NATIONAL

GAMBLING IMPACT

STUDY COMMISSION

Selected Operational

Practices

United States General Accounting Office

GAO Report to the Honorable

Richard H. Bryan

U.S. Senate

April 1999

GAO/GGD-99-46

United States

General Accounting Office

Washington, D.C. 20548

General Government Division

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Page 1 GAO/GGD-99-46 NGISC’s Selected Operational Practices

GAO

April 16, 1999

The Honorable Richard H. Bryan

United States Senate

Dear Senator Bryan:

This report responds to your request that we review selected operational

practices of the National Gambling Impact Study Commission (NGISC). As

agreed with your office, the objectives of our review were to answer the

following questions that were based on allegations made to your office: (1)

Is NGISC subject to the Federal Advisory Committee Act (FACA) and, if

so, did it follow FACA with respect to three specific meetings? (2) What

contracting procedures were used in NGISC’s award of three major

contracts? (3) Why did NGISC contract for legal counsel instead of using

government legal support? (4) Did NGISC attempt to interfere with the

work of one of its contractors? (5) How were Regent University employees

involved in NGISC activities? (6) Has NGISC paid for relocating any staff?

(7) Were NGISC employees allowed to work at a location other than the

NGISC office?

In our opinion, FACA applies to NGISC. For one of the three meetings you

asked us to examine, an October 1998 teleconference, NGISC did not

provide the 15-day advance notice in the Federal Register that is required

under FACA and its implementing regulations. However, a 2-day notice

faxed to about 730 people from the media and general public allowed them

to participate. For another meeting, a retreat held in February 1999, NGISC

published notice of the meeting in the Federal Register more than 15 days

in advance but did not publish a summary of the agenda in the time

required by FACA’s implementing regulations.

Information obtained from procurement records and provided by NGISC’s

Chair and staff indicated that NGISC sought competition in the award of

two of the three major contracts that we reviewed and awarded the third

on a sole-source basis after determining that one source was uniquely

qualified. However, NGISC did not document its efforts to seek

competition for one of the three contracts, which left no record to assess

NGISC’s efforts.

NGISC contracted for legal counsel instead of using government legal

support because the federal agencies from which NGISC sought legal

assistance either could not or would not provide it, and NGISC determined

Results in Brief
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that it would not be feasible to hire in-house counsel with the variety of

expertise desired.

A National Academy of Science’s National Research Council (NAS-NRC)

official involved in the administration of the NGISC’s contract said that

NGISC did not attempt to interfere in the Academy’s contract work, as

alleged to your office.

Through review of NGISC records and discussion with NGISC and Regent

University employees, we identified six persons affiliated with Regent

University—in addition to NGISC’s Chair—who had some involvement in

NGISC’s work. Two of these persons were Regent University graduate

students and a third was a graduate, all of whom volunteered their services

for 2 days in August 1997 to assist in meeting preparations. In July 1998,

one of these individuals became a full-time NGISC employee. A fourth

person, another Regent University graduate, worked part-time for NGISC

for approximately 2 weeks in June 1997 to assist in NGISC’s establishment.

The fifth and sixth individuals were Regent University employees who

worked for NGISC’s Chair in her capacity as Dean of Regent University’s

Robertson School of Government. Both of these individuals said they took

a leave of absence from Regent University to work for NGISC for brief

periods of time as employees to assist in NGISC’s establishment and to

help prepare for meetings.

NGISC records did not indicate it had paid for the relocation costs for any

employee, and NGISC’s Chair said that NGISC does not plan to pay such

costs in the future.

According to NGISC, two employees worked at locations other than

NGISC’s office for part of their regular work schedule for some period of

time. Both of these employees’ supervisors told us that these two

employees accomplished the work expected of them, and we found no

evidence that they did not work their scheduled hours or perform their

expected work. However, we found some confusion among NGISC staff

concerning the details associated with the alternate work location

arrangement for one of the employees; thus, we believe that NGISC’s

internal controls over time and attendance were insufficient to prevent

misunderstandings. NGISC improved these controls in early 1999.

NGISC was established pursuant to the National Gambling Impact Study

Commission Act (NGISC Act).1

 The act requires NGISC to conduct a

 

1

 P. L. 104-169, 110 Stat. 1482, Aug. 3, 1996, 18 USC 1955 note.

Background
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comprehensive legal and factual study of the social and economic impacts

of gambling in the United States and report its findings, conclusions, and

recommendations to the President, Congress, state governors, and Native

American tribal governments. The report is due no later than June 20, 1999,

2 years after the date of NGISC’s first meeting. This study is to include, at a

minimum, the following elements:

• a review of existing federal, state, local, and Native American tribal

government policies and practices with respect to the legalization or

prohibition of gambling, including a review of the costs of such

policies and practices; 

• an assessment of the relationship between gambling and levels of

crime, and of existing enforcement and regulatory practices that are

intended to address any such relationship;

• an assessment of pathological or problem gambling, including its

impact on individuals, families, businesses, social institutions, and the

economy;

• an assessment of the impacts of gambling on individuals, families,

businesses, social institutions, and the economy in general, including

the role of advertising in promoting gambling and the impact of

gambling on depressed economic areas;

• an assessment of the extent to which gambling provides revenues to

state, local, and Native American tribal governments, and the extent

to which possible alternative revenue sources may exist for such

governments; and

• an assessment of the interstate and international effects of gambling

by electronic means, including the use of interactive technologies and

the Internet.

NGISC is to be terminated 60 days after it submits its final report, which is

due in June 1999.

NGISC is a nine-member commission with three members (or

commissioners) appointed by the President, three by the Speaker of the

House of Representatives, and three by the Majority Leader of the Senate.

The act provides for the appointing officials to jointly designate one

commissioner to serve as the Chair. The Chair has the authority to call

NGISC meetings, hire the personnel necessary for NGISC to perform its

duties, and procure temporary and intermittent services to assist NGISC in

its work. The commissioner selected to serve as Chair is the Dean of

Regent University’s Robertson School of Government.
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NGISC’s enabling legislation directed that NGISC contract with the

Advisory Commission on Intergovernmental Relations and NAS-NRC for

some of its research. The Advisory Commission on Intergovernmental

Relations contract was to include a thorough review and cataloging of all

applicable laws, regulations, and ordinances that pertain to gambling in the

United States. The NAS-NRC contract was to include an assessment of

pathological or problem gambling, including its impact on individuals,

families, businesses, social institutions, and the economy.

The legislation that established NGISC does not specify the branch of

government in which NGISC is located. In our view, NGISC is a legislative

branch entity. As explained in an August 13, 1997, letter from the Justice

Department’s Office of Legal Counsel (OLC) to NGISC, NGISC is a

legislative branch entity because (1) six of the nine members are appointed

by the congressional leadership, (2) congressional leadership has the

majority role in choosing the Chair of the Commission, and (3) only

information gathering and advisory functions are performed by NGISC.2

Because NGISC is a legislative branch entity, General Services

Administration (GSA) found NGISC to be exempt from the procurement

and personnel laws that apply to executive branch agencies.3

 GSA also

concluded that FACA applies to NGISC.

NGISC’s enabling legislation specifies that the Chair may, without regard

to civil service laws and regulations, appoint and terminate an executive

director and other personnel necessary for NGISC to perform its duties. In

1997, legislation was passed to clarify that NGISC members and personnel

are considered to be federal employees under the Federal Tort Claims Act

and would not incur personal liability while acting within the scope of

their employment at NGISC. In response to a request from GSA, on

January 26, 1999, the Department of Justice’s OLC issued an opinion

concluding that NGISC is not subject to 18 U.S.C. 208, a criminal conflict of

interest statute.

To address the objectives of this report, we interviewed GSA officials,

NGISC employees, NGISC’s Chair and two of her staff from Regent

University, located in Virginia Beach, VA, and an official from NAS-NRC.

We reviewed necessary documentation, including NGISC travel vouchers,

 

2

 Similarly, the Office of Personnel Management, Office of Government Ethics, Office of Management

and Budget, and General Services Administration characterized NGISC as a legislative branch entity.

3

 In June 1997, GSA entered into a Memorandum of Understanding with NGISC, whereby GSA agreed

to provide specified administrative services to NGISC on a reimbursable basis.
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time and attendance records, and contract files. We also reviewed the

applicability of laws pertaining to NGISC.

We conducted our review in Washington, D.C., and Virginia Beach, VA,

from October 1998 through February 1999 in accordance with generally

accepted government auditing standards. We requested comments on a

draft of this report from NGISC’s Chair and the Administrator of GSA.

Their comments are summarized near the end of this letter and are

included in appendix III. Appendix I provides further details about our

scope and methodology.

Is NGISC subject to FACA and, if so, did it follow FACA with

respect to three specific meetings?

FACA establishes requirements pertaining to the creation, operation,

duration, and review of covered advisory committees. For example, the act

requires advisory committees to file charters, publish notice of their

meetings, open their meetings to the public, and make their minutes and

other committee records publicly available. Whether a particular group is

subject to FACA’s requirements depends on whether it is an advisory

committee to the President or a federal agency.

GSA concluded that NGISC is an advisory committee to the President and

is therefore subject to FACA. NGISC’s outside counsel reached a contrary

conclusion primarily based on the view that NGISC was not established to

advise the President, but rather to study the impact of gambling to advise

the Congress and state and tribal governments. For the reasons explained

in appendix II and summarized below, we believe that NGISC is an

advisory committee under FACA.

