b'Applicability of 18 U.S.C. \xc2\xa7\xc2\xa7431-433 to Limited Partnership\nInterests in Government Leases\nT he interests o f two M em bers o f C ongress under a proposed real estate transaction involving lim ited\npartnership interests in governm ent leases would fall w ithin the prohibition o f 18 U.S.C. \xc2\xa7 4 3 1 ,\nand the \xe2\x80\x9c incorporated com pany\xe2\x80\x9d exception o f 18 U.S.C. \xc2\xa7 4 3 3 does not apply.\n\nFebruary 17, 1998\nM e m o r a n d u m O p in io n f o r t h e G e n e r a l C o u n s e l\nG e n e r a l S e r v ic e s A d m in is t r a t io n\n\nThis memorandum responds to your request for our opinion on the applicability\nof 18 U.S.C. \xc2\xa7\xc2\xa7431-433 (1994) to the interests of two Members of Congress\nin contracts involving government leases under a proposed transaction.1 Those\nprovisions generally prohibit Members of Congress from entering into or holding\ncontracts with federal agencies and render such contracts void. Specifically, you\nhave asked: (1) whether the interests of the Members under the proposed trans\xc2\xad\naction fall within the scope of 18 U.S.C. \xc2\xa7\xc2\xa7431 and 432; (2) whether the \xe2\x80\x9c incor\xc2\xad\nporated company\xe2\x80\x9d exception of 18 U.S.C. \xc2\xa7433 is applicable; and (3) whether\nany or all of four alternatives to the proposed transactions would violate \xc2\xa7\xc2\xa7431\nand 432. We conclude: (1) that the interests of the Members under the proposed\ntransaction would fall within the prohibition of \xc2\xa7431; (2) that the \xe2\x80\x9c incorporated\ncompany\xe2\x80\x9d exception does not apply; and (3) that one o f the alternatives would\nnot violate \xc2\xa7431.\n\nI.\nThe background and pertinent terms of the proposed transaction, as we under\xc2\xad\nstand them, are as follows.2 Two Members of Congress have beneficial interests\nin several blind or excepted trusts that hold ownership interests in six entities\n(the \xe2\x80\x9c MOC Entities\xe2\x80\x9d ) None of the six MOC Entities currently holds a contract\nor lease with the Federal Government that would violate 18 U.S.C. \xc2\xa7\xc2\xa7431\xe2\x80\x94433.\nHowever, a proposed transaction involving these six entities and two additional\nentities (the \xe2\x80\x9c non-MOC Entities\xe2\x80\x9d ) that do have current leases with federal agen\xc2\xad\n1 Letter for Dawn E Johnsen, Acting Assistant Attorney General, Office o f Legal Counsel, from Emily C. Hewitt,\nGeneral Counsel, General Services Administration (Jan. 15,1998) ( \xe2\x80\x9c Hewitt Letter\xe2\x80\x9d ).\n2These facts derive from information provided by you and by counsel for several entities that would contribute\ntheir assets under the proposed transaction. To the extent that additional facts are relevant, but have not been described\nto us, our conclusion could change See Hewitt Letter; Letter for Emily C Hewitt, General Counsel, General Services\nAdministration, from Francis L. Coolidge, Ropes & Gray (Jan 14, 1998) (\xe2\x80\x9c Coolidge Letter I\xe2\x80\x9d ); Letter for Emily\nC. Hewitt, General Counsel, General Services Administration, from Francis L Coolidge, Ropes & Gray (Jan. 29,\n1998) ( \xe2\x80\x9c Coolidge Letter II\xe2\x80\x9d )\n\n33\n\n\x0cOpinions of the Office o f Legal Counsel in Volume 22\n\ncies has raised the question whether the Members would be considered to hold\ninterests in the leases under the proposed transaction.\nThe MOC and non-MOC Entities, which are owned and controlled by one\nfamily, have proposed entering into a transaction with a publicly traded real estate\ninvestment trust (the \xe2\x80\x9c REIT\xe2\x80\x9d ), whereby the entities would contribute their assets\nto a currently existing limited partnership (the \xe2\x80\x9c Operating Partnership\xe2\x80\x9d ). The\nREIT owns and manages, and is the sole general partner of, the Operating Partner\xc2\xad\nship. In exchange for their contributions of assets, the entities would receive cash\nand preferred partnership units (the \xe2\x80\x9c OP U nits\xe2\x80\x9d ) in the Operating Partnership.\nThus, under the transaction, the leases with federal agencies held by the two nonMOC Entities would be contributed to the Operating Partnership.3\nThe OP Units provided to the entities would be a preferred class with a cumu\xc2\xad\nlative preference, vis-a-vis the Operating Partnership\xe2\x80\x99s common units, as to all\ndistributions from the Operating Partnership. The distribution rate would be set\nat six percent (plus or minus) o f the face value of the OP Units at the time of\nissuance. Each OP Unit would be convertible into a fixed number of common\nunits of the Operating Partnership, which are redeemable for shares of the REIT\nor cash at the election of the owners. In addition, the Operating Partnership may\nunilaterally require conversion of the OP Units into common units ten years after\nthe sale/contribution occurs.\nBecause leases with the Government would be held by the Operating Partnership\nunder the transaction, and because the Members of Congress, through their trusts,\nwould acquire ownership interests in the OP Units, the question arises whether\nthe Members would hold interests in contracts with the Government in violation\nof 18 U.S.C. \xc2\xa7\xc2\xa7431-433.\n\nn.\nSection 431 of title 18 prohibits Members of Congress from entering into or\nholding contracts with any federal agency.4 It also provides that any contracts\nmade in violation of that section shall be void. Section 432 prohibits federal offi\xc2\xad\ncers and employees from making contracts with Members of Congress.5 Section\n3 Counsel for the entities also notes that it is possible, though not certain, that the Operating Partnership may\nhave preexisting contracts or leases with federal agencies Coolidge Letter I at 2.\n4 18 U S C \xc2\xa7431 provides, in relevant part\nW hoever, being a M ember o f or Delegate to Congress, or a Resident Commissioner, either before or\nafter he has qualified, directly o r indirectly, himself, or by any other person in trust for him, or for his\nuse o r benefit, or on his account, undertakes, executes, holds, or enjoys, in whole or in part, any contract\no r agreem ent, made or entered into in behalf o f the United States or any agency thereof, by any officer\nor person authorized to make contracts on its behalf, shall be fined under this title\nAll contracts o r agreements made in violation of this section shall be void, and whenever any sum\no f money is advanced by the United States o r any agency thereof, in consideration o f any such contract\nor agreem ent, it shall forthwith be repaid .\n5 18 U.S C. \xc2\xa7 4 3 2 provides\nW hoever, being an officer or employee o f the United States, on behalf of the United States or any\nagency thereof, directly or indirectly makes o r enters into any contract, bargain, or agreement, with any\n\n34\n\n\x0cApplicability o f 18 U.S.C. \xc2\xa7\xc2\xa7431\xe2\x80\x94433 to Limited Partnership Interests in Government Leases\n\n433 sets forth certain exceptions to the applicability of \xc2\xa7\xc2\xa7431 and 432, including\none for contracts\' with an \xe2\x80\x98 \xe2\x80\x98incorporated company for the general benefit of such\ncorporation.\xe2\x80\x9d 6 Since their initial enactment in 1808, these statutes have barred\ncontracts between federal agencies and Members of Congress or partnerships in\nwhich Members of Congress have an interest.7\nA. Applicability o f 18 U.S.C. \xc2\xa7431\n\xe2\x80\x9c Interpretation of a statute must begin with the statute\xe2\x80\x99s language.\xe2\x80\x9d M allard\nv. United States Dist. Court, 490 U.S. 296, 300 (1989). Section 431 \xe2\x80\x99s language\nis broad, extending to the \xe2\x80\x9c undertak[ing], execut[ing], holdfing], or enjoy[ing],\nin whole or in part\xe2\x80\x9d of a contract with the Government by a Member of Congress,\n\xe2\x80\x9c directly or indirectly, himself, or by any other person in trust for him, or for\nhis use or benefit.\xe2\x80\x9d Thus, Attorneys General and our Office consistently have\nrecognized that the statutory prohibition applies not only to Government contracts\nthat are directly with a Member, but also to such contracts with a partnership\nin which a Member of Congress is a partner.8 Government contracts with such\npartnerships have been considered permissible under \xc2\xa7431 only where the\nMember of Congress withdraws from the partnership or the Member properly\nrelinquishes all interest in the contract (thus effectively making the contract one\nwith a different partnership not including the Member).9\nWe believe that the interests of the two Members of Congress under the pro\xc2\xad\nposed transaction would fall within \xc2\xa7431\xe2\x80\x99s prohibitory language, for two reasons.\nFirst, the preferred distribution rights in the OP Units represent ownership\ninterests in the Operating Partnership, which would directly hold the Government\nMember of or Delegate to Congress, or any Resident 18 U S.C. Commissioner, either before or after he\nhas qualified, shall be fined under this title\n6 18 U S C. \xc2\xa7433 provides, in relevant part:\nSections 4 3 1 and 432 o f this title shall not extend to any contract or agreement made or entered mto,\nor accepted by any incorporated company for the general benefit o f such corporation . . . .\nAny exemption permitted by this section shall be made a matter of public record.\n7 Act o f Apr. 21, 1808, ch. 48, \xc2\xa71, 2 Stat. 484; see, e.g.. United States v. Dietrich, 126 F 671 (C C .D . Neb.\n1904), Authority o f the Reconstruction Finance Corporation to Engage the Legal Services o f a Member o f Congress.\n38 Op. A tt\xe2\x80\x99y Gen 213 (1935); Members o f Congress\xe2\x80\x94 Contracts Under Agricultural Adjustment Act and National\nRecovery Act, 37 Op A tt\xe2\x80\x99y Gen 368 (1933); Reclamation Service\xe2\x80\x94Contracts\xe2\x80\x94 Members o f Congress, 26 Op. Att\xe2\x80\x99y\nGen. 537 (1908), Contract with a Member o f Congress, 4 Op. A tt\xe2\x80\x99y Gen. 47 (1842); Contracts with Members o f\nCongress, 2 Op. Att\xe2\x80\x99y Gen. 38 (1826), Memorandum for Gerald D. Morgan, Special Counsel to the President, from\nHerbert Brownell, Jr., Attorney General, Re: Approval o f U S. Senator as a CMS Vendor (Aug 1, 1955) ( \xe2\x80\x9c Brownell\nMem \xe2\x80\x9d ). We are not authorized to provide legal advice to Members of Congress or to private persons. However,\nbecause the statutes in question also render prohibited Government contracts void and impose penalties upon federal\nemployees, we are providing our legal views in response to your request.\ns See 38 Op. Att\xe2\x80\x99y Gen at 215; 4 Op A tt\xe2\x80\x99y Gen. at 49; Memorandum for Robert C MacKichan, Jr., General\nCounsel, General Services Administration, from Lynda Guild Simpson, Deputy Assistant Attorney General, Office\nof Legal Counsel at 3 (Aug 3, 1989) ( \xe2\x80\x9c MacKichan M em.\xe2\x80\x9d ); Brownell Mem. at 3.\n9See 4 Op Att\xe2\x80\x99y Gen at 49; Letter for Edward M. Shulman, Deputy Solicitor, Department of Agriculture, from\nJ Lee Rankin, Assistant Attorney General, Office of Legal Counsel at 1 (June 8, 1953). Even where the Member\no f Congress is specifically excluded from any partnership interest in the Government contract, this O ffice has\nexpressed the caveat that \xe2\x80\x9c legality or illegality may depend, not simply upon a contract as it is phrased, but upon\nthe actual working out o f the arrangement " I d at 2.\n\n35\n\n\x0cOpinions of the Office o f Legal Counsel in Volume 22\n\nleases. The trusts\xe2\x80\x99 ownership o f the OP Units, therefore, is tantamount to an\nownership interest in the Government contracts. Moreover, because the Members\nof Congress are beneficiaries o f the trusts, the trusts\xe2\x80\x99 ownership interests are\nequivalent to the M embers\xe2\x80\x99 interests for purposes o f \xc2\xa7431, which encompasses\nthe holding of Government contracts \xe2\x80\x9c indirectly\xe2\x80\x9d and \xe2\x80\x9c by any other person in\ntrust for [a M ember].