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Private Sector Initiative Miscellaneous 1983 Incoming to MKD from Jim Coyne (6)
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Private Sector Initiative Miscellaneous 1983 Incoming to MKD from Jim Coyne (6)
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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual
collections.
Collection: Deaver, Michael
Folder Title: Private Sector Initiatives
1983 Miscellaneous 1983 Incoming to
MKD from Jim Coyne (6)
Box: 53
To see more digitized collections
visit: https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories
visit: https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives
Catalogue: https://catalog.archives.gov/
THE WHITE HOUSE
WASHINGTON
yes
March 3, 1983
MEMORANDUM FOR JAMES K. COYNE
SPECIAL ASSISTANT TO THE PRESIDENT
FOR PRIVATE SECTOR INITIATIVES
FROM:
FRED F. FIELDING
COUNSEL TO THE PRESIDENT
SUBJECT:
Proposed Executive Order Creating Presidential
Advisory Council on Private Sector Initiatives
and Propriety of Appointing Member of
President's Family to Same
Attached for your consideration please find a draft Executive
Order creating the President's Advisory Council on Private Sector
Initiatives ("Advisory Council,' Tab A). In an effort to
accommodate the wishes of your office, the following changes have
been made in the earlier draft:
(1) The total number of members of the Council is
changed from 17 to "not less than 22."
(2) The total number of members from the public sector
has been changed from 7 to "not less than 7," and the
following phrase has been added at the end of that
paragraph: "and other members as may be appointed
thereto from time to time by the President from among
other public officials who can contribute to the
achievement of the objectives of the Council."
(3) The total number of members from private life has been
changed from 10 to 15 members.
(4) Clarifications have been made in the language of
Section 4.
As you requested, we have examined the propriety of Maureen
Reagan being appointed to serve as an active member of the
Advisory Council. This memorandum will confirm our earlier oral
opinion that her appointment would be inappropriate, in light of
the federal anti-nepotism statute, 5 U.S.C. § 3110.
Attached for your information are two opinions from the Office of
Legal Counsel, Department of Justice, concerning similar issues
which we considered in reaching our conclusion (Tab B). The
memorandum dated February 18, 1977, addressed the issue of
-2-
whether the federal anti-nepotism statute would prevent Mrs.
Carter from being appointed to the President's Commission on
Mental Health, a federal advisory commission. The memorandum
concluded that Mrs. Carter could not serve actively on the
Commission, whether or not she received compensation for her
services, although she could serve in an "honorary" capacity.
The second memorandum, dated March 23, 1977, addressed the
question of whether President Carter's son could volunteer his
services as an assistant to a regular member of the White House
staff. The memorandum concluded that he could not, even though
he would not be compensated.
We have concluded that the proposed Advisory Council does not
differ sufficiently from the President's Commission on Mental
Health to warrant different treatment with respect to the
applicability of section 3110. We therefore advise that Maureen
Reagan not be appointed to the Advisory Council.
EXECUTIVE ORDER
PRESIDENT'S ADVISORY COUNCIL ON
PRIVATE SECTOR INITIATIVES
By the authority vested in me as President by the
Constitution of the United States of America, and in order to
establish, in accordance with the provisions of the Federal
Advisory Committee Act, as amended (5 U.S.C. App. I), an advisory
committee on private sector initiatives, it is hereby ordered as
follows:
Section 1. Establishment. (a) There is established the
President's Advisory Council on Private Sector Initiatives,
composed of not less than 22 members, appointed by the President.
The President shall select members of the Council as follows:
(1) Not less than seven members from the public
sector, consisting of the Secretaries of Housing and Urban
Development, Health and Human Services, Labor, Education, and
Commerce, the Director of Action, and the White House Deputy
Chief of Staff, and other members as may be appointed thereto
from time to time by the President from among other public
officials who can contribute to the achievement of the objectives
of the Council.
(2) Fifteen members from private life.
(b) The President shall designate a Chairman from the
membership of the Council. The Special Assistant to the
-2-
President for Private Sector Initiatives shall serve as Secretary
to the Council.
Section 2. Functions. (a) The Council shall advise the
President with respect to the objectives and conduct of private
sector initiative policies.
(b) The Council shall work with the White House Office of
Private Sector Initiatives and such other government offices as
the President may deem appropriate to recommend new private
sector initiatives.
(c) In performance of its advisory duties the Council shall
report to the President whenever requested.
Section 3. Administration. (a) The heads of Executive
agencies shall, to the extent permitted by law, provide the
Council with such information with respect to private sector
initiatives as it may require for the purpose of carrying out its
functions. Information supplied to the Council shall, to the
extent permitted by law, be kept confidential.
(b) Members of the Council shall serve without any
compensation for their work on the Council. However, they shall
be entitled to travel expenses, including a per diem allowance,
as authorized by law for persons serving intermittently in the
government service (5 U.S.C. §§ 5701-5707).
(c) Any expenses of the Council shall be paid from funds
available for the expenses of the White House Office of Private
Sector Initiatives.
-3-
Section 4. General. (a) Notwithstanding any other
executive order, the responsibilities of the President under the
Federal Advisory Committee Act, as amended, shall be performed by
the President, except that the Administrator of General Services
shall, on a reimbursable basis, provide administrative support
services as may be required.
(b) The Council shall terminate on December 31, 1984,
unless sooner extended.
February 18, 1977
MEMORANDUM FOR DOUGLAS B. HURON
Associate Counsel to the President
Pe: Possible appointment of Mrs. Carter as
Chairman of the Commission on Mental Health
You have asked for our opinion on the question whether the President
could appoint Mrs. Carter to be Chairman of a Commission on Mental Health
proposed to be established in a forthcoming Executive Order. It is our
opinion that he may not. The applicable statute is 5 U.S.C. $ 3110, sub-
section (b) which provides:
A public official may not appoint, employ, promote,
advance, or advocate for appointment, employment, promo-
tion, or advancement, in or to a civilian position in
the agency in which he is serving or over which he exer-
cises jurisdicition or control any individual who is a
relative of the public official.
