b'Appropriate Source for Payment of Judgments and Settlements\nin United States v. Winstar Corp.\nThe Federal Savings and Loan Insurance Corporation Resolution Fund is the appropriate source o f\npaym ent for jud g m en ts against, and settlem ents by, the U nited States in U nited States v W tnstar\nCorp and sim ilar cases arising from the breach o f certain agreem ents to which the Federal Savings\nand L oan Insurance C orporation was a party\n\nJuly 22, 1998\nM\n\nem orand um\n\nO p in io n\n\nfo r th e\n\nD epartm ent\n\nD epu ty G en era l C o u n sel\n\no f the\n\nT rea su ry\n\nOn July 1, 1996, the Supreme Court decided United States v. Winstar Corp.,\n518 U.S. 839 (1996). The Court held that the United States was liable in three\ncases for breaching contracts into which it had entered with entities that took\nover failing thrifts during the savings and loan crisis of the 1980\xe2\x80\x99s. Because the\nUnited States Court of Federal Claims (\xe2\x80\x9c CFC\xe2\x80\x9d ) had not yet determined the appro\xc2\xad\npriate measure or amount of damages, the Supreme Court remanded for further\nproceedings. Id. at 910. After the Winstar decision was handed down, a large\nnumber of cases premised on identical or similar theories of relief that had been\nstayed pending the Supreme Court\xe2\x80\x99s decision were activated.1 We understand that\nin virtually all of these cases, which are currently pending before the CFC or\nthe United States Court of Appeals for the Federal Circuit, the government con\xc2\xad\ntests liability and/or disagrees with the plaintiffs regarding the appropriate measure\nor amount of damages.\nYou have asked for our views regarding the appropriate source for payment\nof judgments in the Winstar-related cases.2 Because the government is currently\nconsidering the possibility of settling two of the three cases that the Supreme\nCourt considered in Winstar, as well as certain other Winstar-ve\\aie,A cases, you\nhave also asked for our opinion regarding the appropriate source of funds for\nthe payment of such settlements. The appropriate source of funds for a settled\ncase is identical to the appropriate source of funds should a judgment in that\ncase be entered against the government. See Availability o f Judgment Fund in\nCases Not Involving a Money Judgment Claim, 13 Op. O.L.C. 98, 103 (1989)\n(\xe2\x80\x9c [I]n determining whether a proposed settlement is payable from the Judgment\nFund, the Attorney General or his designee should examine the underlying cause\nof action, and decide whether the rendering of a final judgment against the United\nStates under such a cause would have required a payment from the Judgment\n1For ease o f discussion, we refer to both these cases and the cases decided by the Supreme Court in Winstar\ncollectively as "W//m,rar-re!ated cases \xe2\x80\x9d\n2 Although we provided the Federal Deposit Insurance Corporation the opportunity to provide its views on this\nmatter, it declined to do so\n\n141\n\n\x0cOpinions of the Office o f Legal Counsel in Volume 22\n\nFund.\xe2\x80\x9d ); 3 Office of the General Counsel, United States General Accounting\nOffice, Principles of Federal Appropriations Law 14\xe2\x80\x949 (2d ed. 1994) (\xe2\x80\x9c GAO Prin\xc2\xad\nciples\xe2\x80\x9d ) (stating that compromise settlements have no effect on the source of\nfunds).3\nOur discussion o f the appropriate source of funds necessarily is premised on\ncourts finding the government liable or on the government entering into settle\xc2\xad\nments based on the risk that a court would find the government liable. We do\nnot, however, mean to suggest that we have reached any conclusions regarding\nthe likelihood of such potential findings. We discuss cases in the context of a\nfinding of government liability because it is only in those cases, and in settlements\nentered into due to the risk of such a finding, that the appropriate source o f funds\nfor the payment of judgments by the government is an issue.\nWe understand from the Commercial Litigation Branch of the Civil Division\no f the Department of Justice that, to the extent that the government has settled\nor is engaged in settlement negotiations in any of the Winstar-related cases, these\ncases involve \xe2\x80\x9c Assistance Agreements\xe2\x80\x9d or \xe2\x80\x9c Supervisory Action Agreements\xe2\x80\x9d to\nwhich the Federal Savings and Loan Insurance Corporation ( \xe2\x80\x9c FSLIC\xe2\x80\x9d ) was a\nparty. We have therefore limited our analysis o f the appropriate source of payment\nfor settlements or potential judgments to the M ns/ar-related cases in which FSLIC\nwas a party to the underlying Assistance Agreements and Supervisory Action\nAgreements.4\nBased upon the information currently available to us, we believe that the FSLIC\nResolution Fund is the appropriate source o f funds to pay judgments and settle\xc2\xad\nments in W instar-related cases in which FSLIC was a party to an Assistance\nAgreement or Supervisory Action Agreement.5 Congress created the FSLIC Reso\xc2\xad\nlution Fund to assume, with a single statutory exception that is not relevant here,\n12 U.S.C. \xc2\xa7 1441a (1994), \xe2\x80\x9c all assets and liabilities of the FSLIC on the day\nbefore\xe2\x80\x9d FSLIC was abolished. 12 U.S.C. \xc2\xa7 1821a(a)(2) (1994). Although the term\n\xe2\x80\x9c liabilities\xe2\x80\x9d is not defined in the statute, its ordinary meaning includes contingent\nliabilities, such as certain contractual obligations, and there is no reason to believe\nthat Congress departed from this ordinary meaning when it created the FSLIC\n3 A lthough the opinions and legal interpretations of the General Accounting Office and the Comptroller General\noften provide helpful guidance on appropriations matters and related issues, they are not binding upon departments,\nagencies, o r officers o f the executive branch. S e e Bowsher v. Synar, 478 U.S. 714, 727-32 (1986).\n4 It is our understanding that whether an agreem ent qualifies as an \xe2\x80\x9c Assistance Agreement\xe2\x80\x9d or a \xe2\x80\x98\xe2\x80\x98Supervisory\nA ction A greem ent\xe2\x80\x9d depends only on the labeling o f the agreement, the terms were used interchangeably, although\nthe term \xe2\x80\x9c Assistance A greem ent\xe2\x80\x9d was more common. Telephone conversation between Caroline Krass, AttomeyAdviser, O ffice o f Legal Counsel and Aaron Kahn, Principal Litigation Counsel, Office of the General Counsel,\nO ffice o f Thrift Supervision, Department of the Treasury (June 30, 1998)\n5 In March 1996, p n o r to the Supreme C ourt\xe2\x80\x99s decision in Winstar, this Office opined that the FSLIC Resolution\nFund was the proper source for payment of the judgm ent in R TC v. F SU C , 25 F.3d 1493 (10th Cir. 1994) ("Security\nF ederal"). See Letter for Ricki Heifer, Chairman, FDIC, from W alter Dellinger, Assistant Attorney General, Office\no f Legal Counsel, R e\' Reimbursement from the Federal Judgment Fund fo r Payment o f Judgment in RTC v. FSUC,\n(10th Cir 1994) (M ar. 18, 1996) ( \xe2\x80\x9c Heifer L etter\xe2\x80\x9d ). Our opinion expressly stated, however, that it was limited\nto the facts o f Security Federal. See id. at 2 ( \xe2\x80\x9c We have not attempted to determine and make no suggestion here\nas to the proper source o f paym ent for any judgm ent that might be entered in the other goodwill/capital forbearance\ncases \xe2\x80\x9d ).\n\n142\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States v. Winstar Corp.\n\nResolution Fund. Based on the Supreme Court\xe2\x80\x99s theory of liability in Winstar,\nwe believe that the judgments or settlements in the Winstar -related cases in which\nFSLIC was a party to the underlying Assistance Agreements and Supervisory\nAction Agreements would qualify as \xe2\x80\x9c liabilities\xe2\x80\x9d of FSLIC under \xc2\xa7 1821a(a)(2).\nAccordingly, in these cases, the potential judgments, and the settlements entered\ninto to avoid the risk of such judgments, are payable from the FSLIC Resolution\nFund. Because payment is \xe2\x80\x9c otherwise provided for\xe2\x80\x9d within the meaning of the\nJudgment Fund statute, the Judgment Fund is not available to pay such judgments\nand settlements. See 31 U.S.C. \xc2\xa7 1304 (1994).\n\nI. BACKGROUND\nDuring the Great Depression, over 1,700 savings and loans, or \xe2\x80\x9c thrifts,\xe2\x80\x9d failed\nbecause borrowers could not pay their mortgages. See H.R. Rep. No. 101-54,\npt. 1, at 292 (1989), reprinted in 1989 U.S.C.C.A.N. 86, 88 (\xe2\x80\x9c House Report\xe2\x80\x9d ).\nAs a result, thrift depositors lost approximately $200 million. In response, Con\xc2\xad\ngress took three actions to stabilize the thrift industry. First, in 1932, Congress\ncreated the Federal Home Loan Bank Board (\xe2\x80\x9c Bank Board\xe2\x80\x9d ) to channel funds\nto thrifts to finance home mortgages and to prevent foreclosures. See Pub. L.\nNo. 72-304, ch. 522, 47 Stat. 725 (1932) (codified as amended at 12 U.S.C.A.\n\xc2\xa7\xc2\xa7 1421-1449 (West 1989 & Supp. 1998)). Second, Congress passed the Home\nOwners\xe2\x80\x99 Loan Act of 1933, which authorized the Bank Board to charter and to\nregulate federal thrifts. See Pub. L. No. 73-43, ch. 64, 48 Stat. 128, 132-34 (1933)\n(codified as amended at 12 U.S.C. \xc2\xa7\xc2\xa7 1461-1468c (1994 & Supp. II 1996)).\nFinally, in 1934, Congress created the Federal Savings and Loan Insurance Cor\xc2\xad\nporation, \xe2\x80\x9c under the direction of\xe2\x80\x9d the Bank Board, to insure thrift deposit\naccounts and to regulate all federally insured thrifts to ensure that their capital\nis unimpaired and that their financial policies and management are \xe2\x80\x9c safe.\xe2\x80\x9d See\nPub. L. No. 73\xe2\x80\x94479, ch. 847, 48 Stat. 1246, 1256-61 (1934) (codified as amended\nat 12 U.S.C.A. \xc2\xa7\xc2\xa7 1701-1750g (West. 1989 & Supp. 1998)); 12 U.S.C. \xc2\xa7 1726(c)\n(1988) (repealed 1989).\n\nA. The Savings and Loan Crisis ef the Early 1980\xe2\x80\x99s\nThe savings and loan crisis of the early 1980\xe2\x80\x99s originated from the rising interest\nrates of the late 1970\xe2\x80\x99s and early 1980\xe2\x80\x99s. Many thrifts were locked into long\xc2\xad\nterm, low-yield, fixed-rate mortgages created when interest rates were low, and\nthus the high interest rates caused the thrifts to experience large operating losses\nas they raised savings account interest rates in an effort to attract funds from\ndepositors. See Winstar, 518 U.S. at 845 (plurality opinion); House Report at 291,\nreprinted in 1989 U.S.C.C.A.N. at 87. By 1981, thrifts\xe2\x80\x99 mortgage portfolios were\nyielding ten percent, but the thrifts were paying an average of eleven percent\n143\n\n\x0cOpinions of the Office o f Legal Counsel in Volume 22\n\nfor their funds, and between 1981 and 1983, 435 thrifts failed. See House Report\nat 296, reprinted in 1989 U.S.C.C.A.N. at 92. As the federal insurer of the thrift\ndeposits, FSLIC was responsible for liquidating the failed thrifts, if necessary,\nand reimbursing depositors for the insured funds they had lost. FSLIC, however,\nlacked adequate assets to do so. In 1985, for example, FSLIC had $4.55 billion\nin its insurance fund, but the Bank Board estimated that it would cost $15.8 billion\nto liquidate all the thrifts deemed insolvent under generally accepted accounting\nprinciples (\xe2\x80\x9c GAAP\xe2\x80\x9d ). See Winstar, 518 U.S. at 847 (plurality opinion).\nIn response to the crisis, Congress and the executive branch extensively deregu\xc2\xad\nlated the thrift industry to enable thrifts to compete with other financial services\nproviders for funds and to broaden their investment powers. See id. at 845 (plu\xc2\xad\nrality opinion); House Report at 291, reprinted in 1989 U.S.C.C.A.N. at 87. In\naddition, the Bank Board lowered the capital requirement for thrifts from five\npercent to four percent of assets in 1980, and from four to three percent in 1982.\nSee Winstar, 518 U.S. at 845-46 (plurality opinion). The capital requirement has\nbeen described as \xe2\x80\x9c \xe2\x80\x98the most powerful source of discipline for financial institu\xc2\xad\ntions.