Delegation of Cabinet" Members’ Functions as

Ex Officio Members of the Board of Directors

of the Solar Energy and Energy Conservation Bank

Under settled principles of administrative law, Cabinet members serving as ex officio members of the 

Board of Directors of the Solar Energy and Energy Conservation Bank may delegate their 

directorial functions to subordinates, even though the legislation establishing the Bank does not 

expressly authorize such delegation.

May 21, 1982

MEMORANDUM OPINION FOR THE GENERAL COUNSEL, 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

This responds to your request for our opinion whether ex cfficio members of 

the Board of Directors of the Solar Energy and Energy Conservation Bank (Bank) 

are authorized to delegate their functions to Substitute Directors, or whether 

actions taken by such Substitute Directors pursuant to this delegation are invalid 

absent subsequent ratification by the statutorily named Directors. For the reasons 

stated below, we believe that the ex cfficio members may delegate their functions 

and, accordingly, that the actions taken by their duly appointed delegees are 

valid.

The Bank was created by Title V of the Energy Security Act of 1980, Pub. L. 

No. 96-294 , 94 Stat. 611, 719, 12 U.S.C. § 3601 (Act) to provide financial 

encouragement for the installation and use of energy conservation devices and 

solar energy systems. See 12 U.S.C. § 3601 (Supp. V 1981) and H.R. Rep. No. 

1104, 98th Cong., 2d Sess. 278-291 (1980) (Conference Report). Established 

“ in the Department of Housing and Urban Development,” the Bank has “ the 

same powers as those powers given to the Government National Mortgage 

Association by [12 U.S.C. § 1723a(a)].” 12 U.S.C. § 3603(a).1 The General 

Accounting Office is responsible for auditing the financial transactions of the 

Bank. 12 U.S.C. § 3603(b).

The Bank is governed by a Board consisting of five ex cfficio Directors: the 

Secretaries of Housing and Urban Development, Energy, Treasury, Agriculture, 

and Commerce. The Secretary of HUD chairs the Board, and three Board

1 These powers include the pow er to enter into and perform contracts with federal and state agencies and pnvate 

persons; to sue and be sued “ in its corporate nam e” ; to lease, purchase and dispose of property; to conduct its 

business “ without regard to any qualification o r sim ilar statute” in any state, and to prescribe rules and regulations 

for the conduct of its business. 12 U .S C § 1723a(a)

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members constitute a quorum. See 12 U.S.C. § 3604(a), (b) and (c). The 

President of the Bank is a presidential appointee and serves as Secretary of the 

Board. See 12 U.S.C. §§ 3604(a) and 3605(a). The Board is responsible for 

establishing the policy and carrying out the functions of the Bank, and it is 

authorized and directed to issue such regulations as it deems necessary to this 

end. 12 U.S.C. §§ 3603(e) and 3618. Among other things, the Board is directed 

to determine levels of financial assistance for various energy projects, 12 U.S.C. 

§ 3608, designate financial institutions for participation in the Bank’s programs, 

12 U.S.C. § 3611, and establish criteria for approving eligible solar technology 

and conservation measures. 12 U.S.C. §§ 3612 and 3613. In addition, the Board 

appoints members of the Bank’s two advisory committees and directs the 

President and other Bank officers in the management of the Bank’s affairs. 12 

U.S.C. § 3605(c).

In September of 1980 the Board of Directors of the Bank met and adopted bylaws, including a provision permitting the designation of “ Substitute Directors” 

by each of the statutorily named Directors. See 24 C.F.R. § 1895.1 (1980) 

(Section 3.02). Each Substitute Director is to be designated “ under the established delegation provisions” of the particular Cabinet agency involved, except 

that each must occupy a position at least equivalent to that of Assistant Secretary. 

In the absence of the designating Director, the Substitute Director “ will be 

deemed to be a member of the Board and will have all the powers and duties of the 

designating Director.” We understand from your request that, pursuant to this bylaw provision and the applicable delegation authorities of the five Cabinet 

agencies,2 Substitute Directors were named, have met on several occasions to 

conduct the statutory business of the Bank, and have taken a number of actions in 

the name of the Bank that have not been adopted or confirmed by the statutorily 

named Directors. The question you have asked us to address is whether the ex

cfficio members were authorized to delegate their directorial functions and, 

accordingly, whether these actions by the Substitute Directors are valid.