The definition of the term "public official" in subsection (a) (2) expressly
includes the President, and a public official's wife is among those listed
in the definition of "relative" in subsection (a) (3). The term "agency"
is defined in 5 U.S.C. $ 3110 (a) (1) (A) to include an "Executive agency"
which in turn includes any "establishment" in the Executive Branch. See
5 U.S.C. SS 104, 105. The comprehensive term "establishment" would clearly
cover the Commission on Mental Health, which will be comprised of persons
who will be regarded as government employees (section 7) and be authorized,
through its Chairman, to conduct hearings and procure independent services
pursuant to 5 U.S.C. $ 3109 (sections 4 and 7(b)). See also 5 CFR 310.101.
Therefore, since the President "exercises jurisdiction or control" over the
Commission, his appointments to that "agency" are squarely covered by the
terms of 5 U.S.C. $ 3110.
Moreover, the legislative history of the statute shows that the pro-
hibition in 5 U.S.C. $ 3110(b) applies whether or not the appointee will
receive compensation. However, we do not believe that 5 U.S.C. $ 3110 (b)
would prohibit the President from appointing Mrs. Carter to an honorary
position related to the Commission if she remained sufficiently removed
from the Commission's official functions. Attached hereto is a memorandum
discussing in more detail the legal basis for our conclusions.
John M. Harmon
Acting Assistant Attorney General
Office of Legal Counsel
Enclosure
John M. Harmon
February 17, 1977
Acting Assistant Attorney General
Office of Legal Counsel
Edwin S. Kneedler
Attorney-Adviser.
Office of Legal Counsel
Legality of the President's appointing Mrs. Carter
as Chairman of the Commission on Mental Health
The appointment of Mrs. Carter to be Chairman of the
Commission on Mental Health proposed to be established by
Executive Order would violate 5 U.S.C. § 3110, subsection
(b). 1/
1/ In a memorandum to files dated October 15, 1968, former
Deputy Assistant Attorney General Richman of this office sug-
gested that 5 U.S.C. § 3110 may not apply to appointments to
titled positions by the President, acting under his constitu-
tional duty to appoint "officers of the United States." Art.
II, Sec. 2. He based this suggestion on the belief that be-
cause of possible constitutional questions in limiting the
President's power of appointment and because Congress was no
doubt aware that President Kennedy had appointed relatives to
high positions, it was unlikely that the provision was in-
tended to reach such appointments without specific mention
of this fact in the legislative history. But in fact, the
Kennedy appointments were specifically discussed during the
Senate hearings on the legislation, and the Chairman of the
Civil Service Commission expressed the opinion, with which no
member of the Committee disagreed, that the provision would
prohibit appointment of a relative to a Cabinet position.
Hearings on Federal Pay Legislation before the Senate Com-
mittee on Post Office and Civil Service, 90th Cong., 1st Sess.
360, 366 (1967). On the question of legislative intent, then,
the 1968 memorandum appears to be wrong. The possible con-
stitutional argument does not seem substantial in the present
case.
The only possible argument that the appointment of
Mrs. Certer would be lawful might be that the statute does
not apply if the appointee will serve without compensation. 2/
The language of the substantive prohibition in 5 U.S.C.
$ 3110(b) is written in broad terms which on their face
attach no significance to the matter of compensation. How-
ever, subsection (c) provides:
An individual appointed, employed,
promoted, or advanced in violation of
this section is not entitled to pay,
and money may not be paid from the
Treasury as pay to an individual so
appointed, employed, promoted, or
advanced.
It might be argued that because the statutory remedy for a
violation is to deny the appointee pay, the statute must be
regarded as being directed only to those situations where the
appointee receives compensation.
In addition there are several instances in the sparse
legislative history of the provision where individual Members
of Congress spoke of the provision in the context of compen-
sated positions. For example, Representative Smith, who in-
troduced the measure on the House floor as an amendment to a
Federal pay bill, stated that a primary place one would find
violations was in smaller post offices, where postmasters often
refused to hire a permanent clerk unless their wives were on
the eligibility list and found other ways to "maneuver to hire
their relatives." 113 Cong. Rec. 28659 (Oct. 11, 1967). Other
Members of Congress used words such as "hire" and "payroll"
when speaking of the prohibition, again suggesting the element
of compensation. Id.; 113 Cong. Rec. 37316 (Dec. 15, 1967);
Hearings, supra, at 369, 371-72. However, I do not believe
that the fact that Congress may have been thinking in terms
of compensated services can have the effect of limiting the
plainly broader reach of the language of the statute itself
absent a clear indication of congressional intent to do SO.
That indication is lacking here.
2/ Section 7 of the proposed Executive Order provides that the
Members of the Commission "may" receive compensation for their
services. I assume this would permit Mrs. Carter to serve
without compensation.
Indeed, there are several factors which affirmatively
suggest that the statute should not be construed to apply
only to situations in which the employee will receive com-
pensation. First, the Senate Report on the legislation 3/
describes the present 5 U.S.C. $ 3110 in broad terms which
contain no suggestion that only compensated positions are
covered, except for a reference to 5 U.S.C. $ 3110(c), which
denies pay to a person appointed in violation of the section.
S. Rep. No. 801, 90th Cong., 1st Sess. 29 (1967). The Civil
Service Commission's description of the provision in its sub-
mission to the Senate Committee, stated that the "amendment
permits no exceptions." Hearings, supra, at 387. 4/ See
also id. at 359.
Also, one rationale of focusing on compensated positions
would apparently be that the statute's purpose is to prevent
the public official from realizing any indirect financial
benefit in appointing a relative. This purpose makes sense
if the employee involved is the public official's spouse, as
in the case of the Postmaster's wife mentioned by Representa-
tive Smith when he introduced the amendment. But the persons
included in the definition of "relative" under the statute
include many persons, such as first cousins, nephews, nieces,
and others whose compensation would be unlikely to redound to
the financial benefit of the appointing official. Thus, the
prohibition must have a broader rationale.