\xe2\x80\x99 \xe2\x80\x9d Id. at 845 (quoting Breeden, Thumbs on the Scale: The Role that\nAccounting Practices Played in the Savings and Loan Crisis, 59 Fordham L. Rev.\nS71, S75 (1991)). To give more leeway to the struggling thrifts, the Bank Board\nalso promulgated new \xe2\x80\x9c regulatory accounting principles\xe2\x80\x9d that often replaced\nGAAP in determining whether thrifts could meet the Bank Board\xe2\x80\x99s capital require\xc2\xad\nment. \xe2\x80\x9c The reductions in required capital reserves,\xe2\x80\x9d the plurality explained in\nWinstar, \xe2\x80\x9c allowed thrifts to grow explosively without increasing their capital base,\nat the same time deregulation let them expand into new (and often riskier) fields\no f investment.\xe2\x80\x9d Id. at 846.\nBased upon the facts before it, the plurality observed that, \xe2\x80\x9c [Realizing that\nFSLIC lacked the funds to liquidate all of the failing thrifts, the Bank Board chose\nto avoid the insurance liability by encouraging healthy thrifts and outside investors\nto take over ailing institutions in a series of \xe2\x80\x98supervisory mergers.\xe2\x80\x99 \xe2\x80\x9d Id. at 847.\nThe plurality explained:\nSuch transactions, in which the acquiring parties assumed the\nobligations of thrifts with liabilities that far outstripped their assets,\nwere not intrinsically attractive to healthy institutions; nor did\nFSLIC have sufficient cash to promote such acquisitions through\ndirect subsidies alone, although cash contributions from FSLIC\nwere often part of a transaction. Instead, the principal inducement\nfor these supervisory mergers was an understanding that the\nacquisitions would be subject to a particular accounting treatment\nthat would help the acquiring institutions meet their reserve capital\nrequirements imposed by federal regulations.\n144\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States v. Winstar Corp.\n\nId. at 848 (citations omitted).\n\nAccording to the plurality in Winstar, the Bank Board and FSLIC6 granted\nacquiring entities three different types of beneficial accounting treatment, often\nreferred to as \xe2\x80\x9c forbearances,\xe2\x80\x9d in connection with supervisory mergers. Id. at 84856. First, the Bank Board and FSLIC \xe2\x80\x9c let the acquiring institutions count super\xc2\xad\nvisory goodwill toward their reserve requirements.\xe2\x80\x9d Id. at 850 (plurality opinion).\nUnder the \xe2\x80\x9c purchase method\xe2\x80\x9d of accounting, \xe2\x80\x9c goodwill,\xe2\x80\x9d i.e., the amount by\nwhich the purchase price of an acquired entity exceeds the fair value of all identifi\xc2\xad\nable assets, could be counted as an intangible asset. Id. at 848-49 (plurality\nopinion). The plurality noted that, in the typical situation, the counting of goodwill\nas an intangible asset makes sense because a rational purchaser in a free market\nwould not purchase a business for more than the fair value of the business\xe2\x80\x99s assets\nunless there were some \xe2\x80\x9c going concern\xe2\x80\x9d value that made up the difference. Id.\nat 849. In the supervisory mergers, however, this situation was not the case.\nInstead, \xe2\x80\x9c [b]ecause FSLIC had insufficient funds to make up the difference\nbetween a failed thrift\xe2\x80\x99s liabilities and assets, the Bank Board had to offer a \xe2\x80\x98cash\nsubstitute\xe2\x80\x99 to induce a healthy thrift to assume a failed thrift\xe2\x80\x99s obligations.\xe2\x80\x9d Id.\nat 849-50 (plurality opinion). According to the plurality, that \xe2\x80\x9c cash substitute\xe2\x80\x9d\npermitted the healthy thrift to count the amount by which the liabilities of a failing\nthrift exceeded the fair value of its assets as an intangible asset, and was referred\nto as \xe2\x80\x9c supervisory goodwill.\xe2\x80\x9d Id. Counting supervisory goodwill as an intangible\nasset that could be used to meet capital requirements was attractive to the\nacquiring entities because it prevented the negative net worth of the failing thrifts\nfrom being deducted from the acquiring entities\xe2\x80\x99 capital, thereby allowing them\nto avoid insolvency under federal requirements. Id. at 850 (plurality opinion).\nSecond, thrifts were permitted to take extended periods of time, up to forty\nyears, to \xe2\x80\x9c depreciate\xe2\x80\x9d or amortize the value of supervisory goodwill, a question\xc2\xad\nable asset. The essence of supervisory goodwill was that it created a paper asset\nin a supervisory merger that was necessary because the liabilities of the institution\nbeing acquired exceeded the fair value of its assets. When the acquiring entity\nwas permitted to extend the time to write down that paper asset, it understated\nfor each reporting period the resulting amortization expense and reduction in its\nrecorded assets and deferred a possible failure to meet capital requirements. See\nid. at 851 (plurality opinion).\nIn addition, thrifts were permitted to accelerate the recognition of capital gains\nto be realized on depreciated assets, when those benefits in fact arose over longer\nperiods. The \xe2\x80\x9c gains\xe2\x80\x9d arose from the accretion of discounts on loans in portfolio.\nA thrift cannot sell at face value a loan bearing interest at a below-market interest\nrate. Instead, it accepts a discount from face value that would increase the effective\nrate on that asset to a market rate. As these loans approach maturity, the discount\n6 We refer to \xe2\x80\x9c the Bank Board and FSLIC " together for ease o f discussion in this section of the memorandum,\nalthough both entities may not have been involved in all cases\n\n145\n\n\x0cOpinions o f the Office o f Legal Counsel m Volume 22\n\ndecreases to zero. The acquiring entity would record the accretion of discount\non its income statement as a gain, in the same fashion as it would for a bond\nin portfolio that it holds to maturity. The faster the thrift recognized the gains,\nthe more income it could report in the short term. See id.\nThe amount of discount in a troubled thrift would generally approximate the\namount of goodwill created by the supervisory merger. Ideally, a thrift should\nhave written down its goodwill at the same rate it recognized gains from accretions\nof discount. The combination of the questionable practices of accelerating the rate\nof gain recognition and deferring the amortization of supervisory goodwill pro\xc2\xad\nvided a method for unhealthy institutions to attempt to survive by engaging in\nsupervisory mergers. According to the plurality in Winstar, \xe2\x80\x9c [t]he difference\nbetween amortization and accretion schedules thus allowed acquiring thrifts to\nseem more profitable than they in fact were.\xe2\x80\x9d Id. at 853.\nThird, the Bank Board and FSLIC generally permitted double-counting of cash\ncontributions by FSLIC to supervisory mergers. While the acquiring entity was\npermitted to treat FSLIC\xe2\x80\x99s cash contribution as a credit for its capital requirement,\ndescribed as a \xe2\x80\x9c capital credit,\xe2\x80\x9d it was not required to subtract the amount of\nthe contribution from the amount of supervisory goodwill. Id. Thus, the amount\nwas, in effect, counted twice, once as a tangible asset\xe2\x80\x94 cash\xe2\x80\x94 and once as an\nintangible asset\xe2\x80\x94 supervisory goodwill. Id.\n\nB. The Legislative Response: FIRREA\nThe regulatory measures taken in the 1980\xe2\x80\x99s by the Bank Board and FSLIC\nto prop up the failing thrift industry actually aggravated its decline by papering\nover inadequate reserves and encouraging thrifts to engage in risky loans and\ninvestments. See Transohio Savings Bank v. Director, Office o f Thrift Supervision,\n967 F.2d 598, 602 (D.C. Cir. 1992); House Report at 298-99, reprinted in 1989\nU.S.C.C.A.N. at 94-95. By 1988, FSLIC was insolvent by over $50 billion. See\nHouse Report at 304, reprinted in 1989 U.S.C.C.A.N. at 100. In response to this\nsituation, and to restore the strength of the thrift industry and the deposit insurance\nfund, Congress enacted the Financial Institutions Reform, Recovery, and Enforce\xc2\xad\nment Act, Pub. L. No. 101-73, 103 Stat. 183 (1989) (\xe2\x80\x9c FIRREA\xe2\x80\x9d ). See House\nReport at 291, reprinted in 1989 U.S.C.C.A.N. at 87. FIRREA was adopted, inter\nalia, to \xe2\x80\x9c promote, through regulatory reform, a safe and stable system of afford\xc2\xad\nable housing finance,\xe2\x80\x9d to \xe2\x80\x9c improve the supervision o f savings associations by\nstrengthening capital, accounting, and other supervisory standards,\xe2\x80\x9d and to \xe2\x80\x9c cur\xc2\xad\ntail investments and other activities of savings associations that pose unacceptable\nrisks to the Federal deposit insurance funds.\xe2\x80\x9d FIRREA, \xc2\xa7 101(1)\xe2\x80\x94(3), 103 Stat.\nat 187 (codified at 12 U.S.C. \xc2\xa7 1811 note (1994)).\nFIRREA abolished both FSLIC and the Bank Board. FSLIC\xe2\x80\x99s thrift deposit\ninsurance function was assumed by the Federal Deposit Insurance Corporation\n146\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States v Winstar Corp\n\n(\xe2\x80\x9c FDIC\xe2\x80\x9d ), which became the manager of the new \xe2\x80\x9c Savings Association Insurance\nFund.\xe2\x80\x9d See 12 U.S.C. \xc2\xa7 1811(a) (1994); H.R. Conf. Rep. No. 101-222, at 393,\n394 (1989), reprinted in 1989 U.S.C.C.A.N. 432, 433 (\xe2\x80\x9c House Conference\nReport\xe2\x80\x9d ) (FIRREA gives FDIC \xe2\x80\x9c the duty of insuring the deposits of savings\nassociations as well as banks.\xe2\x80\x9d ). In addition, FIRREA created a separate fund\nunder the management of the FDIC called the FSLIC Resolution Fund. See 12\nU.S.C. \xc2\xa7821a. The FSLIC Resolution Fund generally assumed all of the \xe2\x80\x9c assets\nand liabilities\xe2\x80\x9d of FSLIC as of the day before its abolition. Id. \xc2\xa7 1821a(a)(2).\nEach of the Bank Board\xe2\x80\x99s principal functions was transferred to a different\nagency upon its dissolution: (1) the supervision and regulation of the thrift industry\nwas transferred to the Office of Thrift Supervision (\xe2\x80\x9c OTS\xe2\x80\x9d ) in the Department\nof the Treasury, see 12 U.S.C. \xc2\xa7 1462a(e) (1994); 12 U.S.C. \xc2\xa71813(q) (1994);\nHouse Conference Report at 404, reprinted in 1989 U.S.C.C.A.N. at 443; House\nReport at 453, reprinted in 1989 U.S.C.C.A.N. at 249; (2) the management and\nregulation of thrift deposit insurance through FSLIC was transferred to the FDIC,\nsee 12 U.S.C. \xc2\xa71811; (3) the oversight and supervision of the twelve regional\nFederal Home Loan Banks was transferred to the Federal Housing Finance Board,\nsee 12 U.S.C. \xc2\xa7 1422a (1994); 12 U.S.C. \xc2\xa7 1422b (1994); and (4) the liquidation\nof the assets of failed thrifts was transferred to the Resolution Trust Corporation\n(\xe2\x80\x9c RTC\xe2\x80\x9d ) for those thrifts that became insolvent between 1989 and 1995, see 12\nU.S.C. \xc2\xa7 1441a. See also House Conference Report at 408-09, reprinted in 1989\nU.S.C.C.A.N. at 447-48; see generally American F ed\xe2\x80\x99n o f G ov\xe2\x80\x99t Employees, Local\n3295 v. Federal Labor Relations Auth., 46 F.3d 73, 74 & n.l (D.C. Cir. 1995);\nEmployment Status o f the Members o f the Board o f Directors o f the Federal\nHousing Finance Board , 14 Op. O.L.C. 127 (1990).\n\nFIRREA also required OTS to prescribe at least three capital requirements for\nthrifts\xe2\x80\x94 a leverage limit requiring thrifts to maintain core capital o f at least three\npercent of the thrift\xe2\x80\x99s total assets; a tangible capital requirement of at least oneand-a-half percent of the thrift\xe2\x80\x99s total assets; and a risk-based capital requirement\naligned with the risk-based capital requirement for national banks. See 12 U.S.C.