Waiver of the Application of Conflict of Interest Laws

for Members of the President’s Commission

on Strategic Forces

M embers of the President’s commission on Strategic Forces are special government employees 

for purposes of the conflict of interest laws, based on a Department of Defense determination. 

Under 18 U.S.C. § 208(a), such employees may not participate without a waiver in any 

particular matter in which they or their employers have a financial interest.

W aivers o f the application o f § 208(a) for members o f the Commission may be granted by the 

Counsel to the President. This authority is based in part on 3 C.F.R. § 100.735-32, by which 

the President delegated to the Counsel his authority to grant waivers under 18 U.S.C. 

§ 208(b)(1) for “Presidential appointees to committees, boards, commissions, or similar 

groups established by the President.”

The statutory standard for the grant of waivers clearly anticipates the exercise of discretion by 

the appointing official. Factors suggested by § 208(b)(1) include the nature and magnitude of 

the em ployee’s financial interest, the nature of the anticipated services to the government, and 

the likelihood that integrity of those services may be compromised. Other non-statutory 

factors might be considered with caution, such as the ability to reduce conflict by public 

disclosure of the em ployee’s interest, the government’s need for the employee’s services, and 

the agency’s general policy or practice in granting waivers.

January 19, 1983

M e m o r a n d u m O p i n i o n f o r t h e G e n e r a l C o u n s e l ,

D e p a r t m e n t o f D e f e n s e

You have asked us to advise you concerning possible waivers of the application of a conflict of interest statute, 18 U.S.C. § 208, for particular members of 

the President’s Commission on Strategic Forces. We have agreed to assist you 

(1) by identifying the appropriate official(s) to consider and, if appropriate, 

approve such waivers; and (2) by describing some of the factors that may be 

considered by that official in applying the waiver standard. We understand that 

your inquiry was prompted by the case of a potential member of the Commission who has an ongoing consulting arrangement with one of the primary 

contractors for the MX missile project.

We understand from our discussions and the materials you have provided 

that the Department of Defense has determined that members of this advisory 

committee are special government employees for purposes of the conflict of 

interest laws. See generally 18 U.S.C. § 202; Federal Personnel Manual, Appendix C. As you know, as special government employees, the members of this 

advisory committee may not participate in any particular matters in which they,

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or their employers, have a financial interest. 18 U.S.C. § 208(a). This restriction on an individual employee’s activities may be waived if “the official 

responsible for the appointment to [the employee’s] position” determines in 

writing that the interest of the employee “is not so substantial as to be deemed 

likely to affect the integrity of the services which the government may expect” 

from the employee. 18 U.S.C. § 208(b)(1). Because it is anticipated that the 

Commission will be advising the President concerning the MX missile and its 

possible basing modes, the application of § 208 to this situation has been raised.

I. Appropriate Official to Grant Waiver

Under 18 U.S.C. § 208(b)

As mentioned above, § 208(b) authorizes the “Government official responsible for the appointment [of an employee] to his position” to waive the 

application of § 208(a) to the employee in certain circumstances. In determining which officials can exercise such power, we consider two questions: (1) 

which official is “responsible for the appointment” of the members of the 

Commission; and (2) has the official “responsible for the appointment” delegated his authority under this provision to any other person(s).

With respect to the first question, we believe the President is the official 

“responsible for the appointment” of the members of the Commission. Pursuant to Executive Order No. 12400, members of the Commission are “appointed 

or designated by the President” to membership on the Commission. There is no 

provision that any other official should be responsible for the appointment of 

any of the members to the Commission. In the process of drafting Executive 

Order No. 12400, members of the White House Counsel’s Office and the 

General Counsel’s Office of the Office of Management and consistently expressed an intent and understanding that the Commission was to be a Presidential Advisory Committee, with control over the appointment and dismissal of 

members of the Commission to be vested solely in the President. Accordingly, 

in our view, the President is the “Government official responsible for the 

appointment [of the members] to [their] position[s]” within the meaning of 18 

U.S.C. § 208.