FACA’s definition of an advisory committee is broadly worded and

includes, in relevant part, any commission that is established by statute,

the President, or an agency “in the interest of obtaining advice or

recommendations for the President or one or more agencies or officers of

the Federal Government.” FACA section 3(2), 5 U.S.C. app. 2. The

definition does not cover committees that are established solely to advise

the Congress. However, a committee can be established in the interest of

advising the President or the executive branch, and thus subject to FACA,

even though part of the purpose of the committee is to report to the

Congress.4

 

4

 See California Forestry Ass’n v. United States Forest Service, 102 F.3d 609 (D.C. Cir. 1996).

Applicability of and

Compliance With

FACA
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As recognized by the courts and OLC, the starting point for determining

whether a commission was established in the interest of obtaining advice

or recommendations for the President or an executive agency is the text of

the commission’s authorizing legislation.5

 In this case, the text of the

NGISC Act clearly identifies the President as a recipient of NGISC’s advice

and recommendations. Specifically, section 4(b) of the NGISC Act

provides that NGISC “shall submit to the President, the Congress, State

Governors, and Native American tribal governments a comprehensive

report of the Commission’s findings and conclusions, together with any

recommendations of the Commission.”

In support of its position that FACA does not apply to NGISC, NGISC’s

outside counsel relied on OLC’s opinion in Applicability of the Federal

Advisory Committee Act to the Native Hawaiians Study Commission

(“Native Hawaiians”), 6 Op. Off. Legal Counsel 39, 1982. In Native

Hawaiians, OLC concluded that the Native Hawaiians Study Commission

was not an advisory committee to the President because, even though the

Commission was required to provide the President as well as the Congress

with a copy of its final report, the Commission’s recommendations were to

be provided only to the Congress. Further, the legislative history of the

Native Hawaiians Study Commission’s authorizing legislation established

that it was created to provide advice and recommendations to the

Congress and not to the President.

Unlike the statutory provisions addressed in Native Hawaiians, the NGISC

Act does not draw a distinction between the types of work results to be

provided to the Congress and the President (i.e., a copy of the report with

and without recommendations). Rather, as discussed above, the NGISC

Act places the President, the Congress, and the other listed recipients of

the Commission’s work on an equal footing by requiring NGISC to provide

each recipient with (1) a report on its findings and conclusions and (2) any

recommendations it has developed. Further, there is nothing in the

legislative history of the NGISC Act to suggest that the Congress viewed

NGISC’s work as being directed to the Congress rather than to the

President or that it otherwise intended for FACA not to apply to NGISC.

The only specific reference to FACA was made during the Senate’s

consideration of H.R. 497, the bill that eventually was enacted as the

NGISC Act, and this statement was to the effect that FACA was intended

 5

 See Sofamor Danek Group v. Gaus, 61 F.3d 929 (D.C. Cir. 1995); Applicability of the Federal Advisory

Committee Act to the Native Hawaiians Study Commission, 6 Op. Off. Legal Counsel 39 (1982).
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to apply to NGISC.6 Accordingly, we conclude that NGISC is an advisory

committee subject to FACA.

While the NGISC’s outside counsel ultimately concluded that FACA does

not apply to NGISC, NGISC has taken steps to comply with FACA’s

requirements. For example, before its first meeting, NGISC filed a charter

with GSA.7

 NGISC designated an official (the current Executive Director)

to serve as NGISC’s Designated Federal Officer; under FACA this official,

among other things, is responsible for approving and attending committee

meetings. NGISC’s operating rules, adopted in October 1997, state that, “in

general, [the commission] will conduct its activities in accordance with the

standards and requirements of the Federal Advisory Committee Act

(FACA) . . . .”

We were asked to review three specific NGISC meetings to determine their

compliance with FACA: (1) a September 29, 1998, Research Subcommittee

meeting; (2) an October 9, 1998, teleconference; and (3) a retreat held in

February 1999. FACA requires that each meeting of an advisory committee

be open to the public (unless, for an advisory committee that is advising

the President, approval is received from GSA to close a meeting) and that

appropriate notice of each meeting be published in the Federal Register.

GSA’s regulations implementing FACA require that notice of advisory

committee meetings be published in the Federal Register at least 15 days

prior to the meeting.

An NGISC Research Subcommittee meeting was held in Denver, CO, on

September 29, 1998. The written minutes showed that the main topic of

discussion was the results of a pilot patron survey conducted at three

casinos and whether to proceed with the full patron survey. The outcome

was a decision to elevate the matter for consideration by the full

Commission. Because the subcommittee identified issues to be considered

by the full Commission, the subcommittee meeting was not required to be

open under FACA. Under FACA’s implementing regulations, the act’s

requirements do not apply to meetings of subcommittees convened solely

to do research, analysis, or work products that will be deliberated upon by

the full committee. (41 C.F.R. 101-6.1004(k)).

 

6

 See 142 Cong. Rec. S7977 (daily ed. July 17, 1996)(statement of Sen. Glenn): “This commission will be

closely watched by many, including those with the power and resources to tie the commission up in

costly litigation. It is subject to the Federal Advisory Committee Act [FACA}, a statute which requires

compliance with open meetings and public access . . . .”

7

 The charter, filed at GSA’s request on June 15, 1997, stated that “[t]he Commission is subject to the

standards and requirements of the Federal Advisory Committee Act (FACA, as amended), with respect

to meetings, hearings, and the availability of Commission records, and other matters.”

Research Subcommittee

Meeting
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A teleconference of NGISC members was held on October 9, 1998. The

minutes showed that the purpose of the teleconference was for the full

Commission to follow up on the subcommittee’s earlier meeting and reach

an immediate decision on whether the casino patron survey should

proceed. NGISC did not publish a 15-day advance notice of the meeting in

the Federal Register, as required by FACA’s implementing regulations.8 A

GSA official agreed that this was a departure from the notice requirement.

According to the current Executive Director, NGISC did not publish a 15-

day advance notice of the teleconference due to time constraints. Two

days before the teleconference, NGISC faxed a notice of the

teleconference to approximately 730 people from the media and general

public that expressed interest in NGISC activities. This fax stated that

NGISC would make available a number of listening lines for interested

members of the press and public and would allow interested individuals to

listen live to the teleconference at NGISC’s Washington, D.C., office. The

minutes of the meeting showed that approximately 40 members of the

public and the media used NGISC’s listening lines during the

teleconference.

The third meeting we reviewed was a February 8 to 10, 1999, NGISC

retreat to review preliminary research results. A copy of the initial NGISC

1999 workplan indicated that the meeting would be closed to the public;

however, NGISC staff said that the Commissioners later decided to open

the retreat to the public and it was an open meeting.

A notice was published in the January 12, 1999, Federal Register covering

the February retreat as well as other scheduled meetings and activities of

NGISC for 1999. This notice stated that meetings conducted by the full

Commission and, where possible, those of its subcommittees would be

fully open to the public unless otherwise announced at least 15 days in

advance of the meeting. For the February retreat, the notice indicated that

the meeting would be conducted by the full Commission, gave the dates of

February 8 to 10, 1999, and provided the conference center’s name and

address where the retreat would be held. The notice stated that further

details on times and locations of specific meetings would be made

 

8

 FACA’s implementing regulations require covered committees to publish, at least 15 calendar days

prior to an advisory committee meeting, a notice in the Federal Register, including the time, date,

place, and purpose of the meeting; a summary of the agenda; and whether the meeting is open to the

public. This regulation also states that in exceptional circumstances, the committee may give less than

15 days notice, provided the reasons for doing so are included in the notice published in the Federal

Register (41 C.F.R. 101-6.1015(b)).

Teleconference

Retreat
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available 15 days in advance of the meeting on NGISC’s website and

advisories would be distributed to individuals and organizations in its Fax

directory. This approach for providing notice of the NGISC’s meetings was

adopted with the concurrence of the GSA official responsible for FACA

compliance. We note that while NGISC did provide in its Federal Register

notice the dates and location of the February retreat more than 15 days in

advance of the meeting, information about the retreat agenda was posted

to the website and sent by fax less than 15 days in advance of the meeting.9

What contracting procedures were used in NGISC’s award of major

contracts?

Because NGISC is a legislative branch entity, it is not subject to the

Competition in Contracting Act of 1984 or the Federal Acquisition

Regulation.10 Under section 6(d) of its enabling legislation, NGISC is

authorized to procure temporary or intermittent services of experts and

consultants pursuant to 5 U.S.C. 3109. Services procured under section

3109 are also specifically exempt from the requirements of 41 U.S.C. 5, a

statute that generally applies to acquisitions by legislative branch

agencies.11

As we have reported in the past, we believe that even government entities

exempt from the requirements that normally apply to executive agency

procurements should procure goods and services using procedures

designed to ensure that they are receiving the best value for the funds they

spend and to protect the government’s interests. Fundamentally, these

procedures should entail identification of potential sources for the goods

 9

 On January 29, 1999, 10 days before the meeting, NGISC sent out a fax stating that the February 8 to

10, 1999, retreat would be dedicated to hearing from as many as 15 organizations, including the major

research contractor—the National Opinion Research Center—and would hear findings from its

subcommittees. NGISC said that this constituted a summary of the agenda. On February 3, 1999,

NGISC sent out a fax relating to the February 8 to 10, 1999, retreat stating that “Commissioners will

meet to receive recommendations from various organizations for possible inclusion into the

Commission’s Final Report.” On February 4, 1999, NGISC posted an identical notice on its website.