\n\xc2\xa7 1464(t)(l)-(2), (9) (1994). In addition, FIRREA gradually phased out over a\nfive-year period the ability of thrifts to include \xe2\x80\x9c qualifying supervisory goodwill\xe2\x80\x9d\nin calculating core capital. Id. \xc2\xa7 1464(t)(3)(A). Under FIRREA, OTS promulgated\nregulations equating capital credits with supervisory goodwill, thereby excluding\nsuch credits from satisfying the capital requirements. 12 C.F.R. \xc2\xa7567.1(w) (1990).\nAs a result of these new strict requirements, \xe2\x80\x9c many institutions immediately fell\nout of compliance with regulatory capital requirements, making them subject to\nseizure by thrift regulators.\xe2\x80\x9d Winstar, 518 U.S. at 858 (plurality opinion).\n\n147\n\n\x0cOpinions of the Office o f Legal Counsel in Volume\n\n22\n\nC. U nited States v. Winstar\nThe Supreme Court\xe2\x80\x99s Winstar decision addressed the consequences of the new\ncapital requirements on three different institutions\xe2\x80\x94Glendale Federal Bank, FSB,\nW instar Corporation, and The Statesman Group, Inc.\xe2\x80\x94 that were parties to super\xc2\xad\nvisory mergers. All three claimed financial losses due to the change in the regu\xc2\xad\nlatory structure caused by FIRREA, and they filed suit against the United States\nin the Court of Federal Claims on both contractual and constitutional theories.\nThat court granted the plaintiffs\xe2\x80\x99 motions for partial summary judgment on con\xc2\xad\ntract liability because it found that the government had breached contractual\nobligations to permit the plaintiffs to count supervisory goodwill and capital\ncredits toward their capital requirements. Statesman Sav. Holding Corp. v. United\nStates, 26 Cl. Ct. 904 (1992) (granting summary judgment on liability to States\xc2\xad\nman and Glendale); Winstar Corp. v. United States, 25 Cl. Ct. 541 (1992) (finding\ncontract breached and entering summary judgment on liability); Winstar Corp.\nv. United States, 21 Cl. Ct. 112 (1990) (finding an implied-in-fact contract but\nrequesting further briefing on other contract issues). After the cases were consoli\xc2\xad\ndated, a divided panel of the Federal Circuit reversed, holding that the parties\ndid not clearly assign the risk o f a subsequent change in the regulatory capital\nrequirements to the government. Winstar Corp. v. United States, 994 F.2d 797,\n811-13 (Fed. Cir. 1993). After rebriefing and reargument, the Federal Circuit,\nsitting en banc, reversed the panel and affirmed the CFC\xe2\x80\x99s rulings on liability,\nconcluding that FIRREA breached the government\xe2\x80\x99s prior contractual obligations\nand that the government therefore was liable in money damages for the breach.\nWinstar Corp. v. United States, 64 F.3d 1531 (Fed. Cir. 1995) (en banc).\nWriting for a plurality of four,7 Justice Souter first described the merger between\nGlendale and the First Federal Savings and Loan Association of Broward County,\na thrift whose liabilities exceeded the fair value o f its assets by over $700 million.\nFSLIC entered into a \xe2\x80\x9c Supervisory Action Agreement\xe2\x80\x9d (\xe2\x80\x9c SAA\xe2\x80\x9d ) with Glendale.\nW instar, 518 U.S. at 861 (plurality opinion). The SAA contained an integration\nclause that, according to the plurality, incorporated by reference the Bank Board\xe2\x80\x99s\nresolution approving the merger, which in turn referred, inter alia, to a document\nstipulating that any supervisory goodwill would be treated in accordance with\nBank Board Memorandum R-31b. That memorandum permitted the use of the\npurchase method of accounting and the recognition o f supervisory goodwill as\nan asset subject to amortization. One of the reasons that the plurality interpreted\nthe integration clause in the SAA to include the Board\xe2\x80\x99s resolutions and memo\xc2\xad\nranda was that it would have been \xe2\x80\x9c irrational\xe2\x80\x9d for Glendale to enter into an agree\xc2\xad\nment that immediately made it insolvent unless it obtained a contractual commit\xc2\xad\nment that the policies identified in the resolutions and memoranda would continue.\n7 Justice Souter w as joined by only two other Justices in two subsections of his opinion that discussed the govern\xc2\xad\nm ent\xe2\x80\x99s \xe2\x80\x9c sovereign acts\xe2\x80\x9d defense. 518 U.S. at 896-903.\n\n148\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States v. Winstar Corp.\n\nId. at 862-63. The plurality agreed with the Federal Circuit\xe2\x80\x99s judgment that \xe2\x80\x9c \xe2\x80\x98the\n\ngovernment had an express contractual obligation to permit Glendale to count the\nsupervisory goodwill generated as a result of its merger with Broward as a capital\nasset for regulatory capital purposes.\xe2\x80\x99 \xe2\x80\x9d Id. at 864 (quoting Winstar Corp. v.\nUnited States, 64 F.3d at 1540).8\nThe Winstar merger resulted from FSLIC actively soliciting bids for the acquisi\xc2\xad\ntion of Windom Federal Savings and Loan Association, a failing thrift. Id. (plu\xc2\xad\nrality opinion). FSLIC and Winstar Corporation, a group of private investors\nformed for the purpose of acquiring Windom, entered into an \xe2\x80\x9c Assistance Agree\xc2\xad\nment\xe2\x80\x9d ( \xe2\x80\x9c AA\xe2\x80\x9d ) under which FSLIC agreed to contribute $5.6 million in cash\nto the acquisition. The AA contained an integration clause that, according to the\nplurality, also incorporated the Bank Board\xe2\x80\x99s approval resolution and a forbear\xc2\xad\nance letter signed by the Bank Board permitting the amortization of supervisory\ngoodwijl over thirty-five years. Id. Again, the plurality noted that it was apparent\nthat \xe2\x80\x9c \xe2\x80\x98the intention of the parties [was] to be bound by the accounting treatment\nfor goodwill arising in the merger.\xe2\x80\x99 \xe2\x80\x9d Id. at 866 (quoting Winstar Corp. v. United\nStates, 64 F.3d at 1544).\nWhen Statesman asked FSLIC for government assistance in purchasing a sub\xc2\xad\nsidiary of an insolvent thrift, FSLIC responded that it could only obtain such\nassistance if it purchased the parent thrift as well as three other unstable thrifts.\nStatesman and FSLIC entered into an AA under which FSLIC contributed $60\nmillion to the acquisition, $26 million of which could be treated as a permanent\ncapital credit for purposes of the regulatory capital requirement. Like the trans\xc2\xad\nactions with Glendale and Winstar, the plurality found that the AA contained an\nintegration clause incorporating contemporaneous resolutions and letters issued by\nthe Bank Board approving the use of supervisory goodwill to be amortized over\na long period (this time twenty-five years). Id. at 867. Once again, the plurality\naccepted the Federal Circuit\xe2\x80\x99s finding that \xe2\x80\x9c \xe2\x80\x98the government was contractually\nobligated to recognize the capital credits and the supervisory goodwill generated\nby the merger.\xe2\x80\x99 \xe2\x80\x9d Id. (quoting Winstar Corp. v. United States, 64 F.3d at 1543).\nJustice Souter, writing for the plurality, rejected the government\xe2\x80\x99s various\ncommon law defenses and held that the United States was liable for breach of\ncontract. In characterizing the contracts at issue, the plurality emphasized that\n\xe2\x80\x9c [n]othing in the documentation or the circumstances of these transactions pur\xc2\xad\nported to bar the Government from changing the way in which it regulated the\nthrift industry.\xe2\x80\x9d Id. Rather, Justice Souter explained:\n8 The government\xe2\x80\x99s petition for a wnt o f certiorari did not directly contest the existence of contracts between\nthe government and plaintiffs, and therefore the question was not technically before the Court See 518 U.S. at\n860-61 (plurality opinion); United States v Winstar Corp , 64 F 3 d 1531 (Fed Cir 1995) (en banc), petition fo r\ncert file d , 64 U S L W. 3486 (U S Dec 1, 1995) (No 95-865) (listing as \xe2\x80\x9c questions presented\xe2\x80\x9d whether\nunmistakability doctnne, reserved powers doctnne, or sovereign acts doctrine should bar enforcement of alleged\ncontracts) The Federal Circuit and the Court o f Federal Claims, however, both found that contracts existed in the\nthree transactions at issue in Winstar, see Winstar Corp. v United States, 64 F 3d at 1545, and the plurality seemed\nto accept the Federal Circuit\xe2\x80\x99s characterization o f the contracts\n\n149\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 22\n\nWe read this promise as the law of contracts has always treated\npromises to provide something beyond the promisor\xe2\x80\x99s absolute con\xc2\xad\ntrol, that is, as a promise to insure the promisee against loss arising\nfrom the promised condition\xe2\x80\x99s nonoccurrence. Holmes\xe2\x80\x99s example\nis famous: \xe2\x80\x9c [i]n the case of a binding promise that it shall rain\ntomorrow, the immediate legal effect of what the promisor does\nis, that he takes the risk of the event, within certain defined limits,\nas between himself and the promisee.\xe2\x80\x9d\nId. at 868-69 (plurality opinion) (footnote omitted) (quoting Holmes, The Common\nLaw (1881) in 3 The Collected Works of Justice Holmes 268 (S. Novick ed.\n\n1995)). In other words, \xe2\x80\x9c the Bank Board and FSLIC . . . assumed the risk [that\nthe law would] change,\xe2\x80\x9d id. at 908 (plurality opinion), see id. at 883 (plurality\nopinion), and agreed to pay plaintiffs for the losses, if any, caused by rsuch a\nchange, see id. at 887 (plurality opinion) ( \xe2\x80\x9c [T]he Government agreed . . . to\nindemnify its contracting partners against financial losses arising from regulatory\nchange.\xe2\x80\x9d ). See also id. at 890 (plurality opinion). The plurality found that,\n\xe2\x80\x9c [w]hen the law as to capital requirements changed . . . the Government was\nunable to perform its promise and, therefore, became liable for breach.\xe2\x80\x9d Id. at\n870.\nJustice Scalia, writing for himself and two other Justices, concurred in the judg\xc2\xad\nment. He agreed with the plurality \xe2\x80\x9c that the contracts at issue in this case gave\nrise to an obligation on the part o f the Government to afford respondents favorable\naccounting treatment, and that the contracts were broken by the Government\xe2\x80\x99s\ndiscontinuation of that favorable treatment, as required by FIRREA.\xe2\x80\x9d Id. at 919\n(Scalia, J., concurring). He also agreed that by promising to regulate the plaintiffs\nin a particular fashion into the future, \xe2\x80\x9c the Government had assumed the risk\no f a change in its laws.\xe2\x80\x9d Id. at 924.\nHowever, Justice Scalia disagreed with the approach used by the plurality to\nreject the government\xe2\x80\x99s \xe2\x80\x9c unmistakability\xe2\x80\x9d and \xe2\x80\x9c sovereign acts\xe2\x80\x9d defenses.\nAccording to Justice Scalia, by characterizing the contracts at issue as merely\ninsurance against the contingency that the regulations might change, rather than\nas promises not to change the regulations, the plurality had incorrectly avoided\nmaking the determination whether the government was entitled to assert these\ndefenses to contractual liability. Id. at 919. Justice Scalia argued that prior prece\xc2\xad\ndent had not made the availability of these defenses dependent upon the nature\no f the underlying contract, id., and he suggested that, in any event, the contracts\ndid appear to constrain the sovereign authority of the government insofar as they\nrequired the government to pay damages for undertaking a sovereign act. Id. at\n919-20. With respect to this latter point, he added that \xe2\x80\x9c [virtually every contract\noperates, not as a guarantee o f particular future conduct, but as an assumption\no f liability in the event of nonperformance: \xe2\x80\x98The duty to keep a contract at\n150\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States v. Winstar Corp\n\ncommon law means a prediction that you must pay damages if you do not keep\nit,\xe2\x80\x94and nothing else.\xe2\x80\x99 \xe2\x80\x9d Id. at 919 (quoting Holmes, The Path o f the Law (1897),\nin 3 The Collected Works of Justice Holmes 391, 394 (S. Novick ed. 1995)).