Applicability of 18 U.S.C. § 281 to Selling Activities of

Retired Military Officers

Section 281 of Title 18, United States Code, which prohibits certain representational 

activities by federal employees, is presently in force as applied to retired officers of the 

armed forces, and in appropriate cases a violation could warrant criminal prosecution 

by the Department o f Justice.

The prohibitions of the first paragraph of §281 apply only to retired officers on active 

duty, but under its second paragraph inactive retired officers are also prohibited from 

engaging in certain selling activities.

The prohibition in the second paragraph of § 281 was intended generally to prevent 

retired officers from being in a position to exert their influence in the procurement 

process of the military department in which they once served, and applies to representational activities in connection with the sale o f services as well as the sale of goods. 

However, its prohibition does not extend to a situation in which the retired officer can 

fairly be said to be representing only himself and no one else as a seller.

November 30, 1981

MEMORANDUM OPINION FOR THE CHIEF, 

LITIGATION DIVISION, OFFICE OF THE 

JUDGE ADVOCATE GENERAL OF THE ARMY

This responds to your request that we clarify the position of the 

Department of Justice on several issues relating to the interpretation 

and enforcement of 18 U.S.C. § 281. In particular, you ask (1) whether 

and under what circumstances the Department of Justice would prosecute an alleged violation of § 281; (2) whether that statute’s prohibitions apply only to retired officers on active duty or to those not on 

active duty as well, and (3) whether we regard its prohibitions as 

extending to the sale of services as well as the sale of goods.

Section 281 reads as follows:

Whoever, being a Member of or Delegate to Congress, 

or a Resident Commissioner, either before or after he has 

qualified, or the head of a department, or other officer or 

employee of the United States or any department or 

agency thereof, directly or indirectly receives or agrees to 

receive, any compensation for any services rendered or to 

be rendered, either by himself or another, in relation to 

any proceeding, contract, claim, controversy, charge, accusation, arrest, or other matter in which the United

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States is a party or directly or indirectly interested, before 

any department, agency, court martial, officer, or any 

civil, military, or naval commission, shall be fined not 

more than $10,000 or imprisoned not more than two 

years, or both; and shall be incapable of holding any 

office of honor, trust, or profit under the United States.

Retired officers of the armed forces of the United 

States, while not on active duty, shall not by reason of 

their status as such be subject to the provisions of this 

section. Nothing herein shall be construed to allow any 

retired officer to represent any person in the sale of anything to the Government through the department in 

whose service he holds a retired status.

This section shall not apply to any person because of 

his membership in the National Guard of the District of 

Columbia nor to any person specially excepted by Act of 

Congress.

In 1962, as part of the general revision and recodification of the laws 

relating to conflicts of interest, this provision was repealed “except as 

[it] may apply to retired officers of the armed forces of the United 

States.” Pub. L. No. 87-849, § 2, 76 Stat. 1119, 1126. As you note, there 

has been considerable controversy over exactly how this statute “may 

apply” to retired military officers.

The response to the first of your questions is contained in a letter 

from D. Lowell Jensen, Assistant Attorney General, Criminal Division, 

to Senator Strom Thurmond, Chairman, Committee on the Judiciary, 

July 7, 1981. Responding to Senator Thurmond’s request for comments 

on a proposal to repeal § 281 and its companion statute 18 U.S.C. § 283, 

the Assistant Attorney General stated that “we believe the two statutes 

are presently in force and properly denote federal crimes.” He also 

stated that while “prosecution would not ordinarily be undertaken . . . 

in the absence of evidence of venal conduct” and while “most of the 

matters involving these statutes can be effectively dealt with administratively,” nonetheless “an aggravated case could warrant criminal prosecution . . . .”

Your second question is whether the prohibitions of § 281 are limited 

to retired officers on active duty or whether they are applicable as well 

to retired officers not on active duty. We believe that the prohibitions 

of the first paragraph of §281 apply in full force only to active duty 

retired officers, but that under its second paragraph inactive retired 

officers are also prohibited from engaging in certain activities.

In 1939, the Court of Appeals for the District of Columbia held that 

all retired military officers, whether or not on active duty, are “officers” of the United States and subject to all conflicts laws from which 

they have not been exempted. See Morgenthau v. Barrett, 108 F.2d 481

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(D.C. Cir. 1939), cert, denied, 309 U.S. 672 (1940). The following year, 

in response to the holding in the Barrett case, Congress added the 

second paragraph to §281 to effect this exemption for retired officers 

not on active duty. The first sentence of the paragraph exempted 

inactive retired officers from the full force of the first paragraph. 

