b"Special Master for Troubled Asset Relief\nProgram Executive Compensation\nThe Special Master for Troubled Asset Relief Program Executive Compensation is not a\nprincipal officer for purposes of the Appointments Clause and thus need not be appointed by the President, by and with the advice and consent of the Senate.\nNovember 5, 2010\n\nMEMORANDUM OPINION FOR THE GENERAL COUNSEL\nDEPARTMENT OF THE TREASURY\nAND THE\n\nSPECIAL INSPECTOR GENERAL\nTROUBLED ASSET RELIEF PROGRAM\nYou have asked for our opinion whether the Special Master for Troubled Asset Relief Program Executive Compensation (\xe2\x80\x9cSpecial Master\xe2\x80\x9d) is\na principal officer for purposes of the Appointments Clause, U.S. Const.\nart. II, \xc2\xa7 2, cl. 2, and thus must be appointed by the President, by and with\nthe advice and consent of the Senate. 1 The position of Special Master was\ncreated by the Secretary of the Treasury, who has charged the Special\nMaster with assisting in the enforcement of the executive compensation\nand corporate governance requirements established under the Emergency\nEconomic Stabilization Act (\xe2\x80\x9cEESA\xe2\x80\x9d), Pub. L. No. 110-343, \xc2\xa7 111, 122\nStat. 3765, 3776\xe2\x80\x9377 (2008) (as amended). See 31 C.F.R. \xc2\xa7 30.16(a)\n(2010). For the reasons that follow, we conclude that the Special Master is\nnot a principal officer. 2\n\n1 See Letter for David J. Barron, Acting Assistant Attorney General, Office of Legal\nCounsel, from Neil M. Barofsky, Special Inspector General, Office of the Special Inspector General for the Troubled Asset Relief Program (Aug. 20, 2010) (\xe2\x80\x9cSIGTARP Letter\xe2\x80\x9d).\nThe Treasury Department General Counsel\xe2\x80\x99s request was conveyed orally.\n2 Both the Treasury Department General Counsel and the Special Inspector General for\nthe Troubled Asset Relief Program (\xe2\x80\x9cSIGTARP\xe2\x80\x9d) premise their shared opinion request on\nthe assumption that the Special Master is an officer of the United States. We take that\nassumption as a given for purposes of this memorandum.\n\n219\n\n\x0c34 Op. O.L.C. 219 (2010)\n\nI.\nOn October 3, 2008, in the midst of a major crisis affecting the Nation\xe2\x80\x99s financial system, Congress enacted the EESA to provide the Secretary of the Treasury with immediate authority and facilities \xe2\x80\x9cto restore\nliquidity and stability to the financial system of the United States.\xe2\x80\x9d 12\nU.S.C. \xc2\xa7 5201(1) (2006 & Supp. III 2009). Generally speaking, the\n\xe2\x80\x9cEESA vests the Secretary with the flexibility and power to take bold\nactions necessary to stabilize the economy.\xe2\x80\x9d In re Motors Liquidation\nCo., 430 B.R. 65, 94 (S.D.N.Y. 2010).\nTitle I of the EESA authorizes the Secretary \xe2\x80\x9cto establish the Troubled\nAsset Relief Program (or \xe2\x80\x98TARP\xe2\x80\x99) to purchase, and to make and fund\ncommitments to purchase, troubled assets from any financial institution,\non such terms and conditions as are determined by the Secretary.\xe2\x80\x9d 12\nU.S.C. \xc2\xa7 5211(a)(1). Section 111 of the EESA, as amended, see Pub. L.\nNo. 111-22, \xc2\xa7 403, 123 Stat. 1632, 1658 (2009); Pub. L. No. 111-5,\n\xc2\xa7 7001, 123 Stat. 115, 516\xe2\x80\x9320 (2009), imposes requirements on TARP\nrecipients related to corporate governance and executive compensation.\nSee 12 U.S.C. \xc2\xa7 5221. Subsections (b), (f), and (h) of that section are of\nparticular relevance to determining the status of the Special Master.\nSubsection (b) provides that \xe2\x80\x9c[t]he Secretary shall require each TARP\nrecipient to meet appropriate standards for executive compensation and\ncorporate governance,\xe2\x80\x9d id. \xc2\xa7 5221(b)(2); see also id. \xc2\xa7 5221(b)(1) (\xe2\x80\x9cDuring the period in which any obligation arising from financial assistance\nprovided under the TARP remains outstanding, each TARP recipient shall\nbe subject to . . . the standards established by the Secretary under this\nsection\xe2\x80\x9d), and it establishes a series of specific requirements that must be\nincluded in those standards, see id. \xc2\xa7 5221(b)(3). 3 Subsection (f) directs\n\n3\n\nThose requirements include:\n(A) Limits on compensation that exclude incentives for senior executive officers\nof the TARP recipient to take unnecessary and excessive risks that threaten the value of such recipient during the period in which any obligation arising from financial assistance provided under the TARP remains outstanding.\n(B) A provision for the recovery by such TARP recipient of any bonus, retention\naward, or incentive compensation paid to a senior executive officer and any of the\nnext 20 most highly-compensated employees of the TARP recipient based on\n\n220\n\n\x0cSpecial Master for Troubled Asset Relief Program Executive Compensation\n\nstatements of earnings, revenues, gains, or other criteria that are later found to be\nmaterially inaccurate.\n(C) A prohibition on such TARP recipient making any golden parachute payment\nto a senior executive officer or any of the next 5 most highly-compensated employees of the TARP recipient during the period in which any obligation arising from\nfinancial assistance provided under the TARP remains outstanding.\n(D) (i) A prohibition on such TARP recipient paying or accruing any bonus, retention award, or incentive compensation during the period in which any obligation\narising from financial assistance provided under the TARP remains outstanding,\nexcept that any prohibition developed under this paragraph shall not apply to the\npayment of long-term restricted stock by such TARP recipient, provided that such\nlong-term restricted stock\xe2\x80\x94\n(I) does not fully vest during the period in which any obligation arising\nfrom financial assistance provided to that TARP recipient remains outstanding;\n(II) has a value in an amount that is not greater than 1/3 of the total amount\nof annual compensation of the employee receiving the stock; and\n(III) is subject to such other terms and conditions as the Secretary may determine is in the public interest.\n(ii) The prohibition required under clause (i) shall apply as follows:\n(I) For any financial institution that received financial assistance provided\nunder the TARP equal to less than $25,000,000, the prohibition shall apply\nonly to the most highly compensated employee of the financial institution.\n(II) For any financial institution that received financial assistance provided\nunder the TARP equal to at least $25,000,000, but less than $250,000,000,\nthe prohibition shall apply to at least the 5 most highly-compensated employees of the financial institution, or such higher number as the Secretary may\ndetermine is in the public interest with respect to any TARP recipient.\n(III) For any financial institution that received financial assistance provided\nunder the TARP equal to at least $250,000,000, but less than $500,000,000,\nthe prohibition shall apply to the senior executive officers and at least the 10\nnext most highly-compensated employees, or such higher number as the Secretary may determine is in the public interest with respect to any TARP recipient.\n(IV) For any financial institution that received financial assistance provided\nunder the TARP equal to $500,000,000 or more, the prohibition shall apply\nto the senior executive officers and at least the 20 next most highlycompensated employees, or such higher number as the Secretary may determine is in the public interest with respect to any TARP recipient.\n(iii) The prohibition required under clause (i) shall not be construed to prohibit\nany bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.\n\n221\n\n\x0c34 Op. O.L.C. 219 (2010)\n\nthe Secretary to \xe2\x80\x9creview bonuses, retention awards, and other compensation paid to the senior executive officers and the next 20 most highlycompensated employees of each entity receiving TARP assistance before\nFebruary 17, 2009, to determine whether any such payments were inconsistent with the purposes of this section or the TARP or were otherwise\ncontrary to the public interest.\xe2\x80\x9d Id. \xc2\xa7 5221(f). Subsection (h) requires the\nSecretary to \xe2\x80\x9cpromulgate regulations to implement this section.\xe2\x80\x9d Id.\n\xc2\xa7 5221(h).\nSection 101(c) of the EESA provides that \xe2\x80\x9c[t]he Secretary is authorized\nto take such actions as the Secretary deems necessary to carry out the\nauthorities in [the EESA].\xe2\x80\x9d 12 U.S.C. \xc2\xa7 5211(c). These authorities include, \xe2\x80\x9cwithout limitation,\xe2\x80\x9d \xe2\x80\x9cdirect hiring authority with respect to the\nappointment of employees to administer [the EESA],\xe2\x80\x9d id. \xc2\xa7 5211(c)(1),\nand \xe2\x80\x9c[i]ssuing such regulations and other guidance as may be necessary\nor appropriate to define terms or carry out the authorities or purposes of\n[the EESA],\xe2\x80\x9d id. \xc2\xa7 5211(c)(5).\nOn June 15, 2009, the Secretary issued an Interim Final Rule on TARP\nStandards for Compensation and Corporate Governance (\xe2\x80\x9cInterim Rule\xe2\x80\x9d).\nSee 74 Fed. Reg. 28,394\xe2\x80\x93423 (codified at 31 C.F.R. pt. 30). The Interim\nRule, which became effective on the day it was issued, see 74 Fed. Reg. at\n28,423; 31 C.F.R. \xc2\xa7 30.17 (2010), elaborates the specific standards and\nother requirements relating to corporate governance and executive compensation that section 111 of the EESA establishes for TARP recipients.\nTo ensure that these requirements are applied \xe2\x80\x9cefficiently,\xe2\x80\x9d \xe2\x80\x9cconsistently,\xe2\x80\x9d and \xe2\x80\x9cequitably,\xe2\x80\x9d the Interim Rule further provides that the Secretary \xe2\x80\x9cshall establish the Office of the Special Master for TARP Executive\nCompensation.\xe2\x80\x9d 74 Fed. Reg. at 28,403; 31 C.F.R. \xc2\xa7 30.16(a). The Special\nMaster is to \xe2\x80\x9cbe appointed by, and serve at the pleasure of, the Secretary,\xe2\x80\x9d\nand \xe2\x80\x9cmay be removed by the Secretary without notice, without cause, and\nprior to the naming of any successor Special Master.\xe2\x80\x9d Id. The Interim\n(E) A prohibition on any compensation plan that would encourage manipulation\nof the reported earnings of such TARP recipient to enhance the compensation of\nany of its employees.