\nNevertheless, Justice Scalia concluded that the government\xe2\x80\x99s contractual under\xc2\xad\ntaking was sufficiently clear to overcome the \xe2\x80\x9c unmistakability\xe2\x80\x9d and \xe2\x80\x9c sovereign\nacts\xe2\x80\x9d defenses. Id. at 919-22, 923-24. He also concluded that, because the plain\xc2\xad\ntiffs did not seek to enjoin the exercise of sovereign authority, but rather to receive\ndamages for breach of contract, there was no force to the government\xe2\x80\x99s \xe2\x80\x9c reserved\npowers\xe2\x80\x9d defense, which he described as \xe2\x80\x9c [s]tand[ing] principally for the propo\xc2\xad\nsition that certain core governmental powers cannot be surrendered.\xe2\x80\x9d Id. at 92223. Finally, Justice Scalia rejected the government\xe2\x80\x99s defense that there was no\n\xe2\x80\x9c express delegation\xe2\x80\x9d of authority permitting the restraint of sovereign power. Id.\nat 923.\nAlthough the plurality and Justice Scalia may have differed in their characteriza\xc2\xad\ntion of the relevance, of the nature of the underlying contracts to the availability\nof certain governmental defenses, they agreed that the government had assumed\nthe risk of regulatory change. They also were in general agreement on what con\xc2\xad\nstituted the breach of contract: the plurality adopted the Federal Circuit\xe2\x80\x99s conclu\xc2\xad\nsion that the breach occurred when, pursuant to the new requirements imposed\nby FIRREA, the federal regulatory agencies limited the use of supervisory good\xc2\xad\nwill and capital credits, id. at 870, and Justice Scalia found that the enactment\nand implementation of FIRREA gave rise to plaintiffs\xe2\x80\x99 claims of breach of con\xc2\xad\ntract. Id. at 920. Finally, both the plurality and Justice Scalia found that the Bank\nBoard and FSLIC had sufficient authority to enter into the contracts: \xe2\x80\x9c the Bank\nBoard and FSLIC had ample statutory authority to . . . promise to permit respond\xc2\xad\nents to count supervisory goodwill and capital credits toward regulatory capital\nand to pay respondents\xe2\x80\x99 damages if. that performance became impossible.\xe2\x80\x9d Id.\nat 891 (plurality opinion); see also id. at 923 (Scalia, J., concurring) ( \xe2\x80\x9c [WJhatever\nis required by the \xe2\x80\x98express delegation\xe2\x80\x99 doctrine is to my mind satisfied by the\nstatutes which the principal opinion identifies as conferring upon the [Bank Board\nand FSLIC] authority to enter into agreements of the sort at issue here.\xe2\x80\x9d ). For\nsuch authority, the Court pointed both to FSLIC\xe2\x80\x99s statutory authority to enter into\ncontracts under 12 UTS.C. \xc2\xa7 1725(c) (1988) (repealed 1989), and to its authority\nin certain circumstances to guarantee an acquiring institution against certain losses\nin order to facilitate a merger or consolidation with a failed or failing thrift under\n12 U.S.C. \xc2\xa7 1729(f)(2) (1988) (repealed 1989). 518 U.S. at 890 (plurality opinion);\nid. at 923 (Scalia, J., concurring).\n\nn. ANALYSIS\nWe understand that currently pending before the Court of Federal Claims and\nthe Federal Circuit are more than one hundred cases premised on identical or\n151\n\n\x0cOpinions of the Office o f Legal Counsel in Volume 22\n\nsimilar theories of relief as the three cases at issue in Winstar. We further under\xc2\xad\nstand that some of these cases involve AA\xe2\x80\x99s or SAA\xe2\x80\x99s entered into by FSLIC,\nand that FSLIC was involved in some but not all of the remaining cases. We\naddress here only those cases in which FSLIC was a party to an AA or SAA.\nSee supra p. 142.\nThere are two potential sources for the payment of judgments (or settlements)\nagainst the government in the cases considered here: the Judgment Fund or the\nFSLIC Resolution Fund. The \xe2\x80\x9c Judgment Fund\xe2\x80\x9d is a permanent and indefinite\nappropriation established by Congress in 1956 to pay certain final judgments,\nawards, compromise settlements, and interest and costs. The Automatic Payment\nof Judgments Act, ch. 748, \xc2\xa7 1302, 70 Stat. 678, 694-95 (1956) (codified as\namended at 31 U.S.C. \xc2\xa7 1304). The Judgment Fund may be used to pay certain\njudgments and settlements when payment is \xe2\x80\x9c not otherwise provided for.\xe2\x80\x9d Id.\nThe question for our purposes is whether Congress \xe2\x80\x9c otherwise provided for\xe2\x80\x9d the\npayment of judgments and settlements in the Winstar-reYdXeA cases addressed in\nthis memorandum when it created the FSLIC Resolution Fund in 1989 to assume,\nwith a single statutory exception that is not applicable here, 12 U.S.C. \xc2\xa7 1441a,\n\xe2\x80\x9c all assets and liabilities of the FSLIC on the day before\xe2\x80\x9d FSLIC was abolished,\n12 U.S.C. \xc2\xa7 1821a(a)(2).\n\nA. Availability of the Judgment Fund\nPrior to the creation of the Judgment Fund, many agencies had to seek specific\nappropriations from Congress to pay judgments and settlements because agency\noperating appropriations are not generally available to make such payments. As\na result of this burdensome process, payments were often unduly delayed, causing\nexcess charges for post-judgment interest. See Availability o f the Judgment Fund\nfo r the Paym ent o f Judgments or Settlements in Suits Brought Against the Com\xc2\xad\nm odity C redit Corporation Under the Federal Tort Claims Act, 13 Op. O.L.C.\n\n362, 363 (1989) (\xe2\x80\x9c CCC Opinion\xe2\x80\x9d ). The Judgment Fund addressed this problem\nby eliminating the need for Congress to pass specific appropriations bills for the\npayment of judgments and settlements that were not \xe2\x80\x9c otherwise provided for.\xe2\x80\x9d\n31 U.S.C. \xc2\xa7 1304; see CCC Opinion at 363; 3 GAO Principles at 14-24 to 1426. This Office has explained that \xc2\xa71304 was not \xe2\x80\x9c designed to shift liability\nto the United States Treasury from agencies that had specific and express statutory\nauthority to pay judgments and settlements out of their own assets and revenues,\nbut rather to eliminate the need for Congress to pass specific appropriations bills\nfor the payment of judgments.\xe2\x80\x9d CCC Opinion at 366.\nSection 1304 provides in pertinent part:\n\n152\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States\n\nv. Winstar Corp.\n\n(a) Necessary amounts are appropriated to pay final judgments,\nawards, compromise settlements, and interest and costs specified\nin the judgments or otherwise authorized by law when\xe2\x80\x94\n(1) payment is not otherwise provided for;\n(2) payment is certified by the Secretary of the Treasury;\nand ,\n(3) the judgment, award, or settlement is payable\xe2\x80\x94\n(A) under sections 2414, 2517, 2672, or 2677 of title\n28; . . . .\n31 U.S.C. \xc2\xa7 1304(a) (1994 & Supp. II 1996). Thus a judgment or settlement may\nbe paid out of the Judgment Fund only if three conditions are met: payment must\nnot be \xe2\x80\x9c otherwise provided for;\xe2\x80\x9d the Secretary of the Treasury must certify pay\xc2\xad\nment; and the judgment must be payable pursuant to one of several specified statu\xc2\xad\ntory provisions.\nWhether the Judgment Fund is available for payment of judgments and settle\xc2\xad\nments in the Winstar-related cases addressed in this memorandum depends first\nupon whether such payment is \xe2\x80\x9c otherwise provided for\xe2\x80\x9d within the meaning of\n\xc2\xa7 1304(a), i.e., whether there is another appropriation or fund that lawfully may\nbe used for payment.9 See 62 Comp. Gen. 12, 14 (1982); see also 3 GAO Prin\xc2\xad\nciples at 14-25 (to determine whether Judgment Fund is available to pay a type\nof judgment that did not exist prior to the Fund\xe2\x80\x99s establishment, usually examine\nwhether Congress has established a mechanism that is available for payment).\nWhether a payment is \xe2\x80\x9c otherwise provided for\xe2\x80\x9d is a question of legal availability\nrather than actual funding status. See Memorandum for Donald B. Ayer, Deputy\nAttorney General, from J. Michael Luttig, Principal Deputy Assistant Attorney\nGeneral, Office of Legal Counsel, Re: Department o f Energy Request to use the\nJudgment Fund fo r Settlement o f Fernald Litigation at 7 (Dec. 18, 1989) ( \xe2\x80\x9c DoE\nOpinion\xe2\x80\x9d ) (citing 66 Comp. Gen. 157, 160 (1986)); accord 3 GAO Principles\nat 14-26. The Judgment Fund does not become available simply because an\nagency may have insufficient funds at a particular time to pay a judgment. See\nid.; DoE Opinion at 7. If the agency lacks sufficient funds to pay a judgment,\nbut possesses statutory authority to make the payment, its recourse is to seek funds\nfrom Congress. See DoE Opinion at 8; 3 GAO Principles at 14\xe2\x80\x9426. Thus, if\nanother appropriation or fund is legally available to pay a judgment or settlement,\npayment is \xe2\x80\x9c otherwise provided for\xe2\x80\x9d and the Judgment Fund is not available.\n9 Because we conclude that payment for the judgments and settlements at issue fails to meet the \xe2\x80\x9c not otherwise\nprovided for\xe2\x80\x9d requirement in \xc2\xa7 1304(a), we express no opinion as to whether that provision\xe2\x80\x99s other two requirements\nare met\n\n153\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 22\n\nB. Availability of the FSLIC Resolution Fund\nThe FSLIC Resolution Fund (\xe2\x80\x9c FRF\xe2\x80\x9d ) is another possible source of payment\nfor judgments against, or settlements by, the government, at least in the Winstarrelated cases addressed in this memorandum. FIRREA simultaneously abolished\nFSLIC as of the date of enactment, August 9, 1989, and, except as provided in\n12 U.S.C. \xc2\xa7 1441a, transferred \xe2\x80\x9c all assets and liabilities of the [FSLIC] on the\nday before August 9, 1989\xe2\x80\x9d to the FRF, a separate fund to be managed by the\nFDIC.10 12 U.S.C. \xc2\xa7 1821a(a)(2) (1994); .see FIRREA \xc2\xa7 401(a)(1) (codified at 12\nU.S.C. \xc2\xa7 1437 note (1994)). The FRF may not be commingled with any other\nFDIC funds or assets. Id. It was initially funded by FSLIC\xe2\x80\x99s transferred assets,\nincome earned on those assets, certain liquidating dividends and payments on\nclaims from receiverships, and borrowed funds. Id. \xc2\xa7 1821a(b) (1994). From 1989\nto 1992, the FRF was supplemented by certain assessments against members of\nthe Savings Association Insurance Fund. Id. If these sources of funds \xe2\x80\x9c are insuffi\xc2\xad\ncient to satisfy the liabilities of the FSLIC Resolution Fund, the Secretary of the\nTreasury shall pay to the Fund such amounts as may be necessary, as determined\nby the [FDIC] and the Secretary, for FSLIC Resolution Fund purposes.\xe2\x80\x9d Id.\n\xc2\xa7 1821a(c)(l) (1994). In addition, \xe2\x80\x9c [t]here are authorized to be appropriated to\nthe Secretary of the Treasury, without fiscal year limitation, such sums as may\nbe necessary to carry out [\xc2\xa7 1821a].\xe2\x80\x9d Id. \xc2\xa7 1821a(c)(2) (1994). Because this lan\xc2\xad\nguage merely authorizes an appropriation, there would have to be an appropriation\nfrom which the Secretary of the Treasury could replenish the FRF. See 1 GAO\nPrinciples at 2-34 ( \xe2\x80\x9c \xe2\x80\x98The mere authorization of an appropriation does not\nauthorize expenditures on the faith thereof . . . . \xe2\x80\x99 \xe2\x80\x9d (quoting 16 Comp. Gen.\n1007, 1008 (1937)).\nThe question that we must answer in determining whether the FRF is available\nto pay judgments or settlements in the M nsrar-related cases in which FSLIC was\na party to an AA or SAA is one o f congressional intent. We must decide whether\nCongress intended for the phrase \xe2\x80\x9c all assets and liabilities of the [FSLIC] on\nthe day before August 9, 1989,\xe2\x80\x9d which FIRREA transferred to the FRF, 12 U.S.C.\n\xc2\xa7 1821a(a)(2), to encompass the kind of liability that would give rise to settlements\nby, or judgments against, the United States in Winstar-related cases of this type.