\xe2\x80\x9c The proposed transaction does not entail any segregation\nof revenues from the Government contracts in the distributions for the OP Units\nor any relinquishment of such revenues by the trusts. Rather, the distributions\nwould reflect revenues from the Government contracts as well as other revenues\ngenerated by the Operating Partnership.10\nW e cannot agree that the statute excludes interests such as those in the OP\nUnits because they are \xe2\x80\x9c too remote and contingent\xe2\x80\x9d to be covered. Coolidge\nLetter I at 6. The statute makes no exception for minor interests. It expressly\nencompasses the \xe2\x80\x9c indirect[]\xe2\x80\x9d holding, \xe2\x80\x9c in whole or in part,\xe2\x80\x9d of Government\ncontracts by Members of Congress. Moreover, even if such a standard applied,\nthe interests here are not contingent. Thus, the interests in the Government con\xc2\xad\ntracts, by virtue of the OP Units, are actual ownership interests covered by the\nplain language of \xc2\xa7 431.\nSecond, the trusts\xe2\x80\x99 interests in the OP Units include a right to convert the OP\nUnits into common units of the Operating Partnership, which in turn are convert\xc2\xad\nible into shares of the REIT. The common units \xe2\x80\x9c are identical in all respects\nto shares of the REIT,\xe2\x80\x9d Coolidge Letter I at 4, the REIT being the sole general\npartner of the Operating Partnership. Holders of the common units of the Oper\xc2\xad\nating Partnership, like holders of the OP Units, would have an interest in the\nPartnership and its general income, including that from the Government contracts.\nOnce again, since the income generated by the Government contracts would flow\ninto the Partnership\xe2\x80\x99s general funds, a portion of which would be owed to common\nunit holders, the common units represent ownership interests in the Government\ncontracts. Reconverting the common units into shares of the REIT would not\nchange the result. Although the holder\xe2\x80\x99s ownership interest would be directly in\nthe REIT rather than the Partnership, the REIT is the sole general partner of,\nand thus has ownership in, the Partnership. The ownership interest in the REIT\ntherefore would be an indirect ownership interest in the Partnership, and hence\nin the Government contracts.\nl0The MOC and non-M OC Entities have identified a \xe2\x80\x9c modified\xe2\x80\x9d version o f the proposed transaction to address\nthis problem See Coolidge Letter I at 8-9 n 3. Under the modified transaction, the distribution rate of the OP\nUnits held by the MOC trusts would be reduced from six percent (more or less) of the face value of the OP Units\nto the extent the revenues o f the Operating Partnership less any gross revenues from Government leases were insuffi\xc2\xad\ncient to make those payments. Additionally, gross revenues from Government leases would be segregated so that\ndistributions to the trusts, in all cases, would be m ade only from revenue other than that derived from Government\nleases. See i d ; Coolidge Letter II at 2 This modification avoids the first problem by ensuring that the trusts do\nnot benefit from any G overnment leases m the distributions for the OP Units\xe2\x80\x94 either through the receipt of actual\nrevenues generated by those leases or through the receipt of funds that would not have been paid but for the leases\nAs discussed below , however, the modified transaction does not address the second problem involving the conversionright feature o f the OP Units.\n\n36\n\n\x0cApplicability o f 18 U.S.C. \xc2\xa7\xc2\xa7431-433 to Limited Partnership Interests in Government Leases\n\nThe fact that these interests are in the form of conversion rights does not remove\nthem from the scope of \xc2\xa7 431.11 These conversion rights clearly represent a signifi\xc2\xad\ncant part o f the value of the OP Units transferred under the proposed transaction.\nAt any time an owner may exercise its right to convert the OP Units into common\nunits of the Operating Partnership or shares of the REIT. An 1885 Attorney Gen\xc2\xad\neral opinion did conclude that a Member of Congress could serve as a bondsman\nor surety on a Government contract under the statute because the arrangement\ngave the Member no \xe2\x80\x9c immediate personal interest in [the contract\xe2\x80\x99s] benefits.\xe2\x80\x9d\n18 Op. Att\xe2\x80\x99y Gen. at 287. In that situation, however, the Member\xe2\x80\x99s potential\ninterest in the underlying Government contract depended entirely on contingencies\noutside his control. Here, in contrast, the owners would immediately enjoy the\nvalue coming from the unfettered ability to effect a conversion that would give\nthem an interest in Government contracts.12\nB. Applicability o f 18 U.S.C. \xc2\xa7433\nSection 433 provides that \xc2\xa7\xc2\xa7431 and 432 shall not extend to any contract with\n\xe2\x80\x9c any incorporated company for the general benefit of such corporation.\xe2\x80\x9d On sev\xc2\xad\neral occasions, Attorneys General and our Office have deemed particular contracts\npermissible under this exception; each case involved a corporation in which a\nMember of Congress had some interest.13 Neither the Operating Partnership nor\nthe REIT is a corporation.14 Because the pertinent language of \xc2\xa7433 is unambig\xc2\xad\nuous, we reject the contention that the \xe2\x80\x9c incorporated company\xe2\x80\x9d exception should\nbe interpreted to cover either entity. See Mallard, 490 U.S. at 300.\nSimilar arguments under the same statute have been rejected in the past.\nAttorney General Cummings concluded that the statute \xe2\x80\x9c expressly excepts con\xc2\xad\ntracts with \xe2\x80\x98incorporated companies\xe2\x80\x99 and, as applied to unincorporated companies\nor partnerships, require[s] the application of the rule expressio unius est exclusio\nalterius.\xe2\x80\x9d 38 Op. Att\xe2\x80\x99y Gen. at 215. And in rejecting an argument that the \xe2\x80\x9c incor\xc2\xad\nporated company\xe2\x80\x9d exception had been construed too broadly (as applying to all\ncorporations), Attorney General Cummings again relied on the plain language of\n11 The \xe2\x80\x9c modified\xe2\x80\x9d version o f the proposed transaction does not purport to alter the conversion rights attached\nto the OP Units, and it therefore retains an indirect interest in Government contracts prohibited by \xc2\xa7431. See. supra\nnote 10\n12 The value o f the conversion right is reflected in the distinction between the third and fourth alternatives to\nthe proposed transaction, under which the trusts would hold promissory notes in lieu of limited partnership interests.\nThe third alternative retains a right o f conversion into shares o f the REIT common stock, while the fourth alternative\nincludes no such conversion rights. The fourth alternative, however, includes a higher interest rate to compensate\nfor the lack o f conversion rights See Coolidge Letter I at 10-11.\n13 See, e.g , Contract with Corporation Partly Controlled by Congressman, 39 Op. Att\xe2\x80\x99y Gen 165 (1938); Advances\nby War Finance Corporation fo r Raising and Marketing Live Stock, 33 O p Att\xe2\x80\x99y Gen. 44 (1921); MacKichan Mem\nat 4 -5 & n.10.\n,4The REIT is a Maryland trust with transferable shares Maryland law defines \xe2\x80\x9c real estate investment trust\xe2\x80\x9d\nas \xe2\x80\x9c an unincorporated trust or association formed under this title in which property is acquired, held, managed,\nadministered, controlled, invested, or disposed o f for the benefit and profit of any person who may become a share\xc2\xad\nholder \xe2\x80\x9d Md Code Ann., Corps. & Ass\xe2\x80\x99ns \xc2\xa7 8\xe2\x80\x94101 (b) (emphasis added)\n\n37\n\n\x0cOpinions of the Office o f Legal Counsel in Volume 22\n\nthe provision, noting that it had been reenacted several times without modification.\n39 Op. Att\xe2\x80\x99y Gen. at 170-71.\nEven if Congress did not contemplate the status of limited partnerships and\nother unincorporated entities when it originally adopted the \xe2\x80\x9c incorporated com\xc2\xad\npany\xe2\x80\x9d exception in 1808, it had occasion to do so when it reenacted the exception\nin 1874, 1909, and 1948, and when it amended the section in other respects in\n1961. See Letter for Kent Frizzell, Acting Secretary, Department of the Interior,\nfrom Antonin Scalia, Assistant Attorney General, Office of Legal Counsel at 3\nn.l (July 28, 1975). Indeed, Congress has shown that it knows how to specify\nthe treatment of limited partnerships in other conflict of interest statutes, as evi\xc2\xad\ndenced by its amendment of title 18, \xc2\xa7208, in 1990, when it substituted the term\n\xe2\x80\x9c general partner\xe2\x80\x9d for \xe2\x80\x9c partner.\xe2\x80\x9d See Act of May 4, 1990, Pub. L. No. 101\xe2\x80\x94\n280, \xc2\xa7 5(e)(2), 104 Stat. 149, 159. We believe that the phrase \xe2\x80\x9c incorporated com\xc2\xad\npany\xe2\x80\x9d in \xc2\xa7433 must be interpreted in a manner consistent with its plain meaning\nand that that meaning does not include unincorporated entities.\nC. P roposed Alternatives\nFour alternatives to the proposed transaction have been outlined by counsel for\nthe MOC and non-MOC Entities.\nUnder the first alternative, each MOC Entity receiving OP Units and cash would\ndistribute the cash to the owners o f the Entity but would retain the OP Units\nfor the benefit of the owners of the Entity (the trusts). Thus, the trusts\xe2\x80\x99 ownership\ninterests in the Operating Partnership would be held through a limited liability\ncompany. Counsel argues that a limited liability company, like a limited partner\xc2\xad\nship, should be treated as an \xe2\x80\x9c incorporated company\xe2\x80\x9d for purposes of \xc2\xa7433.\nCoolidge Letter I at 9-10. A limited liability company, however, is not an incor\xc2\xad\nporated company. For the reasons explained above, the plain language of \xc2\xa7433\ndoes not permit the exception to encompass unincorporated entities such as limited\nliability companies. This alternative therefore does not avoid the prohibition of\n\xc2\xa7431.\nThe second proposed alternative would provide that the trusts contribute their\nownership interests in the MOC Entities to one or more S Corporations created\nfor this specific purpose. Attorneys General and this Office have found the \xe2\x80\x9c incor\xc2\xad\nporated com pany\xe2\x80\x9d exception of \xc2\xa7433 applicable to several transactions in which\nthe M em ber\xe2\x80\x99s only interest in a Government contract is through ownership in\na corporation.15 Because the statute requires that the Government contract be \xe2\x80\x9c for\nthe general benefit of such corporation,\xe2\x80\x9d however, we have stated that the contract\nl5See, e g t 39 Op A tt\xe2\x80\x99y Gen. 165 (1938), 33 O p Att\xe2\x80\x99y Gen 44 (1921), MacKichan Mem at 4 -6 , Letter for\nRalph W erner, General Counsel, District of Columbia Redevelopment Land Agency, from Leon Ulman, Deputy\nAssistant Attorney General, Office o f Legal Counsel (Dec 8, 1971); Memorandum for J Lee Rankin, Assistant\nAttorney G eneral, Executive Adjudications Division, from Edward S Lazowska, Attomey-Adviser, Executive Adju\xc2\xad\ndications Division (Feb 6, 1953).\n\n38\n\n\x0cApplicability o f 18 U.S.C. \xc2\xa7\xc2\xa7431-433 to Limited Partnership Interests m Government Leases\n\nmust be \xe2\x80\x9c entered into in good faith on behalf of the corporation rather than for\nthe specific benefit of the congressman.\xe2\x80\x9d MacKichan Mem. at 5. This Office has\nconcluded that \xc2\xa7433 does not cover a corporation formed specifically to come\nwithin the \xe2\x80\x9c incorporated company\xe2\x80\x9d exception:\nIn our view, the answer must be that generally speaking a corpora\xc2\xad\ntion formed primarily for the purpose of avoiding the proscription\nof \xc2\xa7431 should not qualify for the corporate exception of \xc2\xa7433.