3/ The House Report does not discuss the provision involved
here because it was added as an amendment on the House floor.
4/ The exceptions later included in the bill following the
testimony of the Chairman of the Civil Service Commission
only permit "temporary employment, in the event of emergencies
resulting from natural disasters or similar unforeseen events
or circumstances" and the appointment of veterans who are
entitled to a preference in appointments in the civil service,
5 U.S.C. 55 3110(d) and (e); these obviously would not apply
to Mrs. Carter's appointment.
- 3 -
The broader rationale appears to be to prevent the
detriment to the government when appointments are based on
favoritism -- i.e., familial ties -- rather than merit. For
example, Congressman Smith stated:
This is bad for morale where it is
practiced. Many of these relatives, in-
cluding some on congressional payrolls
may do a good job, but the overall in-
terest of the Government is against the
practice and those good employees can
get a job in some office on their merits
rather than using relationship as a
leverage. 113 Cong. Rec. 28659.
The Civil Service Commission's submission to the Senate Com-
mittee described the provision as a prohibition against fa-
voritism, Hearings, supra, at 387, and the discussion in the
course of the hearings focused on favoritism as such and the
possible detriment or loss of "efficiency" to the Government
when a family member is appointed. Id. at 359, 365-68, 372.
Obviously the injury to the Government in terms of the reduced
quality of the services it receives is the same whether or not
it pays compensation to the employee who is appointed because
of familial ties rather than merit. 5/ Therefore, I do not
believe that the purposes sought to be furthered by the statute
require or even suggest that its plain language should be con-
strued so as not to apply to employees who receive no compen-
sation. I have been informally advised by the Office of the
General Counsel at the Civil Service Commission that while
the issue has apparently not arisen in the past, the Commis-
sion would construe 5 U.S.C. § 3110 to apply even where the
employee receives no compensation.
5/ Another possible purpose of the section might be to pre-
vent public officials from rewarding their relatives with
appointments; but such a reward could be in the form of the
prestige of an appointment as well as compensation.
- 4 -
It has also been suggested that the prohibition may
not apply here because the Commission will be funded out of
appropriations available to the President under the Executive
Office Appropriations Act of 1977 for "Unanticipated Needs,"
which may be expended for personnel "without regard to any
provision of law regulating employment and pay of persons in
the Government service." 90 Stat. 968. However, I do not
believe that the quoted language makes 5 U.S.C. § 3110 inappli-
cable.
This language was included in the appropriation for the
Executive Office under the heading "Emergency Fund for the
President" in the Executive Office Appropriation Act of 1968,
81 Stat. 118 (which was in effect when 5 U.S.C. § 3110 was
enacted) and in prior appropriations act as well. Then, as
now, the separate appropriations available for the White House
Office under the same act contained a virtually identical pro-
vision for obtaining personnel services without regard to laws
governing employment and pay. 81 Stat. 117; 90 Stat. 966.
Although there is no mention in the legislative history of
5 U.S.C. § 3110 of the effect of the appropriations act lan-
guage, the application of the prohibition in the present 5
U.S.C. 5 3110 to appointments by the President was fully dis-
cussed in the Senate hearings. In fact, in response to an
inquiry from Senator Yarborough, Chairman Macy of the Civil
Service Commission stated that had it been in effect, the
provision would have prevented President Franklin Roosevelt
from appointing his son as a civilian White House aide, as
the President apparently had done. Hearings, supra, at 366.
Chairman Macy even suggested that the prohibition should be
inapplicable to the President in order to maintain his dis-
cretion in making appointments. Id. Nevertheless, the
Senate Committee chose to amend the House bill expressly to
include the President among the "public officials" covered
by the bill, and the section was enacted in this form. In
view of this legislative history, the language in the appro-
priation for the White House Office, which merely has been
carried forward from prior years, should not be construed to
override the express prohibition in 5 U.S.C. § 3110. 6/
6/ By memorandum dated November 14, 1972, Assistant Attorney
General Roger Crampton of this office advised the White House
that 5 U.S.C. $ 3110 does apply to appointments to the White
House staff, although the appropriations acts were not con-
sidered in the memorandum.
- 5 -
The result should be no different with respect to the almost
identical language in the appropriation for "Unanticipated
Needs," from which the Commission will be funded.
For the reasons stated, 5 U.S.C. $ 3110(b) prohibits
the President from appointing Mrs. Carter as Chairman or a
member of the proposed Commission.
On the other hand, although the matter is not wholly
free from doubt, I do not believe that 5 U.S.C. § 3110 would
prohibit Mrs. Carter from holding an essentially honorary
position, such as Honorary Chairman, related to the Commis-
sion's work. Subsection (b) as enacted prohibits appoint-
ments to a "civilian position" in an agency over which the
public official has jurisdiction or control. The term
"civilian position" appears to have been intended to cover
all positions occupied by an "officer" or "employee" of the
United States under the civil service laws and to exclude
positions in the military. See Hearings, supra, at 363-64,
365.
For purposes of Title 5 of the United States Code, an
officer or employee is a person who is (1) appointed in the
civil service by an officer or employee; (2) engaged in the
performance of a Federal function under authority of law;
and (3) subject to the supervision of an officer or employee
while engaged in the performance of his duties. 5 U.S.C.
§§ 2104 and 2105. Presumably the President's designation of
Mrs. Carter as an Honorary Chairman of the Commission would
constitute an appointment for purposes of the first of the
factors mentioned above. However, it would seem that Mrs.
Carter's role as Honorary Chairman could be fashioned in
such & manner that she would not necessarily be engaging in
a Federal function when she lends her prestige, insights,
and support to the Commission's work. 7/ To accomplish the
7/ It could also be argued that as an Honorary Chairman Mrs.
Carter would not be subject to the supervision of an officer'
as contemplated in the third factor mentioned above. This
argument is of doubtful validity, however, in view of the
President's authority to appoint an Honorary Chairman and
establish and direct that person's official duties, however
insubstantial they may be.