\nIf Congress did so intend, then the FRF is available to pay the judgments or\nsettlements that arise out of such cases.11 If not, then the FRF is not available\nto pay such judgments or settlements and, absent the existence of some other\nloSection 1441a established the RTC and provided for its termination by December 31, 1995 See 12 U.S.C\n\xc2\xa7 1441a(b) (1994), 12 U S .C \xc2\xa7 1441a(m)(l) (1994) Upon termination, all assets and liabilities of RTC were to\nbe transferred to the FRF Id \xc2\xa71441a(m)(2) If the RTC\xe2\x80\x99s assets exceeded its liabilities, FIRREA obligated the\nFRF to transfer any net proceeds from the sale of the assets to the Resolution Funding Corporation Id\n11 In addition to transferring the assets and liabilities of FSLIC to the FRF, it is clear that Congress also intended\nfor judgm ents o r settlements arising from the \xe2\x80\x9c liabilities o f the [FSLIC]\xe2\x80\x9d to be paid out of the FRF See 12 U S C\n\xc2\xa7 1821a(c) (providing for a \xe2\x80\x9c Treasury backup\xe2\x80\x9d if the funds in the FRF are insufficient to satisfy its liabilities),\nid. \xc2\xa7 1821a(d) (limiting the payment o f certain judgm ents to the assets o f the FRF).\n\n154\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States v. Winstar Corp.\n\nfund from which payment could be made, the Judgment Fund would be the appro\xc2\xad\npriate source of payment.\nWe conclude that, in light of the relevant statutory text and legislative history,\nCongress intended the phrase \xe2\x80\x9c liabilities of the [FSLIC] on the day before August\n9, 1989,\xe2\x80\x9d 12 U.S.C. \xc2\xa7 1821a(a)(2), to encompass the contingent liability that arose\nfrom the contractual obligations that, under the theory of liability set forth in\nWinstar, FSLIC had assumed prior to FIRREA\xe2\x80\x99s passage and that may, as a con\xc2\xad\nsequence of FIRREA\xe2\x80\x99s enactment and implementation, become definite liabilities\nresulting in judgments against, or settlements by, the United States. Our conclusion\nis based on three related determinations: (1) liability arising from AA\xe2\x80\x99s or SAA\xe2\x80\x99s\nto which FSLIC was a party constitute \xe2\x80\x9c liabilities o f the [ F S U C ]\xe2\x80\x9d id. (emphasis\nadded), to the extent that the statutory term \xe2\x80\x9c liabilities\xe2\x80\x9d encompasses contingent\nliabilities; (2) the statutory phrase \xe2\x80\x9c liabilities of the [FSLIC],\xe2\x80\x9d id. (emphasis\nadded), does encompass contingent liabilities arising from FSLIC contracts that\nmay have created obligations leading to the payment of judgments or settlements\nby the United States in the class of Winstar-related litigation considered herein;\nand (3) the language \xe2\x80\x9c on the day before August 9, 1989,\xe2\x80\x9d does not reflect\nCongress\xe2\x80\x99s intention to exclude contingent liabilities arising from such FSLIC\nagreements, even though it is the enactment of FIRREA, an event that took place\nafter the \xe2\x80\x9c day before August 9, 1989,\xe2\x80\x9d that might give rise to any such judgments\nor settlements. We therefore conclude that the FRF is the appropriate source of\npayment for such settlements or judgments. We note that our construction of\n\xc2\xa7 1821a(a)(2) is consistent with the Tenth Circuit\xe2\x80\x99s decision in Security Federal,\n25 F.3d 1493 (10th Cir. 1994).\'2\n1.\nIt is our view that liabilities resulting from AA\xe2\x80\x99s or SAA\xe2\x80\x99s to which FSLIC\nwas a party qualify as \xe2\x80\x9c liabilities o f the [F S U C ],\xe2\x80\x9d 12 U.S.C. \xc2\xa7 1821a(a)(2)\n(emphasis added), to the extent that the term \xe2\x80\x9c liabilities\xe2\x80\x9d encompasses contingent\nliabilities. As we have explained, the Supreme Court\xe2\x80\x99s decision in Winstar held\nthe government liable insofar as the enactment and implementation of FIRREA\nresulted in the breach of AA\xe2\x80\x99s and SAA\xe2\x80\x99s that had been entered into with various\nplaintiffs. The Court concluded that these contracts provided for the assumption\nof the risk of regulatory change and constituted promises to pay plaintiffs damages\nl2The Tenth Circuit held in that case that the FRF is the appropriate source for payment of a judgm ent resulting\nfrom the breach o f contractual obligations incurred by FSLIC where the breach occurred after FSLIC\xe2\x80\x99s abolition\nId In reaching that conclusion, the court o f appeals relied on \xc2\xa7\xc2\xa7 I821a(a) and I821a(d) to hold that the restitution\nto which the plaintiff investors were entitled should be paid from the FRF rather than the RTC\xe2\x80\x99s assets: \xe2\x80\x9c Because\nFIRREA designates the FSLIC Resolution Fund as the successor to FSLIC rights and obligations and limits recovery\nto the Fund\xe2\x80\x99s assets, the Fund is the proper source o f restitution to the Investors.\xe2\x80\x9d Id. at 1506; c f Heifer Letter\n(concluding that under \xc2\xa7 1821 a(d)\xc2\xbb the FRF rather than the Judgment Fund was the proper source for payment of\nthe judgment in Security Federal because FDIC, FSLIC and FRF were all named defendants, the court ordered\npayment of the judgment from the FRF, and the case involved an AA negotiated and executed by FSLIC)\n\n155\n\n\x0cOpinions of the Office o f Legal Counsel in Volume 22\n\nin case o f breach. Under the theory of liability recognized in Winstar, a demonstra\xc2\xad\ntion that the governmental party to the AA\xe2\x80\x99s or SAA\xe2\x80\x99s had the statutory authority\nto enter into them is critical to any claim that may be brought to enforce them.\nWinstar, 518 U.S. at 890-91 (plurality opinion); id. at 923 (Scalia, J., concurring).\nThe Supreme Court recognized in Winstar that FSLIC had such authority to enter\ninto agreements that provided for the assumption of the risk of regulatory change.\nSee id. at 890 (plurality opinion); see also id. at 923 (Scalia, J., concurring).\nAccordingly, to the extent that the governmental liabilities arising out of these\nagreements in the Winstar-related cases constitute \xe2\x80\x9c liabilities\xe2\x80\x9d within the meaning\nof \xc2\xa7 1821a(a)(2), it is fair to treat them as liabilities \xe2\x80\x9c of the [FSLIC,]\xe2\x80\x9d as any\ngovernmental obligation to pay, or settlement premised on such an obligation,\nwould arise from contracts entered into by FSLIC.\nMoreover, we do not believe that, for purposes of determining the statutory\nsource of payment, such liabilities could be attributed to the Bank Board. In con\xc2\xad\ntrast to FSLIC, which exercised its contracting power in forging the underlying\nagreements, it is our understanding that, in the cases considered in this memo\xc2\xad\nrandum, the Bank Board was \xe2\x80\x9c acting through\xe2\x80\x9d FSLIC\xe2\x80\x99s authority to contract,\nWinstar, 518 U.S. at 890 (plurality opinion), and was not exercising authority\nin connection with the agreements that are the subject of this memorandum other\nthan in its capacity as the \xe2\x80\x9c operating head\xe2\x80\x9d o f FSLIC. House Report at 424,\nreprinted in 1989 U.S.C.C.A.N. at 220; see 12 U.S.C. \xc2\xa7 1725(a) (1988) (repealed\n1989) (establishing FSLIC \xe2\x80\x9c under the direction of\xe2\x80\x9d the Bank Board). Accord\xc2\xad\ningly, for purposes of construing the statutory provision that established the FRF,\nany liabilities resulting from the agreements would be \xe2\x80\x9c liabilities\xe2\x80\x9d of FSLIC,\nrather than of the Bank Board.13\nWe also believe that, in light of the quasi-corporate nature of FSLIC, Congress\nwould have intended to treat these liabilities as \xe2\x80\x9c liabilities of the [FSLIC.]\xe2\x80\x9d This\nconclusion is supported by the fact that Congress does not ordinarily intend for\nthe Judgment Fund to serve as the source of payment for liabilities that result\nfrom the breach of contractual obligations of governmental entities such as FSLIC.\nInstead, Congress ordinarily expects that such liabilities will be paid out of the\n13 At least for purposes o f \xc2\xa7 1821a(a)(2), the fact that the \xe2\x80\x9c United States\xe2\x80\x9d appears as the defendant in the Winstarrelated cases does not make any liabilities resulting from FSLIC agreements liabilities of (he United States as a\nwhole rather than o f FSLIC. The styling of the captions in these cases simply reflects the requirement that all\ncases brought in the CFC must be brought against the \xe2\x80\x9c United States,\xe2\x80\x9d see 28 U S C \xc2\xa7 1491(a) (1994), a requirement\nthat obtains without regard to the source from which payments would be made for any liability that results from\nsuch litigation A lthough 12 U.S C \xc2\xa7 1821a(d) defines one class o f judgments payable from the FRF as those\n\xe2\x80\x9c resulting from a proceeding to which [FSLIC] was a party pnor to its dissolution or which is initiated against\nthe [FDIC] with respect to [FSLIC] o r with respect to the FSLIC Resolution Fund,\xe2\x80\x9d we do not believe that this\nprovision limits the liabilities transferred to the FR F to those resulting from actions in which FSLIC or the FDIC\nwas named as a defendant Instead, it is clear that, in light o f the text, structure, and legislative history of \xc2\xa7 1821a(d).\nCongress did not intend for this provision to lim it the class of payable FSLIC liabilities, but rather to insure that\nthe FDIC would only use FRF funds to pay those FSLIC liabilities that had been transferred to the FRF See S\nRep No. 101-19, at 319 (section 1821 a(d) \xe2\x80\x9c insulates the FDIC and the other funds it manages from liabilities\no f FSLIC that are transferred to the [FRF]\xe2\x80\x9d ), see also House Report at 335, reprinted in 1989 U S .C C A N at\n131 ( \xe2\x80\x9c Any judgm ent resulting from\nany action which is initiated against the FDIC based upon FSLIC actions\nis limited to the assets o f the FSLIC Resolution Fund \xe2\x80\x9d )\n\n156\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States\n\nv. Winstar Corp.\n\nseparate funds of such governmental entities. Accordingly, it seems entirely logical\nto conclude that Congress intended for the FRF to serve as the source of payment\nfor all those liabilities that Congress, had it not abolished FSLIC, would have\nexpected FSLIC to have paid out of its own funds. The FRF, after all, is the\nfund that Congress established in order to succeed generally to all o f the assets\nand liabilities of FSLIC.\nOur determination that FSLIC is the type of governmental entity that Congress\nordinarily would expect to use its own funds to pay for liabilities resulting from\nthe breach of its contractual obligations stems from both its statutory designation\nas a \xe2\x80\x9c government corporation\xe2\x80\x9d and an examination of the functions that it per\xc2\xad\nforms. For example, the General Accounting Office (\xe2\x80\x9c GAO\xe2\x80\x9d ) has generally found\nthat judgments against a government corporation, such as FSLIC, see 31 U.S.C.\n\xc2\xa79101(3)(E) (1988) (repealed 1989) (listing FSLIC as a wholly-owned govern\xc2\xad\nment corporation), should be paid from the corporation\xe2\x80\x99s own funds:\nThe theory is that a government corporation is set up to operate\nin a business-like manner. It is usually given considerable latitude\nin determining its expenditures; it is free of many of the restrictions\non appropriated funds that apply to noncorporate agencies; and its\nstatutory charter typically contains a \xe2\x80\x98sue and be sued\xe2\x80\x99 clause. Of\nparticular relevance . . . a corporation may generally retain funds\nit receives in the course of its operations and is not required to\ndeposit them in the Treasury as miscellaneous receipts. Also, unlike\na regular government agency, a government corporation may pro\xc2\xad\ncure liability insurance. This being the case, it is logical that losses\nincurred by a government corporation, whether by judgment or\notherwise, should be treated as liabilities of the corporation and\ncharged to corporate funds.\n3 GAO Principles at 14\xe2\x80\x9436.