\n(F) A requirement for the establishment of a Board Compensation Committee that\nmeets the requirements of subsection (c).\n12 U.S.C. \xc2\xa7 5221(b)(3).\n\n222\n\n\x0cSpecial Master for Troubled Asset Relief Program Executive Compensation\n\nRule delegates to the Special Master certain of the Secretary\xe2\x80\x99s \xe2\x80\x9cpowers,\nduties, and responsibilities\xe2\x80\x9d relating to enforcement of the Act. Id. These\ndelegated functions include: (1) interpreting how the requirements on\nexecutive compensation and corporate governance established under\nsection 111 of the EESA, the Interim Rule, and any other applicable\nguidance apply to TARP recipients and their employees; (2) determining\nwhether compensation paid to employees of TARP recipients prior to\nFebruary 17, 2009 was \xe2\x80\x9cinconsistent with the purposes of section 111 of\n[the] EESA or TARP, or otherwise contrary to the public interest,\xe2\x80\x9d and,\nif so, negotiating with the TARP recipient and the compensated employee for appropriate reimbursement to the government; (3) determining\nwhether to approve compensation payments to, and compensation structures for, certain highly compensated employees of TARP recipients\nreceiving financial assistance defined by the Interim Rule as \xe2\x80\x9cexceptional\nfinancial assistance\xe2\x80\x9d; and (4) issuing advisory opinions on compensation\npayments to, and compensation structures for, certain employees of TARP\nrecipients generally. Id. \xc2\xa7 30.16(a)(1)\xe2\x80\x93(4). In making determinations\nunder paragraphs (2) or (3) and in offering opinions under paragraph (4),\nthe Special Master must follow a set of principles outlined in the Interim\nRule. See id. \xc2\xa7 30.16(a)(2)\xe2\x80\x93(4). 4\n4\n\nThe Interim Rule provides:\nIn reviewing a compensation structure or a compensation payment to determine\nwhether it is inconsistent with the purposes of section 111 of EESA or TARP or is\notherwise contrary to the public interest, the Special Master shall apply the principles enumerated below. The principles are intended to be consistent with sound\ncompensation practices appropriate for TARP recipients, and to advance the purposes and considerations described in EESA sections 2 and 103, including the maximization of overall returns to the taxpayers of the United States and providing stability and preventing disruptions to financial markets. The Special Master has\ndiscretion to determine the appropriate weight or relevance of a particular principle\ndepending on the facts and circumstances surrounding the compensation structure\nor payment under consideration, such as whether a payment occurred in the past or\nis proposed for the future, the role of the employee within the TARP recipient, the\nsituation of the TARP recipient within the marketplace and the amount and type of\nfinancial assistance provided. To the extent that two or more principles may appear\ninconsistent in a particular situation, the Special Master will determine the relative\nweight to be accorded each principle. In the case of any review of payments already\nmade under paragraph (c)(2) of this section, or of any rights to bonuses, awards, or\nother compensation already granted, the Special Master shall apply these principles\n\n223\n\n\x0c34 Op. O.L.C. 219 (2010)\n\nby considering the facts and circumstances at the time the compensation was granted, earned, or paid, as appropriate.\n(i) Risk. The compensation structure should avoid incentives to take unnecessary or excessive risks that could threaten the value of the TARP recipient, including incentives that reward employees for short-term or temporary increases\nin value, performance, or similar measure that may not ultimately be reflected\nby an increase in the long-term value of the TARP recipient. Accordingly, incentive payments or similar rewards should be structured to be paid over a time\nhorizon that takes into account the risk horizon so that the payment or reward reflects whether the employee's performance over the particular service period has\nactually contributed to the long-term value of the TARP recipient.\n(ii) Taxpayer return. The compensation structure, and amount payable where\napplicable, should reflect the need for the TARP recipient to remain a competitive enterprise, to retain and recruit talented employees who will contribute to\nthe TARP recipient's future success, and ultimately to be able to repay TARP\nobligations.\n(iii) Appropriate allocation. The compensation structure should appropriately\nallocate the components of compensation such as salary, short-term and longterm incentives, as well as the extent to which compensation is provided in cash,\nequity or other types of compensation such as executive pensions, other benefits,\nor perquisites, based on the specific role of the employee and other relevant circumstances, including the nature and amount of current compensation, deferred\ncompensation, or other compensation and benefits previously paid or awarded.\nThe appropriate allocation may be different for different positions and for different employees, but generally, in the case of an executive or other senior level\nposition a significant portion of the overall compensation should be long-term\ncompensation that aligns the interest of the employee with the interests of shareholders and taxpayers.\n(iv) Performance-based compensation. An appropriate portion of the compensation should be performance-based over a relevant performance period. Performance-based compensation should be determined through tailored metrics\nthat encompass individual performance and/or the performance of the TARP recipient or a relevant business unit taking into consideration specific business objectives. Performance metrics may relate to employee compliance with relevant\ncorporate policies. In addition, the likelihood of meeting the performance metrics should not be so great that the arrangement fails to provide an adequate incentive for the employee to perform, and performance metrics should be measurable, enforceable, and actually enforced if not met. The appropriate allocation\nand the appropriate performance metrics may be different for different positions\nand for different employees, but generally a significant portion of total compensation should be performance-based compensation, and generally that portion\nshould be greater for positions that exercise higher levels of responsibility.\n(v) Comparable structures and payments. The compensation structure, and\namount payable where applicable, should be consistent with, and not excessive,\n\n224\n\n\x0cSpecial Master for Troubled Asset Relief Program Executive Compensation\n\nWhen acting under paragraphs (2) and (3), the Special Master must\nmake an \xe2\x80\x9cinitial determination\xe2\x80\x9d within 60 days of receiving a \xe2\x80\x9csubstantially complete submission\xe2\x80\x9d from a TARP recipient. Id. \xc2\xa7 30.16(c)(1).\nThe TARP recipient then has 30 days to request reconsideration of the\ninitial determination, and the Special Master must provide a \xe2\x80\x9cfinal determination\xe2\x80\x9d in writing within 30 days thereafter, setting forth the facts\nand analysis that formed the basis for the determination. Id. If the\nTARP recipient does not request reconsideration within 30 days, the\ninitial determination \xe2\x80\x9cshall be treated as a final determination.\xe2\x80\x9d Id.\nThe Interim Rule also specifies the effects of the Special Master\xe2\x80\x99s decisions. The Interim Rule provides that \xe2\x80\x9c[i]n the case of any final determination that the TARP recipient is required to receive, the final determination of the Special Master shall be final and binding and treated as\nthe determination of the Treasury.\xe2\x80\x9d Id. \xc2\xa7 30.16(c)(2). \xe2\x80\x9cAn advisory opinion of the Special Master,\xe2\x80\x9d however, \xe2\x80\x9cshall not be binding upon any\nTARP recipient or employee, but may be relied upon by a TARP recipient\nor employee if the advisory opinion applies to the TARP recipient and\nthe employee and the TARP recipient and employee comply in all respects with the advisory opinion.\xe2\x80\x9d Id. \xc2\xa7 30.16(c)(3).\nFinally, the Interim Rule provides that the Special Master \xe2\x80\x9cshall have\nsuch other duties and powers related to the application of compensation\nissues arising in the administration of [the] EESA or TARP as the Secretary or the Secretary\xe2\x80\x99s designate may delegate to the Special Master,\nincluding, but not limited to, the interpretation or application of contractaking into account compensation structures and amounts for persons in similar\npositions or roles at similar entities that are similarly situated, including, as applicable, entities competing in the same markets and similarly situated entities\nthat are financially distressed or that are contemplating or undergoing reorganization.\n(vi) Employee contribution to TARP recipient value. The compensation structure, and amount payable where applicable, should reflect the current or prospective contributions of an employee to the value of the TARP recipient, taking\ninto account multiple factors such as revenue production, specific expertise,\ncompliance with company policy and regulation (including risk management),\nand corporate leadership, as well as the role the employee may have had with respect to any change in the financial health or competitive position of the TARP\nrecipient.\n31 C.F.R. \xc2\xa7 30.16(b).\n\n225\n\n\x0c34 Op. O.L.C. 219 (2010)\n\ntual provisions between the Federal government and a TARP recipient as\nthose provisions relate to the compensation paid to, or accrued by, an\nemployee of such TARP recipient.\xe2\x80\x9d Id. \xc2\xa7 30.16(a)(5). 5\nII.\nThe Appointments Clause states:\n[The President] . . . shall nominate, and by and with the Advice and\nConsent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the\nCongress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of\nLaw, or in the Heads of Departments.