Under FACA’s implementing regulations, a summary of the agenda is one of the items that is to be

published 15 days in advance of the meeting.

10 The Competition in Contracting Act of 1984 (CICA), P. L. 98-369, amended the Armed Services

Procurement Act of 1947 and the Federal Property and Administrative Services Act of 1949, which

apply to procurements by executive agencies. CICA requires, with certain limited exceptions, that

executive agencies shall obtain full and open competition through the use of competitive procedures

when procuring goods and services. The Federal Acquisition Regulation sets forth uniform policies and

procedures for acquisitions by executive agencies.

11 41 U.S.C. 5 generally requires that acquisitions be advertised a sufficient time before proposals are

due.

Award of Major

Contracts
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and services the agency is procuring and a reasonable effort to seek

competition among them. Further, the agency’s procurement actions

should be documented in writing for management review purposes and to

assist in the resolution of disputes over billings or costs.12

To determine the procedures used by NGISC in the award of its major

contracts, we reviewed NGISC’s award of three contracts: one each for (1)

legal services, (2) research consulting services, and (3) a national survey

on American gambling behavior and the creation of a database on the

economic and social impacts of gambling. These contracts accounted for

the largest dollar values of NGISC’s contracts except for the two contracts

awarded as directed by NGISC’s enabling legislation.13

With respect to our review of the three contracts, we found that

(1) NGISC’s Chair described an award process in which competition was

sought, but NGISC’s Chair did not document the selection process when

contracting for legal services;

(2) NGISC entered into a sole-source contract for research consulting

services, and we found no basis for questioning its determination that the

person selected was uniquely qualified; and

(3) documentation maintained by NGISC showed that it made a reasonable

effort to obtain competition when it contracted for the national survey on

American gambling behavior and the creation of a database.

NGISC entered into a contract with a law firm for legal services for a

maximum amount of $35,000 per month.

NGISC’s Chair said that the criteria she used to select a contractor were

(1) the individual’s stature; (2) knowledge on a variety of legal issues; and

(3) the cost of the services. The Chair said that she went through a twostage selection process. First, she said that she contacted several persons,

 

12 See generally White House Travel Office Operations (GAO/GGD-94-132, May 2, 1994.) In that audit we

determined that even an entity handling private funds (for press travel) should procure goods and

services on a competitive basis and document its procurement actions to provide the public and others

with the assurance that it is receiving the best value for the funds it spends. This is particularly true

where, as with NGISC, the agency involved is using appropriated funds.

13 Section 7 of the National Gambling Impact Study Commission Act requires NGISC to contract with

the Advisory Commission on Intergovernmental Relations for a thorough review and cataloging of all

applicable federal, state, local and Native American tribal laws, regulations, and ordinances that

pertain to gambling in the United States; and the National Research Council of the National Academy

of Sciences to assist NGISC in its studies. We did not review these two contracts.

Contract for Legal Services
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including two former United States attorneys general, to identify individual

attorneys or law firms that would meet her criteria. Secondly, she said that

she and others contacted about 8 to 10 of the referrals she received to

determine whether they met her criteria, ascertain their interest and

availability, and inquire about their fees. However, the Chair said that

contacts with these individuals and firms were not documented, and she

did not write down the names of the individuals she contacted.

The Chair said that she selected the law firm of McGuire, Woods, Battle &

Boothe, L.L.P. to represent NGISC because (1) the principal attorney who

would serve as NGISC’s General Counsel was a former, high-level

Department of Justice official; (2) the law firm had a variety of legal

expertise; (3) and the attorney’s hourly fees were the lowest of the

individuals and firms contacted. The only documentation we were

provided relating to the selection process was an October 29, 1997, letter

from the Chair to NGISC Commissioners stating she had considered “a

number of former high-level Justice Department and congressional

attorneys,” and that the individual she selected to represent NGISC was

“uniquely qualified” with a reference to an attached resume.

We have no reason to question the selection process that the Chair said

she followed. However, the lack of documentation showing the individuals

and firms contacted and the information the Chair relied on to make the

selection left no written record that could be used to verify that this

process was followed or assess the details of the selection process.

With regard to NGISC’s $48,000 contract for research consulting services,

NGISC staff informed us that the Chair of the Research Subcommittee was

tasked with finding a research consultant for NGISC. As documented in a

letter to NGISC’s Chair dated October 8, 1997, the Chair of the Research

Subcommittee identified at least eight researchers with experience in the

gambling field. The Chair of the Research Subcommittee determined that

because of existing obligations, disinterest in being a principal research

consultant, or lack of impartiality, only one of the individuals under

consideration would fit what the subcommittee was looking for in the

principal research consultant. The Research Subcommittee Chair

concluded that this individual was also uniquely qualified since he was the

research director of the NGISC predecessor commission in the 1970s and

had served as the Executive Director of a task force that studied gambling

in the state of Maryland in 1995. Therefore, the Research Subcommittee

Chair urged NGISC’s Chair to enter into a sole-source agreement with this

individual, which NGISC did. We found no basis to question NGISC’s

Contract for Research

Consulting Services
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determination that the person selected was uniquely qualified to perform

the contract.

With regard to the third contract for conducting a national survey and

creating a database (total amount of contract $1,244,150), documentation

maintained by NGISC showed that it made a reasonable effort to obtain

competition for these services. Through a consultant, NGISC identified—

over the phone and by E-mail—eight firms it believed were qualified to

perform the work. A December 10, 1997, memo to the file from NGISC’s

Research Director indicated that the eight firms could perform the survey

and database work without subcontracting; and, due to the pressing time

constraints of NGISC, the Research Director and the Principal Research

Consultant determined that it was in NGISC’s best interest to send the

request for proposals (RFP) to these eight firms.14

The RFP contained the contract requirements and a section on how the

proposals were to be evaluated. Representatives from the firms were

invited to attend a mandatory preproposal conference and, according to

the minutes from this conference, representatives from three firms

attended. Two of the three firms submitted proposals, and NGISC

reviewers evaluated the offerors’ technical and price proposals. Because

documentation showed that several firms were solicited and given the

opportunity to compete for the requirement and the responding firms’

technical and price proposals were evaluated and compared, we believe

that NGISC made a reasonable effort to obtain competition for these

services.

Why did the NGISC contract for legal counsel instead of using

government legal support?

Although NGISC tried to obtain guidance and assistance on legal issues

from GSA, OLC, and the Office of Government Ethics (OGE), NGISC

contracted for legal counsel because it did not obtain the necessary legal

advice and assistance from these agencies and found it impractical to hire

an attorney with sufficient expertise.

GSA offers legal counsel to government commissions on issues that relate

to certain aspects of their operations, such as by providing procurement

 

14 NGISC has a limited life and is required to prepare a report no later than 2 years after the date on

which NGISC first met. Section 4(b) of P. L. 104-169, 18 U.S.C. section 1955 note. Therefore, NGISC

was operating under time constraints to comply with the statutory time frame for issuing the report.

Contract for a National

Survey and Creation of a

Database

NGISC Contracted for

Legal Counsel
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advice. In October 1997, GSA officials suggested that NGISC retain the

services of an attorney to provide guidance on issues that GSA attorneys

said they did not have the expertise to handle, such as developing bylaws

and rendering advice on the applicability of ethics laws. GSA advised

NGISC’s Chair that legal services could be obtained in three ways: (1) by

hiring an attorney to be a member of the staff on a full-time basis, (2) by

hiring an attorney as a consultant where an employer/employee

relationship is established, or (3) by hiring an attorney on an independent

contractor basis where no employer/employee relationship is created.

In addition to seeking guidance and services from GSA, NGISC had also

sought assistance from the Department of Justice and OGE. In an August

13, 1997, letter from OLC to NGISC’s Chair, OLC wrote that since it viewed

NGISC as not being in the executive branch, OLC could not give legal

opinions to NGISC. On August 18, 1997, OGE indicated that since its

statutory responsibilities do not extend to legislative branch entities, OGE

was unable to provide authoritative advice as to how government ethics

laws might apply to specific situations involving NGISC employees.

NGISC’s Chair said she tried to hire an NGISC executive director that

could also serve as general counsel, but it was difficult to find an

individual practicing as an attorney with the requisite experience who was

willing to give up a law firm salary for a 2-year position. The Chair said that

since GSA, OGE, and the Department of Justice’s OLC indicated that they

would not provide legal opinions at all or in the areas needed, she turned

to the private sector for legal counsel.

Did NGISC attempt to interfere in an inappropriate way with the

work of one of its contractors?

The NGISC Act specified that NAS-NRC would receive a contract for

assistance in conducting certain studies required by NGISC to complete its

work. NGISC awarded a contract to NAS-NRC for $620,000. We inquired as

to whether NGISC attempted to interfere with the NAS-NRC contractor in

its scope of work, as was alleged to your office.