\nThis Office has not expressly considered or adopted GAO\xe2\x80\x99s reasoning regarding\nthe appropriate source for payment of judgments against a government corpora\xc2\xad\ntion. Our approach has been to focus on case-specific determinations of congres\xc2\xad\nsional intent. In Availability o f the Judgment Fund fo r the Payment o f Judgments\nor Settlements in Suits Brought Against the Commodity Credit Corporation Under\nthe Federal Tort Claims Act, 13 Op. O.L.C. 362 (1989), for example, we analyzed\nwhether the Judgment Fund was available to pay settlements for suits brought\nagainst the Commodity Credit Corporation ( \xe2\x80\x9c CCC\xe2\x80\x9d ) under the Federal Tort\nClaims Act ( \xe2\x80\x9c FTCA\xe2\x80\x9d ), by searching for indications that Congress intended for\nthe CCC to discharge its own debts, including judgments against it, from its own\nfunds. Id. at 367. As evidence of such intent, we noted that: (1) for the first\nfifteen years of its existence, the CCC operated largely in a private manner; (2)\n157\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 22\n\nlike similar government corporations, the CCC was exposed to legal liability\nthrough a sue-and-be-sued clause; and (3) the CCC was authorized to \xe2\x80\x9c \xe2\x80\x98determine\nthe character of and the necessity for its obligations and expenditures and the\nmanner in which they shall be incurred, allowed, and paid\xe2\x80\x99 \xe2\x80\x99\xe2\x80\x99 and to \xe2\x80\x98 \xe2\x80\x98 \xe2\x80\x98make final\nand conclusive settlement and adjustment of any claims by or against the Corpora\xc2\xad\ntion.\xe2\x80\x99 \xe2\x80\x9d Id. (quoting 15 U.S.C. \xc2\xa7714b(j), (k)). We found that \xe2\x80\x9c [s]ince the CCC\nthus has the authority to apply its own funds to the payment of \xe2\x80\x98any\xe2\x80\x99 of its judg\xc2\xad\nment claims, it follows that the C C C \xe2\x80\x99s obligations arising from FTCA may be\npaid from corporate funds. Accordingly, payment of such FTCA judgments against\nthe CCC is \xe2\x80\x98otherwise provided for\xe2\x80\x99 within the meaning of 31 U.S.C. \xc2\xa7 1304(a)(1),\nand the Judgment Fund is not available for that purpose.\xe2\x80\x9d Id.\nThe common thread running through our and the GAO\xe2\x80\x99s analysis is that, in\ndetermining whether Congress intended for an entity to pay judgments from its\nown funds, relevant considerations include whether: Congress has designated the\nentity as a government corporation; the government corporation operates in a pri\xc2\xad\nvate, or \xe2\x80\x9c business-like,\xe2\x80\x9d manner, as evidenced by, for example, its latitude to\ndetermine its expenditures, its exemption from the normal restrictions on appro\xc2\xad\npriated funds, or the type of program it runs; the government corporation is\nexposed to legal liability through a sue-and-be-sued clause; and the government\ncorporation has a revolving fund through which it may retain funds received in\nthe course of its income-generating operations and spend those funds on day-today expenses.\nWe believe that the relevant circumstances indicate that Congress intended for\nFSLIC to pay judgments against it from its own funds. Congress expressly des\xc2\xad\nignated FSLIC as a government corporation. See 31 U.S.C. \xc2\xa79101(3)(E) (1988)\n(repealed 1989). In addition, while FSLIC in part performed an inherently govern\xc2\xad\nmental function in its role as a regulator of the thrifts, the deposit insurance func\xc2\xad\ntion it performed was one that could have been performed by the private sector.\nFSLIC had considerable latitude to determine its necessary expenditures and could\noperate without considering the usual statutory provisions regarding the use of\nappropriated funds. See 12 U.S.C. \xc2\xa7 1725(c)(5) (1988) (repealed 1989) (requiring\nFSLIC to \xe2\x80\x9c determine its necessary expenditures . . . and the manner in which\nthe same shall be incurred, allowed, and paid, without regard to the provisions\nof any other law governing the expenditure of public funds\xe2\x80\x9d ). FSLIC also oper\xc2\xad\nated like a private business in that its real property was subject to state or local\ntaxes. See id. \xc2\xa7 1725(e). And FSLIC could sue and be sued. See FDIC v. Meyer,\n510 U.S. 471, 475 (1994) (citing 12 U.S.C. \xc2\xa7 1725(c)(4) (1988)). Finally, FSLIC\xe2\x80\x99s\ninsurance fund operated as a revolving fund\xe2\x80\x94paying for both its current operating\nexpenses and defaults on depositors\xe2\x80\x99 accounts out of premiums levied on the\ninstitutions it insured, without having to deposit its funds in the Treasury as mis\xc2\xad\ncellaneous receipts. See 12 U.S.C. \xc2\xa7 1727(b) & (c) (1988) (repealed 1989) (pro\xc2\xad\nviding for payment of premiums to FSLIC by insured institutions); id. \xc2\xa7 1725(d)\n158\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States v. Winstar Corp\n\n(1988) (repealed 1989) (\xe2\x80\x9c Moneys of [FSLIC] not required for current operations\nshall be deposited in the Treasury of the United States, or upon the approval\nof the Secretary of the Treasury, in any Federal Reserve bank, or shall be invested\nin obligations of, or guaranteed as to principal and interest by, the United\nStates.\xe2\x80\x9d ); id. \xc2\xa7 1728 (1988) (repealed 1989) (providing for payment of insurance\nby FSLIC). Thus, it appears that Congress would have expected the liabilities\nof FSLIC that resulted from breaches.of contracts into which FSLIC had entered\nto have been paid from FSLIC\xe2\x80\x99s insurance fund, and that Congress would have\nexpected the liabilities at issue here to have been paid from that fund if they\nhad become definite prior to FSLIC\xe2\x80\x99s abolition.\n2.\nThere remains, then, the question whether the statutory term \xe2\x80\x9c liabilities\xe2\x80\x9d should\nbe construed to encompass not only definite liabilities, such as a final judgment\nentered prior to FSLIC\xe2\x80\x99s abolition as the consequence of an AA or SAA entered\ninto by FSLIC, but also such contingent liabilities as a contractual obligation that\nFSLIC had assumed in an AA or SAA but that had not been breached prior to\nthe time FIRREA abolished FSLIC. FIRREA does not define the term \xe2\x80\x9c liabil\xc2\xad\nities\xe2\x80\x9d in the phrase \xe2\x80\x9c liabilities of the [FSLIC],\xe2\x80\x9d 12 U.S.C. \xc2\xa7 1821a(a)(2), but\nit is well-established that \xe2\x80\x9c the starting point for interpreting a statute is the lan\xc2\xad\nguage of the statute itself. Absent a clearly expressed legislative intention to the\ncontrary, that language must ordinarily be regarded as conclusive.\xe2\x80\x9d Consumer\nProd. Safety Comm\xe2\x80\x99n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). In accord\nwith this interpretive principle, the Supreme Court has explained that when a word\nor phrase in a statute has not been defined by Congress, it should ordinarily be\nconstrued in accordance with \xe2\x80\x9c its ordinary or natural meaning.\xe2\x80\x9d FDIC v. Meyer,\n510 U.S. at 476 (relying on Black\xe2\x80\x99s Law Dictionary for the ordinary meaning\nof a term).\nIn ordinary usage, the term \xe2\x80\x9c liability\xe2\x80\x9d is \xe2\x80\x9c a broad legal term [that] has been\nreferred to as of the most comprehensive significance, including almost every\ncharacter of . . . responsibility, absolute, contingent, or likely.\xe2\x80\x9d Black\xe2\x80\x99s Law Dic\xc2\xad\ntionary 914 (6th ed. 1990); see id. (liability \xe2\x80\x9c has been defined to mean: all char\xc2\xad\nacter of debts and obligations . . . an obligation which may or may not ripen\ninto a debt; any kind of debt or liability, either absolute or contingent, express\nor implied; condition of being actually or potentially subject to an obligation;\ncondition of being responsible for a possible or actual loss, penalty, evil, expense,\nor burden; . . . every kind of legal obligation, responsibility or duty . . . present,\ncurrent, future, fixed or contingent debts\xe2\x80\x9d ) (citations omitted); c f Webster\xe2\x80\x99s Third\nNew International Dictionary 1302 (1986) (defining \xe2\x80\x9c liability\xe2\x80\x9d as \xe2\x80\x9c the quality\nor state of being liable\xe2\x80\x9d and defining \xe2\x80\x9c liable\xe2\x80\x9d as \xe2\x80\x9c bound or obligated according\nto law or equity: responsible, answerable\xe2\x80\x9d ); Montauk Oil Transp. Corp. v. Tug\n159\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 22\n\n\xe2\x80\x9cEl Zorro Grande,\xe2\x80\x9d 54 F.3d 111, 114 (2d Cir. 1995) (quoting Black\xe2\x80\x99s Law Dic\xc2\xad\ntionary as support for reading the term \xe2\x80\x9c liabilities\xe2\x80\x9d in a statute broadly to encom\xc2\xad\npass civil penalties already imposed). Thus, the ordinary meaning of the term\n\xe2\x80\x9c liabilit[y]\xe2\x80\x9d strongly supports the conclusion that Congress intended the phrase\n\xe2\x80\x9c liabilities of the [FSLIC]\xe2\x80\x9d in \xc2\xa7 1821a(a)(2) to include any contingent liability\narising from promises made by FSLIC to insure against the risk of regulatory\nchange, even though that liability had not become definite by the time of FSLIC\xe2\x80\x99s\nabolition.\nO f course, we do not mean to suggest that the term \xe2\x80\x9c liabilities\xe2\x80\x9d is invariably\nbest construed, regardless of context, to include contingent liabilities arising from\nagreements that have provided for the assumption of the risk of events that have\nnot yet occurred. Here, however, the overall statutory context counsels in favor\nof giving the term \xe2\x80\x9c liabilities\xe2\x80\x9d its ordinary, expansive meaning. When FIRREA\nabolished FSLIC, it designated where the functions and the assets and liabilities\nof FSLIC would be transferred. See supra, p. 146-47; see also House Report\nat 438, reprinted in 1989 U.S.C.C.A.N. at 234 (explaining that the FRF \xe2\x80\x9c will\nassume all the assets and liabilities of the FSLIC except for those expressly trans\xc2\xad\nferred or assumed by the Resolution Trust Corporation\xe2\x80\x9d ). Congress established\nthe FRF to wind up all of FSLIC\xe2\x80\x99s affairs, see 12 U.S.C. \xc2\xa7 1821a(f) (providing\nfor dissolution of FRF \xe2\x80\x9c upon satisfaction of all debts and liabilities and sale of\nall assets\xe2\x80\x9d ), and was careful not to extinguish existing obligations attributable\nto FSLIC\xe2\x80\x99s actions. See FIRREA, \xc2\xa7 401 (f) (codified at 12 U.S.C. \xc2\xa71437 note\n(1994)) ( \xe2\x80\x9c savings provision\xe2\x80\x9d explaining that the abolition of FSLIC \xe2\x80\x9c shall not\naffect the validity of any right, duty, or obligation o f \xe2\x80\x99 FSLIC and providing for\nthe continuation of all suits commenced against FSLIC). But nowhere in FIRREA\ndid Congress expressly provide that it intended for the FRF to assume only defi\xc2\xad\nnite, but not contingent, liabilities with respect to FSLIC.\nIt would be anomalous to conclude that Congress, in creating a detailed statutory\nframework intended to wind up the affairs of FSLIC, simply left unanswered the\nquestion where the contingent liabilities arising from FSLIC agreements that had\nnot yet been breached should be transferred. This anomaly does not arise, how\xc2\xad\never, if \xe2\x80\x9c liabilities\xe2\x80\x9d is construed consistent with its ordinary, broad meaning. For\nunder such a construction, it is clear that Congress intended the FRF, which (with\nthe sole exception of 12 U.S.C. \xc2\xa7 1441a) Congress identified as the fund to which\n\xe2\x80\x9c all\xe2\x80\x9d of the FSLIC \xe2\x80\x9c liabilities\xe2\x80\x9d would be transferred, to be the source of payment\nfor the subset of liabilities that were contingent prior to FSLIC\xe2\x80\x99s abolition.\nMoreover, we have found no affirmative evidence in our review of the relevant\nlegislative materials that Congress intended to exclude contingent liabilities from\nthe \xe2\x80\x9c liabilities\xe2\x80\x9d that it plainly intended to transfer to the FRF. All of these mate\xc2\xad\nrials are consistent with construing \xe2\x80\x9c liabilities\xe2\x80\x9d in a manner that would include\nthe contingent liability attributable to the FSLIC agreements, and none provides\na clear, contrary indication of congressional intent. In light of the expansive, ordi\xc2\xad\n160\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States v. Winstar Corp.