- 6 -
required detachment from the Commission's Federal function,
Mrs. Carter should at least have no formal authority or
duties relating to the Commission's work and avoid being
the moving force behind its operations -- e.g., in selecting
staff, convening meetings, conducting hearings, establishing
policy, or formulating recommendations. This would not,
however, prohibit Mrs. Carter from attending meetings or
hearings (although perhaps she should not do so on a regular
basis), submitting her ideas to the Commission for consid-
eration, or offering her support and soliciting support from
others for the Commission's work. It is my understanding
that First Ladies have in the past assumed this type of ad-
vocate's role in connection with Government programs in which
they were especially interested, and it would seem to make
no difference here that Mrs. Carter may have an honorary
title that really only serves to highlight her interest.
- 7 -
MAR 2 3 1977
MEMORANDUM FOR THE ATTORNEY GENERAL
Re:
Employment of relatives who will serve
without compensation
Following our meeting with Bob Lipshutz on March 17, you have
asked for my views as to whether 5 U.S.C. § 3110, which prohibits
a public official from appointing or employing a mlative in a
civilian position in an acency over which he has jurisdicition or
control, applies in situations in which the relative will serve
without compensation.
This question was recently presented to the Office of Lecal
Counsel in connection with the proposed appointment of Mrs. Carter
to be Chairperson of the Commission on Mental Health. After re-
searching the legislative history of the statute, we concluded
that the statute applied to uncompensated positions and advised by
merorandum dated February 18 against the contemplated agointment
of Mrs. Carter.
Subsequently, a cuestion was raised as to whether the Presi-
dent's son could be given office space and support services in the
West Wing of the White House in connection with his part-time work
for the Desocratic National Committee. We orally alvised
Mr. Lipshutz's office that funds appropriated for the White House
Office should not Le used for this purpose.
Finally, the Office of Legal Counsel was asked whether there
would be any lecal objection to the President's son volunteering
his time to word: as an assistant to a regular member of the White
House staff. Mr. Lipshutz's office specifically requested that
the Office of Legal Counsel consider the points raised in a letter
from the General Counsel of the Civil Service Commission to the
Vice President's transition staff on December 29, 1976, which con-
cluded that 5 U.S.C. 5 3110 does not prohibit the President or
Vice President from appointing relatives to their personal staffs.
After re-examining the matter, we concluded that 5 U.S.C. $ 3110
does apply to positions on the President's staff.
In this connection, a memorandum prepared by Ed Kneedler of the
staff of the Office of Legal Counsel and sent to Mr. Lipshutz on
March 15, 1977, noted that the Chairman of the Civil Service Commis-
sion informed the Senate Committee during hearings on the nepotism
provision in 1967 that had it been in effect, the provision would
have prevented President Roosevelt from appointing his son as a
civilian aide in the White House. No member of the committee dis-
puted the Chairman on this point. This comment by the head of the
agency charged with administering Laws relating to Federal employment
generally is particularly persuasive on the application of the statute
to the President's son here, especially in view of the fact that Con-
gress specifically rejected the Chairman's suggestions to exempt
Presidential appointments from the prohibition now contained in
5 U.S.C. $ 3110.
Similarly, we concluded that the argument that there would be
constitutional difficulties in applying the statute to positions on
the President's staff was not substantial. This was in accord with
the position taken by the Office of Legal Counsel in a 1972 memo-
randum, which assumed that the statute applied to the White House
staff and found no constitutional infirmity in its doing SO.
At your request, I have now re-examined the specific issue of
whether the statute applies to uncompensated positions. It is my
conclusion that it does. The reasons for my conclusion are
discussed in the attached legal memorandum which I recommend that
you forward to Bob Lipshutz with the attached cover letter.
John M. Harmon
Acting Assistant Attorney General
Office of Legal Counsel
-2-
MEMORANDUM FOR THE ATTORNEY GENERAL
Re: Employment of relatives who will serve
without compensation
You asked for my views as to whether 5 U.S.C.
$ 3110, which prohibits a public official from appointing
or employing a relative in B civilian position in an agency
over which be has jurisdiction or control, applies in situ-
ations in which the relative will serve without compensation.
The prohibition in 5 U.S.C. I 3110 is stated in sub-
section (b):
h public official may not appoint,
employ, promote, advance, or advocate
for appointment, employment, promotion,
or advancement, in or to a civilian
position is the agency in which be is
serving or over which he exercises ju-
risdiction or control any individual
who is 2 relative of the public offi-
cial. An individual may not be ap-
pointed, employed, promoted or advanced
in or to a civilian position in an agency
if such appointment, employment, promo-
tion, or advancement has been advocated
by & public official, serving in or ex-
ercising jurisdiction or control over
the agency, who is a relative of the
individual.
As is evident, compensation 1s not mentioned in the defi-
nition of the substantive offense. The prohibition applies
broadly to all "civilian positions."
In context, the term "civilian position" appears to
have been intended to refer to positions occupied by persons
who would generally be regarded as "officers" or "employees"
of the United States. See Hearings on Federal Pay Legisla-
tion before the Senate Committee on Post Office and Civil
Service, 90th Cong., 1st Sess. 357, 363, 365 (1967) [herein-
after Hearings]. 1/ Under the civil service laws generally,
a person is regarded as an employee if he 1s appointed in the
civil service, if be performs a Federal governmental function
pursuant to law, and if he works under the supervision of an
officer or employee when he performs his duties. See 5 U.S.C.
§§ 2104 and 2105. A person who satisfies these criteria is
regarded as an officer or employee whether or not he receives
compensation. This is reflected, for example, in the statu-
tory definition of a special Covernment employee for purposes
of the conflict of interest laws -- "an officer or employee
of the executive or legislative branch of the United States
Government ... who is retained, designated, appointed, or
employed to perform, with or without compensation," for not
to exceed 130 days per year. 18 U.S.C. § 202 (a) (emphasis
added). See also Federal Personnel Manual, Chapter 735, Ap-
pendix C at PP. 4-5. 2/ Thus, on its face, the prohibition
1/ The description of the substantive offense uses the word
"employment." Also, a public official is defined as an of-
ficer, employee, a member of the uniformed service or any
other individual in whom is vested the authority to appoint
or employ or recommend individuals for appointment or em-
ployment in connection with employment in an agency.