We spoke with NAS-NRC’s Director of the Committee on Law and Justice

that oversees the NGISC contract. The Director said she worked with

NGISC staff and Commissioners and indicated that NGISC was initially

confused about how NAS-NRC operated by holding both open and closed

meetings. She said NGISC representatives wanted to attend the closed

meetings held pertaining to its contract, but NAS-NRC officials explained

that NAS-NRC did not allow this.

NGISC Contractor

Interference
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The Director said that after the policy of attending closed meetings was

explained to NGISC, NGISC has not attempted to attend closed meetings

or otherwise interfere in NAS-NRC’s work.15

How were Regent University employees involved in NGISC

activities?

Through review of NGISC documents provided to us and interviews with

NGISC’s Chair and selected NGISC and Regent University staff, we

identified six persons, other than the Chair, who were affiliated with

Regent University and had some involvement in NGISC’s activities. Of

these six persons, three served as volunteers for short time periods and

one of these individuals became a full-time NGISC employee. The three

other individuals were part-time NGISC employees for some period of

time. NGISC has employed a total of 28 persons, including the four

individuals affiliated with Regent University, that were employed by the

NGISC.

Two Regent University employees, who reported to the Chair in her

capacity as Dean of the Robertson School of Government, have had

involvement in NGISC. Both of these individuals said that they took a leave

of absence from Regent University to work at NGISC for a brief period as

employees. One individual worked for NGISC for approximately 1 month

to assist the Chair in NGISC’s establishment and to help plan the first

NGISC meeting. The other Regent University employee said he took a

leave of absence to assist NGISC as an employee for 5 weeks after the

former Executive Director resigned. He served as NGISC’s Acting Deputy

Director of Operations and assisted in planning meetings. According to

NGISC’s Chair, she asked these two Regent University employees to assist

NGISC on these two occasions on a temporary basis because critical tasks

had to be completed correctly and immediately, and she had no other

immediate source of help that she could depend on. In addition, these two

assisted the Chair in her role as a Dean at Regent University when they

were employed by Regent University as her assistants.

Three NGISC employees told us they believed that these two Regent

University employees were giving orders affecting NGISC in their roles as

employees of Regent University. The two Regent University employees

told us that it was not appropriate for them to make decisions relative to

NGISC in their roles as assistants to the Chair at Regent University and

 

15 NAS is specifically exempt from FACA and is therefore not required to hold open meetings. See

section 3(2) of FACA.

Involvement of Regent

University Employees
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that they did not do so. They said that, among other duties, they

determined whether the Chair could be scheduled for press conferences,

assisted the Chair in connection with NGISC meetings, and relayed

information between the Chair and NGISC staff. They said that while they

often relayed information between NGISC staff and the Chair regarding

decisions, the Chair made the decisions. NGISC’s Chair confirmed that the

two Regent University employees were not authorized to make decisions

on her behalf, and she said that they did not do so. No evidence was

provided to us to corroborate the allegations made to your office that

these two persons were independently making decisions affecting NGISC

in their capacity as assistants to the Dean.

In addition, two individuals who were Regent University graduate students

and one Regent University graduate volunteered their services to NGISC

for 2 days in August 1997 to assist with meeting preparations. One of these

individuals has been employed by NGISC since July 1998. Another Regent

University graduate was employed by NGISC for approximately a week

and a half in June 1997 to assist in its establishment.

Has NGISC paid for relocating any staff?

Our review of NGISC travel vouchers as well as NGISC’s staff travel

vouchers provided by GSA (GSA processes all travel reimbursement

payments for NGISC) found no evidence that relocation payments were

paid to NGISC employees since NGISC’s inception through November

1998. On May 4, 1998, NGISC’s then Research Director wrote to the former

Executive Director to ask for support to cover moving expenses for a

planned move to the Washington, D.C., area from Richmond, VA. At the

time we began our review, the employee had not yet moved, and no

relocation payments had been made.

After we discussed this issue with NGISC staff, the Chair told us that the

NGISC does not plan to pay for this employee’s relocation costs to

Washington, D.C., or for any employee relocation costs in the future.

Were NGISC employees allowed to work at a location other than

the NGISC office?

You asked us to determine whether the current NGISC Executive Director

was allowed to work at a location other than the NGISC office and if he

actually worked the hours as scheduled. In response to a request dated

November 21, 1997, from NGISC’s Administrative Officer, the current

Executive Director completed a work schedule of his 40-hour workweek

Relocation Costs

Alternate Work

Location
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when he was serving as the Research Director. The work schedule

indicated that he planned to work 3 hours at his home on Fridays and 4

hours on the train (commuting between Washington, D.C. and Richmond,

VA) per day on Mondays and Tuesdays. The current Executive Director

told us that while he served as Research Director between October 1997

and February 1998, he often charged official work time for work he had

done at these alternate locations as provided for on his work schedule.

He also said that his supervisor was aware that he was working at

alternate work locations and had not raised any objections. Further, he

maintained time sheets indicating the number of hours he worked every 2

weeks. These time sheets showed that he accounted for at least 80 hours

and that he often worked more than 80 hours every 2 weeks. His time

sheets from October 1997 through February 1998 sometimes identified the

number of work hours being charged for work at his residence and on the

train. He also provided a record of the tasks he performed at the locations

other than NGISC’s office.

According to NGISC’s current Executive Director, his predecessor

authorized NGISC’s former Deputy Director to begin working on a fulltime basis at a location other than NGISC’s office starting in the later

stages of her pregnancy. According to the NGISC’s Administrative Officer,

the former Deputy Director was employed by NGISC between November

1997 and January 1999 and reported first to the previous Executive

Director and subsequently to the current Executive Director. The

Administrative Officer said there was no written work schedule for the

former Deputy Director approved by a supervisor, which showed the

number of hours she was scheduled to work at home. According to the

current Executive Director, the former Deputy Director began working at

her home on a full-time basis in October 1998, but she discontinued this

arrangement after her first week because she went on maternity leave. The

current Executive Director provided a log of the work that the former

Deputy Director had done during the time she worked at home and said

that she had completed the work she was expected to do outside NGISC’s

office. In January 1999, NGISC’s Administrative Officer told us that no

other NGISC employees were or had been authorized to work at locations

other than the NGISC office on a continuing basis.

NGISC’s Administrative Officer had a written work schedule for the former

Research Director, showing the number of hours to be worked and the

locations where the work was to be performed. NGISC’s former Executive

Director, the former Research Director’s supervisor, did not sign the work

schedule and said that she had not asked to see the work schedules of
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NGISC’s staff. The former Executive Director approved a leave request for

New Year’s week that was a part of the former Research Director’s work

schedule; but this approval, although on the same page as the work

schedule, appeared to relate only to the requested days of leave. According

to the former Executive Director, she was aware of the former Research

Director’s schedule of working at home on Fridays but was not aware that

he was counting work done on the train as official work time.16 The former

Executive Director indicated that the former Research Director’s work

schedule was in place when she began working for NGISC. Further, she

said the former Research Director generally completed the assigned work.

NGISC’s Administrative Officer said that he did not have written work

schedules with supervisory approval for any of its employees.

According to NGISC’s Administrative Officer, he did not believe a written

agreement for the former Research Director covering work at alternate

locations was necessary because the former Research Director was not

working at these alternate locations on a full-time basis. The

Administrative Officer provided us with a draft of such an agreement for

the former Deputy Director, but he said she discontinued working at her

residence before the agreement was completed. Further, NGISC’s time and

attendance process did not require its supervisor to approve employees’

official time sheets. NGISC’s process provided for each employee to

complete an internal time and attendance form showing his or her work

time and provide this internal form to the Administrative Officer, who was

to then prepare the official time sheets and sign them before transmitting

them to GSA. The Administrative Officer said that the former Executive

Director and the former Deputy Director would sometimes review the time

sheets, but that was not done routinely.

We found no evidence that the two NGISC employees who were

authorized to work at locations other than NGISC’s office did not work the

hours scheduled or did not accomplish the work they were expected to

complete. However, there appears to be a misunderstanding concerning

the approval of the former Research Director’s work while commuting on

the train. In addition, according to the NGISC’s Administrative Officer,

NGISC did not have employee work schedules or time sheets approved by

their supervisor.

 16 In connection with executive branch employees, we have stated that they may not be compensated

for work done while commuting. See B-261729, April 1, 1996. However, NGISC is not subject to the

rules governing executive branch agencies.
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We are not aware of any specific policy that applies to legislative branch

entities like NGISC regarding work at a location other than an employee’s

official workstation on a regular basis. Nonetheless, the circumstances

described above indicate that when employees at an entity such as NGISC

want to work regularly at alternate work locations, there should be

documentation of advance supervisory approval and a mechanism for

ensuring that the employees worked as scheduled. Without such controls,

the entity is vulnerable to misunderstandings and other potential problems

that could arise with employees who work at alternate work locations.

We discussed the vulnerabilities associated with NGISC’s time and

attendance process with the current Executive Director. The Chair and

current Executive Director have agreed to require each NGISC staff

member to have a work schedule approved by the Executive Director and

to require that each employee’s time sheet be approved by the Executive

Director. They also said that with very limited exceptions, all work would

be conducted at NGISC’s office in the future.

We requested comments on a draft of this report from the Chair of NGISC

and the Administrator of GSA. On February 24, 1999, GSA notified us orally

that the Deputy Associate Administrator, Office of Governmentwide

Policy, Committee Management Secretariat, had reviewed our draft report

and had no comments on it.