\nTo adopt the opposite position would be to render the statute almost\nmeaningless, since any Member of Congress who wished to seek\nGovernment contracts would be able to do so by simply setting\nup a corporation. Moreover, it may be questioned whether a con\xc2\xad\ntract with a corporation established for the purpose of avoiding\n\xc2\xa7431 could properly be regarded as being \xe2\x80\x9c for the general benefit\nof . . . [the] corporation\xe2\x80\x9d within the meaning of \xc2\xa7433.\nLetter for Kent Frizzell, Acting Secretary, Department of the Interior, from\nAntonin Scalia, Assistant Attorney General, Office of Legal Counsel at 4 (July\n28, 1975). Because the S Corporations contemplated by the second alternative\nare to be created specifically for this transaction, see Coolidge Letter II at 3, and\nthus to avoid application of \xc2\xa7431, we believe that \xc2\xa7433\xe2\x80\x99s \xe2\x80\x9c incorporated com\xc2\xad\npany\xe2\x80\x9d exception would not apply.\nThe third alternative would be identical to the first, except that the trusts would\nliquidate their interests in the MOC Entities in exchange for a promissory note\nissued by the MOC Entities. The note would have the same stated interest rate\nof 6 percent (plus or minus) as that earned by the MOC Entities from the OP\nUnits. The principal on the note would be due in 15 years (or sooner if the Oper\xc2\xad\nating Partnership unilaterally required the conversion of OP Units into common\nunits) and would be convertible into shares of the REIT common stock. Under\nthis scenario, the trusts would not hold any direct interest in the Operating Partner\xc2\xad\nship, but would be creditors of the MOC Entities. We have concluded, however,\nthat the right to convert to shares of the REIT is an interest in the Operating\nPartnership, and thus an interestnn the Govemment~contracts. We have also con\xc2\xad\ncluded that shares of the REIT do not fall within \xc2\xa7433\xe2\x80\x99s \xe2\x80\x9c incorporated company\xe2\x80\x9d\nexception. This alternative therefore would be prohibited by \xc2\xa7431.\nThe fourth and final alternative would be identical to the third, except that\ninstead of a conversion feature attaching to the promissory note, the note would\ncontain a higher stated interest in order to compensate for the loss of conversion\nrights. Because the trusts\xe2\x80\x99 relationship to the Operating Partnership would simply\nbe a debtor-creditor relationship, the trusts would have no ownership interest in\nthe Partnership or its Government contracts. Instead, the Partnership would owe\nthe trusts the face value of the promissory note irrespective of the Partnership\xe2\x80\x99s\n39\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 22\n\nreceipt of income from the Government contracts. Moreover, the amount due on\nthe promissory note would not be based in any part on the value of any Govern\xc2\xad\nment contracts held by the Operating Partnership. See Coolidge Letter II at 3.\nThis alternative eliminates the indirect interests in the Government contracts cre\xc2\xad\nated by the conversion rights included in the third alternative. Accordingly, the\nfourth alternative would not be prohibited by \xc2\xa7 431.\n\nin.\nW e conclude that the proposed transaction is prohibited by 18 U.S.C. \xc2\xa7431\nand that it would not fall within the \xe2\x80\x9c incorporated company\xe2\x80\x9d exception of 18\nU.S.C. \xc2\xa7433. O f the four proposed alternatives to the transaction, the fourth would\nbe permissible under \xc2\xa7 431.\nBETH NOLAN\nDeputy Assistant Attorney General\nOffice o f Legal Counsel\n\n40\n\n\x0c'


b'Legislation Denying Citizenship at Birth to Certain Children\nBorn in the United States\nA bill that would deny citizenship to children bora in the United States to certain classes of alien\nparents is unconstitutional on its face.\nA constitutional amendm ent to restrict birthright citizenship, although not technically unlawful, would\nflatly contradict the N ation\xe2\x80\x99s constitutional history and constitutional traditions.\n\nDecember 13, 1995\nSta tem en t B efore\non\n\nthe\n\nI m m ig r a t io n\n\nS u b c o m m it t e e s\n\nand\n\nC l a im s\n\nand\non the\no f the\n\nC o n s t it u t io n\n\nH o u s e C o m m it t e e\n\non the\n\nJ u d ic ia r y\n\nThroughout this country\xe2\x80\x99s history, the fundamental legal principle governing\ncitizenship has been that birth within the territorial limits o f the United States\nconfers United States citizenship. The Constitution itself rests on this principle\no f the common law.1 As Justice Noah Swayne wrote in one of the first judicial\ndecisions interpreting the Civil Rights Act of 1866,2 the word \xe2\x80\x9c Citizens \xe2\x80\x98under\nour constitution and laws means free inhabitants bom within the United States\nor naturalized under the laws o f Congress.\xe2\x80\x99 We find no warrant for the opinion\nthat this great principle of the common law has ever been changed in the United\nStates.\xe2\x80\x9d 3 When Justice Swayne wrote these words, the nation was only beginning\nto recover from a great Civil War sparked in no small part by the Supreme Court\xe2\x80\x99s\ntragically misguided decision in the D red Scott case.4 That decision sought to\nmodify the founders\xe2\x80\x99 rule of citizenship by denying American citizenship to a\nclass of persons bom within the United States. In response to Dred Scott and\nto the Civil War, Congress enacted the 1866 Act, and Congress and the States\nadopted the Fourteenth Amendment in order to place the right to citizenship based\non birth within the jurisdiction o f the United States beyond question. Any restric\xc2\xad\ntion on that right contradicts both the Fourteenth Amendment and the underlying\nprinciple that the amendment safeguards.\nThe several bills and resolutions now before Congress that would deny citizen\xc2\xad\nship to children bom in the United States to certain classes o f alien parents raise\nvarious issues of law and policy. My testimony today will address two points\n1 Indeed, the com m on law \'s inclusive rule o f citizenship by birth defined \xe2\x80\x9c the People\xe2\x80\x9d who created the Constitu\xc2\xad\ntion. \xe2\x80\x9c The C onstitution itself does not m ake the citizens; it is, in fact, made by them. It only . . . recognizes\nsuch o f them as are natural \xe2\x80\x94 home-born.\xe2\x80\x9d Citizenship , 10 Op. A tt\xe2\x80\x99y Gen. 382, 389 (1862).\n2 A ct o f Apr. 9, 1866, ch. 31, 14 Stat. 27 ( \xe2\x80\x9c 1866 Act\xe2\x80\x9d ).\n3 United States v. Rhodes, 27 F. Cas. 785, 789 (C.C.D. Ky. 1866) (No. 16,151) (Swayne, J., on circuit) (quoting\n2 James Kent, Commentaries on American Law 288 n.(a) (1 1th ed. 1866)).\n4 Dred Scott v. Sandford, 60 U.S (19 How.) 393 (1857).\n\n340\n\n\x0cLegislation Denying Citizenship at Birth to Certain Children Born in the United States\n\nof constitutional law. First, because the rule of citizenship acquired by birth within\nthe United States is the law of the Constitution, it cannot be changed through\nlegislation, but only by amending the Constitution. A bill such as H.R. 1363,\n104th Cong. (1995), the \xe2\x80\x9c Citizenship Reform Act o f 1995,\xe2\x80\x9d that purports to deny\ncitizenship by birth to persons bom within the jurisdiction of this country is\nunconstitutional on its face. Second, the proposed constitutional amendments on\nthis topic conflict with basic constitutional principles. To adopt such an amend\xc2\xad\nment would not be technically unlawful, but it would flatly contradict our constitu\xc2\xad\ntional history and our constitutional traditions. Affirming the citizenship of Afri\xc2\xad\ncan-Americans that Dred Scott had denied, in 1862 President Lincoln\xe2\x80\x99s Attorney\nGeneral wrote an opinion for the Secretary of the Treasury asserting \xe2\x80\x9c [a]s far\nas I know . . . you and I have no better title to the citizenship which we enjoy\nthan the \xe2\x80\x98accident of birth\xe2\x80\x99 \xe2\x80\x94 the fact that we happened to be bom in the United\nStates.\xe2\x80\x9d 5 Today, in 1995, we cannot and should not try to solve the difficult\nproblems illegal immigration poses by denying citizenship to persons whose claim\nto be recognized as Americans rests on the same constitutional footing as that\nof any natural-born citizen. Members of both of your Subcommittees have worked\nvigorously, with the Department of Justice on an evenhanded bipartisan basis,\non legislation and oversight to address these problems.\nI.\n\nH.R. 1363, the \xe2\x80\x9c Citizenship Reform Act of 1995,\xe2\x80\x9d exemplifies the various\nlegislative proposals before the committees. The stated purpose of the bill is \xe2\x80\x9c to\ndeny automatic citizenship at birth to children bom in the United States to parents\nwho are not citizens or permanent resident aliens.\xe2\x80\x9d Section 3(a) of the bill amends\nsection 301(a) of the Immigration and Nationality Act, which grants U.S. citizen\xc2\xad\nship \xe2\x80\x9c at birth\xe2\x80\x9d to all persons \xe2\x80\x9c bom in the United States, and subject to the juris\xc2\xad\ndiction thereof.\xe2\x80\x9d Specifically, section 3(a) proposes to define the phrase \xe2\x80\x9c subject\nto the jurisdiction thereof\xe2\x80\x9d to include only children bom to U.S. citizens or perma\xc2\xad\nnent resident aliens.\nMy office grapples with many difficult and close issues o f constitutional law.\nThe lawfulness of this bill is not among them. This legislation is unquestionably\nunconstitutional. The Fourteenth Amendment declares that \xe2\x80\x9c [a]ll persons bom or\nnaturalized in the United States, and subject to the jurisdiction thereof, are citizens\nof the United States and of the State wherein they reside.\xe2\x80\x9d U.S. Const, amend.\nXIV, \xc2\xa7 1. The unmistakable purpose of this provision was to constitutionalize the\nexisting Anglo-American common law rule of jus soli or citizenship by place of\nbirth and especially to extend it to persons of African descent and their descend\xc2\xad\nants.\n5 10 Op. A tt\'y Gen. at 394.\n\n341\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 19\n\nThe phrase \xe2\x80\x9c subject to the jurisdiction thereof\xe2\x80\x9d was meant to reflect the\nexisting common law exception for discrete sets o f persons who were deemed\nsubject to a foreign sovereign and immune from U.S. laws, principally children\nbom in the United States of foreign diplomats, with the single additional exception\no f children of members of Indian tribes. Apart from these extremely limited excep\xc2\xad\ntions, there can be no question that children bom in the United States of aliens\nare subject to the full jurisdiction of the United States. And, as consistently recog\xc2\xad\nnized by courts and Attorneys General for over a century, most notably by the\nSupreme Court in United States v. Wong Kim Ark,6 there is no question that they\npossess constitutional citizenship under the Fourteenth Amendment.\n\nA.\nWhile the Constitution recognized citizenship of the United States in prescribing\nthe qualifications for President, Senators, and Representatives, it contained no defi\xc2\xad\nnition of citizenship until the adoption of the Fourteenth Amendment in 1868.\nPrior to that time, citizenship by birth was regulated by common law. And the\ncommon law conferred citizenship upon all persons7 bom within the territory of\nthe United States, whether children of citizens or aliens.8 The only common law\nexceptions to this generally applicable rule of jus soli were children bom under\nthree circumstances \xe2\x80\x94 to foreign diplomats, on foreign ships, and to hostile occu\xc2\xad\npying forces \xe2\x80\x94 which, under principles of international law, were deemed not to\nbe within the sovereignty of the territory.9\n6 169 U.S. 649(1898).\n7 Slaves, shamefully, not being considered persons at all for many legal purposes, were ignored by the common\nlaw analysis.