[Federal Register Volume 65, Number 105 (Wednesday, May 31, 2000)]
[Rules and Regulations]
[Pages 34588-34590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-13285]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 270

[RIN 0790-AG67]


Compensation of Certain Former Operatives Incarcerated by the 
Democratic Republic of Vietnam

AGENCY: Office of Under Secretary of Defense for Personnel and 
Readiness, DoD.

ACTION: Final rule.

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SUMMARY: This rule adopts as final an interim rule implementing section 
657 of the National Defense Authorization Act for Fiscal Year 1997, 
which authorizes the Secretary of Defense to make payments to persons 
captured and incarcerated by the Democratic Republic of Vietnam. The 
rule established policy and procedures concerning the payments to these 
persons. The rule amended regulations to reflect changes necessary as a 
result of new language in section 658 of the FY99 National Defense 
Authorization Act. Section 658 expands the field of beneficiaries of 
the Vietnamese Commandos Compensation Commission to parents and 
siblings of deceased Commandos. It also added words ``notwithstanding 
any agreement (including a power of attorney) to the contrary, the 
actual disbursement'' must be made directly to the person who is 
eligible for the payment. The rule also amended regulations to reflect 
necessary technical changes to accommodate the new language. The 
Department of Defense is adopting the Interim Final Rule as a Final 
Rule without change.

EFFECTIVE DATE: This rule is effective October 17, 1998.

FOR FURTHER INFORMATION CONTACT: LTC Frank Hudson, (703) 588-6570 or 
Mr. Chuck Witschonke, (703) 693-1059, Directorate of Compensation, 
Office of the Secretary of Defense, 4000 Defense Pentagon, Washington, 
DC, 20301

SUPPLEMENTARY INFORMATION: The Department of Defense published an 
Interim Final Rule with a request for comments on December 10, 1998 (63 
FR 68194). The following comments were received:
    Comment: The Statute Requires Prompt Payment In A Manner Requested 
By The Awardee.
    Section 657(d)(2) of Pub. L. 104-201, as amended, states that 
``Subject to subsection (f), if the Secretary determines that the 
claimant is eligible for the payment, the Secretary shall promptly pay 
the claim.'' (Emphasis added.) Subsection (f) provides notwithstanding 
any agreement (including a power of attorney) to the contrary, the 
actual disbursement of a payment under this section may be made only to 
the person who is eligible for payment under subsection (a) or (b) and 
only--upon the appearance of that person, in person, at the designated 
distribution office in the United States or its territories; or as such 
other location or in such manner as that person may request in writing.
    The only change made to this subsection by the FY 99 National 
Defense Authorization Act was the addition of ``[n]otwithstanding any 
agreement (including a power of attorney) to the contrary'' at the 
beginning of Subsection (f)(1).
    The statutory requirements for disbursement are clearly stated. 
First, the payment must be disbursed to the person eligible for 
payment. Thus, the check must be made payable to the intended 
beneficiary and not to a third party, such as the person's attorney or 
another designee or assignee, regardless of any agreement to the 
contrary.
    The second condition for payment is that it be made: (1) in person 
at a designated distribution office in the United States or its 
territories or, (2) if the beneficiary requests in writing, at such 
other location or in such other manner as that person may request. The 
statute recognizes that many payment recipients may not be able to 
appear in person to receive their payments. Many, for instance, still 
live in Vietnam under a repressive government that denies them the 
ability to travel or even to correspond freely. Hence the statute 
allows the eligible person to request alternative methods of payment.
    The Secretary of Defense has complete discretion in determining 
whether a claim is justified and such determinations are considered 
final and conclusive. Pub. L. 104-201, section 6570). However, once DoD 
has determined that a person is eligible for payment under the 
provisions of the Vietnamese Commando Compensation Act, that discretion 
ends. The agency is mandated by statute to promptly pay the claim. DoD 
may not establish unreasonable regulations that hinder payments to 
those persons eligible for the compensation established by Congress. In 
fact, section 657(f)(2) provides that DoD shall hold funds in trust for 
eligible persons only until such time as ``the person makes an 
election'' (emphasis added) to appear in person at a disbursing office 
or to request payment at another location or in another manner.
    Response: Section 657(f) provides that the actual disbursement of a 
payment may be made only to an eligible claimant, not withstanding any 
agreement to the contrary. The statute does not require that payment be 
made in any manner requested by a claimant; rather, it authorizes the 
Department, in its discretion, to grant requests by eligible claimants 
to receive their payments at a particular location or in a manner other 
than the personal appearance of the claimant at a designated 
distribution office. This provision does not negate the independent 
requirement that only eligible claimants may receive payments.
    Comment: The Interim Regulation Violates The Statute And Inflicts 
Hardship.
    The interim regulation drastically curtails the statutory right of 
eligible persons to receive their payments in the manner they request. 
As revised, regulation states that:

    The Commission [on Compensation] may, in its discretion, require 
the person who is eligible for the payment to appear at any 
designated Defense Finance Accounting Service disbursement office in 
the United States to receive payment. The Commission may, in its 
discretion, coordinate with other U.S. governmental agencies to 
facilitate disbursement of payments to persons eligible for payments 
who reside outside the United States. If an eligible person makes a 
written request that payment be made at an alternate location or in 
an alternative manner, the Commission may, in its discretion, grant 
such request, provided that the actual payment (i.e., the physical 
delivery of the payment) is made only to the eligible person. The 
Commission will not disburse payment to any person other than an 
eligible person, notwithstanding any written request, assignment of 
rights, power of attorney, or other agreement.