2/ In this connection, you will recall that we advised that
Charles Kirbe should be regarded as a special Government em-
ployee if he performs governmental functions even though he
serves without compensation.
- 2 -
in 5 U.S.C. $ 3110(b) would appear to apply to compensated
as well as uncompensated positions.
The argument that it does not apply to uncompensated
services is based on subsection (c), which reads:
An individual appointed, employed,
promoted, or advanced in violation of
this section is not entitled to pay,
and money may not be paid from the
Treasury as pay to an individual so
appointed, employed, promoted, or
advanced.
The argument is that because Congress has provided that a
person appointed or employed in violation of subsection (b)
is not entitled to pay, Congress must not have intended the
prohibition in subsection (b) to apply where the appointed
relative will receive no compensation and where the sanction
provided will therefore have no bite. I believe this reads
too much into the sanction provision.
On its face subsection (c) only provides that an in-
dividual appointed or employed in violation of subsection
(b) is not entitled to and may not receive pay; its lan-
guage is not well-suited to support an inference that the
withholding of pay also erases the underlying substantive
violation. Although the legislative history is not illum-
inating on this point, the purpose of subsection (c) appears
to have been to insure that an individual appointed in vio-
lation of the section does not have a right to retain pay-
ments or to bring an action in the Court of Claims to re-
cover pay for services he performed prior to the time that
his violation was uncovered. See Federal Personnel Manual,
Chapter 310, % 3-2.
Absent a specific provision such as subsection (c),
persons employed in violation of 5 U.S.C. § 3110(b) may
have come within the general rule that a person erroneously
appointed by agency officials does not have to pay back his
salary to the Government if there is no evidence of fraud
or bad faith in the appointment. 28 Comp. Gen. 514 (1949);
- 3 -
see also 45 Comp. Gen. 432 (1966). A person erroneously
appointed has DO right to continue to hold his job even if
be is entitled to retain payments under these decisions.
The special provision in subsection (c) denying a right to
retain payments should therefore not be interpreted to pre-
clude other sanctions, such as removal, absent some evidence
that it was also intended to have this reach. There does
not appear to be a basis for inferring this intent.
It is important to note that the express sanction
in subsection (c) has not been construed to be exclusive.
For example, although subsection (c) imposes no penalty on
the appointing official, the Civil Service Commission's
Federal Personnel Manual, Chapter 310, 1 3-2, provides that
"public officials who violate civil service regulations
governing employment of relatives are subject to appli-
cable penalties on this account" -- apparently referring
to the possibility of administrative discipline. Removal
of an individual employed in an uncompensated position
would presumably also be an appropriate sanction or remedy,
even though the statute does not expressly provide for re-
moval.
For the foregoing reasons, I believe the most that
can be said about the provision for withholding of pay in
subsection (c) is that Congress may have been thinking pri-
marily in terms of compensated services. There are also
several instances in the sparse legislative history of the
provision in which individual Members of Congress spoke of
it using words such as "hire and "payroll," again sugges-
ting that the principal frame of reference was compensated
services. 113 Cong. Rec. 28659 (Gct. 11, 1967); id. at
37316 (Dec. 15, 1967) : Hearings, sucra, at 369, 371-72.
However, there are several factors which affirma-
tively suggest that the broader language of subsection (b)
should not be construed to apply only to situations in which
the employee will receive compensation. First, the Senate
Report on the legislation describes the present 5 U.S.C.
3/ The House Report does not discuss the provision INVOLVED
here because it was added as an amendment on the House Floor.
$ 3110 in broad terms which contain no suggestion that only
compensated positions are covered. except for a reference
to the provision in subsection (c) denying pay to a person
appointed in violation of the section. S. Rep. No. 801,
90th Cong., 1st Sess. 28 (1967). Referring to subsection
(c), the report states that any person found to have been
appointed or employed in violation of the section "would
be required to be removed from the payroll." Id. Use of
the word "payroll" again might appear to suggest that Con-
gress was focusing on compensated positions. But the re-
quirement that a person be "removed from the payroll" may
in the present context just as readily be thought to be
another way of saying that the person's employment must be
terminated. In this regard, the report notes that "a saving
provision is included which will permit the continued eu-
ployment of a relative appointed by a public official prior
to the effective date of the provision." Id. (emphasis
added). The word "employment" could refer to both compen-
sated and uncompensated services.
The Civil Service Commission also described the sub-
stantive prohibition in subsection (b) in broad terms in
its submission to the Senate Committee considering the
legislation -- stating that the "amendment permits no CA-
ceptions -- although the matter of compensation was not
specifically mentioned. Gearings, supra. at 387. See also
id. 357. 359. 41
4/ The exceptions later included in the bill following the
testimony of the Chairman of the Civil Service Commission
only permit temporary employment, in the event of eser-
gencies resulting from natural disasters or similar unfore-
seen events cr circumstances" and, in some circumstances,
the appointment of veterans who are entitled to & preference
in appointments in the civil service. See 5 U.S.C. $ 2 $ 3110
(d) and (e).
- 5 -
The argument that the nepotism statute should be con-
strued to apply only to compensated positions may also rest
on a view that the statute was aimed at preventing public
officials from feathering their families' nests. But this
supposed purpose ignores the fact that a person can enjoy
substantial non-econowic benefits in working for the Federal
Government, in terms of power, prestige, and experience that
may be of value at a later time. If the purpose of the nepo-
tism statute were only to prevent public officials from be-
stowing benefits on their relatives. even this goal would
not be fully served by withholding compensation.