\nU.S. Const. art. II, \xc2\xa7 2, cl. 2. As the Clause thus makes clear, officers of\nthe United States fall into two basic categories: principal officers and\ninferior officers. See, e.g., United States v. Germaine, 99 U.S. (9 Otto)\n508, 509 (1878) (\xe2\x80\x9cThe Constitution for purposes of appointment . . .\ndivides all its officers into two classes.\xe2\x80\x9d); see also Morrison v. Olson,\n487 U.S. 654, 670 (1988). Principal officers must be appointed by the\nPresident, by and with the advice and consent of the Senate. Inferior\nofficers must be appointed in the same manner, unless Congress \xe2\x80\x9cby\nLaw vest[s] the[ir] Appointment . . . in the President alone, in the Courts\nof Law, or in the Heads of Departments.\xe2\x80\x9d U.S. Const. art. II, \xc2\xa7 2, cl. 2;\nsee Morrison, 487 U.S. at 670 \xe2\x80\x9371; Buckley v. Valeo, 424 U.S. 1, 132\n\n5 The preamble to the Interim Rule characterizes the Special Master\xe2\x80\x99s residual authority as limited to matters arising under section 111 of the EESA. It states that \xe2\x80\x9c[t]he scope\nof the Special Master\xe2\x80\x99s authority and responsibility is limited to compensation and\ncorporate governance matters under section 111 with respect to TARP recipients, and the\nSpecial Master has no authority to provide guidance or review any submissions with\nrespect to matters other than compensation and corporate governance matters under\nsection 111, or to provide guidance or review any submissions with respect to compensation or corporate governance matters of employers that are not TARP recipients.\xe2\x80\x9d 74 Fed.\nReg. at 28,404 (emphasis added). The Treasury Department General Counsel\xe2\x80\x99s Office has\ninformed us that the Secretary has not assigned any additional functions to the Special\nMaster under this provision.\n\n226\n\n\x0cSpecial Master for Troubled Asset Relief Program Executive Compensation\n\n(1976) (per curiam). \xe2\x80\x9c[T]he terms of the Appointments Clause set out the\nonly means by which Congress may provide for the appointment of \xe2\x80\x98Officers of the United States,\xe2\x80\x99\xe2\x80\x9d The Constitutional Separation of Powers\nBetween the President and Congress, 20 Op. O.L.C. 124, 139 (1996)\n(citing Buckley, 424 U.S. at 124\xe2\x80\x9337), and \xe2\x80\x9c[n]either Congress nor the\nExecutive can agree to waive this structural protection,\xe2\x80\x9d Freytag v.\nComm\xe2\x80\x99r, 501 U.S. 868, 880 (1991).\nThe Special Inspector General for the Troubled Asset Relief Program\n(\xe2\x80\x9cSIGTARP\xe2\x80\x9d) questions whether the Special Master is a principal officer\nbecause, in his view, \xe2\x80\x9cthe Secretary appears to be without authority to\ncontrol the actions of the Special Master in any . . . meaningful manner\xe2\x80\x9d\nother than removal. SIGTARP Letter at 5. 6 If the Special Master were\nindeed a principal officer, his appointment by the Secretary would not be\nin conformity with the Appointments Clause.\nIn our view, the Special Master is not a principal officer. The Supreme\nCourt has \xe2\x80\x9cnot set forth an exclusive criterion for distinguishing between\nprincipal and inferior officers for Appointments Clause purposes.\xe2\x80\x9d Edmond v. United States, 520 U.S. 651, 661 (1997). But in three decisions\nover the past quarter century the Court has set out a number of important\nguideposts by which to distinguish principal from inferior officers.\nIn Morrison v. Olson, 487 U.S. 654 (1988), the Supreme Court considered whether an independent counsel appointed pursuant to the Ethics in\nGovernment Act of 1978, 28 U.S.C. \xc2\xa7\xc2\xa7 591\xe2\x80\x93599 (1988), was an inferior\nofficer. It concluded that she was, based on four considerations. First, the\nCourt noted that the independent counsel was \xe2\x80\x9csubject to removal by a\nhigher Executive Branch official\xe2\x80\x9d (the Attorney General). Morrison, 487\nU.S. at 671. The Court explained that this factor weighed in favor of\nviewing the independent counsel as an inferior officer even though \xe2\x80\x9cshe\npossesse[d] a degree of independent discretion to exercise the powers\ndelegated to her under the Act.\xe2\x80\x9d Id. Second, the Court relied on the fact\n6 The Office of the Special Inspector General for the Troubled Asset Relief Program\nwas created by the EESA. 12 U.S.C. \xc2\xa7 5231(a). The Office is headed by a Special Inspector General\xe2\x80\x94the SIGTARP\xe2\x80\x94who is appointed by the President, with the advice and\nconsent of the Senate. Id. \xc2\xa7 5231(b). The duties of the SIGTARP include conducting\naudits and investigations of the Secretary\xe2\x80\x99s purchase, management, and sale of assets\nunder the TARP and of the Secretary\xe2\x80\x99s management of the TARP, as well as conducting\naudits and investigations of other actions taken under the EESA. Id. \xc2\xa7 5231(c)(1), (4).\n\n227\n\n\x0c34 Op. O.L.C. 219 (2010)\n\nthat the independent counsel performed what it considered only \xe2\x80\x9climited\nduties\xe2\x80\x9d because she was \xe2\x80\x9crestricted primarily to investigation and, if\nappropriate, prosecution for certain federal crimes.\xe2\x80\x9d Id. The Court\nacknowledged that the Ethics in Government Act gave the independent\ncounsel \xe2\x80\x9cfull power and independent authority to exercise all investigative and prosecutorial functions and powers of the Department of Justice,\xe2\x80\x9d but thought it significant that \xe2\x80\x9cthis grant of authority does not\ninclude any authority to formulate policy for the Government or the\nExecutive Branch, nor does it give appellant any administrative duties\noutside of those necessary to operate her office.\xe2\x80\x9d Id. at 671\xe2\x80\x9372. Third,\nthe Court stressed that the independent counsel\xe2\x80\x99s jurisdiction was relatively narrow, both because the Ethics in Government Act itself was\n\xe2\x80\x9crestricted in applicability to certain federal officials suspected of certain\nserious federal crimes\xe2\x80\x9d and because \xe2\x80\x9can independent counsel can only act\nwithin the scope of the jurisdiction that has been granted by the Special\nDivision pursuant to a request by the Attorney General.\xe2\x80\x9d Id. at 672.\nFourth, the Court pointed out that the independent counsel\xe2\x80\x99s tenure was\n\xe2\x80\x9climited\xe2\x80\x9d because while her office had no fixed term, it was \xe2\x80\x9c\xe2\x80\x98temporary\xe2\x80\x99 in the sense that an independent counsel is appointed essentially to\naccomplish a single task, and when that task is over the office is terminated.\xe2\x80\x9d Id.\nAlmost a decade after Morrison, the Court returned to the distinction\nbetween principal and inferior officers in Edmond v. United States, 520\nU.S. 651 (1997). Edmond concerned civilians appointed by the Secretary\nof Transportation to serve as military judges on the Coast Guard Court of\nCriminal Appeals. The Supreme Court concluded that the judges were\ninferior officers, but it characterized the factors it had relied on in Morrison as not \xe2\x80\x9cdefinitive\xe2\x80\x9d and adopted a somewhat different approach. Id. at\n661.\nThe Court acknowledged that judges on the Coast Guard Court of\nCriminal Appeals did not have a \xe2\x80\x9cnarrow\xe2\x80\x9d jurisdiction or \xe2\x80\x9climited\xe2\x80\x9d tenure,\nas those terms had been used in Morrison, and that the third and fourth\nconsiderations discussed in Morrison thus cut against characterizing the\njudges as inferior officers. Id. It nonetheless deemed them inferior officers because their work was \xe2\x80\x9cdirected and supervised at some level by\nother [officers] who were appointed by Presidential nomination with the\nadvice and consent of the Senate.\xe2\x80\x9d Id. at 663. That supervision, the Court\n228\n\n\x0cSpecial Master for Troubled Asset Relief Program Executive Compensation\n\nexplained, was carried out by two Executive Branch actors. The Judge\nAdvocate General of the Coast Guard (the Secretary of Transportation\xe2\x80\x99s\nsubordinate) \xe2\x80\x9cexercise[d] administrative oversight over the Court of\nCriminal Appeals\xe2\x80\x9d in that the Judge Advocate General established the\ncourt\xe2\x80\x99s rules of procedure, could order any of its decisions submitted for\nreview, and could remove judges without cause. Id. at 664, 666. And the\nCourt of Appeals for the Armed Forces (an Executive Branch tribunal)\ncould review and reverse the lower tribunal\xe2\x80\x99s decisions, and prevent any\nfinal order from being issued. Id. at 664\xe2\x80\x9365. Thus, \xe2\x80\x9c[w]hat is significant,\xe2\x80\x9d\nthe Supreme Court explained, \xe2\x80\x9cis that the judges of the Court of Criminal\nAppeals have no power to render a final decision on behalf of the United\nStates unless permitted to do so by other Executive officers.\xe2\x80\x9d Id. at 665.\nRather than listing a number of non-exclusive factors as it had done in\nMorrison, then, the Court in Edmond appeared to offer one overall standard for identifying inferior officers. \xe2\x80\x9cGenerally speaking,\xe2\x80\x9d the Court\nstated, \xe2\x80\x9cthe term \xe2\x80\x98inferior officer\xe2\x80\x99 connotes a relationship with some\nhigher ranking officer or officers below the President: Whether one is\nan \xe2\x80\x98inferior\xe2\x80\x99 officer depends on whether he has a superior.\xe2\x80\x9d Id. at 662. At\nthe same time, the Court indicated that determining whether an officer has\na superior in this sense may well require considering a number of factors,\nincluding whether the officer is removable by an Executive Branch official below the President and whether the officer\xe2\x80\x99s work \xe2\x80\x9cis directed and\nsupervised at some level by others who were appointed by Presidential\nnomination with the advice and consent of the Senate.\xe2\x80\x9d Id. at 663.\nEarlier this year, the Supreme Court followed the Edmond approach\nfor distinguishing inferior from principal officers in Free Enterprise\nFund v. Public Company Accounting Oversight Board, 130 S. Ct. 3139\n(June 28, 2010). In Free Enterprise Fund, the Court considered separation of powers and Appointments Clause challenges to the structure of\nthe Public Company Accounting Oversight Board (\xe2\x80\x9cPCAOB\xe2\x80\x9d), a statutorily created entity with \xe2\x80\x9cexpansive powers to govern [the accounting] industry.