S.C.A. § 4617; H.R. Rep. No. 110-142, at 90.
Consequently, the FHFA Inspector General conducts investigations
with respect to an agency with substantially broader functions, powers,
and responsibilities than did the FHFB Inspector General. Perhaps not
surprisingly, while the statute establishing the FHFB provided that its
Inspector General was to be appointed by the agency head, see IG Act
§ 8G, the Reform Act provides for appointment of FHFA’s Inspector
General by the President with the advice and consent of the Senate. That
distinction between the offices is thus also in keeping with our conclusion
that the Reform Act cannot be read to have automatically, by implication,
328
Authority of Former IG for FHFB to Act as IG for FHFA
given the former FHFB Inspector General authority to act as Inspector
General for the FHFA.
III.
In sum, neither the Reform Act nor the Vacancies Reform Act author-
izes the former FHFB Inspector General to assume the functions and
duties of the FHFA Inspector General pending appointment of a new
nominee. The answer to your second question—whether the former FHFB
Inspector General has authority to appoint staff to the FHFA Office of
Inspector General—follows logically from this answer. The Inspector
General Act authorizes only the Inspector General to “select, appoint, and
employ such officers and employees as may be necessary for carrying out
the functions, powers, and duties of the Office.” IG Act § 6(a)(7). Thus,
because the former FHFB Inspector General lacks authority to act as
FHFA Inspector General, he cannot hire staff for the FHFA Inspector
General’s office. And because we conclude that the former FHFB Inspec-
tor General cannot hire staff in the FHFA Office of Inspector General, we
need not determine at this time what pay rates would apply to any em-
ployees who are hired in the future. We therefore do not address your
third question.
Insofar as the absence of an Inspector General creates practical difficul-
ties for the FHFA, we note that the Reform Act authorizes the FHFA
Director to “delegate to officers and employees of the [FHFA] any of
the functions, powers, or duties of the Director, as the Director considers
appropriate.” Reform Act § 1102(a); 12 U.S.C.A. § 4513(b). As you
have suggested, this authority might permit the Director to give designat-
ed employees certain responsibilities for auditing and monitoring the
FHFA’s activities.
DANIEL L. KOFFSKY
Deputy Assistant Attorney General
Office of Legal Counsel
329