However, aside from the purpose to prevent the ap-
pointment process from being used for private benefit, it
appears that the statute was also intended to protect the
Government against the receipt of possibly inferior ser-
vices from those whose opportunity to work for the Govern-
ment stems from favoritism rather than merit. For example,
the principal sponsor of the legislation, Congressuan Smith,
stated:
This is bad for morale where it
is practiced. Many of these rela-
tives, including some on congres-
sional payrolls may do a good job,
but the over-all interest of the
Government is against the practice
and those good employees can get &
job in some office on their nerits
rather than using relationship as
B leverage. 113 Cong. Rec. 28659.
Similarly, Congressman Udall stated that the nepotism statute
is the strongest possible guarantee against any abuse of
Federal appoincive authority and any preference in Federal
positions that is adverse to the public interest.' The Civil
Service Commission's submission to the Senate Committee de-
scribed the provision as a prohibition against favoritism,
Hearings, supra, at 387, 5/ see also Lee V. Blount, 345
part: 5/ The Civil Service Commission's formal statement read in
(Footnote cont'd on D. 7)
F. Supp. 585, 587-88 (N.D. Cal. 1972), and the discussion
in the course of the hearings focused on favoritism as such
and the possible loss of "efficiency" in the operation of
Government when people are chosen to perform services for
the Government on a basis other than merit. Hearings at 359,
365-68, 372. The potential injury to the Government in
terms of the reduced quality of the services it receives
is the same whether or not it pays compensation to the em-
ployee who is appointed because of familial ties rather
than merit. Therefore, I do not believe that the purposes
sought to be furthered by the statute indicate that the
facially all-inclusive language of the prohibition should
be interpreted as not applying to individuals in uncompen-
sated positions.
I understand that an additional problem has arisen
in determining what constitutes employment in a civilian
position under the statute, especially when a member of the
President's family is involved. Perhaps a few illustrations
will best serve to delimit the statute's reach.
It seems clear that Mrs. Carter is not prohibited by
5 U.S.C. § 3110 from carrying on the traditional duties of
First Lady in directing the operation of the Executive Resi-
dence, making arrangements for entertainment, etc. Nor, in
my view, are Mrs. Carter and the President's other relatives
prohibited from representing the President at certain of-
ficial functions or from going abroad in the land as his
personal emissary to assess local problems, as Chip Carter
5/ (Footnote cont'd from P. 6)
In our opinion favoritism in the
appointment and advancement of
relatives, or favoritism in any
form whatsoever shall have no
place in the Government service,
whether it be in the competitive
civil service or outside of it.
- 7 -
did on his trip to Buffalo. On these occasions, members
of the President's family appear essentially on the Presi-
dent's behalf, not in an official especity or position.
Finally, 5 U.S.C. $ 3110 would not appear to prohibit men-
bers of the President's family from rendering personal ad-
vice to the President on one or another subjects. In this
regard, you may recall that we concluded that Charles Kirbo
would not be a Federal employee solely by virtue of his
giving personal advice to the President.
These types of activities should be distinguished,
however, from the day-to-day work of the White House Office,
such as answering correspondence or telephone calls, which
is more clearly a governmental function of the kind ordi-
narily performed by regular members of the White House staff.
It might be argued that Chip Carter is acting on the Presi-
dent's personal behalf when he performs these functions,
just as be is when he is a personal emissary of the Presi-
dent at official functions. But this argument proves too
much, because everyone in the White House Office in a sense
acts on behalf of the President. The argument just sug-
gested would therefore permit the President's relatives to
hold any position in the White House Office, despite the
legislative history to the contrary.
The distinction just outlined between regular staff
functions and the traditional activities of members of the
First Family on the President's personal behalf may be dif-
ficult to apply in certain close cases, but the distinction
is clear in principle and, in my view, required by the terms
5 U.S.C. $ 3110. 6/
John M. Harmon
Acting Assistant Attorney General
Office of Legal Counsel
6/ It is also supported by the only decision of the Comp-
troller General construing the statute. The Comptroller
(Footnote cont'd on P. 9)
(Footnote cont'd from p. 8)
General concluded that a replacement designated by a fourth
class postmaster to perform his duties when he was on sick
or annual leave did not have to be regarded as being appointed
or employed in a civilian position under 5 U.S.C. § 3110. The
decision noted that the replacements are not officially ap-
pointed, they render services on a temporary intermittent
basis, " the same replacement is not always designated, and
since the postmaster retained the only position in a fourth
class office when he was on leave, there was no position for
his replacement to occupy. 47 Comp. Gen. 636, 638 (1968).
A member of the President's family acting as his personal
enissary for a given occasion doos SO on a temporary inter-
mittent basis,' without regular assignment, and does not
occupy a position as such. A relative permitted to be em-
ployed doing office work, even without a formal appointment,
does not meet these requirements.
THE WHITE HOUSE
WASHINGTON
February 23, 1983
MEMORANDUM Jun FOR MICHAEL K. DEAVER
FROM:
JAMES K. COYNE
SUBJECT:
Scheduled Meeting - John Gardner
Prior to Jay Moorhead's departure, we developed a list of
former Private Sector Initiatives Task Force members and
Volunteer Sector constituents with whom I should arrange
courtesy calls.
Jay and I included Brian O'Connell and John Gardner, President
and Chairman, respectively of "Independent Sector" on this
courtesy call list. Brian contacted me and scheduled the
March 2nd meeting.
Jay and I, of course, were well aware of the partisanship
that Mr. Gardner (and Brian to a lesser degree) has maintained
toward the Administration. But, in light of the Independent
Sector's considerable influence and our desire to persuade them
to support the Administration's goals, we included them on
the courtesy call list.
THE WHITE HOUSE
WASHINGTON
February 19, 1983
till
MEMORANDUM FOR MICHAEL DEAVER
FROM:
CRAIG L. FULLER
as
SUBJECT:
Job Search Club Funding
I have spoken with Secretary Donovan about the Job Search
Club Funding that has been proposed by the Private Sector
Initiative Office. Ray is well aware of the project and the
job search projects going on around the country.
He will meet with Jim Coyne and his staff to determine how
Labor can best support the effort. He believes that a $2
million commitment might be high, but he is willing to
consider providing financial support.