\xe2\x80\x9d Id. at 3147. The statute establishing the PCAOB, the\nSarbanes-Oxley Act of 2002, 15 U.S.C. \xc2\xa7\xc2\xa7 7211\xe2\x80\x937219 (\xe2\x80\x9cSOX Act\xe2\x80\x9d),\nprovided for the Securities and Exchange Commission (\xe2\x80\x9cSEC\xe2\x80\x9d) to appoint\n\n229\n\n\x0c34 Op. O.L.C. 219 (2010)\n\nthe PCAOB\xe2\x80\x99s members. 7 The SOX Act also granted the SEC \xe2\x80\x9c[b]road\npower over [the PCAOB] functions,\xe2\x80\x9d id. at 3148, including approving the\nPCAOB\xe2\x80\x99s budget, issuing regulations that bind it, relieving the PCAOB\nof authority, amending and denying approval for PCAOB sanctions and\nrules, and enforcing PCAOB rules on its own. See id. at 3158. Under the\nSOX Act as enacted, however, the SEC could remove PCAOB members\nonly \xe2\x80\x9c\xe2\x80\x98for good cause shown,\xe2\x80\x99\xe2\x80\x9d \xe2\x80\x9c\xe2\x80\x98in accordance with\xe2\x80\x99\xe2\x80\x9d specified procedures. Id. at 3148 (quoting 15 U.S.C. \xc2\xa7 7211(e)(6)). The Court held that\nthe resulting dual for-cause limitations on the President\xe2\x80\x99s ability to\nremove PCAOB members\xe2\x80\x94with the SEC Commissioners removable by\nthe President only for good cause, and the PCAOB members removable\nby the SEC only for another, more restrictive type of good cause specified in the SOX Act\xe2\x80\x94was \xe2\x80\x9ccontrary to Article II\xe2\x80\x99s vesting of the executive power in the President,\xe2\x80\x9d and therefore violated the separation of\npowers. Id. at 3147, 3154. To remedy the infirmity, the Court excised\nfrom the SOX Act the provision making PCAOB members removable\nonly for cause, thus rendering them removable by the SEC at will.\nTurning to the Appointments Clause challenge under this modified\nstatutory structure, the Court concluded that the PCAOB\xe2\x80\x99s members were\nproperly appointed inferior officers. \xe2\x80\x9cGiven that the Commission is\nproperly viewed, under the Constitution, as possessing the power to\nremove Board members at will,\xe2\x80\x9d the Court explained, \xe2\x80\x9cand given the\nCommission\xe2\x80\x99s other oversight authority, we have no hesitation in concluding that under Edmond the Board members are inferior officers.\xe2\x80\x9d Id.\nat 3162.\nBoth Edmond and Free Enterprise Fund indicate that the level of direction and supervision exercised by a superior over a subordinate need not\nbe total for the subordinate to qualify as an inferior officer. In Edmond,\nfor example, the Court acknowledged that the scope of substantive review\nthat the Court of Appeals for the Armed Forces exercised over the Court\nof Criminal Appeals \xe2\x80\x9cis narrower than that exercised by the Court of\nCriminal Appeals,\xe2\x80\x9d because \xe2\x80\x9cso long as there is some competent evidence\nThe parties stipulated that SEC Commissioners could not be removed by the President except for \xe2\x80\x9c\xe2\x80\x98inefficiency, neglect of duty, or malfeasance in office,\xe2\x80\x99\xe2\x80\x9d and the Court\ndecided the case based on that understanding. Free Enterprise Fund, 130 S. Ct. at 3148\xe2\x80\x93\n49.\n7\n\n230\n\n\x0cSpecial Master for Troubled Asset Relief Program Executive Compensation\n\nin the record to establish each element of the offense beyond a reasonable\ndoubt, the Court of Appeals for the Armed Forces will not reevaluate the\nfacts.\xe2\x80\x9d 520 U.S. at 665. What was \xe2\x80\x9csignificant\xe2\x80\x9d in concluding that the\nCourt of Criminal Appeals judges nonetheless were inferior officers,\nhowever, was that they \xe2\x80\x9chave no power to render a final decision on\nbehalf of the United States unless permitted to do so by other Executive\nofficers.\xe2\x80\x9d Id. Similarly, in Free Enterprise Fund, the Court rejected the\nproposition that the SEC\xe2\x80\x99s power over the PCAOB\xe2\x80\x99s activities was \xe2\x80\x9cplenary.\xe2\x80\x9d 130 S. Ct. at 3159. Rather, the Court observed, the PCAOB \xe2\x80\x9cis\nempowered to take significant enforcement actions, and does so largely\nindependently of the Commission\xe2\x80\x9d; indeed, \xe2\x80\x9cthe Act nowhere gives the\nCommission effective power to start, stop, or alter individual Board\ninvestigations.\xe2\x80\x9d Id.; see also id. at 3159 (\xe2\x80\x9cThe Board . . . has significant\nindependence in determining its priorities and intervening in the affairs\nof regulated firms (and the lives of their associated persons) without\nCommission preapproval or direction.\xe2\x80\x9d). Thus, Edmond and Free Enterprise Fund make clear (as had Morrison) that an executive official can\nexercise some level of independent authority and still qualify as an inferior officer, so long as it can be said that the official \xe2\x80\x9cis directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.\xe2\x80\x9d Edmond, 520 U.S. at 663\n(emphasis added).\nIII.\nApplying the principles established by the Supreme Court, we think it\nclear that the Special Master is not a principal officer. If one looks to the\nfour Morrison factors\xe2\x80\x94removal, duties, jurisdiction, and tenure\xe2\x80\x94they all\npoint in favor of the conclusion that the Special Master is not a principal\nofficer. The Special Master is subject to at-will removal by the Secretary\n(without \xe2\x80\x9cnotice\xe2\x80\x9d or \xe2\x80\x9ccause\xe2\x80\x9d). 31 C.F.R. \xc2\xa7 30.16(a). The Special Master\xe2\x80\x99s\nduties are limited. As indicated above, they consist of interpreting EESArelated requirements on TARP recipients\xe2\x80\x99 executive compensation and\ncorporate governance, negotiating reimbursements for improper compensation payments made by TARP recipients before February 17, 2009,\ndetermining whether to approve compensation payments and structures\nrelating to certain employees of TARP recipients receiving \xe2\x80\x9cexceptional\nfinancial assistance,\xe2\x80\x9d and issuing advisory opinions. See supra pp. 222\xe2\x80\x93\n231\n\n\x0c34 Op. O.L.C. 219 (2010)\n\n226 & note 4. Like the independent counsel in Morrison, the Special\nMaster thus lacks both \xe2\x80\x9cauthority to formulate policy for the Government\nor the Executive Branch\xe2\x80\x9d and significant administrative duties. 487 U.S.\nat 671\xe2\x80\x9372. 8 While the Special Master is entrusted with authority to\ninterpret section 111 of the EESA, the Interim Rule, and related guidance, the Special Master is authorized to do so only in applying those\nprovisions to the compensation practices of particular TARP recipients\nand certain of their employees. The Special Master\xe2\x80\x99s jurisdiction is limited to TARP recipients\xe2\x80\x99 executive compensation and corporate governance. See id. And the Special Master\xe2\x80\x99s tenure is limited to the duration of\nthe Secretary\xe2\x80\x99s authority under section 111 of EESA, namely \xe2\x80\x9cthe period\nin which any obligation arising from financial assistance provided under\nthe TARP remains outstanding.\xe2\x80\x9d 12 U.S.C. \xc2\xa7 5221(b)(1). The Special\nMaster, then, bears each of the marks of inferior officer status attributed\nto the independent counsel in Morrison.\nIf one looks not to the Morrison factors, but instead to the Edmond\nconsiderations of whether the Special Master is removable by an officer\nother than the President and whether the Special Master\xe2\x80\x99s work is subject\nto \xe2\x80\x9csome level\xe2\x80\x9d of \xe2\x80\x9cdirect[ion] and supervis[ion]\xe2\x80\x9d by an official appointed by the President, with the advice and consent of the Senate\xe2\x80\x94here, the\nSecretary of the Treasury\xe2\x80\x94again we think it clear that the Special Master\nis not a principal officer. 520 U.S. at 663.\nFirst, the Special Master is removable by the Treasury Secretary at will.\nThe Special Master serves \xe2\x80\x9cat the pleasure of the Secretary, and may be\nremoved by the Secretary without notice, without cause, and prior to the\nnaming of any successor Special Master.\xe2\x80\x9d 31 C.F.R. \xc2\xa7 30.16(a). As the\nSupreme Court has remarked more than once, \xe2\x80\x9c[t]he power to remove\n\n8 Under the Interim Rule\xe2\x80\x99s residual clause, the Special Master may also be given those\n\xe2\x80\x9cduties and powers related to the application of compensation [and corporate governance]\nissues arising in the administration of [the] EESA or TARP as the Secretary or the\nSecretary\xe2\x80\x99s designate may delegate to the Special Master.\xe2\x80\x9d Id. \xc2\xa7 30.16(a)(5). But while\nthe outer limit of those potential duties\xe2\x80\x94none of which has been granted\xe2\x80\x94is not precisely defined, the clause by its terms encompasses only the \xe2\x80\x9capplication\xe2\x80\x9d of compensation\nissues. Id. Accordingly, we do not believe that the clause contemplates the Secretary\xe2\x80\x99s\ndelegation to the Special Master of authorities under section 111 that might be characterized as more closely resembling policymaking, such as the establishment of executive\ncompensation and corporate governance standards. Cf. 12 U.S.C. \xc2\xa7 5221(b)(2).\n\n232\n\n\x0cSpecial Master for Troubled Asset Relief Program Executive Compensation\n\nofficers . . . is a powerful tool for control.\xe2\x80\x9d Edmond, 520 U.S. at 664\n(citing Bowsher v. Synar, 478 U.S. 714, 727 (1986) and Myers v. United\nStates, 272 U.S. 52 (1927)); see Free Enterprise Fund, 130 S. Ct. at 3162\n(\xe2\x80\x9c\xe2\x80\x98[t]he power to remove officers\xe2\x80\x99 at will and without cause \xe2\x80\x98is a powerful\ntool for control\xe2\x80\x99 of an inferior\xe2\x80\x9d (quoting Edmond)).\nSecond, the Treasury Department has reasonably construed the Interim\nRule as not precluding the Treasury Secretary from reviewing and revising the Special Master\xe2\x80\x99s determinations should the Secretary choose to\nexercise that authority.\nWhether the Interim Rule permits the Special Master\xe2\x80\x99s determinations\nto be reviewed by the Treasury Secretary is a point of contention between\nthe SIGTARP and the Treasury Department. The SIGTARP argues that\nthe Interim Rule insulates the Special Master\xe2\x80\x99s determinations from\nsecretarial review. He notes that the Interim Rule \xe2\x80\x9cdoes not expressly\nauthorize any internal approval or review of the Special Master\xe2\x80\x99s actions.