Even though the President is the appointing “Government official” within 

the meaning of 18 U.S.C. § 208, he may, pursuant to 3 U.S.C. § 301, delegate 

his authority with respect to “any function vested in the President by law” to 

“the head of any department or agency in the executive branch, or any official 

thereof who is required to be appointed by and with the advice and consent of 

the Senate.” Such delegation must be in writing and published in the Federal 

Register. Id. In addition, the President has certain inherent authority, which is 

recognized but not specifically enumerated in 3 U.S.C. § 302, to delegate 

authority to officials who do not meet the requirements set forth in § 301. In 

Executive Order No. 11222, Part V, as amended, the President delegated his 

authority to grant waivers under 18 U.S.C. § 208(b) with respect to many 

Presidentially appointed officers and employees, while specifically exempting

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from this delegation, among other persons, “Presidential appointees to committees, boards, commissions, or similar groups established by the President.” In 3 

C.F.R. § 100.735-32, however, the President delegated to the Counsel to the 

President the authority reserved in the above provision. Although the Counsel 

to the President is not appointed by the President with the advice and consent of 

the Senate, this delegation has existed at least since 1968 and has never, to our 

knowledge, been challenged by Congress. While we do not need to pass on that 

issue for the purpose of this memorandum, the delegation of power to the 

Counsel to the President would appear to fall within the President’s inherent 

power to delegate, and thus, the President and the Counsel to the President 

currently appear to have authority to grant a waiver under 18 U.S.C. § 208(b) to 

members of the Commission with respect to their service on the Commission.

An argument could be made that § 4 of Executive Order No. 12400, which 

created the Commission, also delegates to the Secretary of Defense the 

President’s authority to grant waivers under 18 U.S.C. § 208. We conclude, 

however, that if the President wishes the Secretary of Defense to exercise the 

President’s authority under § 208(b), the proper course would be to execute a 

new, more specific memorandum under 3 U.S.C. § 301, specifically delegating 

such authority to the Secretary of Defense. Section 4 of Executive Order No. 

12400 delegates the “performance” of the President’s “functions” under the 

Federal Advisory Committee Act (FACA), as amended, 5 U.S.C. app. § 1, to 

the Secretary of Defense. The FACA, 5 U.S.C. app. § 8, provides, inter alia,

that each agency head, in this case the Secretary of Defense, “shall establish 

uniform administrative guidelines and management controls for advisory committees” and appoint an Advisory Committee Management Officer to “exercise 

control and supervision” over the committee. The FACA, however, does not 

specifically address conflict-of-interest problems related to members of advisory committees. Thus, granting a waiver of conflicts of interest under 18 

U.S.C. § 208 may not be a “function” “performed” under the Federal Advisory 

Committee Act. In light of the fact that the President expressly reserved to 

himself in Executive Order No. 11222, as amended, the authority to grant 

waivers under 18 U.S.C. § 208(b), it is doubtful that the delegation of authority 

in Executive Order No. 12400 is sufficiently specific to constitute a delegation 

of the Presidential waiver authority. For these reasons, if the President wishes 

the Secretary of Defense, rather than the Counsel to the President, to assume 

the authority to grant waivers for members of the Commission, we conclude 

that a new memorandum of delegation should be executed. In addition, if the 

President wishes some other official to exercise this authority, he may execute 

a memorandum delegating this to any official appointed by the President with 

the advice and consent of the Senate. See 3 U.S.C § 301.

II. The Wanver Standard

Section 208(b)(1) provides that waivers of the restriction of § 208(a) may be 

granted upon a written determination that the disqualifying interest of the

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employee is “not so substantial as to be deemed likely to affect the integrity of

the services which the government may expect” from the employee. (Emphasis 

added.) This standard clearly anticipates the exercise of discretion and personal 

judgment by the appointing official. We have not reviewed the facts of this 

matter in sufficient detail to make our own judgment concerning a waiver in 

this case, nor would it be appropriate for us to do so inasmuch as the responsibility of the Commission will relate to matters that are beyond our knowledge 

and expertise. The discussion that follows is intended simply to direct attention 

to some of the factors which are generally used to inform such judgments.

The standard set forth in the statute suggests two lines of inquiry, focusing 

on (1) the financial interest and (2) the services of the employee. In our view, it 

is appropriate to consider any factors that develop either of these lines of 

inquiry suggested by the statute.

There are numerous factors that may help to clarify the nature and magnitude 

of the employee’s financial interest. Certainly it is helpful to quantify the dollar 

amount of the interest, or its outer limits. In this case, the consulting contract 

presumably is worth $50,000, and possibly more if the contract is extended or 

additional contracts are expected. These factors might be compared with the 

potential member’s overall income, and with his net worth, to obtain some 

sense of the relative value of the consulting contract(s) to him.1 The type of the 

financial interest may also be important. In this case, the financial interest 

arises from an employment relationship. While employment relationships frequently create stronger and more personal ties than ordinary investment relationships, the tenure and details of this particular relationship could be significant factors in making a waiver determination. For example, one might find it 

more difficult to justify a § 208(b) waiver if the potential member’s contract 

activities involve defense issues that will be before the Commission than if 

they involve giving technical advice on completely unrelated subjects. Similarly, a long or frequent association with the contractor might also counsel 

against a waiver in this case.