\ns E.g., Murray v. The Schooner Charming Betsy , 6 U.S. (2 Cranch) 64, 119 (1804) (presuming that all persons\nbom in the United States were citizens thereof); McCreery v. Somerville, 22 U.S. (9 W heat.) 354 (1824) (in deter\xc2\xad\nmining title to land in M aryland, Court assum ed that children bom in the state o f an alien were native-born citizens\no f the U nited States), Lynch v. Clarke, 1 Sand. Ch. 583 (N.Y. Ch. 1844) (in holding that child bom in New York\nduring temporary stay by alien parents w as a citizen o f the United States, Court, after thorough examination of\nlaw, concluded that it entertained no doubt th at every person bom within the dominions and allegiance o f the United\nStates, whatever the situation o f his parents, w as a natural-bom citizen); Letter for Mr. Mason, United States Minister\nto France, from Mr. M arcy, Secretary o f S tate (June 6, 1854), in 2 Francis Wharton, Digest o f the International\nLaw o f the United States 394 (2d ed. 1887) ( \xe2\x80\x9c In reply to the inquiry which is made by you . . . whether \xe2\x80\x98the\nchildren o f foreign parents bom in the U nited States, but brought to the country o f which the father is a subject,\nand continuing to reside within the jurisdiction o f their father\xe2\x80\x99s country, are entitled to protection as citizens of\nthe United States,\xe2\x80\x99 I have to observe that it is presumed that, according to the common law, any person bom in\nthe U nited States, unless he be bom in one o f the foreign legations therein, may be considered a citizen thereof\nuntil he formally renounces his citizenship.\xe2\x80\x9d ); Citizenship o f Children Born in the United States o f Alien Parents,\n10 Op. A tt\xe2\x80\x99y Gen. 328 (1862) (child bom in the United States o f alien parents who have never been naturalized\nis, by fact o f birth, a native-born citizen o f th e United States); 10 Op. A tt\xe2\x80\x99y Gen. 382 (1862) (reaffirming general\nprinciple o f citizenship by birth in the U nited States and rejecting the existence under law o f a class o f persons\nintermediate between citizens and aliens); Frederick Van D yne, Citizenship o f the United States 6 -7 (1904) ( \xe2\x80\x9c It\nis beyond doubt that, before the enactment o f the civil rights act of 1866 . . . or the adoption of the constitutional\namendment, all white persons, at least, bom w ithin the sovereignty o f the U nited States, w hether children o f citizens\nor foreigners, excepting only children o f ambassadors or public ministers of a foreign government, were nativeborn citizens o f the United States.\xe2\x80\x9d ) (citations omitted).\n9 United States v. Wong Kim Ark, 169 U.S. 649 (1898); 4 Charles Gordon et al., Immigration Law and Procedure\n\xc2\xa7 92-03(3] (rev. ed. 1995). See infra note 13 fo r a discussion o f the status o f tribal Indians.\n\n342\n\n\x0cLegislation Denying Citizenship al Birth to Certain Children Born in the United States\n\nB.\nAs the legislative history of the Civil Rights Act of 1866 and the Fourteenth\nAmendment makes clear, the definitions of citizenship contained in both were\nintended to codify the common law and overrule Dred Scott\xe2\x80\x99s denial o f citizenship\nto persons of African descent. Thus, with the three limited exceptions already\nnoted and the additional exception of tribal Indians, the Fourteenth Amendment\nguaranteed citizenship to all persons bom in the United States, including children\nbom to aliens.\nThe Civil Rights Act of 1866 provides that \xe2\x80\x9c all persons bom in the United\nStates and not subject to any foreign power, excluding Indians not taxed, are\nhereby declared to be citizens of the United States.\xe2\x80\x9d 1866 Act, \xc2\xa71, 14 Stat. at\n27. During the debates on the Act, the Chair of the House Judiciary Committee\nstated that the provision defining citizenship is \xe2\x80\x9c merely declaratory of what the\nlaw now is,\xe2\x80\x9d and he cited, among other authorities, a quotation from William\nRawle, whose constitutional law treatise was one of the most widely respected\nantebellum works: \xe2\x80\x9c Every person bom within the United States, its Territories,\nor districts, whether the parents are citizens or aliens, is a natural-born citizen\nin the sense of the Constitution, and entitled to all the rights and privileges apper\xc2\xad\ntaining to that capacity.\xe2\x80\x9d 10\nThe Fourteenth Amendment initially contained no definition of citizenship. Sen\xc2\xad\nator Howard of Michigan proposed to insert the definition that became the opening\nsentence of the Fourteenth Amendment:\nThis amendment which I have offered is simply declaratory of what\nI regard as the law of the land already, that every person bom\nwithin the limits o f the United States, and subject to their jurisdic\xc2\xad\ntion, is by virtue of natural law and national law a citizen o f the\nUnited States.11\nHe explained that this was not meant to include those discrete classes of persons\nexcluded by the common law, \xe2\x80\x9c but will include every other class of persons.\xe2\x80\x9d\nThe Framers intended the amendment to resolve not only the status o f AfricanAmericans and their descendants, but members of other alien groups as well. This\nis reflected in the exchange between Senators Trumbell and Conness, supporters\nof the Fourteenth Amendment and the Civil Rights Act, and Senator Cowan, a\nstrong opponent of both. Senator Cowan expressed his reluctance to amend the\nThe principal alternative system, jus sanguinis used in most civil law European countries, grants citizenship by\ndescent or blood\xe2\x80\x94 that is, according to the citizenship o f one\xe2\x80\x99s parents. This system obviously could not have\noperated in the United Stales at its inception, where, except for American Indians, the inhabitants were citizens\nof other countries.\n10Cong. Globe, 39th Cong., 1st Sess. 1115 (1866); id. at 1117 (quoting William Rawle, A View o f the Constitution\no f the United States o f America 80 (1829)).\n\xe2\x96\xa0i Id. at 2890.\n\n343\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 19\n\nConstitution in such a way as would \xe2\x80\x9c tie the[] hands\xe2\x80\x9d of the Pacific states \xe2\x80\x9c so\nas to prevent them . . . from [later] dealing with [the Chinese] as in their wisdom\nthey see fit.\xe2\x80\x9d 12 The supporters of the citizenship clause responded by confirming\ntheir intent to constitutionalize the U.S. citizenship of children bom in the United\nStates to alien parents.\nSenator Cowan . . . . I am really desirous to have a legal definition\no f \xe2\x80\x98citizenship of the United States.\xe2\x80\x99 What does it mean? . . . Is\nthe child of the Chinese immigrant in California a citizen? Is the\nchild of a Gypsy bom in Pennsylvania a citizen?\nSenator Conness . . . . The proposition before us . . . relates . . .\nto the children begotten of Chinese parents in California, and it\nis proposed to declare that they shall be citizens. We have declared\nthat by law; now it is proposed to incorporate the same provision\nin the fundamental instrument of the nation. I am in favor of doing\nso.13\nC.\nThe constitutional guarantee o f citizenship to children bom in the United States\nto alien parents has consistently been recognized by courts, including the Supreme\nCourt, and Attorneys General for over a century. Most notably, in United States\nv. Wong Kim Ark,14 the Supreme Court held that a child bom in San Francisco\nl2See, e.g., id. at 2891.\ni*Id. at 2890-91.\nA great deal o f attention was spent on h o w (not whether) to exclude unassimilated or tribal Indians. Ultimately,\nany reference to \xe2\x80\x9c excluding Indians not ta x e d \xe2\x80\x9d \xe2\x80\x94 the phrase used in the Civil Rights Act of 1866\xe2\x80\x94 was omitted\nas unnecessary, as they were not deemed to be \xe2\x80\x9c subject to the jurisdiction\xe2\x80\x9d of the United States because of the\nunique status o f Indian tribes within the U nited States. In Elk v. Wilkins, 112 U.S. 94, 99 (1884), the Court construed\nthe \xe2\x80\x9c subject to jurisdiction\xe2\x80\x9d clause in a case brought by an Indian claiming citizenship who was bom a member\no f a tribe, but w ho had later taken up residence among the non-Indian citizens o f the state. The Court held he\nwas not a U nited States citizen, because he was not \xe2\x80\x9c subject to the jurisdiction" o f the United States at the time\no f his birth. In construing the phrase \xe2\x80\x9c subject to the jurisdiction\xe2\x80\x9d the Court noted that the Indian tribes, although\nnot, strictly speaking, foreign nations, were alien nations w ith distinct political communities with which the United\nStates entered into treaties.\nIndians bom within the territorial limits o f the United States, m embers of, and owing immediate allegiance\nto, one o f the Indian tribes (an alien, though dependent, power), although in a geographical sense bom\nin the U nited States, are no more \xe2\x80\x9c b o m in the U nited States and subject to the jurisdiction thereof,\xe2\x80\x9d\nw ithin the meaning o f the first section o f the Fourteenth Amendment, than the children o f subjects of\nany foreign government bom within the dom ain o f that government, or the children bom within the United\nStates, o r ambassadors o f other public m inisters o f foreign nations.\nId. at 102; see also David C. Williams, The Borders o f the Equal Protection Clause: Indians as Peoples, 38 UCLA\nL. Rev. 759, 832-41 (1991) (reviewing the legislative history o f the citizenship clause to conclude that \xe2\x80\x9c subject\nto jurisdiction\xe2\x80\x9d was intended to exclude tribal Indians with separate laws and governments o f their own, and thus\nw ere, \xe2\x80\x9c in m odem international law parlance, a separate people\xe2\x80\x9d ). Wilkins cannot be interpreted to mean that children\nbom in the U nited States o f aliens are not \xe2\x80\x9c subject to the jurisdiction\xe2\x80\x9d o f the United States because their parents\nmay owe som e allegiance to their own country o f birth. Otherw ise, dual nationality would be prohibited.\nThe denial o f citizenship to American Indians was later corrected by statute. 8 U.S.C. \xc2\xa7 1401(b).\n14169 U.S. 6 49(1898).\n\n344\n\n\x0cLegislation Denying Citizenship al Birth to Certain Children Born in the United States\n\nof Chinese parents (who, under the Chinese Exclusion laws then in effect, could\nnever themselves become U.S. citizens) became at the time of his birth in the\nUnited States a citizen of the United States, by virtue of the Fourteenth Amend\xc2\xad\nment.\nThe Court, in a detailed review of the Anglo-American common law of citizen\xc2\xad\nship and the legislative history of the Fourteenth Amendment, established several\npropositions. First, because the Constitution does not define United States citizen\xc2\xad\nship, it must be interpreted in light of the common law. Under the common law\nof England, which was adopted by the United States, every child bom within\nthe territory of alien parents was a natural-born subject, with the exception of\nchildren bom of foreign ambassadors, of alien enemies during hostile occupation,\nand of aliens on a foreign vessel.\nFurther, \xe2\x80\x9c [a]s appears upon the face of the [Fourteenth] Amendment, as well\nas from the history of the times, [the amendment] was not intended to impose\nany new restrictions upon citizenship, or to prevent any persons from becoming\ncitizens by the fact o f birth within the United States, who would thereby have\nbecome citizens according to the law existing before its adoption. It is declaratory\nin form, and enabling and extending in effect.\xe2\x80\x9d Wong Kim Ark, 169 U.S. at 676.\nSpecifically, the Court explained, \xe2\x80\x9c [t]he real object . . . in qualifying the words\n\xe2\x80\x98[a]ll persons bom in the United States\xe2\x80\x99, by the addition \xe2\x80\x98and subject to the juris\xc2\xad\ndiction thereof,\xe2\x80\x99 would appear to have been to exclude, by the fewest and fittest\nwords (besides children of members of the Indian tribes, standing in a peculiar\nrelation to the National Government, unknown to the common law), the two\nclasses of cases \xe2\x80\x94 children bom of alien enemies in hostile occupation, and chil\xc2\xad\ndren of diplomatic representatives of a foreign state\xe2\x80\x94 both of which, . . . by\nthe law of England and by our own law, . . . had been recognized exceptions\nto the fundamental rule of citizenship by birth within the country.