The terms of the Act do not provide for delegation of the directorial functions 

of the ex cfficio Board members. It is clear, however, as a “general proposition” 

of administrative law, that “merely vesting a duty in [a Cabinet officer] . . . 

evinces no intention whatsoever to preclude delegation to other officers in the 

[Cabinet officer’s agency] . . . .” UnitedStates v. Giordano, 416U.S. 505, 513

(1974).3 See also 1 Davis, Administrative Law Treatise, § 3:17 (2d ed. 1978);

l See 42 U .S .C § 3535(d) (Supp. V 1981) (HUD); 42 U .S C. § 7252 (Supp V 1981) (Energy); 31 U .S.C . 

§ 1007 (1976) (Treasury); Section 4 of R eorganization Plan N o. 2 o f 1953, 67 Stat. 633 (A griculture), Section 2 of 

R eorganization Plan N o. 5 o f 1950, 64 Stat 1263 (Com m erce) T he H U D delegation provision is typically worded.

T he S ecretary may delegate any o f his functions, pow ers, and duties to such officers and 

em ployees o f the D epartm ent as he m ay designate, may authorize such successive redelegations of 

such functions, pow ers, and duties a s he may deem desirable, and may make such rules and 

regulations as may be necessary to carry out his functions, pow ers, and duties.

42 U .S .C . § 3535(d) (Supp. V 1981)

3 Giordano involved a statutory provision that vested the authority to approve w iretaps under Title III o f the 

O m nibus C rim e C ontrol and Safe Streets A ct o f 1968 in “ the A ttorney G eneral or any A ssistant A ttorney General 

specially designated by the Attorney G eneral." 416 U S at 514. T he governm ent argued that delegation to the 

A ttorney G en eral’s Executive Assistant w as perm issible under the D epartm ent of Justice's general delegation

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FTC v. Gibson, 460 F.2d 605 (5th Cir. 1972) (FTC may delegate to field officer 

power to issue subpoena); Wirtz v. Atlantic States Construction Co., 357 F.2d

442 (5th Cir. 1966) (Secretary of Labor may delegate to regional attorneys 

authority to institute suit under the Fair Labor Standards Act of 1938). To be sure, 

the legality of a particular administrative delegation is primarily a function of 

legislative intent. See, e.g., Hall v. Marshall, 476F. Supp. 262, 272 (E.D. Penn. 

1979). Nevertheless, as summarized in Sutherland’s treatise on statutory 

construction,

Where the statute is silent on the question of redelegation and the 

delegation was to a single executive head, it is almost universally 

held that the legislature, understanding the impossibility of personal performance, impliedly authorized the delegation of authority to subordinates.

1 C. Sands, Sutherland Statutory Construction, § 4.14 (4th ed. 1972).

The practical necessities underlying this administrative law principle are 

equally applicable where ex officio functions are involved. Indeed, they may be 

especially applicable. It can be fairly assumed that when Congress selects 

particular government officials for ex officio service, it is because their official 

duties bear a reasonable relationship to the functions of the body to which they are 

attached ex officio. In so designating political officials who serve individually 

only for the length of time they remain in their official posts, Congress expects 

both to take advantage of their agency’s specialized knowledge and experience, 

and to ensure its continuous availability. It is reasonable to conclude in these 

circumstances that Congress expects the agency head to operate as he would 

normally in running his agency, and thus to conform to the accepted administrative practice of delegating authority to subordinates for the performance of 

many of his official duties. An opposite conclusion would often lead to frustration 

of the legislation establishing the body in question, as well perhaps as other laws, 

since a rigid requirement that a Cabinet member give his personal attention to 

every one of his many official functions would be impossible of fulfillment.4

In this case, nothing in the legislative history of the Bank’s organic act suggests 

that Congress intended to depart from settled administrative law practice with

statute, 28 U S .C § 5 1 0 The C ourt disagreed. W hile finding no “ precise language forbidding d eleg atio n ," the 

C ourt held that the 1968 statute, “ fairly read, was intended to lim it the power to the Attorney General h im self 

and to any A ssistant A ttorney G eneral he might designate." Id The C o u rts opinion includes an extensive discussion 

o f the 1968 statute’s legislative history, in w hich it notes in particular C ongress’ concern that the individual 

responsible for authorizing wiretaps be responsive to the political process In reaching this conclusion, however, the 

C ourt noted, as a general “ unexceptionable” proposition, that functions vested in the A ttorney General m ay be 

delegated unless the m atter of delegation has been otherwise “ expressly addressed " Id.