I suggest a quick follow-up meeting with Secretary Donovan to
get the effort started and perhaps it can build over time.
THE WHITE HOUSE
WASHINGTON
February 9, 1983
et
MEMORANDUM FOR MICHAEL K. DEAVER
Jogan wont ?
FROM:
JAMES K. COYNE
to Mandle?
SUBJECT:
JOB SEARCH CLUB FUNDING.
As we discussed, the Job Search Club is a partnership between
business and labor unions to aid displaced workers. This
effort is being coordinated by the National Alliance of
Business and my office with the intention of providing
technical assistance and resources to the workers.
The Department of Commerce has agreed to provide the
program with $300,000 and we have approached the Department
of Labor for $2 million of the $6 million Secretary's
discretionary fund as provided under Title III of the Job
Training Partnership Act. The money will be used to
provide seed money to management and labor at 20-30
company sites to begin the program.
Al Angrisani and Secretary Donovan want to discuss the
matter but have not received the necessary notice
from the Administration that the White House is behind
the program.
Fuller likes the idea and promised the get to Donovan
but has been out of town. Angrisani is eager to spend
the money elsewhere if we do not get to Secretary
Donovan ASAP. I think a telephone call from you
to Donovan would get the process moving.
Background material attached.
APPROVE OK
DISCUSS
2/18 -discussed heagred coyne at & assist to need Dawan &
$2m high
NAB 2:00 Friday
CONCEPT PAPER
FOR A
PRIVATE SECTOR INITIATIVES DISPLACED WORKER PROJECT
A COLLABORATIVE APPROACH
EXECUTIVE SUMMARY
PURPOSE
The purpose of this proposal is to assist the efforts of the President's
Advisory Council on Private Sector Initiatives to design and implement an ef-
fective program which will assist displaced workers to transition to new em-
ployment opportunities. The design of this proposal utilizes the tri-partite
partnership of business, labor and government to pilot test a range of program
options to accomplish this task.
A key component of the project is the Job Search Club, a proven self-help
technique, administered primarily through the efforts of the affected company
and union, fully supported by other private sector organizations.
BUSINESS/LABOR GOVERNMENT COOPERATION - A JOINT APPROACH
The National Alliance of Business and the Human Resources Development
Institute, in cooperation with the Potomac Institute for Economic Research, will
work with affected companies and unions to develop efficient worker assistance
programs at the local level. They will augment the Job Search Club developed by
the President's Private Sector Initiative Task Force.
The Departments of Labor and Commerce will assist in this tri-partite effort
by providing resources, technical oversight and direction.
IMPLEMENTATION
The project proposes to provide services from 20 to 30 company sites. NAB,
HRDI and PIER will work as a team to carry out the project through the following
activities:
Develop guidelines for, and select company/union sites for project imple-
mentation.
Collaborate with the company/union to develop a worker assistance program
consonant with company/union needs and requirements.
- 2 -
Work with local service delivery groups and the private sector to provide
resources and otherwise suppor the company/union effort.
Provide technical assistance and oversight throughout the duration of the
project to assure maximum success.
Coordinate with the state government to ensure model replication in other
affected areas.
PROGRAM COMPONENTS
As indicated earlier, an important component of the project is the Job Search
Club. Experience with such programs indicates that other services provided to
workers are important adjuncts to its success. The team would encourage the com-
pany and union to consider the delivery of other services as well, such as:
Intensive job development and placement
Referral to retraining programs where appropriate.
Counseling and provision of short term classes.
TIME CONSTRAINTS
It is imperative that all participants in this project be prepared to begin
as soon as possible. Of particular importance is that the project be in operation
at several sites prior to the jointly/sponsored business/labor/government Conference
on Displaced Workers to be held in Pittsburgh in early April.
PRELIMINARY BUDGET
I.
Requested from Department of Labor
20 Sites
30 Sites
A. Funds available to sites pending
Governor's request:
$75,000 for program costs per site
$1,500,000
$2,250,000
plus $15,000 for technical assis-
tance from NAB/HRDI team per site
$ 300,000
$ 450,000
for $90,000 per site
DEPARTMENT OF LABOR TOTAL
$1,800,000
$2,700,000
II. Department of Commerce Funds for Job Search Club Assistance
A. Travel expenses for technical
assistance teams for initial site
visits and follow-up feasibility.
visits.
2 trips per site X 2 people X $500
$ 40,000
$ 60,000
B. Contract with Potomac Institute for
Economic Research for materials de-
veloped, Job Club start-up assistance
and evaluation of 5 sites
$ 260,000
$ 285,000
DEPARTMENT OF COMMERCE TOTAL
$ 300,000
$ 345,000
III. Funding match required from non-federal
sources, including company, union, state
and local in-kind and financial contri-
butions (match)
$1,500,000
$2,250,000
GRAND TOTAL - ALL SOURCES
$3,600,000
$5,295,000
THE WHITE HOUSE
WASHINGTON
February 2, 1983
MEMORANDUM FOR MICHAEL K. DEAVER
FROM:
JAMES K. COYNE, SPECIAL ASSISTANT TO THE
PRESIDENT, PRIVATE SECTOR INITIATIVES
SUBJECT:
ADVISORY COUNCIL CHAIRMAN
Per your discussion with Michael Castine, we have drafted
a list of possible candidates for the chairmanship of
the Private Sector Initiatives Advisory Council.
William Edgerly State Street Bank, Boston
Bob Beck - Prudential
Bob Dee - Smith/Kline
Ed Spencer - Honeywell
Sandy Trowbridge - National Association of Manufacturers
Nick Brady
Drew Lewis
I would be willing to discuss these candidates
if you are not familiar with them.