However, the second sentence of the paragraph limited the scope of 

this exemption, so that a retired officer not on active duty was left 

subject to a narrowly defined prohibition: he was forbidden to “represent any person in the sale of anything to the Government through the 

department in whose service he holds a retired status.” 1

This reading of the text of § 28 l’s second paragraph is supported by 

the legislative history of the 1940 amendments. See H.R. Rep. No. 2330, 

76th Cong., 3d Sess. 1 (1940) (hereafter 1940 House Report) (second 

sentence “intended to continue the prohibition against the sale of anything to a department by an officer formerly actively connected with 

that department.”). See also H.R. Rep. No. 748, 87th Cong., 1st Sess. 

10-11 (1961). And, every court which has dealt with the statute has 

concurred in this interpretation of its reach. United States v. Gillilan,

288 F.2d 796 (2d Cir. 1961), cert, denied sub nom. Apex Distributing Co.

v. United States, 368 U.S. 821 (1961); Taussig v. McNamara, 219 F. 

Supp. 757 (D.D.C. 1963), cert, denied, 379 U.S. 834 (1964). See also

Field v. Brown, 610 F.2d 981 (D.C. Cir. 1979), cert, denied, 446 U.S. 939 

(1980).

The status of active duty retired personnel was unaffected by the 

1940 amendment, and they remained subject to all of the prohibitions of 

the first paragraph of § 281.

As previously noted, §281 was repealed in 1962 “except as [it] may 

apply to retired officers of the armed forces of the United States.” 76 

Stat. at 1126. By its terms, this partial repeal left an active duty retired 

officer subject to all of the prohibitions of the first paragraph of § 281, 

and an inactive retired officer subject to the second paragraph’s bar 

against selling back to the department in which he had served. At the 

same time, Congress expressly exempted inactive retired officers from 

the provision which replaced § 281. See 18 U.S.C. § 206. The legislative 

history of the 1962 revision makes clear that Congress believed the 

status of inactive officers was not affected by the new law. See H.R. 

Rep. No. 748, 87th Cong., 1st Sess. 10-11 (1961).2 Accordingly, retired

1 Section 283 is similarly structured, and a similar analysis can be applied to determine who is 

covered by it and what activities it prohibits.

8 The cited portion of the House report states:

The problems involved in the peculiar status of retired officers of the Armed Forces 

while not on active duty are of a complexity that requires further specialized study for 

solution. The committee therefore determined to omit this class of persons from the 

bill. Accordingly, the bill provides (sec. 206) that sections 203 and 205 shall not apply 

to a retired officer of the armed forces of the United States while not on active duty.

What is more, the bill does not repeal present section 281 or 283 insofar as they may 

apply to such retired officers. In consequence, the present legal status of this group is 

wholly unaffected by the .bill

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officers not on active duty remain subject to the limited prohibition 

contained in the second paragraph of § 281. Active duty retired officers 

are now somewhat anomalously subject to the virtually identical prohibitions of both the old and new versions of the law.

Your third question is whether § 281 prohibits the sale of services as 

well as the sale of goods and, if it does, whether it would preclude a 

retired officer’s contracting with the Army for his own services. Taking 

the latter part of your question first, this Department has consistently 

taken the position that § 281 does not extend to a situation in which a 

retired officer “represents” only himself and no one else as a seller, 

whether the sale involves goods or services. This conclusion is implicit 

in the substantive prohibition of §281, which bars the receipt of compensation for services rendered. See also United States v. Gillilan, 288 

F.2d at 797, a criminal prosecution involving §281, where Judge 

Learned Hand noted that a violation of the statute would occur if the 

retired officer “is representing someone else” in the sale of anything to 

his own former department.

We recognize that this distinction between representing only oneself 

and representing others as well is not always easy to maintain. This is 

highlighted by your hypothetical questions about services provided by 

a corporation in which the retired officer is a shareholder. The answer 

in each case depends on the facts; that is, whether the officer can fairly 

be said to be representing only himself, or is representing someone else 

besides or in addition to himself. As a rule of thumb, we would counsel 

retired officers to avoid representing corporations in any such selling 

situations.

A more difficult problem is presented by the question whether the 

second paragraph of § 281 is intended to reach the sale of services at 

all. Several years ago, responding to a request from the Acting General 

Counsel of the Department of Defense, this Office left open the question, citing “a sharp division of opinion” within the Department of 

Justice on the matter. See letter from Robert G. Dixon, Jr., Assistant 

Attorney General, Office of Legal Counsel, to L. Niederlehner, January 21, 1974. That division of opinion no longer exists. While the 

question is not entirely free from doubt, we believe that the second 

sentence of the second paragraph of §281 should be interpreted to 

prohibit a retired officer’s representing some other party in connection 

with a contract for the sale of services as well as one for the sale of 

goods.'