On March 4, 1999, we received written comments on our draft report from

NGISC. These comments are reprinted in appendix III. NGISC’s Chair

indicated that she had no comments but provided the comments of

NGISC’s outside legal counsel regarding our opinion on the applicability of

FACA.

NGISC’s outside counsel asked that we reconsider our conclusion that

NGISC is subject to FACA for two reasons. First, the outside counsel said

that our analysis distinguishing OLC’s opinion in Native Hawaiians was

unpersuasive. Second, the outside counsel stated that application of FACA

to NGISC would impose a “responsibility on the President to act on the

recommendations of the Commission which is beyond the scope of the

National Gambling Impact Study Commission Act.” In this regard, the

outside counsel stated that (1) there is no requirement in the NGISC’s Act

for the President or other recipients of NGISC’s report to take action on

the report, but that (2) under section 6(b) of FACA, the President would be

required to provide Congress with a report stating either his proposals for

action or reasons for inaction with respect to recommendations made to

him.

Agency Comments
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With respect to the outside counsel’s first point, we continue to believe

that there are fundamental differences between the authorizing legislation

that was at issue in the Native Hawaiians opinion and the language and

history of the NGISC Act. As described in detail in appendix II, the

legislation authorizing the Native Hawaiians Study Commission and its

legislative history established that the Native Hawaiians Study

Commission was created to provide advice and recommendations to the

Congress and not to the President; thus, it was not subject to FACA. In

contrast, the NGISC Act requires NGISC to provide the President, the

Congress, and the other specified recipients with a report on its findings

and conclusions and any recommendations it has developed. Neither the

language nor the legislative history of the NGISC Act supports a

conclusion that NGISC’s work was intended to be directed solely to the

Congress and not to the President as well.

With respect to the outside counsel’s second point, we do not agree that

the absence of a requirement in the NGISC Act for the President to act on

any recommendations made by NGISC affects the applicability of FACA.

FACA applies to any commission established by statute “in the interest of

obtaining advice or recommendations” for the President or the executive

branch; there is no further stipulation that, for FACA to apply, the recipient

must be required to act on the advice or recommendations received.17 To

the contrary, section 6(b) of FACA only requires the President or his

delegate to provide the Congress with a follow-up report on his plans for

acting (or reasons for not acting) on recommendations made to him by an

advisory committee.

As agreed with your staff, unless you announce its contents earlier, we

plan no further distribution of this report until 7 days from the date of this

letter. At that time, we will send copies to Senator Fred Thompson,

Chairman, and Senator Joseph I. Lieberman, Ranking Minority Member,

Senate Committee on Governmental Affairs; Representative Dan Burton,

Chairman, and Representative Henry A. Waxman, Ranking Minority

Member, House Committee on Government Reform. We are also sending

copies of this report to Representative Frank Wolf; Ms. Kay James,

NGISC’s Chair; The Honorable David Barram, Administrator of GSA; and

 

17 Other statutes creating advisory committees that have reporting responsibilities to the President and

the Congress and have been designated by GSA as advisory committees to the President do not require

the President to respond to recommendations. See, for example, P. L. 101-549, 104 Stat. 2399, 2574

(1990)(establishing the Risk Assessment and Management Commission); P. L. 103-394, 108 Stat. 4106,

4147 (1994)(National Bankruptcy Review Commission); and P. L. 102-325, 106 Stat. 448, 827

(1992)(National Commission on the Cost of Higher Education).
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other interested parties. Copies also will be made available to others upon

request.

Major contributors to this report are listed in appendix IV. Please contact

me on (202) 512-8387 if you have any questions about this report.

Sincerely yours,

Bernard L. Ungar

Director, Government Business

Operations Issues
Page 21 GAO/GGD-99-46 NGISC’s Selected Operational Practices
Page 22 GAO/GGD-99-46 NGISC’s Selected Operational Practices

Contents

Letter 1

Appendix I

Scope and

Methodology

24

Appendix II

GAO Legal Opinion on

the Applicability of

FACA

26

Appendix III

Comments From the

NGISC

38

Appendix IV

Major Contributors to

This Report

40

Abbreviations

FACA Federal Advisory Committee Act

FOIA Freedom of Information Act

GISA Government in Sunshine Act

GSA General Services Administration

HHS Department of Health and Human Services

NEC National Economic Commission

NGISC National Gambling Impact Study Commission

NHSC Native Hawaiins Study Commission

OGE Office of Government Ethics

OLC Department of Justice's Office of Legal Counsel

RFP request for proposal
Page 23 GAO/GGD-99-46 NGISC’s Selected Operational Practices
Appendix I

Scope and Methodology

Page 24 GAO/GGD-99-46 NGISC’s Selected Operational Practices

The scope of our work was limited to the review of selected operational

practices of the National Gambling Impact Study Commission (NGISC).

We did not attempt to review NGISC’s work in regard to its comprehensive

legal and factual study of the social and economic impacts of gambling.

(1) To determine if NGISC is subject to the Federal Advisory Committee

Act (FACA) and if three specific meetings were in compliance with FACA,

we reviewed the opinion prepared by NGISC’s outside legal counsel and

information submitted by an NGISC commissioner on the applicability of

FACA. We prepared our own legal opinion on the applicability of FACA

based on a review of the legislation that established NGISC, FACA, and

relevant opinions on FACA. We spoke with officials from the General

Services Administration (GSA) and NGISC on the applicability of FACA

and obtained documentation on FACA related issues, such as

authorization to close meetings and designation of a federal officer, and

specifics regarding the three meetings.

(2) To determine NGISC’s process for awarding major contracts, we

reviewed the three largest contracts it awarded, excluding the two

required by NGISC’s enabling legislation. We limited our review to

determining how NGISC chose the contractors, i.e., whether competition

was sought and if not, whether reasonable justification existed for not

doing so. We reviewed NGISC’s contract files and other documents that

included information on the selection processes used. We also interviewed

NGISC’s Administrative Officer, Chair, and Executive Director.

(3) To determine why NGISC contracted for legal counsel instead of using

government legal counsel, we interviewed GSA and NGISC officials and

reviewed correspondence between NGISC and GSA, the Department of

Justice’s Office of Legal Counsel (OLC), and the Office of Government

Ethics (OGE).

(4) To determine if NGISC interfered in the work of the National Academy

of Science’s National Research Council (NAS-NRC) contractor, we spoke

with the NAS-NRC director of the committee who oversaw the NGISC

contract.

(5) To determine how Regent University employees were involved in

NGISC activities, we interviewed NGISC employees, the Chair, and two

Regent University employees. We also looked at the roles of employees at

NGISC.

Scope and

Methodology for

Reviewing Selected

Operational Practices
Appendix I

Scope and Methodology

Page 25 GAO/GGD-99-46 NGISC’s Selected Operational Practices

(6) To determine if NGISC had paid for relocating any staff, we

interviewed NGISC employees, the Chair, and GSA officials. In addition,

we reviewed copies of all travel vouchers that had been processed and

filed at NGISC since its inception to November 1998 and copies of NGISC

staff travel vouchers processed through GSA. We also reviewed a May

1998 memo requesting the payment of the current Executive Director’s

relocation costs.

(7) To determine if NGISC employees were allowed to work at locations

other than the NGISC office in Washington, D.C., we interviewed NGISC

employees, the NGISC Chair, and reviewed the current Executive

Director’s and the former Deputy Director’s work schedules and time

sheets.

In general, we reviewed NGISC’s enabling legislation and the applicability

of laws, such as the Competition in Contracting Act of 1984, FACA, and

title 5 U.S.C. We reviewed correspondence from the Department of

Justice’s OLC addressing whether NGISC is in the legislative branch, and

whether it is subject to 18 U.S.C. 208, a criminal conflict of interest statute.

We also reviewed correspondence from OGE to NGISC concerning the

applicability of ethics laws to NGISC.

We did our audit work from October 1998 through February 1999 in

Washington, D.C., and in Virginia Beach, VA, in accordance with generally

accepted government auditing standards.
Appendix II

GAO Legal Opinion on the Applicability of

FACA

Page 26 GAO/GGD-99-46 NGISC’s Selected Operational Practices

FACA, 5 U.S.C. app. 2 sections 1-16, imposes certain requirements on

advisory committees to the President and federal agencies. FACA’s

definition of an advisory committee includes, in relevant part, any

commission that is established by statute, the President, or an agency “in

the interest of obtaining advice or recommendations for the President or

one or more agencies or officers of the Federal Government.” 5 U.S.C. app.

2, section 3(2).

As discussed below, GSA concluded that the Commission is an advisory

committee to the President and is therefore subject to FACA. The

Commission’s outside counsel reached a contrary conclusion primarily

based on the view that the Commission was not established for the

purpose of providing advice to the President, but rather to study the

impact of gambling in order to advise Congress and state and tribal

governments. Based on our review of the NGISC Act, P. L. No. 104-169, 110

Stat. 1482 (1996) and its legislative history, we conclude that NGISC is an

advisory committee under FACA because it was established in the interest

of obtaining advice or recommendations for the President. The language of

the NGISC Act clearly designates the President as a recipient of the

Commission’s work results, and there is nothing in the legislative history

to suggest that NGISC’s work was intended to be directed to the Congress

to the exclusion of the President or that FACA was not intended to apply.