\xe2\x80\x9d\nSIGTARP Letter at 8. Instead, by making the \xe2\x80\x9cfinal determinations\xe2\x80\x9d of\nthe Special Master \xe2\x80\x9cfinal and binding\xe2\x80\x9d and \xe2\x80\x9ctreated as the determination\nof the Treasury,\xe2\x80\x9d the SIGTARP contends, the Interim Rule precludes\nfurther review. Id. The Treasury Department, by contrast, takes the view\nthat the Special Master\xe2\x80\x99s \xe2\x80\x9cdecisions remain subject to further review\nwithin the Treasury.\xe2\x80\x9d 9\nOur approach to this question is informed by the familiar principle that\nthe Secretary\xe2\x80\x99s interpretation of his own regulations is entitled to deference \xe2\x80\x9cunless plainly erroneous or inconsistent with the regulation.\xe2\x80\x9d Auer\nv. Robbins, 519 U.S. 452, 461 (1997) (quoting Robertson v. Methow\nValley Citizens Council, 490 U.S. 332, 359 (1989), in turn quoting Bowles\nv. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945)). We think the\nTreasury Department\xe2\x80\x99s interpretation of the Interim Rule readily meets\nthat standard.\nLetter for Bryan Saddler, Chief Counsel, SIGTARP, from Timothy G. Massad, Chief\nCounsel, Office of Financial Stability, at 2 (Mar. 26, 2010); see Letter for Bryan Saddler,\nChief Counsel, Special Inspector General for the Troubled Asset Relief Program, Department of the Treasury, from Timothy G. Massad, Chief Counsel, Office of Financial\nStability, at 1 (July 29, 2010) (\xe2\x80\x9cthe decisions of the Special Master are subject to review\n(i.e., can be reviewed) by other officials within Treasury\xe2\x80\x9d). The Treasury Department\nGeneral Counsel\xe2\x80\x99s Office has confirmed for us that these statements reflect the view of\nthe Secretary of the Treasury.\n9\n\n233\n\n\x0c34 Op. O.L.C. 219 (2010)\n\nThe Interim Rule\xe2\x80\x99s lack of an express authorization for secretarial review of the Special Master\xe2\x80\x99s determination does not imply preclusion of\nsuch review. On the contrary, by statute the Secretary is \xe2\x80\x9cthe head of the\nDepartment,\xe2\x80\x9d 31 U.S.C. \xc2\xa7 301(b), and is vested with the \xe2\x80\x9c[d]uties and\npowers of the officers and employees of the Department,\xe2\x80\x9d id. \xc2\xa7 321(c). In\nour view, these statutes create a strong presumption that officials within\nthe Department are subject to the Secretary\xe2\x80\x99s supervision, including the\nauthority to review and reverse their decisions. This default rule may be\novercome, we have suggested, when there is \xe2\x80\x9cspecific and explicit reservation of \xe2\x80\x98final decisionmaking power\xe2\x80\x99 in a subordinate official,\xe2\x80\x9d in the\nsense of a preclusion of the presumptive reviewing authority possessed by\nthe department head. Memorandum for the Deputy Attorney General from\nLeon Ulman, Deputy Assistant Attorney General, Office of Legal Counsel, Re: Authority of the Attorney General Over the National Institute of\nJustice and the Bureau of Justice Statistics at 2 (Oct. 14, 1980) (\xe2\x80\x9cNIJ/BJS\nMemo\xe2\x80\x9d) (emphasis added); see also Under Secretary of Treasury for\nEnforcement, 26 Op. O.L.C. 230, 232\xe2\x80\x9333 (2002) (applying similar principle to Treasury Department). But we think it reasonable to conclude that\nthe Interim Rule lacks a clear enough preclusion of secretarial review to\novercome the presumption of secretarial supervisory authority.\nTo be sure, the Interim Rule characterizes the Special Master\xe2\x80\x99s final\ndeterminations as \xe2\x80\x9cfinal and binding\xe2\x80\x9d and directs that they be \xe2\x80\x9ctreated as\nthe determination of the Treasury.\xe2\x80\x9d 31 C.F.R. \xc2\xa7 30.16(c)(2). But those\nphrases by themselves do not necessarily, or even most naturally, amount\nto the sort of specific and explicit reservation of decision-making power\nin the Special Master that would insulate the Special Master\xe2\x80\x99s final\ndeterminations from secretarial review. Indeed, on at least two occasions\nwe have concluded that similar phrases were inadequate to demonstrate\nan intent to insulate subordinate officials\xe2\x80\x99 decisions from review by the\nhead of a Department. See Memorandum for Alan C. Raul, General\nCounsel, Department of Agriculture, from Doug R. Cox, Deputy Assistant Attorney General, Re: Secretary of Agriculture Review of ALJ Decisions (Feb. 20, 1991) (statute providing that subordinate officials\xe2\x80\x99 decisions \xe2\x80\x9cshall be final\xe2\x80\x9d and \xe2\x80\x9cshall take effect\xe2\x80\x9d thirty days after notice of\ntheir delivery did not prohibit issuance of regulations providing for\nsecretarial review); Secretary of Education Review of Administrative Law\nJudge Decisions, 15 Op. O.L.C. 8, 10\xe2\x80\x9313 (1991) (\xe2\x80\x9cSecretary of Educa234\n\n\x0cSpecial Master for Troubled Asset Relief Program Executive Compensation\n\ntion Review\xe2\x80\x9d) (statute providing that an administrative law judge\xe2\x80\x99s decision \xe2\x80\x9cshall be considered to be a final agency action\xe2\x80\x9d did not preclude\nfurther agency review). As we explained in the earlier of those opinions,\nwhen a statute (or regulation) refers to a decision as \xe2\x80\x9cfinal agency action\xe2\x80\x9d\nit is often \xe2\x80\x9cunderstood to mean that action which is necessary and sufficient for judicial review\xe2\x80\x9d under the Administrative Procedure Act even\nthough the decision may be \xe2\x80\x9csubject to reconsideration or appeal to a\nhigher authority within the agency.\xe2\x80\x9d Id. at 10 \xe2\x80\x9311; cf. Darby v. Cisneros,\n509 U.S. 137, 144\xe2\x80\x9347 (1993) (explaining that agency decisions may be\nfinal for purposes of judicial review even though additional, optional\nlevels of administrative review may be available). As we made clear in\nthe later of those prior opinions, we have concluded that it was reasonable to attach the same interpretation to a statute (or regulation) that\ncharacterizes an official\xe2\x80\x99s decision as \xe2\x80\x9cfinal.\xe2\x80\x9d Secretary of Agriculture\nReview, 15 Op. O.L.C. at 1\xe2\x80\x932. 10\n10 The SIGTARP contends that our opinion in Secretary of Education Review of ALJ\nDecisions is \xe2\x80\x9clargely inapposite\xe2\x80\x9d because the statute at issue there and the Interim Rule\ndiffer in two material respects. SIGTARP Letter at 6. First, the SIGTARP points out that\nthe statute at issue in Secretary of Education Review used the phrase \xe2\x80\x9cshall be considered\nto be a final agency action,\xe2\x80\x9d whereas the Interim Rule provides that \xe2\x80\x9cfinal determinations\xe2\x80\x9d\nof the Special Master \xe2\x80\x9cshall be final and binding and treated as the determination of the\nTreasury.\xe2\x80\x9d SIGTARP Letter at 6\xe2\x80\x937. We do not think, however, that the absence of the\nverb \xe2\x80\x9cconsidered\xe2\x80\x9d is decisive (particularly given the Interim Rule\xe2\x80\x99s use of the similar verb\n\xe2\x80\x9ctreated\xe2\x80\x9d). Indeed, we have previously rejected such a distinction. Admittedly, in Secretary of Education Review, we determined that Congress\xe2\x80\x99s use of \xe2\x80\x9cshall be considered\xe2\x80\x9d\ninstead of the more unequivocal \xe2\x80\x9cshall be\xe2\x80\x9d made it easier to conclude that Congress did\nnot intend to preclude further agency review. 15 Op. O.L.C. at 10. \xe2\x80\x9c[L]anguage that the\nALJ\xe2\x80\x99s decision \xe2\x80\x98shall be the final agency action\xe2\x80\x99,\xe2\x80\x9d we explained, \xe2\x80\x9cwould, at a minimum,\npresent a question as to whether Congress intended for the ALJ decision to be final in the\nsense that no further agency review is available.\xe2\x80\x9d Id. at 10 n.3. Nevertheless, we concluded that it was \xe2\x80\x9cunlikely that we would construe even this language to express an intent to\nforeclose secretarial review, absent affirmative evidence that Congress so intended.\xe2\x80\x9d Id.\nA month later we made good on that prediction by finding that a statute using the phrase\n\xe2\x80\x9cshall be final\xe2\x80\x9d\xe2\x80\x94without the \xe2\x80\x9cconsidered\xe2\x80\x9d phrasing\xe2\x80\x94also did not preclude secretarial\nreview. Secretary of Agriculture Review at 1\xe2\x80\x932. Second, the SIGTARP emphasizes that\nthe statute at issue in Secretary of Education Review used the phrase \xe2\x80\x9cfinal agency\naction,\xe2\x80\x9d a term borrowed almost directly from the Administrative Procedure Act, see\n5 U.S.C. \xc2\xa7 704 (\xe2\x80\x9cfinal agency action for which there is no other adequate remedy in a\ncourt [is] subject to judicial review\xe2\x80\x9d), while the Interim Rule uses \xe2\x80\x9cfinal determination\xe2\x80\x9d\nand \xe2\x80\x9cfinal and binding.\xe2\x80\x9d See SIGTARP Letter at 7. Again, we hardly think that difference\nis decisive, as our memorandum on Secretary of Agriculture Review, which addressed a\n\n235\n\n\x0c34 Op. O.L.C. 219 (2010)\n\nSimilarly, the Interim Rule\xe2\x80\x99s characterization of the Special Master\xe2\x80\x99s\nfinal determinations as \xe2\x80\x9cfinal and binding\xe2\x80\x9d may reasonably be understood\nas intended not to insulate the Special Master\xe2\x80\x99s decisions from secretarial\nreview, but instead to make clear when the Special Master\xe2\x80\x99s decisions\ntake effect and thus become ripe for judicial review. This understanding\ndraws support from the Interim Rule\xe2\x80\x99s distinction between \xe2\x80\x9cinitial determinations\xe2\x80\x9d and \xe2\x80\x9cfinal determinations.\xe2\x80\x9d 31 C.F.R. \xc2\xa7 30.16(c)(1). After the\nSpecial Master renders an \xe2\x80\x9cinitial determination,\xe2\x80\x9d the TARP recipient has\n30 days to request reconsideration, and the Special Master must provide a\n\xe2\x80\x9cfinal determination\xe2\x80\x9d in writing within 30 days thereafter, setting forth\nthe facts and analysis that formed the basis for the determination. Id. If\nthe TARP recipient does not request reconsideration within 30 days, the\ninitial determination \xe2\x80\x9cshall be treated as a final determination.