\xe2\x80\x9d Id. at 682.\nIn concluding its review of the relevant law, the Court summarized:\nThe fourteenth amendment affirms the ancient and fundamental rule\nof citizenship by birth within the territory, in the allegiance and\nunder the protection of the country, including all children here bom\nof resident aliens, with the exceptions or qualifications (as old as\nthe rule itself) of children of foreign sovereigns or their ministers,\nor bom on foreign public ships, or of enemies within and during\na hostile occupation of part of our territory, and with the single\nadditional exception of children o f members of the Indian tribes\nowing direct allegiance to their several tribes. The amendment, in\nclear words and in manifest intent, includes the children bom within\nthe territory o f the United States, of all other persons, of whatever\nrace or color, domiciled within the United States. Every citizen or\n\n345\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 19\n\nsubject of another country, while domiciled here, is within the alle\xc2\xad\ngiance and the protection, and consequently subject to the jurisdic\xc2\xad\ntion, o f the United States.\nId. at 693.\nThe Court then turned to the status o f Chinese persons in the United States\nunder the Constitution and the Chinese Exclusion Acts, which provided for exclu\xc2\xad\nsion and expulsion o f Chinese persons. After considering the effects of both\nsources of law, the Court held that Wong Kim Ark had become a citizen at birth\nby virtue o f the Fourteenth Amendment, reaffirming the constitutional principle\nthat \xe2\x80\x9c [t]he fourteenth amendment, while it leaves the power, where it was before,\nin congress, to regulate naturalization, has conferred no authority upon congress\nto restrict the effect o f birth, declared by the constitution to constitute a sufficient\nand complete right to citizenship.\xe2\x80\x9d Id. at 703.\nThe principles set forth in Wong Kim Ark cannot be dismissed as having been\novertaken by contemporary judicial interpretation or current events. Both the\ncourts and commentators have consistently cited and followed the principles of\nWong Kim Ark. 15\nI am aware o f only one statement of the contrary view that birthright citizenship\nmay be modified by a simple act of legislation. In their 1985 book, Professors\nPeter Schuck and Rogers Smith argue for a novel \xe2\x80\x9c reinterpretation\xe2\x80\x9d of the citizen\xc2\xad\nship clause.16 Briefly, the authors recommend replacing the \xe2\x80\x9c ascriptive\xe2\x80\x9d approach\nto citizenship\xe2\x80\x94 which determines citizenship by an objective circumstance, such\nas place o f birth or citizenship of parents\xe2\x80\x94 with a \xe2\x80\x9c consensual\xe2\x80\x9d approach \xe2\x80\x94\nwhich makes political membership a product of mutual consent by the polity and\nthe individual. The authors argue that the Fourteenth Amendment may be reinter\xc2\xad\npreted to allow Congress to deny citizenship to children of illegal aliens by legisla\xc2\xad\ntion (as opposed to constitutional amendment). As support, the authors attempt\n15 See INS v. Rios-Pineda, 471 U.S. 444, 4 4 6 (1985) (in habeas proceeding brought by deportable aliens, Court\nnoted that respondent had given birth to a ch ild , \xe2\x80\x9c who, bom in the United States, was a citizen o f this country");\nPlyler v. Doe, 437 U.S. 202, 211 n.10 (1982) (relying on Wong Kim Ark\xe2\x80\x99s predominantly geographic inteipretation\no f the \xe2\x80\x9c jurisd ictio n \xe2\x80\x9d clause o f the Fourteenth Amendment); Rogers v. Bellei, 401 U.S. 815, 829-30 (1971) (citizen\xc2\xad\nship clause is \xe2\x80\x9c \xe2\x80\x98declaratory o f existing rights, and affirmative o f existing law ,\xe2\x80\x99 so far as the qualifications of being\nbom in the U nited States, being naturalized in the United States, and being subject to its jurisdiction are concerned\xe2\x80\x99 \xe2\x80\x99);\nKennedy v. Mendoza-Martinez, 372 U.S. 144, 159 n.10 (1963) (confirming that the citizenship clause \xe2\x80\x9c is to be\ninterpreted in light o f pre-existing common-law principles governing citizenship\xe2\x80\x9d ); Morrison v. California, 291 U.S.\n82, 85 (1934) (noting that although persons o f Japanese descent were not eligible to becom e citizens through natu\xc2\xad\nralization, a person o f Japanese descent is a citizen o f the United States if he was bom within the United States,\nciting Wong Kim Ark)-, 4 Charles Gordon et al.. Immigration Law and Procedure \xc2\xa792.03[2][e] (rev. ed. 1995) (noting\nthat any uncertainty regarding the applicability o f the ju s soli rule to children bom in this country was \xe2\x80\x9c finally\nresolved by the Fourteenth Amendment and the Supreme C ourt\xe2\x80\x99s decision in U.S. v. Wong Kim Ark. There is now\nno doubt that the constitutional rule of universal citizenship for all persons bom in the United States is unaffected\nby the status o f their parents, except in minimal situations. Thus American citizenship is acquired by children bom\nin the U nited States, even though their parents were always aliens, and even if the parents were themselves ineligible\nto becom e citizens o f the U nited States. Nor has the acquisition o f citizenship been affected by the circumstance\nthat the ch ild \xe2\x80\x99s alien parents were in the United States temporarily o r even illegally at the time the child was bom .\xe2\x80\x9d )\n(footnotes om itted).\n16 Peter H. Schuck & Rogers M. Smith, Citizenship Without Consent: Illegal Aliens in the American Polity (1985).\n\n346\n\n\x0cLegislation Denying Citizenship at Birth to Certain Children Born in the United States\n\nto show that the Framers of the Fourteenth Amendment intended the reference\nto \xe2\x80\x9c subject to the jurisdiction\xe2\x80\x9d of the United States to replace the existing\nascriptive common law principle with one of express mutual consent. As one\nreviewer recommends, the authors\xe2\x80\x99 proposals \xe2\x80\x9c should be relegated to academic\ndebate.\xe2\x80\x9d 17\nSchuck and Smith are proposing a change in the law, not a plausible reinter\xc2\xad\npretation of the Constitution. Their theory would require repudiation of the lan\xc2\xad\nguage of the Constitution itself, the clear statements of the Framers\xe2\x80\x99 intent, and\nthe universal understanding of 19th and 20th century courts. Indeed, the authors\nthemselves concede that there is no judicial precedent in support of their theory.\nMoreover, as one review of the book notes on a more philosophical level, \xe2\x80\x9c [t]he\nexamples [Schuck and Smith give in support of their consent theory] \xe2\x80\x94 the denial\nof citizenship to Blacks, Indians and Chinese \xe2\x80\x94 are all deeply shameful for\ncontemporary Americans. This is not a history to build on.\xe2\x80\x9d 18\nIn short, the text and legislative history of the citizenship clause as well as\nconsistent judicial interpretation make clear that the amendment\xe2\x80\x99s purpose was\nto remove the right o f citizenship by birth from transitory political pressures. The\nSupreme Court noted in Wong Kim Ark,19 \xe2\x80\x9c [t]he same congress, shortly after\xc2\xad\nwards, evidently thinking it unwise, and perhaps unsafe, to leave so important\na declaration of rights to depend upon an ordinary act of legislation, which might\nbe repealed by any subsequent congress, framed the fourteenth amendment of the\nconstitution.\xe2\x80\x9d More recently, the Supreme Court noted in Afroyim v. Rusk20 that\nthe framers of the Fourteenth Amendment \xe2\x80\x9c wanted to put citizenship beyond the\npower of any governmental unit to destroy.\xe2\x80\x9d See also Rogers v. Bellei, 401 U.S.\nat 835 (recognizing that \xe2\x80\x9c Congress has no \xe2\x80\x98power, express or implied, to take\naway an American citizen\xe2\x80\x99s citizenship without his assent,\xe2\x80\x99 \xe2\x80\x9d where that citizen\xc2\xad\nship is attained by birth). By excluding certain categories of native-born persons\nfrom U.S. citizenship, the proposed legislation impermissibly rescinds citizenship\nrights that are guaranteed to those persons by the citizenship clause of the Four\xc2\xad\nteenth Amendment. Such a rescission of constitutionally protected rights is beyond\nCongress\xe2\x80\x99s authority.\n\n17 Arthur C. Helton, Citizenship Without Consent, 19 N.Y.U. J. Int\xe2\x80\x99l L. & Pol. 221, 226 (1986) (book review).\nFor incisive critiques o f Schuck and Sm ith\'s work, see also, David A. Martin, Membership and Consent: Abstract\nor Organic?, 11 Yale J. Int\xe2\x80\x99l L. 278 (1985) (book review); Gerald L. Neuman, Back to Dred Scott?, 24 San Diego\nL. Rev. 485 (1987) (book review).\n18 David Howarth, Citizenship Without Consent, 46 Cambridge L.J. 169, 170 (1987) (book review).\n\'\xc2\xbb 169 U.S. at 675.\n20 387 U.S. 253, 263(1967).\n\n347\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 19\n\nII.\nCongress is, of course, constitutionally free to propose, and the states to ratify,\nany amendment to the Constitution.21 Such naked power undeniably exists. The\nConstitution taken as a whole, however, stands for certain enduring principles.22\nWhen Congress undertakes to tamper through the amendment process with the\nmost basic presuppositions of American constitutionalism, it should do so with\nexceeding caution and utmost restraint. The proposition that all persons bom in\nthe United States and subject to its jurisdiction are citizens at birth is one of\nthose bedrock principles.\nAcademics may conceive of nation-states in which citizenship would not nec\xc2\xad\nessarily extend to those who lack the approval or mutual consent of existing citi\xc2\xad\nzens. But the country in question is not some theoretical conception, but our own\ncountry with its real experience and its real history. It would be a grave mistake\nto alter the opening sentence o f the Fourteenth Amendment without sober reflec\xc2\xad\ntion on how it came to be part o f our basic constitutional charter.\nThe constitutional principle with which these proposed amendments would\ntamper flows from some of the deepest wellsprings of American history. From\nthe earliest days of our nation, with the tragic exception o f slaves and tribal\nIndians, all those who were bom on its soil and subject to no foreign power\nbecame its citizens. The simple fact of birth here in America was what mattered.\nAnd then came D red Scott. In its most monumentally erroneous decision, the\nSupreme Court created a monstrous exception to the common law rule that birth\non American soil to a free person was sufficient for American citizenship. The\nCourt held that no persons of African descent\xe2\x80\x94 mcluding free persons of African\ndescent\xe2\x80\x94 and none of their descendants for all time to come could ever be citi\xc2\xad\nzens of the United States regardless of their birth in America.\nIt was in the aftermath of this decision that one of our great political parties\nwas formed. In 1857, in the first of many speeches he was to give on the subject,\nthat party\xe2\x80\x99s candidate for President in 1860 denounced Dred Scott\'s creation of\na class of persons bom on American soil and yet without rights and condemned\nto pass their status on to future generations. Abraham Lincoln declared that the\ndefenders o f that decision had committed themselves to a principle that contra\xc2\xad\ndicted\xe2\x80\x94 and that made a \xe2\x80\x9cmere wreck \xe2\x80\x94 mangled ruin\xe2\x80\x9d \xe2\x80\x94 of the Declaration of\nIndependence.23\nAfterwards, the nation plunged into the heart of darkness\xe2\x80\x94 a savage and brutal\ncivil war in which hundreds of thousands lost their lives on the battlefield. From\nthose ashes, a nation was reformed. It is no trivial matter that the Fourteenth\n21 The only present exception to this rule is the proviso to Article V o f the Constitution that \xe2\x80\x9c no State, without\nits Consent, shall be deprived o f its equal Suffrage in the Senate.\xe2\x80\x9d\n22 See W alter Dellinger, Constitutional Politics: A Rejoinder, 97 Harv. L. Rev. 446, 447 (1983).