The NGISC Act provided for the creation of a nine-member commission

with three members each appointed by the President, the Speaker of the

House of Representatives, and the Majority Leader of the Senate (NGISC

Act section 3). Section 4 of the act directs the Commission to conduct a

comprehensive legal and factual study of the social and economic impacts

of gambling. This study is to include a review of specific topics, such as

existing federal, state, local, and tribal policies with respect to the

legalization or prohibition of gambling; an assessment of the relationship

between gambling and levels of crime; and an assessment of the interstate

and international effects of gambling by electronic means.

The NGISC Act requires the Commission to report on the results of its

work no later than 2 years after the date of the Commission’s first

meeting.1

 Specifically, section 4(b) of the act provides in relevant part:

“ (b) REPORT—No later than 2 years after the date on which the Commission first meets,

the Commission shall submit to the President, the Congress, State Governors, and Native

 

1

The Commission held its first meeting on June 20, 1997.

Introduction

Background
Appendix II

GAO Legal Opinion on the Applicability of FACA

Page 27 GAO/GGD-99-46 NGISC’s Selected Operational Practices

American tribal governments a comprehensive report of the Commission’s findings and

conclusions, together with any recommendations of the Commission.”

Because NGISC is required to report to the President as well as the

Congress and state and tribal officials, GSA determined that the

Commission is advisory to the President and is subject to FACA.2 At GSA’s

request, on June 15, 1997, the Commission filed a charter with GSA stating

that: “The Commission is subject to the standards and requirements of the

Federal Advisory Committee Act (FACA, as amended), with respect to

meetings, hearings, and the availability of Commission records, and other

matters.”3

 On October 31, 1997, the Commission unanimously adopted

operating rules, that included the statement that NGISC “is an independent

legislative commission which will, in general, conduct its activities in

accordance with the standards and requirements of the FACA, the

Freedom of Information Act (FOIA), and the Government in the Sunshine

Act (GISA) . . . .”4

Subsequently, the Commission requested an opinion from its outside

counsel concerning FACA’s applicability to the Commission. The opinion,

issued on February 26, 1998, concluded that the Commission is not subject

to FACA for several reasons that are discussed in more depth below.

Essentially, the opinion maintained that the Commission was not

established for the purpose of providing advice to the President or an

executive agency, but rather to study the impact of gambling in order to

advise Congress, the states, and tribal governments. In this connection, the

outside counsel relied on a 1982 opinion issued by OLC, in which OLC

 

2

GSA found the Commission to be exempt from a number of other laws (e.g., procurement laws,

provisions of title 5, U.S.C.) based on advice that NGISC is in the legislative branch. Specifically, the

Justice Department’s Office of Legal Counsel (OLC) concluded in effect that NGISC is a legislative

branch entity because of its structure and the fact that it performs only information-gathering and

advisory functions. See OLC’s letter of August 13, 1997, to the Chairman of NGISC. Office of Personnel

Management, OGE, and Office of Management and Budget also characterized NGISC as a legislative

branch entity.

3

According to an October 22, 1998, letter from the Chair of the Commission to GSA, the Commission

had been informed that “we had to file a charter and that it had to contain specific language concerning

FACA before GSA would arrange for an account to be opened with the Department of the Treasury or

allow us to conduct our first meeting.”

4

By memorandum of October 30, 1997, Commissioner Loescher had concluded that FACA “may not

apply” to the Commission. The basic premise of the October 30, 1997, memorandum was that NGISC

was formed primarily to advise Congress and state and local governments, not the President, and

therefore is not within FACA’s definition of an “advisory committee” established in the interest of

obtaining advice or recommendations for the President. The memorandum noted that “[I]f FACA does

not apply, its objectives can be still achieved through the adoption of Commission rules. The

Commission operations would be more efficient without the rigid constraints of FACA, particularly in

the issue of closed meetings.”
Appendix II

GAO Legal Opinion on the Applicability of FACA

Page 28 GAO/GGD-99-46 NGISC’s Selected Operational Practices

concluded that FACA was inapplicable to the Native Hawaiians Study

Commission (NHSC). See Applicability of the Federal Advisory Committee

Act to the Native Hawaiians Study Commission (hereinafter Native

Hawaiians), 6 Op. Off. Legal Counsel 39 (1982). In Native Hawaiians, OLC

found that although the NHSC was required to furnish the President with a

copy of its final report, the text of NHSC’s authorizing legislation and its

legislative history established that the commission was created to provide

advice and recommendations to the Congress and not to the President.

As additional support for its conclusion that FACA does not apply to

NGISC, the outside counsel’s opinion pointed to (1) a provision in the

NGISC Act that it viewed as being duplicative of the requirements of

FACA; (2) the absence of a requirement in the NGISC Act that the

executive branch utilize the commission’s work product; and (3) the fact

that neither funding for, nor management of the study comes from the

executive branch. However, the opinion concluded with the caveat that

since “no controlling authority on this issue exists . . . a court therefore

could reach a contrary conclusion.”5

GSA continues to view NGISC as an advisory committee subject to FACA.6

In an October 9, 1998, letter responding to a request from Senator Bryan,

GSA stated that “[o]ur review of . . . the statute creating the NGISC, its

legislative history, and [the outside counsel’s] opinion does not alter our

conclusion that FACA is applicable to the Commission.”

FACA establishes requirements pertaining to the creation, operation,

duration, and review of covered advisory committees. It imposes certain

obligations on advisory committees, requiring them to file charters, publish

notice of their meetings, open their meetings to the public, and make their

minutes and other committee records publicly available. Whether a

particular group is subject to FACA’s requirements depends on whether it

is an advisory committee within the meaning of section 3(2) of FACA,

which provides that

“(2) The term ‘advisory committee’ means any committee, board, commission, council,

conference, panel, task force, or other similar group, or any subcommittee or other

subgroup thereof . . . which is”

 (A) established by statute or reorganization plan, or

 

5

The outside counsel’s opinion refers to two court cases discussed below, but states that neither

definitively resolves the issue of FACA’s applicability to the NGISC.

6

GSA listed NGISC as a presidential advisory committee in its Twenty-sixth Annual Report on Federal

Advisory Committees covering fiscal year 1997.

Applicable Legal

Framework
Appendix II

GAO Legal Opinion on the Applicability of FACA

Page 29 GAO/GGD-99-46 NGISC’s Selected Operational Practices

 (B) established or utilized by the President, or

 (C) established or utilized by one or more agencies, in the interest of obtaining advice or

recommendations for the President or one or more agencies or officers of the Federal

Government. . . .”

The above-quoted definition is broadly worded and in relevant part

includes any commission that is established by statute in the interest of

obtaining advice or recommendations for the President or one or more

agencies. The definition does not cover commissions that are established

solely to advise the Congress.7

 However, as discussed below, a committee

can be established in the interest of advising the executive branch, and

thus subject to FACA, even though part of the purpose of the committee is

to report to the Congress. California Forestry Ass’n v. United States Forest

Service, 102 F.3d 609 (D.C. Cir. 1996).

As the NGISC outside counsel’s opinion notes, there are no court cases

specifically addressing the issue of FACA’s applicability to NGISC.

However, two court cases cited in the opinion have examined FACA’s

applicability to committees serving more than one purpose and apply an

analytical framework that is useful in examining the status of NGISC.

In Sofamor Danek Group v. Gaus, 61 F.3d 929 (D.C. Cir. 1995), the Agency

for Health Care Policy and Research had convened a “Low Back Panel”

under its statutory authority to use panels to develop clinical practice

guidelines for private health care professionals. A medical device

manufacturer challenged the guidelines developed by the panel,

contending that the panel was an advisory committee under FACA but had

not followed its requirements. The manufacturer contended that, although

one purpose of the panel was to provide advice to private health care

professionals, an additional purpose, which was reflected in the panel’s

authorizing legislation and legislative history was to obtain advice for the

Department of Health and Human Services (HHS) to use in formulating

Medicare reimbursement policy. The court rejected the plaintiff’s

argument, finding that the intended recipient of the panel’s work was clear

from the face of the statute:

 

7

 See Native Hawaiians, 6 Op. Off. Legal Counsel at 40. Earlier versions of the bills that resulted in

FACA included advisory committees established or organized to advise and make recommendations to

the Congress, but these references were deleted before final passage.
Appendix II

GAO Legal Opinion on the Applicability of FACA

Page 30 GAO/GGD-99-46 NGISC’s Selected Operational Practices

“Congress expressly stated the purpose for the establishment of the panels—improving

health care by developing, reviewing, and updating guidelines for use by clinical health care

practitioners. In light of that express purpose, the court will not lightly infer any other

purpose, such as reducing health care costs by giving advice to the Secretary regarding

Medicare reimbursement policy . . . Although [HHS] may consult [the guidelines] when

setting Medicare reimbursement policy, and Congress may have intended that [the agency]

do so, it does not follow that Congress’ purpose in authorizing the panels . . . was to provide

advice or recommendations to [the agency].” 61 F.3d at 935-36.

Because the panel’s authorizing legislation expressly designated the

intended beneficiaries of its guidelines, the court stated that HHS’s

“subsequent and optional use” of the guidelines in administering Medicare

policy would not render the panel an advisory committee subject to FACA.