The language of the second paragraph of § 281 has been said to be 

ambiguous with respect to whether representational activity in connection with service contracts was intended to be prohibited. On the one 

hand, the phrase “sale of anything” can reasonably be interpreted 

literally to include the sale of services as well as the sale of goods. On 

the other hand, at common law a “sale” does not include a sale of

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services. See, e.g., Five Per Cent Cases, 110 U.S. 471, 478 (1884). When 

read in the context of § 281 as a whole, we think the literal interpretation, with the emphasis on “anything,” more persuasive. The substantive prohibition of the first paragraph of § 281 bars any services rendered in connection with any matter in which the United States “is a 

party or directly or indirectly interested,” including contracts for the 

sale of services. The prohibition of the second paragraph is more 

narrowly drawn to apply only to sales activities, and then only those 

made through the officer’s own former department. The policy served 

by this more narrow prohibition is to prevent retired officers from 

being in a position to exert their influence in the procurement process 

of the military department in which they once served. We can think of 

no sensible reason why it should be applied selectively depending upon 

the nature of the contract involved. The narrower interpretation would 

apply to a contract for the purchase of equipment, but not to a contract 

for maintenance service on that equipment—an anomalous result.

This literal reading of the text of the statute finds support in its 

legislative history. The 1940 legislative action which added the second 

paragraph to § 281 was prompted by the broad reading given the 

predecessor of § 281 by the Court of Appeals for the District of Columbia in Barrett, supra, 108 F.2d 481. In that case a retired Army officer 

practicing law in New York sued unsuccessfully to gain admission to 

practice before the Department of the Treasury. In denying his petition 

on grounds that the activity would constitute a crime, the court of 

appeals expressed its opinion that the policy behind the law, and 

common sense, would dictate an opposite result:

Much, we think, may be said in reason and common sense 

in favor of petitioner’s application. To us it seems a far 

cry to attribute to a former captain in the military service, 

twenty years removed from that service, whose activities 

are wholly separated from military life, ability to exert a 

sinister influence in some matter pending in one of the 

departments of government. But this, for whatever it may 

be worth, must be addressed to the legislature and not to 

the courts.

108 F.2d at 484. The following year the House Committee on Military 

Affairs reported out legislation intended to meet the concerns expressed 

by the court of appeals. See 1940 House Report at 3. At the same time, 

the Committee recognized that it would be unwise to lift the bar of 

§ 281 entirely, and so added an amendment in the form of a proviso to 

its broad exemption for retired military officers not on active duty. 

Under this proviso, the substantive prohibition of § 281 would continue 

to apply to a retired military officer only in connection with “the sale 

of anything” to his own former department.

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The proviso was explained in the House report in the following 

terms:

The amendment adopted by the committee is intended 

to continue the prohibition against the sale of anything to 

a department by an officer formerly actively connected 

with that department. It applies only to representation in 

the actual sale of goods, and does not apply to employment and the other activities of any corporation or other 

person such as manufacturing.

1940 House Report at 1. We recognize that the reference in the second 

sentence quoted above to “the actual sale of goods” could be and has 

been construed as expressive of an intention to apply the substantive 

prohibition of § 281 only to a particular class of selling activity. See,

e.g., Navy Judge Advocate General’s Reference Guide to Employment 

Activities of Retired Naval Personnel, June 1969, at 28. However, the 

statement of what the amendment does not apply to (“employment and 

the other activities of any corporation . . . such as manufacturing”) 

indicates that the House Committee intended to distinguish selling activities generally (which it intended to prohibit) from other kinds of 

activities barred by the first paragraph (which it did not). In other 

words, we believe that a construction of the word “only” in this 

sentence to refer to “representation” and not to “the actual sale of 

goods” is more consistent with the history and purpose of the statute. 

This reading better effectuates the purpose of the proviso to prevent 

retired military officers from exerting their influence in the procurement process of the military department in which they once served.

An interpretation of § 281 to cover service contracts is supported by 

a comparison with its nearest civil analogue, § 801(c) of Title 37. The 

latter statute denies retired pay to a retired regular officer who is 

engaged in selling “supplies or war materials” to any agency of the 

Department of Defense, the Coast Guard, the Environmental Science 

Services Administration, or the Public Health Service. A predecessor 

of this civil statute was in existence in 1940 when § 281 was amended to 

prohibit representation “in the sale of anything.” 3 Had Congress intended to confine the meaning of “anything” in § 281 to tangible goods, 

we think it would have so stated.

We are not troubled by the lack of parallelism in the two statutes in 

this respect, since their respective scopes differ in several other ways. 

For example, unlike § 281, § 801(c) prohibits self-representation. Section 

801(c) also reaches selling activities involving agencies other than the 

military department in which the retired officer formerly served.

3 See § 9 of the A ct of July 22, 1935, 49 Stat. 490 (prohibiting payment o f retired pay to any retired 

officer of the Navy or Marine Corps who for himself or others engages in selling “naval supplies or 

war material” to the Navy).

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In light of this Department’s now uniform position on the question of 

the continued vitality of §281, there would appear to be no need to 

respond to your final question respecting the authority of the military 

departments, independent of §281, to promulgate regulations prohibiting retired officers from selling to their former departments.

The Department’s Criminal Division has reviewed and concurs in the 

statements and conclusions contained in this letter.

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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