\n23 Speech at Springfield, Illinois (June 26, 1857), in 2 The Collected Works o f Abraham Lincoln 406 (Roy P.\nBaster, ed. 1953).\n\n348\n\n\x0cLegislation Denying Citizenship at Birth to Certain Children Born in the United States\n\nAmendment opens with the principle that some would now change. From our\nexperience with D red Scott, we had learned that our country should never again\ntrust to judges or politicians the power to deprive from a class bom on our soil\nthe right of citizenship. We believe that no discretion should be exercised by\npublic officials on this question\xe2\x80\x94 there should be no inquiry into whether or not\none came from the right caste, or race, or lineage, or bloodline in establishing\nAmerican citizenship. Other nations may seek more consensual and perhaps more\nchangeable forms o f citizenship; for us, for our nation, the simple, objective,\nbright-line fact of birth on American soil is fundamental.\nSince the Civil War, America has thrived as a republic of free and equal citi\xc2\xad\nzens. This would no longer be true if we were to amend our Constitution in a\nway that would create a permanent caste of aliens, generation after generation\nafter generation bom in America but never to be among its citizens. To have\ncitizenship in one\xe2\x80\x99s own right, by birth upon this soil, is fundamental to our liberty\nas we understand it. In America, a country that rejected monarchy, eich person\nis bom equal, with no curse of infirmity, and with no exalted status, arising from\nthe circumstance o f his or her parentage. All who have the fortune to be bom\nin this land inherit the right, save by their own renunciation of it, to its freedoms\nand protections. Congress has the power to propose an amendment changing these\nbasic principles. But it should hesitate long before so fundamentally altering our\nrepublic.\nWALTER DELLINGER\nAssistant Attorney General\nOffice o f Legal Counsel\n\n349\n\n\x0c'


b'Compensation of Government Employees for\nReferring Potential Job Applicants\nThe provision o f monetary awards or administrative leave to government em ployees w ho\nrefer potential jo b candidates for certain difficult-to-fill vacancies in the governm ent is\nnot barred by 18 U.S.C. \xc2\xa7 211, which prohibits the receipt o f anything o f value in con sid\xc2\xad\neration for helping a person obtain government employment.\n\nAugust 17, 1989\nM e m o r a n d u m O p in io n\nD epartm ent\n\nof\n\nfor the\n\nH o u s in g\n\nand\n\nG e n e r a l C o u n sel\n\nU rban D evelopm ent\n\nThis responds to your request o f March 28, 1989, for the opinion o f this\nOffice on the applicability o f 18 U.S.C. \xc2\xa7 211 to a proposal that the\nDepartment o f Housing and Urban Development (\xe2\x80\x9cHUD\xe2\x80\x9d) provide mone\xc2\xad\ntary awards or administrative leave to employees who refer potential can\xc2\xad\ndidates for certain hard-to-fill clerical positions. We understand that,\nbecause o f difficulties experienced in recruiting clerical staff, HUD is\ninterested in implementing a program that would encourage its employ\xc2\xad\nees to assist in recruitment. Under the terms o f the proposed program,\nthe Department would pay small cash awards or grant small amounts of\nadministrative leave to employees who refer potential job candidates\nwho are eventually hired. Before implementing the program, however,\nyou have asked us to determine whether the restrictions of section 211,\nwhich generally prohibit the receipt of anything o f value in consideration\nfor helping a person obtain employment, bar the creation o f such a pro\xc2\xad\ngram. For the reasons below, we conclude that 18 U.S.C. \xc2\xa7 211 does not\nbar the Department from providing incentive payments to employees\nwho have referred potential job applicants.\nSection 211 provides, in full:\nWhoever solicits or receives, either as a political contribu\xc2\xad\ntion, or for personal emolument, any money or thing of\nvalue, in consideration of the promise of support or use of\ninfluence in obtainingfo r any person any appointive office\n\nor place under the United States, shall be fined not more\nthan $1,000 or imprisoned not more than one year, or both.\n\n277\n\n\x0cWhoever solicits or receives any thing o f value in consid\xc2\xad\neration o f aiding a person to obtain employment under\nthe United States either by referring his name to an execu\xc2\xad\ntive department or agency o f the United States or by requir\xc2\xad\ning the payment of a fee because such person has secured\nsuch employment shall be fined not more than $1,000, or\nimprisoned not more than one year, or both. This section\nshall not apply to such services rendered by an employ\xc2\xad\nment agency pursuant to the written request of an execu\xc2\xad\ntive department or agency of the United States.\n18 U.S.C. \xc2\xa7 211 (emphasis added).\nIn our view, section 211 does not prohibit HUD from agreeing to\naward its employees for referring potential candidates to the agency.\nBoth its text and purpose show that section 211 seeks only to prevent\ncandidates for federal employment from having to pay influencepeddlers or employment agencies to obtain government positions.\nThus, the section\xe2\x80\x99s restrictions prohibit agreements to promote a can\xc2\xad\ndidacy before an agency, but not agreements to promote the agency\nbefore potential candidates.\nSection 211\xe2\x80\x99s first paragraph, enacted in 1926, prevents influencepeddling in employment by prohibiting anyone from soliciting or\naccepting payments \xe2\x80\x9cin consideration o f the promise o f support or use\no f influence in obtaining for any person any appointive office.\xe2\x80\x9d 18\nU.S.C. \xc2\xa7 211. On its face, then, the section prohibits only payments for\nthe promise o f support or use o f influence if the support or influence\nis used to \xe2\x80\x9cobtain[] for any person any appointive office.\xe2\x80\x9d HUD\xe2\x80\x99s pro\xc2\xad\nposed payments, however, would not be in consideration o f its employ\xc2\xad\nees\xe2\x80\x99 influence on HUD but in consideration o f the employee\xe2\x80\x99s contri\xc2\xad\nbutions to the department\xe2\x80\x99s recruitment o f job candidates.\nAccordingly, the payments would not be prohibited under the plain\nterms o f section 211\xe2\x80\x99s first paragraph.\nThat HUD\xe2\x80\x99s proposed payments are not prohibited by the first para\xc2\xad\ngraph o f section 211 is also supported by the 1926 Committee Report,\nwhich states that \xe2\x80\x9c [t]his bill seeks to punish the purchase and sale of pub\xc2\xad\nlic offices.\xe2\x80\x9d H.R. Rep. No. 1366, 69th Cong., 1st Sess. 1 (1926). The bill was\nneeded because\n[c]ertain Members of Congress have brought to the atten\xc2\xad\ntion o f the House both by speeches on the floor and state\xc2\xad\nments before the Judiciary Committee a grave situation,\ndisclosing corruption in connection with postal appoint\xc2\xad\nments in Mississippi and South Carolina. It is believed that\nthis bill will prevent corrupt practices in connection with\npatronage appointments in the future.\n278\n\n\x0cId. In light o f the statute\xe2\x80\x99s purposes, it is clear that HUD\xe2\x80\x99s proposed pay\xc2\xad\nments are not the type o f payments Congress intended to prohibit in 1926.1\nThe second paragraph o f section 211 was added in 1951 to extend the\noriginal prohibition to include situations where payments are made \xe2\x80\x9cin\nconsideration o f aiding a person to obtain employment under the United\nStates.\xe2\x80\x9d 18 U.S.C. \xc2\xa7 211. The amendment was intended \xe2\x80\x9cto prohibit pri\xc2\xad\nvate employment agencies from soliciting or collecting fees for helping\napplicants to obtain employment in any executive department or agency\nof the United States Government.\xe2\x80\x9d H.R. Rep. No. 784, 82d Cong., 1st Sess.\n1-2 (1951), reprinted in 1951 U.S.C.C.A.N. 1767. Prior to the amendment\xe2\x80\x99s\nenactment, it was feared that such practices were not prohibited because\nemployment agencies generally do not use \xe2\x80\x9cinfluence\xe2\x80\x9d to obtain jobs for\ntheir customers. H.R. Rep. No. 784 at 2, reprinted in 1951 U.S.C.C.A.N. at\n1768. Because \xe2\x80\x9cno American citizen should have to register with an\nemployment agency and no American citizen should have to pay a fee in\norder to obtain a job with his own Government,\xe2\x80\x9d the Civil Service\nCommission had \xe2\x80\x9clong sought such legislation.\xe2\x80\x9d Id.\nFor reasons similar to those explained above, HUD\xe2\x80\x99s proposed pay\xc2\xad\nments would also not be prohibited by the second paragraph of section\n211. Payment o f a cash reward to an employee for assisting in the\nDepartment\xe2\x80\x99s recruitment efforts would not be \xe2\x80\x9cin consideration of aid\xc2\xad\ning a person to obtain employment,\xe2\x80\x9d 18 U.S.C. \xc2\xa7 211 (emphasis added),\nbut in consideration o f aiding the Department to fill a particular job\nvacancy. Moreover, we note that Congress deliberately \xe2\x80\x9cexempted from\nthe general prohibition\xe2\x80\x9d regarding employment agencies \xe2\x80\x9cthose cases\nwhere jobs are filled by private agencies upon the written request o f the\nGovernment agency concerned.\xe2\x80\x9d H.R. Rep. No. 784 at 2, reprinted in\n1951 U.S.C.C.A.N. at 1768. This exception to the prohibition suggests that\nCongress had no intention of limiting the ability o f agencies to recruit\npotential employees.\nIn conclusion, we believe that it is clear that section 211 does not pro\xc2\xad\nhibit HUD from implementing its proposed program to provide cash\nawards or other benefits to employees who refer potential job candidates\nfor certain difficult-to-fill vacancies.2\n\nJOHN O. McGINNIS\nDeputy Assistant Attorney General\nOffice of Legal Counsel\n\n1Our interpretation o f the first paragraph o f section 211 is consistent with that o f the Supreme Court.\n\xe2\x80\x9cThe evil at which the statute is directed is the operation ot purchased, and thus improper, influence in\ndetermining the occupants o f federal office.\xe2\x80\x9d United States v Hood, 343 U.S 148, 150 (1952), see also\nUnited States v Shirey, 359 U.S 255, 262 (1959)\n2The Office o f Personnel Management reached the same conclusion in 1966 Memorandum for John D\nRoth, Director, Federal Incentive Awards Program, from John S. McCarthy, Assistant General Counsel,\nCivil Service Commission (Apr. 25, 1966).\n\n279\n\n\x0c'