32 CFR 270.11. (Emphasis added.)

    By requiring that all payments be made by ``physical delivery of 
the payment'' only to the eligible person, DoD has imposed an 
unreasonable burden on the intended beneficiaries of the 
Congressionally mandated compensation. By imposing such an arbitrary 
condition on payments, DoD set an unnecessary hurdle which many persons 
eligible for compensation will be unable to clear. Such arbitrary 
action violates DoD's statutory obligation to

[[Page 34589]]

promptly pay the claims after eligibility has been determined.
    It does little good for DoD to state that it will hold the funds in 
trust for the person authorized to receive payment ``until such time as 
the person complies with the conditions for disbursement.'' 32 CFR 
270.11. For the most part, the Commandos and their beneficiaries, 
especially those still living in Vietnam, are poor and need the money 
now. The Commandos themselves are middle-aged or older and many are in 
very poor health. Disbursing payments only if the awardees can figure 
out some way to get to a Defense Finance Accounting Service office or 
can arrange some other face-to-face meeting with a Defense Department 
representative authorized to disburse payments would frustrate the 
intent of Congress to pay claimants as fairly and expeditiously as 
possible.
    In fact, the statutory language found in section 657(f)(2) does not 
authorize the Commission to withhold payment until ``the person 
complies with the conditions for disbursement'' but rather until ``the 
person makes an election under such paragraph (i.e., appear in person 
at a designated disbursement office or request payment at another 
location or in another manner).'' The statute gives the awardee, and 
not DoD, the right to elect how payment will be made. If that request 
is reasonable, i.e., if the eligible person will receive the funds to 
which he or she is entitled, DoD may not deny the request without a 
valid reason.
    DoD states that it is required to make physical delivery of the 
payment to the eligible person because of new language in section 668 
of the FY 99 National Defense Authorization Act, Pub. L. 105-261, which 
amended section 657(f)(1) of the National Defense Authorization Act for 
Fiscal Year 1997 (Pub. L. 104-201). The amendment simply added the 
words ``Notwithstanding any agreement (including a power of attorney) 
to the contrary'' before the description of how ``actual disbursement'' 
will be made. DoD's revised regulation, however, equates ``actual 
disbursement'' to ``the physical delivery of payment.'' 63 FR 68195. 
Such a distortion of the term ``actual disbursement'' is completely 
unreasonable.
    ``Disbursement'' does not equate to ``physical delivery.'' As 
defined in the American Heritage College Dictionary, to disburse means 
``to pay out; expend.'' The Federal Government typically makes 
disbursements of payments by issuing checks or initiating electronic 
funds transfers (``EFTs''). See, e.g., 31 CFR 205.3, 206.2, 208.2(c). 
The Department of Defense, as a matter of course, disburses payments by 
mail or EFT to service members and civilian employees, as well as to 
other persons eligible for government payments. See, e.g., 32 CFR 63.6 
(procedures for direct payment of retired pay to former spouses). 
Therefore, to equate disbursement with the actual physical delivery of 
a payment to the beneficiary is unreasonable and flies in the face of 
the Government's normal way of doing business.
    The statutory language mandating payments to eligible individuals 
provides no authority for DoD to withhold payment until ``physical 
delivery'' of the payment can be made. DoD seems to believe that some 
remarks contained in the Congressional Record justify its avoidance of 
the statutory mandate to make prompt payment for approved claims. Such 
a position is entirely insupportable.
    It is a basic canon of statutory construction that, absent a 
clearly expressed legislative intention to the contrary, the language 
of the statute must ordinarily be regarded as conclusive. United States 
v. Turkette 452 U.S. 576, 580 (1981); Consumer Products Safety Comm'n 
v. GTE Sylvania, Inc, 447 U.S. 102, 108 (1980). Given a 
``straightforward statutory command, there is no reason to resort to 
legislative history.'' United States v. Gonzales, 520 U.S. 1, 10 (1997) 
(quoting Connecticut Nat. Bank v. Germain 503 U.S. 249, 254 (1992)). 
There is no ambiguity in the language of section 657(f) that would 
necessitate looking beyond the four corners of the statute to decipher 
its meaning.
    Even if the statutory language were not clear regarding 
disbursement of payment, a review of the scant legislative history 
associated with the modification of the disbursement language in 
section 657(f)(1) lends no support to DoD's position that payments must 
be made physically to the eligible person. In remarks made on the floor 
of the Senate on June 23, 1998, Senator John McCain (R-Arizona), one of 
the sponsors of the amendment explained that the amendment ``would 
ensure that the Vietnamese commandos receive their rightful share of 
the funds authorized and appropriated by Congress.'' 142 Cong. Rec. 
S6849 (daily ed. July 23, 1998). Senator McCain stated that the 
amendment ``seeks to clarify that the actual disbursement of a payment 
under our 1996 legislation may be made only to the person eligible for 
the payment, notwithstanding any agreement, including a power of 
attorney, to the contrary.'' Id.
    Nothing in the Senator's brief remarks supports a conclusion that 
payments must be made by means of ``physcial delivery'' to the eligible 
persons. The statute and the Senator's remarks clearly establish that 
payments can be made only to the eligible recipients. Hence, a payment 
check could not be made out to a third person for later payment to the 
recipient. However, an eligible recipient can request that his or her 
check be mailed to a particular address or that the funds be 
electronically transferred to a particular account. Unless DoD had a 
reasonable basis for concluding that the recipient would not receive 
the payment to which he or she was entitled if the payment request were 
honored, the statute requires the Commission to follow the reasonable 
payment request of an eligible recipient.
    Response: As discussed above, the regulation implements the plain 
language of the statute, and ensures that eligible claimants receive 
all of the money they are owed in the most secure and expeditious 
manner possible.
    Comment: The Regulation Can Be Revised To Comply With The Statute.
    For all of these reasons, the amendment to 32 CFR 270.11 must be 
modified. In order to comply with Section 657(f) of Pub. L. 104-201, as 
amended, the following revised language is suggested:

Sec. 270.11  Limitation on disbursement

    (a) Subject to subparagraph (b) below, if the Secretary 
determines that a claimant is eligible for the payment of 
compensation, the Commission shall promptly pay the claim.
    (b) Notwithstanding any agreement (including a power of 
attorney) to the contrary, the Commission will make a disbursement 
of a payment under this part only to the person who is eligible for 
payment. Payment will be made only in one of the following ways:
    (1) Upon appearance of the eligible person, in person at any 
designated Defense Finance Accounting Service disbursement office in 
the United States or its territories;

or

    (2) At such other location or in such other manner as the 
eligible person may request in writing.
    The Commission will comply with any reasonable request for 
payment, as described in (2) above, unless the Commission believes 
that the requested method of payment is likely to result in the 
eligible person not receiving his or her rightful share of the funds 
authorized and appropriated by Congress. Methods of payment approved 
by a Federal court or agency of appropriate jurisdiction will be 
considered as reasonable per se.
    (c) In the case of a claim approved for payment but not 
disbursed as the result of operation of paragraph (b) above, the 
Commission shall hold the funds in trust for the eligible person in 
an interest bearing account until such time as the person makes an 
election under paragraph (b).


[[Page 34590]]


    This revised language would allow the Commandos and their 
beneficiaries to receive their rightful share of the money Congress 
intended them to have, while at the same time allowing DoD to exercise 
control if the payments are not in conformance with the law. DoD is 
strongly urged to implement this proposed revision in place of the 
unfair, unworkable, and unreasonable language proposed in the Interim 
Final Rule.
    Response: The suggested change to the regulation is not consistent 
with or required by the statute. This statute makes clear that the 
compensation must be paid directly to the claimants, notwithstanding a 
power of attorney indicating that another disposition is preferred.

Executive Order 12866, Regulatory Planning and Review

    It has been determined that 32 CFR part 270 is not a major rule. It 
does not have an annual effect to the economy of $100 million or more 
or adversely affect in a material way the economy; a section of the 
economy; productivity; competition; jobs; the environment; public 
health or safety; or State, local, or tribal governments or 
communities.

Public Law 96-354, Regulatory Flexibility Act (5 U.S.C. 601)

    It has been certified that 32 CFR part 270 is not subjet to the 
Regulatory Flexibility Act (5 U.S.C. 601) because it does not, it 
promulgated, have a significant economic impact on a substantial number 
of small entities. The primary reason for this rule is to provide 
compensation for a limited number of Vietnamese Commandos who were 
incarcerated in North Vietnam, and as such, does not affect small 
entiites.

Public Law 96-511, Paperwork Reduction Act (44 U.S.C. Chapter 35)

    It has been certified that 32 CFR part 270 does not impose 
reporting and recordkeepting requirements under the Paperwork Reduction 
Act of 1995. The reporting and recordkeeping requirements are exempt 
from this Act, as it directly involves active litigation in which the 
U.S. is a party.
    The specific exemption from the Paperwork Reduction Act is found in 
5 CFR part 1320. The information collection in this final rule is 
exempt from OMB approval under Section 1320.4(a)(2), ``Controlling 
Paperwork Burdens on the Public; Regulatory Chnges Reflecting 
Recodification of the Paperwork Reduction Act''.

Public Law 104-4, Unfunded Mandates Report Act of 1995 (UMRA)

    It has been determined that 32 CFR part 270 does not contain a 
federal mandate that may result in expenditures of $100 million or more 
for state, local, and tribal governments, in the aggregate, or the 
private sector in any one year.

    Accordingly, the interm rule amending 32 CFR Part 270, which was 
published at 63 FR 68194 on December 10, 1998, is adopted as a final 
rule without change.


    Dated: May 22, 2000.
Patricia L. Toppings,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 00-13285 Filed 5-30-00; 8:45 am]
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