\n\nnary meaning of the term \xe2\x80\x9c liability,\xe2\x80\x9d as well as the particular statutory context\nat issue here, the term \xe2\x80\x9c liabilities\xe2\x80\x9d in \xc2\xa7 1821a(a)(2) should be construed to include\nthe type of contingent liability that arose from AA\xe2\x80\x99s and SAA\xe2\x80\x99s that FSLIC\nentered into prior to its abolition. See John Hancock Mut. Life Ins. Co. v. Harris\nTrust & Sav. Bank, 510 U.S. 86, 94-95 (1993) (in interpreting the meaning of\na statutory provision, \xe2\x80\x9c we examine first the language of the governing statute,\nguided not by a single sentence or member of a sentence, but looking to the\nprovisions of the whole law, and to its object and policy\xe2\x80\x9d ) (quotations and cita\xc2\xad\ntions omitted).\nCertainly the statutory provision that addresses payments from the FRF arising\nfrom \xe2\x80\x9c legal proceedings,\xe2\x80\x9d 12 U.S.C. \xc2\xa7 1821a(d), does not manifest an intention\non the part of Congress to exclude liabilities that were only contingent at the\ntime of FSLIC\xe2\x80\x99s abolition. Instead, that provision makes clear that Congress fully\nexpected the FRF to be the source of payment for FSLIC liabilities that would\narise from litigation commenced only after FSLIC had been abolished. Section\n1821a(d) provides: \xe2\x80\x9c Any judgment resulting from a proceeding to which [FSLIC]\nwas a party prior to its dissolution or which is initiated against the [FDIC] with\nrespect to [FSLIC] or with respect to the FSLIC Resolution Fund shall be limited\nto the assets of the FSLIC Resolution Fund.\xe2\x80\x9d 12 U.S.C. \xc2\xa7 1821a(d). The plain\nlanguage of this provision indicates that Congress contemplated that judgments\nresulting from cases initiated against the FDIC after the enactment of FIRREA\nwith respect to FSLIC\xe2\x80\x99s pre-FIRREA activities would be paid from the FRF. That\nis to say, Congress must have intended for the \xe2\x80\x9c liabilities of the [FSLIC]\xe2\x80\x9d trans\xc2\xad\nferred to the FRF to include at least some potential judgments resulting from\nactions by FSLIC prior to its abolition, brought against the FDIC as the successor\nto FSLIC\xe2\x80\x99s obligations. 12 U.S.C. \xc2\xa7 1821a(a)(2). Yet, in addressing the availability\nof the FRF to pay such future judgments, Congress did not purport to limit the\nclass of payable \xe2\x80\x9c liabilities:\xe2\x80\x9d Instead, Congress employed the broad phrase \xe2\x80\x9c any\njudgment,\xe2\x80\x9d which comports with the expansive, ordinary meaning of \xe2\x80\x9c liabilities\xe2\x80\x9d\nthat we believe Congress intended to adopt in \xc2\xa7 1821a(a)(2).\nNor can it be argued that the particular class of future judgments and settlements\nat issue here\xe2\x80\x94judgments and settlements that may arise from contractual agree\xc2\xad\nments assuming the-risk of regulatory change that, by definition, had not been\nbreached prior to FSLIC\xe2\x80\x99s abolition\xe2\x80\x94were so far beyond the contemplation of\nCongress at the time that it established the FRF that it would be implausible to\nconstrue the term \xe2\x80\x9c liabilities\xe2\x80\x9d in \xc2\xa7 1821a(a)(2) to encompass them. As Justice\nSouter explained in Winstar, the effect that the enactment of FIRREA might have\non the agreements was a subject of \xe2\x80\x9c intense concern\xe2\x80\x9d in the congressional debate\nover the legislation. 518 U.S. at 902 (plurality opinion).14 For example,\n\xe2\x80\x9c [o]pponents of FIRREA\xe2\x80\x99s new capital requirements complained that \xe2\x80\x98[i]n its\n14This section o f Justice Souter\xe2\x80\x99s plurality opinion and the other portions of the opinion cited in this paragraph\nwere joined by only tw o other Justices\n\n161\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 22\n\npresent form, [FIRREA] would abrogate written agreements made by the U.S.\ngovernment to thrifts that acquired failing institutions by changing the rules in\nthe middle of the game.\xe2\x80\x99\xe2\x80\x9d Id. at 900-01 (plurality opinion) (quoting 135 Cong.\nRec. 12,145 (1989) (statement of Rep. Ackerman)). More generally, Justice Souter\nnoted that the effect that the legislation might have on existing FSLIC contracts\nwas \xe2\x80\x9c a focal point of the congressional debate,\xe2\x80\x9d id. at 900 (plurality opinion),\nand that \xe2\x80\x9c Congress itself expressed a willingness to bear the costs at issue here\nwhen it authorized FSLIC to \xe2\x80\x98guarantee [acquiring thrifts] against loss\xe2\x80\x99 that might\noccur as a result of a supervisory merger.\xe2\x80\x9d Id. at 883 (quoting 12 U.S.C.\n\xc2\xa7 1729(f)(2) (1988) (repealed 1989)). Given the attention in Congress to the ques\xc2\xad\ntion whether FIRREA would abrogate the agreements to assume the risk of regu\xc2\xad\nlatory change, it would appear reasonable to construe \xe2\x80\x9c liabilities of the [FSLIC]\xe2\x80\x9d\nto encompass any liability that might result from the breach of those agreements.\nFinally, the relevant legislative history does not demonstrate that Congress\nintended for \xe2\x80\x9c liabilities of the [FSLIC]\xe2\x80\x9d to exclude contingent liabilities. In\naccordance with the natural reading of the term \xe2\x80\x9c liabilities\xe2\x80\x9d in \xc2\xa7 1821a(a)(2), the\nearlier versions of the provision reported out of both the Senate and House\ncommittees specified that the types of liabilities that the FRF would inherit\nincluded \xe2\x80\x9c debts, obligations, contracts and other liabilities of [FSLIC], matured\nor unmatured, accrued, absolute, contingent, or otherwise.\xe2\x80\x9d S. Rep. No. 101-19,\nat 107-08 (Apr. 13, 1989); House Report at 64 (May 16, 1989) (identical lan\xc2\xad\nguage); see also S. Rep. No. 101\xe2\x80\x9419, at 319 (explaining that \xe2\x80\x9c [t]he liabilities\ntransferred include FSLIC\xe2\x80\x99s outstanding obligations under assistance agreements\nwith acquirers of failing thrift institutions\xe2\x80\x9d ); House Report at 334, reprinted in\n1989 U.S.C.C.A.N. at 130 (explaining that the FRF \xe2\x80\x9c is the successor to the\nexisting reserves and assets, debts, obligations, contracts and other liabilities of\nthe FSLIC\xe2\x80\x9d ). This explanatory language was deleted without any reference in\nthe House Conference Report, and thus it could be argued that the deletion reflects\nCongress\xe2\x80\x99s intent to have adopted a narrower meaning of \xe2\x80\x9c liabilities\xe2\x80\x9d in the\nstatute itself. We do not believe, however, that such a reading of the legislative\nhistory would be sound. To the contrary, the appearance of this broad description\nof liabilities in the Senate and House reports is consistent with the conclusion\nthat Congress intended the term \xe2\x80\x9c liabilities\xe2\x80\x9d to retain its ordinary, and quite\nexpansive, meaning, and that Congress simply deleted the explanatory language\nas unnecessary.\nIn evaluating the effect of the deletion of the explanatory language, we have\nreviewed the case law that concludes that Congress does not ordinarily \xe2\x80\x9c intend\nsub silentio to enact statutory language that it has earlier discarded in favor of\nother language.\xe2\x80\x9d INS v. Cardoza-Fonseca, 480 U.S. 421, 4 4 2 ^ 3 (1987); see also\nG ulf Oil Corp. v. Copp Paving Co., 419 U.S. 186, 200 (1974) (Congress\xe2\x80\x99s deletion\nof provision \xe2\x80\x9c strongly militates against a judgment that Congress intended a result\nthat it expressly declined to enact\xe2\x80\x9d ). There are certainly situations in which the\n162\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States v. Winstar Corp.\n\ndeletion of language that has appeared in an earlier, unenacted version of the\nlegislation may be read to signal Congress\xe2\x80\x99s intention to have enacted a provision\nwith a different meaning. There are also situations, however, where the deletion\nof the language that appeared in earlier versions of the bill merely reflects\nCongress\xe2\x80\x99s intention to have avoided an unnecessary redundancy that would have\nresulted from the inclusion of the additional language. See Gemsco, Inc. v.\nWalling, 324 U.S. 244, 263-65 (1945) (rejecting argument that deletion in con\xc2\xad\nference of an illustrative parenthetical phrase from a bill meant that Congress\nintended to circumvent the authority conferred by the bill where parenthetical had\nbeen both inserted and deleted without comment); see also Erie R.R. v. Tompkins,\n304 U.S. 64, 72-73 & n.5 (1938) (overturning the Court\xe2\x80\x99s previous interpretation\nof \xc2\xa734 of the Federal Judiciary Act in part because of the \xe2\x80\x9c research of a com\xc2\xad\npetent scholar, who examined the original document\xe2\x80\x9d ) (citing Charles Warren,\nNew Light on the History o f the Federal Judiciary Act o f 1789, 37 Harv. L. Rev.\n49, 51-52, 81-88, 108 (1923) (when the drafter of an amendment to \xc2\xa734 replaced\nhis original version\xe2\x80\x99s phrase \xe2\x80\x9c the Statute law of the several States in force for\nthe time being and their unwritten or common law now in use, whether by adop\xc2\xad\ntion from the common law of England, the ancient statutes of the same or other\xc2\xad\nwise\xe2\x80\x9d with \xe2\x80\x9c laws of the several States,\xe2\x80\x9d the latter was intended to be a concise\nsummary that encompassed the former)).\nHere, as we have explained, the ordinary meaning of the undefined term \xe2\x80\x9c liabil\xc2\xad\nities\xe2\x80\x9d is perfectly consistent with the expansive descriptions of \xe2\x80\x9c liabilities\xe2\x80\x9d con\xc2\xad\ntained in the House and Senate reports.15 In addition, the other indications of\ncongressional intent that we have identified above do not suggest that Congress\nintended to depart from the ordinary meaning of \xe2\x80\x9c liabilities\xe2\x80\x9d in establishing the\nFRF. Indeed, they all suggest that Congress intended to ensure a comprehensive\ntransfer to the FRF of all of the assets and liabilities that had formerly been\nFSLIC\xe2\x80\x99s. Accordingly, we believe that Congress would have indicated in some\nway its intention for the deletion of the explanatory language to exclude the ordi\xc2\xad\nnary meaning of the term \xe2\x80\x9c liabilities,\xe2\x80\x9d rather than merely to eliminate\nredundancies, if it had intended that result. Thus, the legislative history concerning\nthe use of the term \xe2\x80\x9c liabilities\xe2\x80\x9d in \xc2\xa7 1821a(a)(2) is consistent with the conclusion\nthat Congress intended for that term to retain its ordinary meaning.\n\n1?1ln reaching its conclusion in Security Federal that the FRF was the appropriate source of payment, the Tenth\nCircuit relied on the earlier, more complete, listing o f the types o f liabilities transferred to the FRF. See 25 F.3d\nat 1505 ( \xe2\x80\x9c the FSLIC Resolution Fund\n. \xe2\x80\x98is the successor to the existing reserves and assets, debts, obligations,\ncontracts and other liabilities of the FSLIC\xe2\x80\x99 \xe2\x80\x9d (quoting House Report at 334)). The court did not address, however,\nwhether the deletion o f that additional, descriptive language from the final version of \xc2\xa7 1821a(a)(2), which uses\nonly the term \xe2\x80\x9c liabilities,\xe2\x80\x9d reflected Congress\xe2\x80\x99s intention to have adopted a narrower meaning of \xe2\x80\x9c liabilities\xe2\x80\x9d\n\n163\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 22\n\n3.\nAlthough we believe that Congress intended the phrase \xe2\x80\x9c the liabilities of the\n[FSLIC]\xe2\x80\x9d to encompass contingent liabilities resulting from contracts in which\nFSLIC assumed the risk of regulatory change, we must still consider the effect\nof the remaining portion of the relevant statutory language\xe2\x80\x94i.e., the portion of\nthe statute that limits the liabilities of FSLIC to include only those that existed\n\xe2\x80\x9c on the day before August 9, 1989.