b"Committee Approval Provision in the\nSimpson-Mazzoli Immigration Bill\nThe provision in the Sim pson-M azzoli im m igration bill, w hich gives the House and Senate Judiciary\nCom m ittees pow er to dispense with certain otherw ise applicable statutory requirem ents fo r an\nem ploym ent eligibility system , is unconstitutional, w hether viewed as allowing a congressional\ncom m ittee to exercise delegated executive power, o r as authorizing a legislative act w ithout the\nnecessary requirem ents of bicam eralism and presentation to the President\n\nJuly 15, 1982\nMEMORANDUM OPINION FOR THE ATTORNEY GENERAL\nThis memorandum addresses the question whether the committee approval\nprovision in the Simpson-Mazzoli immigration bill comes within the class of socalled \xe2\x80\x9c legislative veto\xe2\x80\x9d provisions to which the Department of Justice objects\non constitutional grounds. We believe that it does, for reasons set forth in this\nmemorandum.\nThe relevant provision is \xc2\xa7 10l(c)ofS. 2222, which provides in pertinent part\nas follows:\n(c)(1) Within three years after the date of the enactment of this\nsection, the President shall implement such changes in or addi\xc2\xad\ntions to the requirements of subsection (b) [which deals with\neligibility for employment] as may be necessary to establish a\nsecure system to determine employment eligibility in the United\nStates, which system shall conform to the requirements of para\xc2\xad\ngraph (2).\n(2) Such system shall be designed in a manner so that\xe2\x80\x94\n(A) the system will reliably determine that a person with the\nidentity claimed by an employee or prospective employee is\neligible to work, and that the employee or prospective em\xc2\xad\nployee is not claiming the identity of another individual;\n(B) if the system requires an examination by an employer of any\ndocument, such document must be in a form which is resistant\nto counterfeiting and tampering, unless the President a n d the\nJu diciary Com m ittees o f the C ongress have determ ined that\nsuch fo rm is unnecessary to the reliability c f th e system . . . .\n\n449\n\n\x0cS. 2222, rep rin ted in S. Rep. No. 4 8 5 ,97th Cong., 2d Sess. 32(1982) (emphasis\nadded). The italicized language contains the committee approval mechanism.\nThe President is directed by subsection (c)(1) to \xe2\x80\x9c implement such changes in or\nadditions to the requirements\xe2\x80\x9d of subsection (b) \xe2\x80\x9c as may be necessary to\nestablish a secure system to determine employment eligibility in the United\nStates . . . .\xe2\x80\x9d The system \xe2\x80\x9cshall conform to the requirements of paragraph (2),\xe2\x80\x9d\nwhich includes the committee approval mechanism. In particular, if the system\nrequires an examination by an employer of any document, such document \xe2\x80\x9c must\nbe in a form which is resistant to counterfeiting and tampering, unless the\nP residen t a n d the Judiciary C om m ittees c f the C ongress have d eterm in ed that\nsuch fo rm is u nn ecessary to th e reliability o f the system . . . \xe2\x80\x9d (emphasis\n\nadded). We interpret this language to mean that so long as the system requires an\nemployer to look at any document, the document must be tamper-proof unless\nthere is, in effect, agreement between the President and the House and Senate\nJudiciary Committees that such tamper-proof requirements are not needed to\nassure a reliable system.\nWhen the provision is so interpreted, it purports to allow the Judiciary\nCommittees to exercise delegated power under the statute. The Judiciary Com\xc2\xad\nmittees would be given power to decide whether or not a tamper-proof system of\ndocumentation will or will not be required. If the President were to determine that\ntamper-proof requirements were unnecessary in any particular instance, he\nnevertheless would have to implement such requirements if the Judiciary Com\xc2\xad\nmittees did not agree with him. The exercise by the Committees of this kind of\ngovernmental power, as an analytical matter, is necessarily either an executive or\na legislative action for constitutional purposes. (We believe that it would clearly\nnot be a judicial action, for it constitutes the exercise of delegated power to\nestablish what the law will be, not the adjudication of a case or controversy on\nparticular facts.) This being so, the question is whether the Judiciary Committees\nmay be authorized by statute to play the role in the execution of this bill\ncontemplated in subsection (c)(2)(B). The answer, in our view, is no.\nAssuming that the exercise of such authority by the Judiciary Committees were\nsought to be justified on the ground that it constitutes an appropriate exercise of\nArticle I legislative power, the exercise of such power must follow a constitu\xc2\xad\ntionally prescribed procedure. The Constitution plainly bars Congress from\nassigning to one or more of its committees alone the authority to exercise\nlegislative power by adopting measures intended to have legal effect outside the\nLegislative Branch. Such lawmaking power may be accomplished only by the\ncombined action of both Houses o f Congress and the President, or if there is a\npresidential veto, by two-thirds o f both Houses of Congress.\nA rticle I, \xc2\xa7 1 of the Constitution vests \xe2\x80\x9c [a]ll legislative powers herein\ngranted\xe2\x80\x9d \xe2\x80\x9c in a Congress of the United States, which shall consist of a Senate and\nHouse of Representatives.\xe2\x80\x9d The legislative power granted by the Constitution is\n\xe2\x80\x9c the authority to make laws,\xe2\x80\x9d B u ckley v. Valeo, 424 U.S. 1,139 (1976), quoting\nS p rin g e r v. P h ilippin e Islands, 277 U.S. 189, 202 (1928). Alexander Hamilton\nemphasized this basic point when asking rhetorically: \xe2\x80\x9c What is a legislative\n450\n\n\x0cpower but a power of making Laws? What are the means to execute a legislative\npower but laws?\xe2\x80\x9d The F ederalist No. 33 (A. Hamilton), at 204\xe2\x80\x94205 (J. Cooke ed.\n1961) (emphasis in original).\nThe procedure for passing laws, whether called bills or resolutions or votes\nbefore passage, is set forth in Article I, \xc2\xa7 7, Clauses 2 & 3. Clause 2 provides in\npertinent part:\nEvery Bill which shall have passed the House of Representatives\nand the Senate, shall, before it becomes a Law, be presented to the\nPresident of the United States; if he approve he shall sign it, but if\nnot he shall return it, with his Objections to that House in which it\nshall have originated . . . .\nIf the President disapproves the bill, \xe2\x80\x9c it shall become a Law\xe2\x80\x9d only if two-thirds\nof both Houses of Congress override the disapproval.\nIf Clause 2 appeared alone in the Constitution, it could be argued that the\nrequirements of bicameral passage of a legislative measure and presentation to\nthe President could be evaded by using some mechanism other than a \xe2\x80\x9c B ill,\xe2\x80\x9d\nsuch as, for instance, a \xe2\x80\x9c resolution\xe2\x80\x9d or a committee \xe2\x80\x9c vote\xe2\x80\x9d or determination\nsuch as contemplated by the present bill that is not cast in terms of any formal\nprocedure. This possibility was foreseen by the Framers. As a result, Clause 3\nwas added, which provides:\nEvery Order, Resolution, or Vote to which the Concurrence of the\nSenate and House of Representatives may be necessary (except on\na question of Adjournment) shall be presented to the President of\nthe United States; and before the Same shall take Effect, shall be\napproved by him, or being disapproved by him, shall be repassed\nby two thirds of the Senate and House of Representatives, accord\xc2\xad\ning to the Rules and Limitations prescribed in the case of a Bill.\nThe \xe2\x80\x9c Concurrence\xe2\x80\x9d of the Senate and House of Representatives is \xe2\x80\x9c necessary\xe2\x80\x9d\nunder the Constitution whenever Congress attempts to exercise the legislative\npower granted by Article I. Accordingly, when the Judiciary Committees seek to\ndetermine whether a tamper-proof system of identification will or will not be\nrequired, they are exercising legislative powers. Such exercise of authority is\nsubject to the bicameralism and presentation requirements if that exercise is to be\nlegally binding.\nWe note that the Senate Judiciary Committee interpreted Article I, \xc2\xa7 7,\nClause 3 in a manner consistent with our analysis in a thorough historical study\nconducted in 1897. The Committee concluded at that time that the concurrence of\nboth Houses and presentation to the President are required with respect to all\nresolutions that \xe2\x80\x9c contain matter which is properly to be regarded as legislative in\nits character and effect.\xe2\x80\x9d S. Rep. No. 1335, 54th Cong., 2d Sess. 8 (1897).\nFurthermore, the principles we have put forward have been embraced by the\nUnited States Court of Appeals for the District of Columbia Circuit in C onsum er\nEnergy Council o f A m erica v. F ederal E nergy R egulatory C om m ission, 673 F.2d\n451\n\n\x0c425 (D.C. Cir. 1982). In this case, the court, without dissent, ruled that a\nprovision of the Natural Gas Policy Act of 1978 purporting to authorize one\nHouse of Congress to invalidate an incremental pricing regulation promulgated\nby FERC was unconstitutional. As the court noted, \xe2\x80\x9c [t]he primary basis of this\nholding is that the one-house veto violates Article I, Section 7, both by prevent\xc2\xad\ning the President from exercising his veto power and by permitting legislative\naction by only one house of Congress.\xe2\x80\x9d Id. at 448. See a lso Chadha v. Im m igra\xc2\xad\ntion a n d N atu ralization Service, 634 F.2d 408, 433 (9th Cir. 1980) (\xe2\x80\x9c Having\nvested all legislative power in the Congress, the framers deemed it necessary not\nonly to design checks on that power by means of the other branches, but also to\nuse the internal checks of bicameralism.\xe2\x80\x9d ).'\nWe understood that a question about the foregoing analysis has been raised on\nthe ground that the committee approval mechanism in the Simpson-Mazzoli bill\nwould purport to empower the Judiciary Committees to eliminate the tamper\xc2\xad\nproof requirement, rather than to impose a new requirement. The suggestion\nappears to be that whenever Congress seeks to authorize its committees to excuse\nthe Executive Branch from an otherwise-applicable legal requirement, rather\nthan to impose a new legal constraint, Congress may do so as a constitutional\nmatter without complying with Article I, \xc2\xa7 7, Clauses 2 & 3.\nWe believe that this suggestion finds no support whatsoever in the Constitu\xc2\xad\ntion\xe2\x80\x99s text, history or purposes. It makes no difference whether the committee\naction would seek to add new requirements, or to repeal, withdraw or waive old\nrestrictions. So long as the committee action constitutes an exercise of legislative\npower, it is invalid unless it conforms to the constitutionally prescribed pro\xc2\xad\ncedures in Article I, \xc2\xa7 7, Clauses 2 & 3. Congress surely may block the execution\nof any law by the President if it chooses to do so. However, it is our view that in\norder to do so, Congress must pass plenary legislation subject to the President\xe2\x80\x99s\nveto.\nThe underlying legal deficiency of the foregoing suggestion is illustrated by\nextending the argument to its rational conclusion. Under the suggested logic, it\nwould be acceptable, for instance, for a statute to require the Executive Branch to\nhalt all programs and activities presently authorized, unless the Judiciary Com\xc2\xad\nmittees approve (along with the Executive Branch) of the continuation of a given\nprogram or activity. This kind of realignment of power in the national govern\xc2\xad\nment, albeit extreme, is different only in degree from the rearrangement con\xc2\xad\ntemplated by the committee approval provision in the Simpson-Mazzoli bill.\nSuch a statutory arrangement would purport to give to the Judiciary Committees\nthe power to decide whether legal requirements will or will not be imposed on\n(and rights conferred on) the Executive Branch or, indeed, private persons. The\nexercise of such power is consummately a legislative decision. As we have\ndiscussed, under our Constitution such a decision may be made only after\ncompliance with the plenary legislative process mandated by Article I, \xc2\xa7 7,\nClauses 2 & 3.\n1 In Chadha, the court of appeals held unconstitutional a provision of the Immigration and Nationality Act that\npurports to allow one H ouse of Congress to overturn the decision of the Attorney General suspending the deportation\nof an alien. The case is presently pending before the Supreme C ourt, having been recently set down for reargument\nduring the coming term of the Court\n\n452\n\n\x0cIn addition, the attempt to confer on committees of Congress power to\ndetermine whether or not tamper-proof documentation will be necessary \xe2\x80\x9c to the\nreliability of the system\xe2\x80\x9d also may be seen as an attempt to confer on con\xc2\xad\ngressional committees executive power. Executive power is the power to execute\nthe laws. As Chief Justice Marshall observed, \xe2\x80\x9c [t]he difference between the\ndepartments undoubtedly is, that the legislature makes, the executive executes,\nand the judiciary construes the law.\xe2\x80\x9d Wayman v. Southard, 23 U.S. (10 Wheat.)\n1, 46 (1825). S ee also Buckley v. Valeo, 424 U.S. 1, 139 (1976), quoting\nSpringerw. P hilippine Islands, 277U .S. 189, 202(1928). Under the principle of\nthe separation of powers\xe2\x80\x94 which is one of the basic principles underlying the\nConstitution\xe2\x80\x94 it is unconstitutional as a substantive matter to confer on a Legis\xc2\xad\nlative Branch entity, such as a committee of Congress, power to execute the laws.