\xe2\x80\x9d Id. Initial\ndeterminations trigger a deadline for a reconsideration request; final\ndeterminations impose an obligation to abide by the Special Master\xe2\x80\x99s\ndirectives and thus signal an entitlement to seek judicial review. Given\nthese other legal effects, we do not see any reason to conclude that the\nterms \xe2\x80\x9cfinal and binding\xe2\x80\x9d in the Interim Rule must be read to have the\nadditional effect of insulating the Special Master\xe2\x80\x99s decisions from further\nreview by the Secretary.\nA comparison of the Interim Rule with a regulation the Supreme Court\nhas found to impose a limitation on review by the head of a department\nunderscores the point that the Treasury Department\xe2\x80\x99s understanding of\nthe Interim Rule as not involving such elimination of secretarial review is\nreasonable. In United States v. Nixon, 418 U.S. 683 (1974), the Court\nfound that a regulation delegating authority in certain matters to a Special\nProsecutor and providing that \xe2\x80\x9c[t]he Attorney General will not countermand or interfere with the Special Prosecutor\xe2\x80\x99s decisions or actions\xe2\x80\x9d\nshielded the Special Prosecutor\xe2\x80\x99s decisions from revision by the Attorney\nGeneral. Id. at 694 n.8. That language is much more direct and specific\nthan the language in the Interim Rule. It constitutes the sort of \xe2\x80\x9cspecific\nand explicit reservation of \xe2\x80\x98final decisionmaking power\xe2\x80\x99\xe2\x80\x9d that we have\nindicated would be necessary to shield a subordinate official\xe2\x80\x99s decisions\nfrom review by a Department head.\nstatute characterizing officials\xe2\x80\x99 decisions as \xe2\x80\x9cfinal\xe2\x80\x9d (rather than as \xe2\x80\x9cfinal agency action\xe2\x80\x9d),\nindicates.\n\n236\n\n\x0cSpecial Master for Troubled Asset Relief Program Executive Compensation\n\nFor all these reasons, we think the Treasury Department\xe2\x80\x99s interpretation\nof the Interim Rule as not precluding secretarial review of the Special\nMaster\xe2\x80\x99s determinations is not plainly erroneous or inconsistent with the\nInterim Rule. 11\nA third consideration, not necessary to our analysis, may offer some\nfurther support for the conclusion that the Special Master is not a principal officer. The Secretary has established the specific functions of the\nSpecial Master by regulation and thus may alter the Special Master\xe2\x80\x99s\npowers, or even abolish the position, by regulation. The degree of incremental control this regulatory power over the Special Master affords the\nSecretary is not clear, given both that (i) were the Secretary to eliminate\nor modify the position of Special Master, he would need to do so by\nregulation, and that revising regulation would have to conform to statutes\n11 We do not mean to suggest that use of the term \xe2\x80\x9cfinal,\xe2\x80\x9d when considered in context\nand in conjunction with other considerations, may never lead to the conclusion that a\nstatute or regulation was intended to insulate a subordinate official\xe2\x80\x99s decisions from\nreview by the head of a Department. In at least one instance, for example, we have\nadvised that an explicit statutory delegation of \xe2\x80\x9cfinal authority over all grants, cooperative\nagreements, and contracts\xe2\x80\x9d to the \xe2\x80\x9cDirectors\xe2\x80\x9d of certain entities established by statute\nwithin the Department of Justice precluded the Attorney General from overturning the\nDirectors\xe2\x80\x99 decisions. NIJ/BJS Memo at 2. But our reasoning in reaching that conclusion\nonly confirms the reasonableness of interpreting the Interim Rule as not precluding\nsecretarial review.\nFirst, the statute at issue in that earlier memorandum did not characterize the subordinate officials\xe2\x80\x99 individual decisions as \xe2\x80\x9cfinal,\xe2\x80\x9d let alone contrast such \xe2\x80\x9cfinal determinations\xe2\x80\x9d with \xe2\x80\x9cinitial determinations,\xe2\x80\x9d as the Interim Rule does. Rather, that statute endowed those officials with \xe2\x80\x9cfinal authority\xe2\x80\x9d over several classes of decisions. Id. at 1\n(emphasis added). The latter wording is not easily understood as simply identifying\ncertain decisions as ready for judicial review; instead it is much more readily understood\nas granting certain officials the last word in the Department. Second, as we noted, the\nlegislative history of the statute at issue in that memorandum supported the conclusion\nthat Congress intended the Directors created by the statute to be protected from reversal\nby the Attorney General. See id. Third, the Directors, unlike the Special Master, were\nappointed by the President, with the advice and consent of the Senate. Id. That eliminated any concern rooted in the Appointments Clause that might have counseled against\nfinding that the Directors\xe2\x80\x99 decisions were shielded from review by the Attorney General.\nHere, such constitutional avoidance concerns would, if anything, support the reasonableness of reading the Interim Rule as not precluding secretarial review of the Special\nMaster\xe2\x80\x99s decisions. See generally Application of 28 U.S.C. \xc2\xa7 458 to Presidential Appointments of Federal Judges, 19 Op. O.L.C. 350, 352 (1995) (describing avoidance\ncanon and noting its use in Executive Branch legal interpretation).\n\n237\n\n\x0c34 Op. O.L.C. 219 (2010)\n\nplacing procedural limits on the Secretary\xe2\x80\x99s rulemaking authority and\nthat (ii) the Special Master is already subject to removal by the Secretary\nwithout cause. 12 But this power may represent some small additional\nlever of \xe2\x80\x9cdirect[ion] and supervis[ion].\xe2\x80\x9d Edmond, 520 U.S. at 663.\nIV.\nAccordingly, whether we apply the Morrison or the Edmond analysis,\nthe Special Master is not a principal officer and therefore need not be\nappointed by the President, by and with the advice and consent of the\nSenate.\nJONATHAN G. CEDARBAUM\nActing Assistant Attorney General\nOffice of Legal Counsel\n\nCompare Morrison, 487 U.S. at 721 (Scalia, J., dissenting) (characterizing power of\n\xe2\x80\x9camending or revoking [an authorizing] regulation\xe2\x80\x9d as a means of at-will removal); and In\nre Sealed Case, 829 F.2d 50, 56\xe2\x80\x9357 (D.C. Cir. 1987) (Attorney General\xe2\x80\x99s ability to\nabolish position of Iran-Contra Independent Counsel by rescinding authorizing regulation\nsupports conclusion that Independent Counsel is not a principal officer), with Free\nEnterprise Fund, 130 S. Ct at 3158\xe2\x80\x9359 (\xe2\x80\x9c[A]ltering the . . . powers of an agency as a\nwhole is a problematic way to control an inferior officer. The Commission cannot wield a\nfree hand to supervise individual members if it must destroy the Board in order to fix it.\xe2\x80\x9d).\n12\n\n238\n\n\x0c"


b'Appointments to the Commission on the\nBicentennial of the Constitution\nPresidential appointm ent o f the C hief Justice o f the United States to the Commission on the\nBicentennial o f the Constitution is consistent with the Appointments Clause, art. II, \xc2\xa7 2, cl. 2,\nand, as applied to the unique circum stances of this Com mission, with general separation of\npow ers principles.\nIn addition, participation o f the Chief Justice on the Com mission would appear to be permissible\nunder the Code o f Judicial Conduct.\nM em bers o f C ongress may participate on the Com m ission without violating the Appointments\nClause or the Incompatibility C lause, art. I, \xc2\xa7 6, cl. 2, if the Commission creates an executive\ncom m ittee to discharge the purely executive functions of the Commission, or if the noncongressional m em bers determine that the Com mission will not act unless a full majority,\nincluding the congressional members, approve.\n\nAugust 31, 1984\nM e m o r a n d u m O p i n i o n f o r t h e C o u n s e l t o t h e P r e s id e n t\n\nSome time ago we discussed whether there was some practical means for\nresolving the legal disputes that have arisen concerning the Commission on the\nBicentennial of the Constitution. You suggested that we consider the matter\nand put any thoughts we might have in a memorandum to you. This follows\nthrough on that discussion.\nI. Introduction\nOn September 29, 1983, the President signed S. 118, a bill that established\nthe Commission on the Bicentennial of the Constitution (Commission). The\nstatute authorized the Commission to plan and coordinate activities to celebrate\nthe bicentennial of the Constitution and specifically included within the\nCommission\xe2\x80\x99s powers, in addition to the generally advisory functions, certain\nclearly executive functions, such as carrying out a limited number of com\xc2\xad\nmemorative events and projects and the adoption of binding regulations gov\xc2\xad\nerning use of the Commission\xe2\x80\x99s logo. The statute vests the appointment of most\nof the members of the Commission in the President, but it also specifically\ndesignates as members, the Chief Justice of the Supreme Court, the President\npro tempore of the Senate, and the Speaker of the House of Representatives.\nBecause the members of the Commission are authorized to perform executive\nduties that may be performed only by Officers of the United States, this Office\n200\n\n\x0cconcluded that the statutory designations were improper under the Incompat\xc2\xad\nibility and Appointments Clauses of the Constitution. This position is one that\nhas been taken by President Reagan and many of his predecessors on innumer\xc2\xad\nable occasions under similar circumstances. Moreover, in an analogous con\xc2\xad\ntext, the Senate Judiciary Committee recently expressed its appreciation for,\nand agreement with, our Appointments Clause objections to legislation that\npurports to vest in Congress the power to designate persons to serve on a\ncommission that is given Executive functions:\nThe Appointments Clause requires that individuals with execu\xc2\xad\ntive responsibilities must be appointed by the President with the\nadvice and consent of the Senate, or if authorized by Congress,\nby the President alone, the courts or the heads of departments.\nBuckley v. Valeo , 424 U.S. 1, 124\xe2\x80\x9441 (1976). Inasmuch as the\nCommittee intended the Commission to initiate and conduct\ncommemorative activities, and to avoid any constitutional ques\xc2\xad\ntions, the Committee has amended S. 500 to give the President\nfull authority over all appointments. This will ensure that the\nCommissioners will be appointed in accordance with the Con\xc2\xad\nstitution and remove any doubt about the Commission\xe2\x80\x99s ability\nto plan, sponsor, and conduct such activities as it deems appropriate.