In California Forestry Ass’n v. United States Forest Service, 102 F.3d 609,

the Forest Service unsuccessfully argued, based on Sofamor Danek, that it

was only an incidental recipient of a research panel study that was being

prepared for submission to the Congress. The concept for the panel

originated in a provision of an appropriations act that allocated funds to be

used for forest research and conference report language explaining that a

panel should be convened to study forests of the Sierra Nevada. The Forest

Service sought more specific guidance, and it received two letters from

multiple members of Congress framing the scope of the study and

directing that the study results be submitted to the Congress.

The court in California Forestry distinguished Sofamor Danek, noting that

in Sofamor “the statute designated the primary user” of the Low Back

Panel whereas, “[h]ere we have no similar statutory directive” (102 F.3d at

613). In the absence of a statutory directive, the court looked to the

circumstances surrounding the creation and use of the research panel and

found that, among other things, the study results were expected to form an

important part of the Forest Service’s long-term plan for ecosystem

management. Thus, although the research panel had been created at the

behest of and was responsible for reporting to the Congress, the Forest

Service was not merely a subsequent and optional user of the study (102

F.3d at 612).

Finally, the core legal authority relied on by NGISC’s outside counsel is

OLC’s opinion in Native Hawaiians, cited above. As indicated previously,

the outside counsel’s opinion draws parallels between NGISC and NHSC,

maintaining that, like NHSC, NGISC is not an advisory committee because

it was established to advise the Congress (and others) but not the

President or a federal agency. Because the Native Hawaiians opinion is

central to the outside counsel’s conclusions and involves an extensive
Appendix II

GAO Legal Opinion on the Applicability of FACA

Page 31 GAO/GGD-99-46 NGISC’s Selected Operational Practices

analysis of FACA’s applicability to NHSC, it is summarized in some detail

below.

In Native Hawaiians, OLC framed the issue as “[w]hether the Native

Hawaiians Study Commission was established to advise the President or

federal agencies or solely to advise Congress,” and stated that the answer

“must be determined by reference to the Commission’s authorizing act.”

Turning to the NHSC’s authorizing legislation, the NHSC Act, OLC noted

that the NHSC’s basic mission was to “conduct a study of the culture,

needs, and concerns of Native Hawaiians.” The act provided that, after

NHSC completed its study, it was to publish a draft report summarizing the

study’s findings, solicit comments on the draft from various sources, and

prepare a final report with copies to be sent to the President and two

congressional committees. Finally (and according to OLC “most

importantly”), the NHSC Act required the Commission to “make

recommendations to the Congress based on its findings and conclusions

[from the study].”

Reviewing the provisions summarized above, OLC noted that the fact that

the President was to receive a copy of NHSC’s final report could imply a

relationship for the transmittal of advice between NHSC and the President.

However, OLC found that several factors weighed against NHSC being

considered an advisory body to the President. First, OLC found it

significant that the NHSC Act drew a distinction between the NSHC’s final

report, which was to contain factual findings, and its recommendations,

which were to be made only to the Congress and apparently transmitted

separately. Second, OLC stated that, even if the final report could be

characterized as advice, it was unclear that such advice was really meant

for the President, where (as discussed below) various factors showed that

the Commission was created to formulate policy recommendations to the

Congress for future legislation. Accordingly, OLC stated that the fact

“[t]hat the President is to receive a copy of the study, perhaps simply as a

courtesy or for his general information, does not mean the study was

intended to advise him.”

The OLC mentioned two additional provisions in the NHSC Act that it

viewed as at least indirectly suggesting that NHSC was not established to

advise the President. The first provision required NHSC to publish public

notice of its hearings, specifying the information to be included, and

required NHSC to “take such other actions as it considers necessary to

obtain full public participation” in its study. According to OLC, the effect

of this provision was to establish a modest open meeting goal for NHSC,

and it would have been redundant if FACA’s more prescriptive
Appendix II

GAO Legal Opinion on the Applicability of FACA

Page 32 GAO/GGD-99-46 NGISC’s Selected Operational Practices

requirements had applied to the Commission. OLC also noted that the

NHSC Act provided initial funding for NHSC from the contingent fund of

the Senate, suggesting that NHSC was closely tied to the Congress.

Although OLC viewed all of these factors as weighing against a conclusion

that NHSC was formed to advise the President, it found that they did not

resolve the issue conclusively. In OLC’s view, the provision requiring

NHSC to submit its final report to the President made NHSC’s relationship

with the President “sufficiently ambiguous” to present a close question

requiring resort to the NHSC Act’s legislative history.

As described in detail in Native Hawaiians, the NHSC Act’s legislative

history disclosed numerous indications that NHSC was established

specifically for the purpose of advising the Congress. For example, OLC

found that, in floor comments, the bill’s two sponsors described NHSC as a

body to advise the Congress (and referred to possible legislation resulting

from the Commission’s findings), without any mention of an advisory

relationship with the executive branch. Tracing the evolution of the bill,

OLC found that two predecessor bills had sought to establish a

commission specifically to advise the Congress. One of these bills had

been amended in committee to add the requirement that the commission’s

final report be submitted to the President, but the accompanying

committee report did not comment on the change and continued to

characterize NHSC as an advisory body to the Congress. Based on these

and other “clear indications . . . that the Commission was created to advise

the Congress and not the President or federal agencies,” OLC concluded

that NHSC was not subject to FACA.

As recognized by the court cases and OLC opinion discussed above, the

starting point for determining whether a commission was established in

the interest of obtaining advice or recommendations for the President or

an executive agency is the text of the commission’s authorizing legislation.

If the statutory language clearly identifies the intended recipients of a

commission’s work results, there is no need to resort to the legislative

history or other sources to determine the purposes to be served by the

commission (Sofamor Danek). However, if statutory language identifying

the intended recipients is ambiguous (or absent), the commission’s

fundamental purposes must be ascertained through an examination of the

legislative history and other relevant sources. See California Forestry Ass’n

and Native Hawaiians.

In this case, the text of the NGISC Act clearly identifies the President as a

recipient of NGISC’s work results. In this regard, section 4(b) of the act

Analysis

Text of NGISC Act
Appendix II

GAO Legal Opinion on the Applicability of FACA

Page 33 GAO/GGD-99-46 NGISC’s Selected Operational Practices

provides that the Commission “shall submit to the President, the Congress,

State Governors, and Native American tribal governments a

comprehensive report of the Commission’s findings and conclusions,

together with any recommendations of the Commission.”

Unlike the statutory provisions addressed in Native Hawaiians, the NGISC

Act does not draw a distinction between the types of work results to be

provided to the Congress and the President (i.e., a copy of the report with

and without recommendations) or indicate that reporting to the President

is intended to be on a less substantive level. Rather, the NGISC Act places

the President, the Congress, and the other listed recipients of the

Commission’s work on an equal footing by requiring NGISC to provide

each recipient with (1) a report on its findings and conclusions and (2) any

recommendations it has developed.

While there are no other provisions in the NGISC Act that directly address

reporting by the commission or the use of its work results, NGISC’s

outside counsel points to certain provisions that it views as creating an

inference that FACA does not apply to the commission.8

 In particular, the

outside counsel points to language in section 3(b)(3) of the act, which

provides that

“ (3) CONSULTATION REQUIRED.—The President, the Speaker of the House of

Representatives, and the Majority Leader of the Senate shall consult among themselves

prior to the appointment of the members of the Commission in order to achieve, to the

maximum extent possible, fair and equitable representation of various points of view with

respect to the matters to be studied by the Commission. . . .”

According to the outside counsel’s opinion, this language duplicates the socalled balance provision of FACA, section 5(b)(2), which requires that

advisory committee membership be fairly balanced in terms of the points

of view represented and functions to be performed by the committee.

Thus, the outside counsel draws an analogy to the statute at issue in Native

Hawaiians, which prescribed modest open meeting requirements for NHSC

and, in OLC’s view, would have been redundant had FACA applied to

NHSC.

In our view, there is a fundamental distinction between the statutory

provisions at issue in this case and the “open meeting” requirements that

OLC addressed in Native Hawaiians. The balance requirement in the

NGISC Act essentially implements FACA’s direction in section 5(b)(2) that

 

8

 One of the outside counsel’s arguments, relating to the funding and management of NGISC, is

discussed separately below.
Appendix II

GAO Legal Opinion on the Applicability of FACA

Page 34 GAO/GGD-99-46 NGISC’s Selected Operational Practices

“any . . . legislation [establishing an advisory committee] shall require the

membership of the advisory committee to be fairly balanced in terms of

the points of view represented and the functions to be performed by the

advisory committee.” In contrast, in Native Hawaiians, the NHSC Act

requirements for open meetings were different from those imposed by

FACA and thus supported an inference that FACA was not intended to

apply.

The outside counsel’s opinion also maintains that an inference of FACA’s

inapplicability can be drawn from the fact that the NGISC Act does not

require the executive branch to consider or utilize the commission’s work

product. However, FACA applies to any advisory committee established by

statute in the interest of obtaining advice or recommendations for the

executive branch; there is no further stipulation that, for FACA to apply,

the recipient must be required to act on the advice or recommendations

received. Rather FACA itself provides that within 1 year after a

presidential advisory committee’s report is issued, the President or his

delegate must report to the Congress his proposals for action or reasons

for inaction, with respect to the committee’s recommendations. See FACA

section 6(b).