\nAs the Supreme Court wrote in Buckley v. Valeo, supra, 424 U.S. at 121-122,\nquoting H am pton & C o. v. U nited States, 276 U.S. 394, 406 (1928), \xe2\x80\x9c \xe2\x80\x98it is a\nbreach of the National fundamental law if Congress . . . by law attempts to invest\nitself or its members with either executive power or judicial power.\xe2\x80\x99\xe2\x80\x9d\nThe substantive unconstitutionality of attempting to vest in the Judiciary\nCommittees power to determine whether or not tamper-proof documentation will\nbe required follows directly, in our view, from the Supreme Court\xe2\x80\x99s decision in\nBuckley, su pra. In that case, the Court held unconstitutional a statutory provision\nauthorizing the President pro tem pore of the Senate and the Speaker of the House\nof Representatives to appoint members of the Federal Election Commission. See\n424 U.S. at 109\xe2\x80\x944 J. In discussing this matter, the Court extensively reviewed the\ndoctrine of separation of powers and, in particular, its expression in the Appoint\xc2\xad\nments Clause, Article II, \xc2\xa7 2, Clause 2. The Court concluded that any \xe2\x80\x9c signifi\xc2\xad\ncant governmental duty . . . pursuant to a public law\xe2\x80\x9d (id. at 141)\xe2\x80\x94 which\nincludes promulgating regulations, issuing advisory opinions, determining eligi\xc2\xad\nbility for benefits and otherwise executing the law\xe2\x80\x94 must be exercised by\n\xe2\x80\x9c Officers of the United States\xe2\x80\x9d appointed by the President or otherwise in\nconformity with the Appointments Clause. Such duties, the Court held, cannot\nbe exercised by officials appointed by Congress. Id. at 138-141; see a lso id. at\n125-126.\nUnder the Simpson-Mazzoli bill, Congress would purport to authorize the\nJudiciary Committees to make the determination that a tamper-proof documenta\xc2\xad\ntion system is or is not necessary for the reliability of the Nation\xe2\x80\x99s employment\neligibility system. Such exercise of authority plainly constitutes the exercise of\nsignificant governmental duties that involve the discharge of executive power.\nThat kind of action, as Buckley held, can be exercised only by officers of the\nExecutive Branch, not by members of the Judiciary Committees.\nThe underlying substantive defect of the attempt to confer on the Judiciary\nCommittees power to determine whether or not a tamper-proof identification\nsystem will be required is essentially similar to the defect found to exist by the\nCourt of Appeals for the Ninth Circuit in C hadha v. Im m igration an d N a tu ra liza \xc2\xad\ntion S ervice, supra, in a provision allowing one House of Congress to overturn a\ndecision to suspend an alien\xe2\x80\x99s deportation. In both cases, the separation of powers\nprinciple is violated by attempts to vest executive decisionmaking authority in a\n453\n\n\x0cLegislative Branch entity. The effect of such a scheme is to render the efforts of\nthe Executive Branch faithfully to execute the laws entirely tentative and con\xc2\xad\nditional on action\xe2\x80\x94 whether by means of disapproval or approval\xe2\x80\x94 by legislative\nauthorities. The C hadha court summarized as follows its rejection of such\nlegislative provisions on the basis of the separation of powers principle:\nWe cannot accept that definite, uniform, and sensible criteria\ngoverning the conferral of government burdens and benefits on\nindividuals should be replaced by a species of non-legislation,\nwherein the Executive branch becomes a sort of referee in making\nan initial determination which has no independent force or valid\xc2\xad\nity, even after review and approval by the Judiciary, save and\nexcept for the exercise of final control by the unfettered discretion\nofC ongressastoeachcase. . . . In such a world, the Executive\xe2\x80\x99s\nduty of faithful execution o f the laws becomes meaningless, as the\nlaw to be executed in a given case remains tentative until after\naction by the Executive has ceased.\n634 F.2d at 435-36. In response to the argument that the Necessary and Proper\nClause of Article I, \xc2\xa7 8, should permit Congress to reserve to itself power to\ndetermine whether a requirement will or will not be imposed on the Executive\nBranch, C h adha noted that this Clause \xe2\x80\x9c authorizes Congress to \xe2\x80\x98make all laws,\xe2\x80\x99\nnot to exercise power in any way it deems convenient. That a power is clearly\ncommitted to Congress does not sustain an unconstitutional form in the exercise\nof the power.\xe2\x80\x9d Id. at 433.\nIn sum, if the committee approval mechanism in the Simpson-Mazzoli bill is\nsought to be justified as an exercise of Congress\xe2\x80\x99 Article I power, it is invalid\nbecause it does not contemplate the exercise of legislative authority by means of\nthe procedures set forth in Article I, \xc2\xa7 7, Clauses 2 & 3. In addition, to the extent\nthat the committee approval mechanism would authorize the Judiciary Commit\xc2\xad\ntees to determine when a tamper-proof system is necessary and when it is not, the\nprovision would seek to authorize the Committees to act as if they were Executive\nBranch officials, which they are not. Thus, the provision also violates the\nseparation of powers principle.\nWe note in closing that the procedural and substantive limitations discussed in\nthis memorandum are not mere formalities or empty legalisms that are being\nemployed to seek a result desired on other grounds. To the contrary, these\nprinciples lie at the core of our nation\xe2\x80\x99s constitutional scheme. They could not be\nmore fundamental. As a result, since they apply directly to the committee\napproval provision in the Simpson-Mazzoli bill, we are constrained to object\nstrongly to that provision.\nT\n\nheodore\n\nB.\n\nO\n\nlson\n\nA ssistan t A ttorn ey G eneral\nOffice o f L egal Counsel\n\n454\n\n\x0c"


b"July 9, 1979\n\n79-50\n\nMEMORANDUM OPINION FOR THE SENIOR\nASSOCIATE COUNSEL TO THE PRESIDENT\nFederal Home Loan Bank Board\xe2\x80\x94Chairman\xe2\x80\x94\nVacancy\xe2\x80\x94Reorganization Plan No. 3 of 1947 (5\nU.S.C. App. 1), Reorganization Plan No. 6 of 1961\n(5 U.S.C. App.)\n\nThis memorandum confirms the oral advice this Office has recently\ngiven you regarding the selection of a new Chairman of the Federal Home\nLoan Bank Board. The facts, as we understand them, can be briefly\nstated. At noon, on Saturday, June 30, 1979, Mr. McKinney resigned as a\nmember and Chairman of the Board. It is anticipated that his successor\nwill be named within 10 days. There are two other board members in ac\xc2\xad\ntive service on the Board at this time.\nThe first question is whether the President is required to name an Acting\nChairman (either one of the two members or someone else) to serve until a\nsuccessor is named. It is our opinion that the President is not required to\ndo so and that the Board ought to be able to perform its essential functions\nwithout significant interruption until appointment o f a new Chairman.\nPursuant to Reorganization Plan No. 3 of 1947, the President is em\xc2\xad\npowered to designate the Chairman. See \xc2\xa7 2(b), reprinted in 5 U.S.C. App.\nat 734 (1976 ed.). The plan also authorizes the Chairman to designate a\nperson to serve as Acting Chairman during the \xe2\x80\x9c absence or disability\xe2\x80\x9d of\nthe Chairman. Id. There is no provision, however, that deals specifically\nwith the selection of an Acting Chairman to serve during a vacancy. In the\nabsence of any such specific provision, it should be assumed that the\npower to designate an Acting Chairman remains in the President, and, in\nfact, we have been informed by the General Counsel of the Federal Home\nLoan Bank Board that historically the President has named Acting\nChairmen in cases in which vacancies have occurred.\nIn the absence of a designation by the President of an Acting Chairman,\nthe question arises whether the Board may operate without a Chairman\nfor a short period of time. (We have been advised that a period of\n283\n\n\x0capproximately 10 days is contemplated.) At least a partial answer is pro\xc2\xad\nvided by Reorganization Plan No. 6 of 1961, which authorizes the Chair\xc2\xad\nman to delegate any of his management and oversight functions to any ap\xc2\xad\npropriate officer. See \xc2\xa7 2(b), reprinted in 5 U.S.C. App. at 783. Pursuant\nto that authority, on June 29, 1979, the Chairman delegated to the \xe2\x80\x9c Chief\nAdministrative Officer of the Bank Board\xe2\x80\x9d all of his administrative func\xc2\xad\ntions, including each of the eight listed functions set forth in \xc2\xa7 1 of the\n1961 reorganization plan. This delegation should assure continuity during\nthe short period in which there will not be a sitting Chairman.\nFinally, a question has also been raised with respect to the ability of the\nBoard to meet in special or emergency session in the absence of a Chair\xc2\xad\nman. Section 1(8) of the plan gives to the Chairman the power to call\nspecial meetings. Under the June 29 delegation, that power has been trans\xc2\xad\nferred to the Board\xe2\x80\x99s chief administrative officer. In any event, it is our\nopinion that a special session could be called by the two sitting board\nmembers even in the absence of such a call. This opinion is based on \xc2\xa7 1(8)\nof the 1961 plan which transfers to the Chairman \xe2\x80\x9c [t]he calling of the\nBoard into special session * * * upon request of one or both of the other\nmembers of the Board.\xe2\x80\x9d This subsection seems to render the Chairman\xe2\x80\x99s\ncalling of special meetings merely ministerial when one or both of the\nboard members request a meeting. Furthermore, the Presidential message\naccompanying the plan makes clear that the transfer of functions is in\xc2\xad\ntended to strengthen internal management of the Board and not to change\nthe distribution of power within the Board. The message states:\n[n]othing in the plan impinges upon the ability of the members of\nthe Board to act independently with respect to substantive mat\xc2\xad\nters that come before them for decision, or to participate in the\nshaping of Board policies. In carrying out his managerial func\xc2\xad\ntions, the Chairman will be governed by the policies of the Board\nand the determinations it is authorized to make. [5 U.S.C. App.\nat 784.]\nThe plan and the President\xe2\x80\x99s message lead us to conclude that the two re\xc2\xad\nmaining members of the Board have the authority to call a special meeting\nif such a meeting is necessary to the proper functioning of the Board.\nIt is also our view that if a meeting is held by the other two board\nmembers any action taken at such meeting may not properly be challenged\non the ground that the calling of the meeting was not in conformance with\nthe reorganization plan. It appears that, as a matter of corporate common\nlaw, business transacted at a meeting of a corporate board is valid so long\nas there is sufficient notice to the board members enabling them to attend,\nor if, in fact* all the members did attend. See 2 Fletcher, Cyclopedia o f the\nLaw o f Private Corporations \xc2\xa7\xc2\xa7 404, 406, 411 (1969 ed,). We suspect that\nin the absence of specific statutory language to the contrary, a Govern\xc2\xad\nment entity such as the Federal Home Loan Bank Board may rely on the\ncommon law rule. C f, FTC v. Flotill Products,' Inc., 389 U.S. 1979\n(1967). O f course, the notification and scheduling of any meeting would\n284\n\n\x0cstill have to comply with other applicable provisions of law, including the\nprovisions of the Sunshine Act, 5 U.S.C. \xc2\xa7\xc2\xa7 552b.\nGiven these considerations, it is our opinion that the Board may func\xc2\xad\ntion appropriately during this brief period without a sitting Chairman.\nLarry A . H am m ond\n\nDeputy Assistant Attorney General\nOffice o f Legal Counsel\n\n285\n\n\x0c"