\nS. Rep. No. 194, 98th Cong., 1st Sess. 2 (1983) (referring to the Commission\ncharged with planning, encouraging, coordinating, and conducting the Christo\xc2\xad\npher Columbus Quincentenary Jubilee).\nIn a statement he issued at the time he signed S. 118, the President articulated\nthe constitutional conclusions that had been raised by this Office:\nI welcome the participation of the Chief Justice, the President\nPro Tempore of the Senate, and the Speaker of the House of\nRepresentatives in the activities of the Commission. However,\nbecause of the constitutional impediments contained in the Doc\xc2\xad\ntrine of the Separation of Powers, I understand that they will be\nable to participate only in ceremonial or advisory functions of\nthe Commission, and not in matters involving the administration\nof the Act. Also, in view of the Incompatibility Clause of the\nConstitution, any Member of Congress appointed by me pursu\xc2\xad\nant to Section 4(a)(1) of this Act may serve only in a ceremonial\nor advisory capacity.\nI also understand that this Act does not purport to restrict my\nultimate responsibility as President for the selection and ap\xc2\xad\npointment of Members of the Commission, under Article 2,\nSection 2, Clause 2, of the Constitution.\nSenator Hatch apparently disagreed with the legal conclusions contained in the\nPresident\xe2\x80\x99s signing statement and asked the Congressional Research Service\n201\n\n\x0c(CRS) to review the President\xe2\x80\x99s objections to the structure of the Commission.\nThe CRS memorandum supported, to a certain extent, the viewpoint of Senator\nHatch. Senator Hatch forwarded that memorandum both to Edwin Meese, III,\nCounselor to the President, and to the Attorney General. This Office prepared a\nresponse to the CRS memorandum (which we have previously sent to you) in\nwhich we reviewed the issues raised by the CRS and concluded that our\noriginal opinion with respect to the Commission was correct and that the CRS\nmemorandum was in error.\nThe establishment of the Commission has remained a controversial issue,\nand the President has not yet appointed the members of the Commission. A\nconflict continues to persist between what we believe to be the clear require\xc2\xad\nments of the Constitution and the understandable desires of certain members of\nthe Legislative and Judicial Branches to participate in the commemoration of\nthe document that created all three branches of government.\nThis memorandum suggests some potential practical means for resolving the\nconflict. First, the memorandum considers the legality of the President appoint\xc2\xad\ning the Chief Justice as a member of the Commission. If such an appointment\nwere permissible, the Appointments Clause problems arising from Congress\xe2\x80\x99\nattempt to make the appointment might be avoided, and the Chief Justice might\',\nthen be eligible to participate in all aspects of the Commission\xe2\x80\x99s activities,\nincluding those of an executive nature. Second, we make some suggestions\nconcerning how the Commission might be structured in order to avoid the\nIncompatibility and Appointments Clause problems with respect to potential\ncongressional members of the Commission.\nII. Presidential Appointment of the Cihiieff Justice to tlhe Cbmmissioini\nA. Constitutional Considerations\n\n1. The Appointments Clause\nIt seems apparent that there would be no Appointments Clause problems if\nthe President himself appointed the Chief Justice as one of the regular members\nof the Commission. Even if, as we have concluded, members of the Commis\xc2\xad\nsion are Officers of the United States who must be appointed pursuant to the\nAppointments Clause, a direct Presidential appointment would satisfy the\nrequirements of that Clause. The Appointments Clause contains no direct\nprohibitions against the appointment of any particular individuals to serve as\nOfficers of the United States; it simply requires a certain procedure for appoint\xc2\xad\ning such Officers. See U.S. Const, art. II, \xc2\xa7 2, cl. 2. Presidential appointment of\nthe Chief Justice would satisfy this procedure.1\n1 T he Incom patibility C lause would p resen t no problem w ith respect to Presidential appointm ent o f the\nC h ie f Justice. By its express terms, the Incom patibility Clause applies only to M embers o f C ongress. See U.S.\nC onst, art. I, \xc2\xa7 6, cl. 2. T hus, under the p rin cip le that expressio unius est exctusio alterius , the absence o f any\nreference to the ju d iciary in the Incom patibility C lause suggests that there is no absolute constitutional bar to\nthe appointm ent o f ju d g es to positions th a t may be filled only by O fficers o f the U nited States.\n\n202\n\n\x0c2. The Separation of Powers\nAlthough the Appointments Clause would not bar appointment of the Chief\nJustice in this instance, the more general principles of the separation of powers\nmay have more relevance to this issue. In this context, the basic separation of\npowers issue is whether appointment of the Chief Justice to an Executive\nBranch position would disrupt the separation of functions that the Framers\nintended to build into the structure of the federal government. The separation of\npowers doctrine generally requires a careful balancing of the potential impact\nof a given action on the constitutional powers of each branch. See, e.g., Nixon\nv. Administrator o f General Services, 433 U.S. 425 (1977).\nWith respect to the issue of performance of executive functions by a judge,\nthe Supreme Court has made it clear that Congress may not require a court to\nperform nonjudicial functions. In H aybum \xe2\x80\x99s Case, 2 U.S. (2 Dali.) 409 (1792),\nthe Supreme Court appended to its decision an opinion of Chief Justice Jay,\nJustice Cushing, and a district judge sitting as a circuit court, in which they\nmade the following Findings in ruling that Congress could not assign nonjudicial\nduties to courts:\nThat by the Constitution of the United States, the government\nthereof is divided into three distinct and independent branches,\nand that it is the duty of each to abstain from, and to oppose,\nencroachments on either.\nThat neither the Legislative nor the Executive branches, can\nconstitutionally assign to the Judicial any duties, but such as are\nproperly judicial, and to be performed in a judicial manner.\n2 U.S. (2 Dali.) at 410 n.*. This decision has subsequently been recognized by\nthe Supreme Court as establishing the principle that courts could not be\nrequired to perform nonjudicial functions that would then be subject to review\nand revision by the Executive or Legislative Branches. See Muskrat v. United\nStates, 219 U.S. 346, 352 (1911); United States v. Ferreira, 54 U.S. 40,50-51\n(1851).\nThis principle is not implicated in this matter, however, because the Chief\nJustice would not be required to perform nonjudicial functions, but rather\nwould voluntarily accept an appointment to a nonjudicial office. Moreover, the\nChief Justice would not be performing executive functions in his role as a\njudge, but rather would be holding two separate appointments, one of which\nwas judicial, the other, executive. Thus, the issue is whether the Chief Justice\nmay voluntarily accept this additional appointment.\nAlthough, as far as we know, no court has ever ruled on this question, the\nAttorney General has on several occasions issued opinions upholding the right\nof the President to appoint members of the judicial branch to other government\npositions. See 40 Op. Att\xe2\x80\x99y Gen. 423 (1945); 22 Op. Att\xe2\x80\x99y Gen. 184 (1898). In\nthe former instance, Attorney General Clark concluded that a judge of the\n203\n\n\x0cUnited States Court of Appeals could continue in that position while serving at\nthe request of the President, and without compensation, as an alternate judicial\nmember of the International Military Tribunal established for the trial of\npersons charged with war crimes. Attorney General Clark concluded:\nThere is no express prohibition against Federal judges perform\xc2\xad\ning other services of a general character for the Federal Govern\xc2\xad\nment. On the contrary, it is a well established practice for the\nPresident to secure the services of Federal judges in connection\nwith various matters. The practice arose along ago. Chief Justice\nJay served as special envoy to England at the request of the\nPresident. . . and Chief Justice Fuller twice acted as an arbitra\xc2\xad\ntor of international disputes . . . .\n40 Op. Att\xe2\x80\x99y Gen. at 424. Although none of the examples cited and approved\nby the Attorney General involved the performance by judges of executive\nduties that may be performed only by an Officer of the United States, there are\nexamples of such appointments, particularly during World War II when, for\nexample, Judge John C. Collet served as Director of Economic Stabilization.\nSee 32 A.B.A. J. 682 (1946). In addition, judges have frequently undertaken\ndiplomatic missions, and during this Administration, Chief Judge Irving R. Kaufman\nof the United States Court of Appeals for the Second Circuit was appointed to serve\nas Chairman of the President\xe2\x80\x99s Commission on Organized Crime.\nSuch actions have not, however, gone uncriticized. In 1947, the Senate\nJudiciary Committee issued a report that questioned the propriety of appointing\nmembers of the judiciary to nonjudicial posts. S. Exec. Rep. No. 7, 80th Cong.,\n1st Sess. (1947) (reprinted in 33 A.B.A. J. 792 (1947)). The Committee raised\nthe following general objection:\nIf it becomes common to expect Executive appointments, judges\nmay slip into that frame of mind which seeks promotional\nopportunity at the hand of the Executive and the quality of the\njudicial character may be impaired. This could take on an ugly\npolitical tinge if judges came to see in the Executive appoint\xc2\xad\nment a chance to advance themselves politically or a chance to\naid the Chief Executive politically.