Because the statutory language requiring NGISC to provide its report and

recommendations to the President as well as the other listed recipients is

clear on its face, there is no need to resort to the legislative history to

ascertain the intended recipients of NGISC’s work results (See Sofamor

Danek, above). Nevertheless, we reviewed the legislative history of the

NGISC Act to determine whether there was anything to suggest that the

Congress viewed NGISC as being solely advisory to the Congress or that it

otherwise intended for FACA not to apply to NGISC.

The only specific reference to FACA was made during the Senate’s

consideration of H.R. 497, the bill that eventually was enacted as the

NGISC Act. In this regard, in commenting on the Senate-amended version

of H.R. 497, Senator Glenn expressed the view that FACA would apply to

the NGISC:

“This commission will be closely watched by many, including those with the power and

resources to tie the commission up in costly litigation. It is subject to the Federal Advisory

Committee Act [FACA], a statute which requires compliance with open meetings and public

access, but also a statute that allows litigation, something we’ve seen a significant amount

of in the last several years with various executive branch commissions and taskforces. So I

would urge the commission at its first meeting to read FACA and to closely adhere to its

requirements.” 142 Cong. Rec. S. 7977 (daily ed. July 17, 1996).

Legislative History
Appendix II

GAO Legal Opinion on the Applicability of FACA

Page 35 GAO/GGD-99-46 NGISC’s Selected Operational Practices

Further, with regard to the intended focus of NGISC’s work results, there

is nothing to show that NGISC’s work was intended to be directed to the

Congress rather than the President. 9

 Rather, the main debate in both the

House and Senate concerned the role of the states versus the federal

government in issues relating to gambling.10 The federal interest in NGISC’s

study results was described in broad terms, with little discussion of the

specific roles envisioned for the President and Congress.11 However, the

original version of H.R. 497 (and S. 704, the companion bill in the Senate)

put the President and the Congress on an equal footing in terms of the

recommendations to be made by NGISC, providing that

“ [The Commission] shall submit a report to the President and the Congress which shall

contain a detailed statement of the findings and conclusions of the Commission, together

with its recommendations for such legislation and administrative actions as it considers

appropriate.” H.R. 497, 104th Cong. § 4(b) (1995); S. 704, 104th Cong. § 4(b) (1995).

The above-quoted language ultimately was changed to add state governors

and Native American tribal governments to the list of recipients, resulting

in the requirement in section 4(b) of the NGISC Act that the Commission

“submit to the President, the Congress, State Governors, and Native

American tribal governments a comprehensive report of the Commission’s

findings and conclusions, together with any recommendations of the

Commission.” However, there is nothing in the legislative history to show

that this change was intended to alter the respective roles of the President

 

9

 The outside counsel’s opinion acknowledges that the NGISC act’s legislative history is “less

conclusive” than that addressed in Native Hawaiians: “In Native Hawaiians, two sponsors of the bill

‘characterized the commission as an advisory committee to Congress’ . . . . Here, there is no such

statement by the bill’s sponsors.”

10Opponents argued that the bill intruded into the states’ regulatory prerogatives. See, e.g., 142 Cong.

Rec. 3643 (1996) (statement of Rep. Vucanovich)(“[W]hen our states are the best ones to be handling

this issue, why are we advocating more federal intrusion?”). Proponents countered that the basic

purpose of NGISC was to study and not regulate gambling, and that the federal government has a

legitimate interest in gambling issues. See, e.g., 142 Cong. Rec. 3645 (1996)(statement of Rep. Wolf)

(“This legislation does not outlaw gambling. It does not tax gambling. It does not regulate gambling. It

merely recognizes that gambling is spreading through the country like wildfire and it needs a hard

look.”)

11See 142 Cong. Rec. 3645 (1996)(statement of Rep. Wolf)(“It is time for Congress to take a

comprehensive look at gambling and its associated problems”); 142 Cong. Rec. 3642 (statement of Rep.

Hyde) (“A study of the impact of gambling on our society—focusing on both its positive and negative

aspects—will be a helpful tool for policymakers at the Federal, State, and local government levels”);

142 Cong. Rec. S7976 (daily ed. July 17, 1996)(statement of Sen. Glenn) (“Based on its examination . . .

the commission will then make appropriate recommendations to policymakers at all levels of

government.”)
Appendix II

GAO Legal Opinion on the Applicability of FACA

Page 36 GAO/GGD-99-46 NGISC’s Selected Operational Practices

and the Congress as recipients of the study or that, as the bills evolved, the

focus of NGISC became solely legislative.12

Finally, the outside counsel suggested that because NGISC is a legislative

branch entity, it was established to advise the Congress and not the

President and thus is not subject to FACA.13 While a commission’s linkage

to the legislative branch may, in combination with other factors, indicate

that a commission was intended solely to advise the Congress (Native

Hawaiians), it is not determinative of an entity’s status as an advisory

committee. FACA’s definition of an advisory committee focuses on

whether the committee has an advisory relationship with the President or

a federal agency and not on the branch of government in which the

committee is located.14

NGISC’s status as a legislative branch entity with responsibilities to the

Congress has no bearing on whether it is also responsible for providing

advice to the President and is therefore subject to FACA. The Supreme

Court, in commenting on the dual obligations of the Comptroller General

to the legislative and executive branches, recognized that “[o]bligations to

two branches are not . . . impermissible and the presence of such dual

obligations does not prevent the characterization of the official with the

dual obligations as part of one branch.” See Bowsher v. Synar, 478 U.S.

714, 746 (1986) (Stevens, J., concurring in the judgment). In this

 

12In fact, the NGISC Act identifies subjects for review that relate to areas currently under the

jurisdiction of executive agencies. For example, the statute requires NGISC to assess “existing

enforcement and regulatory practices” that address the relationship between gambling and levels of

crime. See NGISC Act section 4(a)(2)(B). The study also is to include a review of Native American

tribal policies and practices relating to gambling (NGISC Act section 4(a)(2)(A)); gambling on Indian

tribal lands is federally regulated. Under section 4(a)(2)(D) of the act, NGISC is to study the role of

advertising in promoting gambling. See 142 Cong. Rec. S7977 (daily ed. July 17, 1996)(statement of Sen.

Bryan) (“[T]he federal government, through the Federal Trade Commission, already exercises broad

enforcement and regulatory authority over false and deceptive advertisements in general, including

those for gaming.”)

13The outside counsel’s opinion draws parallels to Native Hawaiians stating that the “Study Commission

primarily exercises legislative duties [and] is not funded through the executive branch . . . .” While the

outside counsel’s opinion states that the NGISC Act authorized the Commission funding through the

Advisory Commission on Intergovernmental Relations and the National Academy of Sciences, “neither

[of which] fall within the executive branch.” Section 9 of the act authorizes appropriations for NGISC

in its own right, as well as for the two other specified entities in connection with duties they are to

perform under the act. The Commission received its appropriations under the Departments of

Commerce, Justice, and State; the Judiciary; and Related Agencies appropriations acts for fiscal years

1997 and 1998.

14Thus, for example, OLC concluded that the Native Hawaiians Study Commission did not have the

requisite advisory relationship with the executive branch, and was outside the reach of FACA, because

it had been formed specifically to advise the Congress. In a later opinion on the applicability of the

Hatch Act, OLC concluded that NHSC is in the executive branch. See Applicability of the Hatch Act to

the Chairman of the Native Hawaiians Study Commission, 6 Op. Off. Legal Counsel 292 (1982).

Other Considerations
Appendix II

GAO Legal Opinion on the Applicability of FACA

Page 37 GAO/GGD-99-46 NGISC’s Selected Operational Practices

connection, in 1988, OLC determined that the National Economic

Commission (NEC), which was charged with making recommendations to

the President and to the Congress regarding methods to reduce the federal

deficit, was in effect a legislative branch entity. Letter for Alexander H.

Platt, General Counsel, National Economic Commission, from Douglas W.

Kmiec, Deputy Assistant Attorney General, Office of Legal Counsel (June

22, 1988). OLC reached this conclusion even though, as OLC noted in a

later opinion, NEC’s enabling legislation expressly made it subject to

FACA. See Status of the Commission on Railroad Retirement Reform for

Purposes of the Applicability of Ethics Laws, 13 Op. Off. Legal Counsel

285, 290 n.11 (1989).

We conclude that NGISC is an advisory committee as defined in section

3(2) of FACA, because it was established in the interest of obtaining advice

or recommendations for the President. The language of the NGISC Act

clearly designates the President as a recipient of the Commission’s work

results, and there is nothing in the legislative history of the act to suggest

that the focus of the Commission was solely legislative or that the

requirements of FACA were intended not to apply.

Conclusion
Appendix III

Comments From the NGISC

Page 38 GAO/GGD-99-46 NGISC’s Selected Operational Practices
Appendix III

Comments From the NGISC

Page 39 GAO/GGD-99-46 NGISC’s Selected Operational Practices
Appendix IV

Major Contributors to This Report

Page 40 GAO/GGD-99-46 NGISC’s Selected Operational Practices

John S. Baldwin, Sr., Assistant Director

Lisa Wright-Solomon, Evaluator-in-Charge

Lynn Gibson, Associate General Counsel

Susan Michal-Smith, Senior Attorney

General Government

Division

Office of General

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