The employee’s anticipated services to the government should also be examined. We think that, in this regard, it is appropriate to consider both the 

likelihood that the integrity of the employee’s services may be compromised, 

and the nature and significance of the services themselves. In this case, the 

employee’s services will presumably involve giving advice on a subject of 

direct concern to a present client of his consulting firm. There appears to be 

little doubt that the contractor will be affected by the government’s final 

decision regarding the MX, but the impact of the potential member’s advice 

through the advisory committee may be somewhat more remote. On the other 

hand, one might predict that the advice would be particularly influential in light 

of the potential member’s background and stature. The potential value to the 

contractor of the potential member’s service on this advisory committee should

1 Although the value of the consulting contract in relation the potential m ember's annual income and 

overall net worth may indeed be considered, it should not overshadow the significance o f the absolute value 

of the contract, which is, in our view, a far more important criterion in making a waiver decision.

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also be considered. In this regard, one may want to consider the value of the 

MX contract to the contractor in absolute dollars and as a proportion of the 

company’s anticipated receipts for upcoming years.

There are undoubtedly numerous other factors that might be considered. 

Some of these derive more justification from common sense and other disqualification standards than they do from the actual text of § 208(b). See, e.g.,

Decisional Officials’ Participation in Rulemaking Proceedings, Administrative 

Conference of the United States, 1980 Report, at 51-55. See also Code of 

Professional Responsibility, American Bar Association (in particular Canons 

4, 5 and 9). For example, public disclosure of the employee’s interest and the 

government’s need for the services of the particular employee are factors that 

could be compelling in some circumstances.2 We would also advise that some 

deference be given to the agency’s general policy or practice in granting 

waivers under § 208(b)(1). Accordingly, we are not prepared to reject all 

consideration of factors that do not reflect directly the statutory standard. We 

must urge, however, that non-statutory factors be used with caution and that the 

weight given to them be analyzed in light of the fact that they are not directly 

articulated in the statutory standard.

Numerous other nonstatutory factors have been suggested for use in this 

case. We think that many of these factors, especially when taken in their 

combination, could confuse rather than clarify the inquiry. For example, the 

importance of the advisory committee to the government’s national security 

interests is a factor that can be used convincingly either to justify or deny a 

waiver.3 The same can be said of the temporary, short-term nature of the 

Commission’s work. It also can be counterproductive, in our view, to focus on 

the reputation for personal integrity of the employee. The integrity factor is 

extremely subjective. As we see it, § 208 was enacted, in large part, to eliminate such subjective judgments from the disqualification process. Furthermore, 

we fear that a heavy or frequent reliance upon an official judgment of the 

employee’s personal integrity will detract from the public acceptance of the 

waiver process, as well as make it more difficult to deny waivers because of the 

possible negative implication o f a denial with respect to the integrity of the 

employee. Accordingly, we must counsel against a reliance upon a subjective, 

personal evaluation of an individual’s reputation for integrity in considering 

the propriety of § 208(b)(1) waivers.

In the end, waiver decisions are committed to the judgment of the appointing 

official. Although the statutory standard should guide the exercise of that 

discretion, Congress has clearly left that ultimate decision in the hands of the 

appointing official. It is the responsibility of that official to exercise his 

considerable discretion soundly and in good faith, after a careful and thorough

2 In this case, public disclosure of the potential member’s contractual interest would help to eliminate many 

o f the potential adverse effects o f the interest.

3 In addition, it should be noted that a “national interest" factor was suggested to Congress as a basis for 

granting w aivers when § 208 was enacted, but such a test was never adopted. See Conflict o f Interest

H earings on H.R. 8140 Before the Senate Judiciary Comm., 87th Cong., 2d Sess. 46 (1962) (testimony of 

R oswell Perkins).

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consideration of all of the pertinent facts. We are not in a position to advise you 

about the pertinent facts or about the relative weight that should be assigned to 

the various factors discussed above. We hope this opinion will assist the 

decision-maker in his task, but we do not intend for it to imply any judgment on 

our part concerning the proper direction of that decision.

The Office of Government Ethics has reviewed this opinion and has advised 

us that it agrees with the conclusions set forth above.

R a l p h W . T a r r

Assistant Attorney General

Office of Legal Counsel

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