\n33 A.B.A. J. at 793. The Committee went on to list a series of specific problems\nthat might result from appointment of judges to executive positions:\n1. Reward may be conferred or expected in the form of\nelevation to a higher judicial post.\n2. The judicial and Executive functions may be improperly merged.\n3. The absence of the judge from his regular duties increases\nthe workload of the other judges of the Court, if any, and may\nresult in an impairment of judicial efficiency in the disposition\nof cases.\n204\n\n\x0c4. Nonjudicial activities may produce dissension or criticism\nand may be destructive of the prestige and respect of the federal\njudiciary.\n5. A judge, upon resumption of his regular duties, may be\ncalled upon to justify or defend his activity under an Executive\ncommission.\nId. at 795. We believe that these are appropriate factors to be evaluated in\n\nassessing the impact of an appointment on the constitutionally prescribed\nseparation of powers.\nIn this particular case, consideration of these factors supports the conclusion\nthat appointment of the Chief Justice (or other members of the judiciary) to the\nCommission on the Bicentennial of the Constitution would not be inconsistent\nwith separation of powers principles. First, given the position of the Chief\nJustice and the nature of this particular Commission, the appointment would\nnot generally be regarded as a reward or, conversely, further reward would not\nbe expected as a result of service on the Commission. Second, because the\nexecutive functions of the Commission are relatively insubstantial, there seems\nlittle danger of improperly merging the judicial and executive functions. Third,\nthe work of the Commission is unlikely to draw the Chief Justice\xe2\x80\x99s attention\naway from the duties of his work on the Court to any material extent. Fourth,\nthe relatively noncontroversial responsibilities of the Commission are unlikely\nto create dissension or criticism that would affect the prestige of the Court or\nthe federal judiciary. Fifth, the Commission\xe2\x80\x99s activities are unlikely to result in\nactions that would later be subject to review by the Court. Finally, a Commis\xc2\xad\nsion to plan the celebration of the two- hundredth anniversary of the Constitu\xc2\xad\ntion is an entity that seems peculiarly suited to some participation by represen\xc2\xad\ntatives of all three branches of government and is less likely than other types of\nentities to be considered a broad precedent.\nAn analysis of these factors therefore suggests that the appointment would\nnot be inconsistent with the Constitution. Nevertheless, the general concerns\nthat underlie the constitutional issue are significant enough to raise serious\npolicy questions concerning the appropriateness of judicial appointments to\nexecutive positions in other circumstances. The considerations suggested by\nthe Senate report are legitimate; the appointment of judges to Executive Branch\npositions is generally not a prudent policy. Thus, even though this particular\nappointment may be entirely appropriate, there is some risk that this appoint\xc2\xad\nment would be cited in some quarters as a precedent for future appointments\nwith respect to which the problems may be greater.\nB. Statutory Questions\n\nThe only statutory issue that might be raised by the appointment of a judge to\nan additional position in the federal government would involve the Dual\nCompensation Act, 5 U.S.C. \xc2\xa7 5533, which prohibits a person from receiving\n205\n\n\x0ccompensation for more than one position with the federal government. In this\ncase, however, because membership on the Commission involves no remunera\xc2\xad\ntion, no problem exists under this particular statute.\nC. The Code o f Judicial Conduct\nCanon 5(G) of the Code o f Judicial Conduct for United States Judges is also\nrelevant to the issue discussed in this memorandum. The Canon states:\nExtra-judicial Appointments. A judge should not accept ap\xc2\xad\n\npointment to a governmental committee, commission, or other\nposition that is concerned with issues of fact or policy on mat\xc2\xad\nters other than the improvement of the law, the legal system, or\nthe administration of justice, unless appointment of a judge is\nrequired by Act of Congress. A judge should not, in any event,\naccept such an appointment if his governmental duties would\ninterfere with the performance of his judicial duties or tend to\nundermine the public confidence in the integrity, impartiality, or\nindependence of the judiciary. A judge may represent his coun\xc2\xad\ntry, state, or locality on ceremonial occasions or in connection\nwith historical, educational, and cultural activities.\nThe Code was adopted by the Judicial Conference of the United States in 1973.\nIt is interpreted for the judiciary by the Advisory Committee on Judicial\nActivities. As we have stated before, in view of the existence of this Commit\xc2\xad\ntee, and in view of the autonomy of the judiciary in matters concerning the\npropriety of judicial conduct, this Office cannot issue authoritative pronounce\xc2\xad\nments concerning the applicability of the Code in the circumstances presented\nby this case. Nevertheless, we can offer our views with respect to what we\nperceive to be the apparent meaning of this provision.\nWe believe that participation of the Chief Justice on the Commission of the\nBicentennial of the Constitution would not be inconsistent with Canon 5(G).\nFirst, it seems clear that the Commission\xe2\x80\x99s activities, because they involve\ncelebration of, and education regarding, our fundamental legal charter, relate to\na certain extent to \xe2\x80\x9cthe legal system\xe2\x80\x9d and the \xe2\x80\x9cadministration of justice.\xe2\x80\x9d\nMoreover, participation on the Commission also seems to involve representa\xc2\xad\ntion of the country \xe2\x80\x9cin connection with historical, educational, and cultural\nactivities.\xe2\x80\x9d In addition, participation on the Commission is unlikely to impose\nsignificant time demands on the Chief Justice or to involve the Court in an\n\xe2\x80\x9cextra-judicial matter that may prove to be controversial,\xe2\x80\x9d which are the\nprincipal concerns underlying the Canon. See Commentary to Canon 5(G).\nFinally, full participation in the executive functions of the Commission would\npose no greater problems with respect to Canon 5(G) than would participation\nas an advisory member, which the President interpreted the statute to mandate.\nTherefore, we believe that the President\xe2\x80\x99s appointment of the Chief Justice to\nthe Commission would not pose a problem under Canon 5(G).\n206\n\n\x0cD. Conclusion\n\nIn sum, we believe that there are no legal obstacles to Presidential appoint\xc2\xad\nment of the Chief Justice to the Commission. Such an appointment would be\npermissible under the Constitution, current statutory law, and, at least as we\nread it, the Code of Judicial Conduct.\nIII. Practical Solutions to the Incompatibility Clause Problem\nWe have also explored the possibility of various structural arrangements\nwithin the Commission that might be designed to respect the Incompatibility\nClause requirements of the Constitution,2 but at the same time enable congres\xc2\xad\nsional members of the Commission to play a significant role in the Commission\xe2\x80\x99s\nwork. We have two general suggestions, both of which involve significant and\nmeaningful participation by congressional members, but in a technical advi\xc2\xad\nsory capacity.\nA. Establishment o f an Executive Committee to Handle Executive Duties\n\nThe Commission might wish to create an executive committee composed of\nall non-advisory members of the Commission that would be legally responsible\nfor discharging the purely executive functions of the Commission. These\nfunctions would include official approval of any binding regulations, signing\nlegal instruments, and the technical responsibility for implementation of the\ncommemorative events that the Commission is authorized to undertake itself.\nThe full Commission would conduct meetings and do all the other things\ncontemplated for the Commission, and the executive committee could finally\napprove all executive actions. This approach would separate the purely execu\xc2\xad\ntive functions from the advisory functions that the Commission will perform\nand would allow all members of the Commission to participate in nearly all of\nthe Commission\xe2\x80\x99s activities, including the formulation of programs that would\nbe technically approved and executed by non-congressional members.\nB. Establishment o f a Special Advisory Committee to the Commission\n\nThe Commission, without the congressional members voting, could decide\nthat it would not act unless a full majority of the Commission, including the\ncongressional members, approved. Technically the non-congressional mem\xc2\xad\nbers, i.e., those who were \xe2\x80\x9cofficers\xe2\x80\x9d of the United States, could also reverse a\nCommission decision reached in this way, but we suspect such a contingency\nwould be extremely unlikely.\n2 A sim ilar problem is raised by the Ineligibility Clause, which provides in part that no \xe2\x80\x9cSenator or\nR epresentative shall, during the Tim e for which he w as elected, be appointed to any civil O ffice under the\nA uthority o f the U nited States, which shall have been created, o r the Em oluments w hereof shall have been\nincreased during such tim e." U.S. Const, art. I, \xc2\xa7 6, cl. 2.\n\n207\n\n\x0cBoth of these concepts are quite general and the details would have to be\nmore fully developed. There may be problems that we have not anticipated, but\nwe think that both of the above proposals could be implemented in such a way\nso as to resolve the technical legal problems with respect to establishment of\nthe Commission. In fact, some combination of the alternatives could be consid\xc2\xad\nered which would accommodate the interests, enthusiasm, expertise, and sup\xc2\xad\nport from the congressional members without contravening the Incompatibility\nClause.\nT h eo d o re B. O lso n\n\nAssistant Attorney General\nOffice o f Legal Counsel\n\n208\n\n\x0c'