\xe2\x80\x9d It could be argued that the inclusion of\nthis limiting language reflected Congress\xe2\x80\x99s intention to exclude liabilities resulting\nfrom breaches of contract caused by FIRREA\xe2\x80\x99s enactment and implementation,\nwhich, of course, occurred after August 8, 1989. Under that view, the phrase\n\xe2\x80\x9c liabilities of the [FSLIC]\xe2\x80\x9d on the day before it was abolished would encompass,\nfor example, outstanding promissory notes for the cash assistance that FSLIC had\npromised to contribute to supervisory mergers. The phrase would not encompass\nmere contingent liabilities that were attributable to agreements by FSLIC that\nwould not be breached until after August 8, 1989. We do not believe, however,\nthat this argument has force.\nAs we have already explained, there is nothing in the term \xe2\x80\x9c liabilities\xe2\x80\x9d itself\nthat would counsel in favor of construing it to exclude contingent liabilities\nresulting from FSLIC contracts that had not been breached as of August 8, 1989.\nIndeed, the ordinary meaning of that term points in the opposite direction, and\nwe have found no evidence that Congress intended the date restriction in\n\xc2\xa7 1821a(a)(2), i.e., the phrase \xe2\x80\x9c on the day before August 9, 1989,\xe2\x80\x9d to limit the\ntypes of \xe2\x80\x9c liabilities\xe2\x80\x9d of FSLIC transferred to the FRF. We do not believe, for\nexample, that Congress intended this date restriction to preclude the FRF from\nserving as the source of payment for judgments or settlements resulting from\nbreaches of FSLIC agreements that occurred either on the date of FIRREA\xe2\x80\x99s\nenactment, or later, when FIRREA was implemented, and thus after \xe2\x80\x9c the day\nbefore August 9, 1989.\xe2\x80\x9d Instead, we believe that the inclusion of the date restric\xc2\xad\ntion merely resulted from the timing of FSLIC\xe2\x80\x99s abolition; technically, FSLIC\nwas abolished just after midnight on August 8, and thus the transfer to the FRF\nof FSLIC\xe2\x80\x99s liabilities as of midnight on August 8 makes sense as a matter of\ntiming. Earlier versions of the bill reported out of both the House and Senate\ncommittees had used the phrase \xe2\x80\x9c [o]n the date of the dissolution of [FSLIC] in\naccordance with section 401 of [FIRREA],\xe2\x80\x9d see S. Rep. No. 101-19, at 107 (Apr.\n13, 1989); House Report at 64 (May 16, 1989), and there is no indication in\nthe House Conference Report that the substitution of \xe2\x80\x9c the day before August 9,\n1989\xe2\x80\x9d for \xe2\x80\x9c the date of the dissolution of [FSLIC]\xe2\x80\x9d was intended to work any\nsubstantive change.\n\n164\n\n\x0cAppropriate Source fo r Payment o f Judgments and Settlements in United States v. Winstar Corp.\n\nIII. CONCLUSION\nWe conclude, therefore, that the transfer of \xe2\x80\x9c all assets and liabilities of the\n[FSLIC] on the day before August 9, 1989\xe2\x80\x9d to the FRF included not only the\ntransfer of those liabilities that were definite on the day before FSLIC was abol\xc2\xad\nished by reason of a judgment, or that arose from a breach of a contractual obliga\xc2\xad\ntion that occurred on or before that date, but also those contingent liabilities that\nresulted from FSLIC\xe2\x80\x99s earlier assumption of the risk of adverse changes in the\nregulatory structure and that became definite only after FSLIC had been abolished.\n12 U.S.C. \xc2\xa7 1821a(a)(2). Because the FRF inherited these contingent liabilities\nfrom FSLIC, it also inherited the corresponding duty to pay damages once the\nregulatory structure changed. Thus, the FRF is legally available to pay judgments\nresulting from proceedings seeking to enforce this duty, and any settlements based\non the risk of such judgments. Because payment is \xe2\x80\x9c otherwise provided for\xe2\x80\x9d\nwithin the meaning of the Judgment Fund statute, the Judgment Fund is not avail\xc2\xad\nable to pay such judgments and settlements. See 31 U.S.C. \xc2\xa7 1304. In sum, we\nbelieve that the FRF is the appropriate source of funds to pay judgments and\nsettlements in Wmstar-related cases in which FSLIC was a party to an Assistance\nAgreement or Supervisory Action Agreement.\nRANDOLPH D. MOSS\nActing Assistant Attorney General\nOffice o f Legal Counsel\n\n165\n\n\x0c'


b'Obligation to Sell Governors Island\nThe statutory requirement that the Administrator of General Services sell Governors Island at fair\nmarket value continues to apply notwithstanding the President\xe2\x80\x99s subsequent reservation of Governors Island as a national monument under the Antiquities Act.\n\nApril 24, 2001\n\nMEMORANDUM OPINION FOR THE ACTING GENERAL COUNSEL\nGENERAL SERVICES ADMINISTRATION\nThis memorandum confirms oral advice provided on January 19, 2001, in\nconnection with President Clinton\xe2\x80\x99s designation of Governors Island, New York,\nas a national monument, see Proclamation No. 7402, 66 Fed. Reg. 7855 (2001).\nWe were asked whether section 9101 of Public Law 105-33, 111 Stat. 251, 670\n(1997), which requires the Administrator of General Services (\xe2\x80\x9cAdministrator\xe2\x80\x9d) to\nsell at fair market value \xe2\x80\x9cno earlier than fiscal year 2002 . . . all rights, title, and\ninterests of the United States in and to the land of, and improvements to, Governors Island, New York,\xe2\x80\x9d would continue to require the Administrator to sell the\nproperty after the President\xe2\x80\x99s designation of the property as a national monument\nunder section 2 of the Antiquities Act, 16 U.S.C. \xc2\xa7 431 (1994). As we advised, we\nbelieve that section 9101 would continue to require the sale. 1\nThe Antiquities Act authorizes the President to\ndeclare by public proclamation historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest\nthat are situated upon the lands owned or controlled by the Government of the United States to be national monuments, and may\nreserve as a part thereof parcels of land, the limits of which in all\ncases shall be confined to the smallest area compatible with the\nproper care and management of the objects to be protected.\n16 U.S.C. \xc2\xa7 431. The Antiquities Act thus confers upon the President the power to\ntake federal lands out of the public domain by reserving them as national monuments in order to protect the objects of scientific and historic interest located on\nthose lands.\nWe have previously observed that, \xe2\x80\x9c[a]s a general rule, land that has been\nwithdrawn from the public domain is no longer subject to laws governing the\n\n1\nOur memorandum approving the form and legality of the proclamation designating the property as\na national monument indicated that the proclamation was subject to existing law, including section\n9101. Memorandum from Randolph D. Moss, Assistant Attorney General, Office of Legal Counsel,\nRe: Proposed Presidential Proclamation Entitled \xe2\x80\x9cEstablishment of the Governors Island National\nMonument\xe2\x80\x9d (Jan. 19, 2001).\n\n110\n\n227-329 VOL_25_PROOF.pdf 120\n\n10/22/12 11:10 AM\n\n\x0cObligation to Sell Governors Island\n\ndisposition or sale of public lands.\xe2\x80\x9d Federal \xe2\x80\x9cNon-Reserved\xe2\x80\x9d Water Rights, 6 Op.\nO.L.C. 328, 340 (1982). For example, a general statute affecting public lands\nenacted after the President\xe2\x80\x99s reservation of lands for a federal purpose will not be\ninterpreted to apply to the reserved lands. See, e.g., United States v. Minnesota,\n270 U.S. 181, 206 (1926) (noting the \xe2\x80\x9cfamiliar rule\xe2\x80\x9d that \xe2\x80\x9clands which have been\nappropriated or reserved for a lawful purpose are not public, and are to be regarded\nas impliedly excepted from subsequent laws\xe2\x80\x9d). The general rule, however, is\nsubject to the exception that a particular area of reserved land will be governed by\na statute that specifically requires the disposition of that land. See, e.g., id. (noting\nthat the \xe2\x80\x9cfamiliar rule\xe2\x80\x9d only applies when the subsequent law \xe2\x80\x9cdo[es] not specially\ndisclose a purpose to include [the reserved lands]\xe2\x80\x9d); Scott v. Carew, 196 U.S. 100,\n109 (1905) (\xe2\x80\x9c[W]henever a statute is passed containing a general provision for the\ndisposal of public lands, it is, unless an intent to the contrary is clearly manifest by\nits terms, to be held inapplicable to lands which for some special public purpose\nhave been in accordance with law taken full possession of by and are in the actual\noccupation of the Government.\xe2\x80\x9d) (emphasis added); Missouri, K&T Ry. Co. v.\nRoberts, 152 U.S. 114, 119 (1894) (\xe2\x80\x9c[A] tract lawfully appropriated to any\npurpose becomes thereafter severed from the mass of public lands, and . . . no\nsubsequent law or proclamation will be construed to embrace or operate upon\nit . . . . Congress cannot be supposed to grant [reserved lands] in a subsequent law,\ngeneral in its terms. Specific language, leaving no room for doubt as to the\nlegislative will, is required for such a purpose.\xe2\x80\x9d) (emphasis added) (internal\nquotation marks omitted). Although here (unlike the situation in the cited cases)\nthe statute specifically requiring sale of the land was enacted before the President\xe2\x80\x99s reservation of the land under a general reservation statute, we believe that\nthe principle of following the more specific statute still applies. A statute that\nspecifically requires the sale or some other disposition of a particular area of land\nwill continue to apply even if the land is later reserved under a general reservation\nstatute.\nSection 9101, enacted in 1997, requires the Administrator to \xe2\x80\x9cdispose of by sale\nat fair market value all rights, title, and interests of the United States in and to the\nland of, and improvements to, Governors Island, New York.\xe2\x80\x9d Pub. L. No. 105-33,\n\xc2\xa7 9101(a). The statute further provides that \xe2\x80\x9c[b]efore a sale is made under\nsubsection (a) to any other parties, the State of New York and the city of New\nYork shall be given the right of first offer to purchase all or part of Governors\nIsland at fair market value as determined by the Administrator . . . .\xe2\x80\x9d Id. \xc2\xa7 9101(b).\nBecause section 9101 shows Congress\xe2\x80\x99s intent to require the Administrator to sell\nGovernors Island, the statute applies, under the principle explained above, even\nafter the President\xe2\x80\x99s reservation of the land under the Antiquities Act on January\n20, 2001. If there were any doubt that the specific terms of section 9101 apply\nregardless of the reservation of the land under the Antiquities Act, the first clause\nof subsection (a) of section 9101, which requires the Administrator to sell the\n\n111\n\n227-329 VOL_25_PROOF.pdf 121\n\n10/22/12 11:10 AM\n\n\x0cOpinions of the Office of Legal Counsel in Volume 25\n\nproperty \xe2\x80\x9c[n]otwithstanding any other provision of law,\xe2\x80\x9d makes it clear that\nsection 9101\xe2\x80\x99s requirements survive the designation of Governors Island as a\nnational monument.\nThe proclamation designating Governors Island as a national monument explicitly recognizes the Administrator\xe2\x80\x99s continuing obligation to sell the land. The\nparagraph providing for the withdrawal of federal lands from sale, leasing, or other\ndisposition under the public land laws begins with the proviso that such withdrawal is \xe2\x80\x9c[s]ubject to existing law, including Public Law No. 105-33, Title IX, section\n9101(a), 111 Stat. 670 (Aug. 5, 1997).\xe2\x80\x9d 66 Fed. Reg. at 7856. This proviso tracks\nwhat the law already requires\xe2\x80\x94namely, that section 9101, because it specifically\nmandates the sale of Governors Island, applies despite the President\xe2\x80\x99s reservation\nof that land as a monument under the Antiquities Act.\nDANIEL L. KOFFSKY\nActing Assistant Attorney General\nOffice of Legal Counsel\n\n112\n\n227-329 VOL_25_PROOF.pdf 122\n\n10/22/12 11:10 AM\n\n\x0c'