4 C ongress has som etim es made specific provision for the delegation of ex officio functions o f Cabinet m em bers 

and other high governm ent officials serving on boards and advisory groups See, e.g., 40 U S C . § 872 (ex cfficio

m em bers of Pennsylvania Avenue Redevelopm ent C orporation Board of Directors may designate alternates); 45 

U S C § 711 (sam e, United States Railway A ssociation); 16 U .S C § 468 (sam e. National Trust for H istoric 

Preservation). But for every express provision perm itting delegation of directorial functions in statutes creating 

governm ent corporations, there are several w hose boards include Cabinet m em bers serving ex cfficio which contain 

no express delegation provisions. See, e g., 15 U .S .C . § 714g(a) (C om m odity Credit C orporation), 16 U .S .C . 

§ 19(0 (National Rark Foundation); 45 U .S.C . § 543(a) (N ational Railroad F^ssenger C orporation), 42 U .S C. 

§ 8103 (N eighborhood Reinvestm ent Corporation), 2 9 U S C. § 1302(c) (Pension Benefit G uaranty Corporation)

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respect to the delegation of ex cfficio board members’ authority. Indeed the 

statutory scheme lends support to the presumption favoring delegation. As in 

most instances where Congress selects particular government officials for ex

cfficio service, the choice of the five Cabinet members in this case was based not 

on individual personal attributes, but on the contribution Congress believed each 

one’s agency could make to the Bank’s operations. See, e.g.. Conference Report 

at 278 (“The Conferees expect the Board will rely on DOE and HUD to determine 

the reliability, safety, and performance of such new energy conserving improvements. . . .” ). We think it reasonable to conclude, therefore, that the general 

delegation authority available to each of these five Cabinet members is sufficient 

to accomplish the delegation of functions provided in the Board’s by-Laws.5

The district court for the District of Columbia has sustained a delegation of ex

officio authority in a case similar to this one. In D .C . Federation of Civil

Associations v. Airis, 275 E Supp. 533 (D.D.C. 1967), the court held that ex

cfficio members of the National Capital Planning Commission properly appointed alternates to vote and otherwise act in their behalf, in spite of the absence of 

any specific statutory authorization for the delegation.6 In so holding, it noted that

obviously, the ex cfficio members of the Commission are not 

expected to and cannot devote their entire time to its work. On the 

contrary, their services as members of the Commission are only 

one feature of their numerous activities. It has become the usage 

for the ex cfficio members to appoint alternates to act in their 

behalf.

275 F. Supp. at 539.

The general rule of private corporate law prohibiting delegation of a Director’s 

voting authority has no relevance in this context. Even if the Bank more closely 

resembled a private corporation in its structure and functions,7 the law applicable 

to it would remain that contained in its own organic statute and in general 

principles of administrative and constitutional law applicable to similar government entities. See Rainwater v. United States, 356 U.S. 590 (1958). See also

D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 472 (1942) (Jackson, J., 

concurring). Like the Commodity Credit Corporation, whose status under the 

False Claims Act was at issue in the Rainwater case, the Bank is “ simply an 

administrative device established by Congress for the purpose of carrying out 

[energy] programs with public funds.” 356 U.S. at 592. Unlike the Commodity 

Credit Corporation, it does not even have “a corporate name . . . to distinguish it

5 Indeed, this delegation probably would b e perm issible even w ithout the form al adoption by the Board o f the 

“ Substitute D irector” by-law

6 The court did not say w hether any of the statutorily appointed officials involved— who included the C hief of 

Engineers o f the Army, the D irector of the N ational Park S ervice, the Federal Highway Administrator, and the 

C hairm en o f the H ouse and Senate District C om m ittees— w ere otherw ise authorized by law to delegate their 

functions, as are the C abinet members in this case. See note 2, supra.

7 W hile the B ank’s authorities are described m the legislative history as “ corporate pow ers,” it is not subject to the 

G overnm ent Corporation C ontrol A ct, 3t U .S .C §§ 841-870 (Supp. V 1981). See list of w holly ow ned governm ent 

corporations in 31 U S .C § 846 (Supp. V 1981), and of m ixed-ow nership corporations in 31 U S .C § 856 (Supp. 

V 1981).

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from the ordinary government agency.” Id. Nor is there any suggestion in the Act 

or its legislative history that Congress intended the Bank to be subject to 

principles of private corporation law.

Based on applicable administrative law principles permitting delegation by 

agency heads of ex officio functions in the absence of legislative directives to the 

contrary, we conclude that the directorial functions were properly delegated in 

this case and that actions taken by the Substitute Directors were not tainted by any 

improper delegation.

T h e o d o r e B . O l s o n

Assistant Attorney General

Office of Legal Counsel

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