ACTION
sile
psl
THE WHITE HOUSE
WASHINGTON
January 27, 1983
MEMORANDUM FOR MICHAEL DEAVER
FROM:
JAMES MEDAS gm
SUBJECT:
PSI CHAIRMANSHIP
Retired Republican Governors
Milliken (MI)
Ray (IA)
Thone (NB)
Dreyfus (WI)
Clements (TX)
Hammond (AK)
White (AR)
Quie (MN)
List (NV)
Rhodes (OH)
Dalton (VA)
Romney (MI)
Evans (OR)
Incumbent Republican Governors
Deukmejian (CA)
DuPont (DE)
Thompson (IL)
Orr (IN)
Treen (LA)
Bond (MO)
Kean (NJ)
Olsen (ND)
Atiyeh (OR)
Thornburgh (PA)
Janklow (SD)
Alexander (TN)
Snelling (VT)
Spellman (WA)
Sununu (NH)
Branstad (IA)
THE WHITE HOUSE
psl
WASHINGTON
January 13, 1983
MEMORANDUM FOR MICHAEL DEAVER
FROM:
MICHAEL P. CASTINE, ACTING DIRECTOR
MPC
PRIVATE SECTOR INITIATIVES
SUBJECT:
JOB FAIRS.
Attached is a front page article from today's Washington
Post on the WDCA-TV Job Fair in case you have not read it.
The President filmed a P.S.A. spot for this event as
well as for four other simultaneous job fairs. (Buffalo,
Birmingham, Kansas City, and Cincinnati). Also, he will
conference call the television stations this evening to
reiterate his support for the effort.
Note: The Washington, D.C. Job Fair expects to generate
over 2,000 jobs.
CC: D. Gergen
L. Speakes
M. Baroody
THE WASHINGTON POST
Friday, January 14, 1983
A27
Unemployed Make
ALEXANDRA PANTELIDES
JOHN DUNDAS
Pitch for Work
makes plea for graduates
ready to go to work
TV Program Tries to Aid
On TV Program
JOBS, From A1
Jobless in Finding Work
papers have offered free employment-wanted ads.
"The number one problem in our community,
as it is everywhere, is unemployment," said Farrell
By Karlyn Barker
cast from 8 p.m. to 10 p.m., also
Meisel, Channel 20's program manager. "This is
Washington Post Staff Writer
will feature tips on job hunting
truly what local television should be doing."
The job-seeker, a former social
and retraining, phone calls from
Meisel says Taft Broadcasting Co., which owns
services administrator out of
employers pledging jobs and em-
Channel 20 and six other stations, decided an on-
work since a year ago last June,
ployes seeking them (a computer
air job fair would be a good project, especially
stared into the television camera.
will match them up) and taped
after its Columbus station held one in September
He had 40 seconds to make his
and live personal appeals for
and placed more than 500 job-seekers.
employment pitch.
work.
Taft's stations in Cincinnati, Kansas City, Bir-
"Hello. My name is John Dun-
The sign-of-the-times show is
mingham and Buffalo will also air similar pro-
das," he said, pausing nervously
the first of its kind in this area,
grams tonight. Channel 20 has coordinated its
before giving a brief employment
efforts with Maryland, Virginia and District of
history. "I'm 52 years of age. I'm
but similar televised job-a-thons
strong, vigorous and ready to go
have been held in Columbus, Des
Columbia employment offices and is picking up
to work."
Moines, Louisville, Milwaukee
the tab on computer, phone bank and filming
and Wheeling.
costs, worth well over $20,000, according to the
Tonight, Dundas and a dozen
station.
other out-of-work Washington
One is planned for Boston; a
area residents will deliver "Hire
San Francisco station makes
President Reagan has given the program a
Me" spots on a "Job Fair" broad-
"Hire Me" spots a regular feature
boost by taping promotional spots and an appeal
of its newscasts, and some news-
for private sector employers to hire the jobless.
cast on Channel 20 (WDCA-
D.C. Mayor Marion Barry also has taped a jobs
TV). The program, to be broad-
See JOBS, A27, Col. 1
appeal for the program, and Govs. Harry Hughes
of Maryland and Charles Robb of Virginia have
endorsed it.
Another job hunter who will appear on the
show is Therman Coles, 35, a Vietnam veteran
who said, "I've seen it from the other side of the
counter, and now I'm seeing it from this side of
the counter." Coles was a program director for
job-placement training, counseling others on how
to make a good impression at interviews until last
August when he lost his job after government
CETA regulations were rewritten, making it hard-
er for his employer to get funds.
"I never thought I'd be in this situation myself,"
said Coles, a Silver Spring resident who has two
daughters, 18 and 12. Like Dundas, he taped a
"Hire Me" spot for the show at the Maryland Em-
ployment Security Administration's Wheaton
Plaza office this week.
Post
1-17-83
"I have a B.A. in political science, a law degree
from Howard [University] and am completing
work, hopefully by June, on an MBA," said Coles.
Dundas, who lives in the Rockville area and is
the father of two, ages 11 and 20, is experiencing
unemployment for the first time since he gradu-
ated from high school. A Korean War veteran
with a degree in psychology, and nearing a mas-
ter's in sociology, he's finding it hard to find work
in his social services field.
Not everyone featured on the program will be
unemployed. Alexandra Pantelides, 22, of Annap-
olis, has two jobs, as a waitress and clerical assist-
ant, both a far cry from the personnel career she
hoped for last June when she graduated from col-
lege with honors.
"I'm told it's hard to find a job in personnel
with so little experience," she said. "I wish more
people were willing to give graduates a chance."
Also taping spots for the show were Norm
Kaufman, regional director for operations for Har-
dee's Food Systems; Jack Hix, recruiting manager
for Tracor, Inc., which does defense contracting
for the Navy; and Angelita Moreno, personnel di-
rector for Applied Management Sciences. Har-
dee's is looking for assistant managers. Tracor has
200 to 300 openings for electronic, electric and
mechanical engineers. Applied Sciences has 25
openings for economists, statisticians, clerks and
secretaries.
With their help and job pledges from other em-
ployers, the program will be trying to make a
small dent in the region's unemployment. For
Dundas and others, that's reason enough to hope.
"I'm going to go to work, somehow, someway
soon," he says.