b'Sequestration of Public Company\nAccounting Oversight Board Funds\nThe operating funds of the Public Company Accounting Oversight Board are subject to\nsequestration under section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, because the Board\xe2\x80\x99s funds have consistently been included in the President\xe2\x80\x99s budget, were not exempted from sequestration by Congress,\nand qualify as \xe2\x80\x9cbudgetary resources\xe2\x80\x9d under the Act.\nSeptember 13, 2013\n\nMEMORANDUM OPINION FOR THE GENERAL COUNSEL\nPUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD\nIn March and April 2013, the President ordered the cancellation of\nbudgetary resources, known as \xe2\x80\x9csequestration,\xe2\x80\x9d after Congress failed to\nenact a bill achieving $1.2 trillion in deficit reduction. See Balanced\nBudget and Emergency Deficit Control Act of 1985, as amended\n(\xe2\x80\x9cBBEDCA\xe2\x80\x9d), 2 U.S.C. \xc2\xa7 901a (2012). Among the entities affected by\nthese sequestration orders was the Public Company Accounting Oversight\nBoard (\xe2\x80\x9cPCAOB\xe2\x80\x9d or \xe2\x80\x9cBoard\xe2\x80\x9d), which Congress created \xe2\x80\x9cto oversee the\naudit of public companies\xe2\x80\x9d after a series of high-profile auditing scandals.\n15 U.S.C. \xc2\xa7 7211(a) (2006 & Supp. V 2012); see Free Enter. Fund v. Pub.\nCo. Accounting Oversight Bd., 130 S. Ct. 3138, 3147 (2010). The Board\xe2\x80\x99s\nactivities are funded through annual accounting support fees it levies on\nthe companies it regulates, with the approval of the Securities and Exchange Commission. 15 U.S.C. \xc2\xa7 7219(d). The Board draws no funds\nfrom the United States Treasury, and by statute its receipts are not \xe2\x80\x9cpublic monies of the United States.\xe2\x80\x9d Id. \xc2\xa7 7219(c)(1). Since its inception,\nhowever, the Board has been included in the list of accounts in the President\xe2\x80\x99s budget, and on that basis the Office of Management and Budget\n(\xe2\x80\x9cOMB\xe2\x80\x9d) designated the Board\xe2\x80\x99s budget account as subject to the cancellations required by BBEDCA section 251A, codified at 2 U.S.C. \xc2\xa7 901a. 1\n1 See OMB Report to the Congress on the Joint Committee Sequestration for Fiscal\nYear 2013 at 67 (Mar. 1, 2013), http://www.whitehouse.gov/sites/default/files/omb/\nassets/legislative_reports/fy13ombjcsequestrationreport.pdf (last visited ca. Sept. 2013);\nOMB Sequestration Preview Report to the President and Congress for Fiscal Year 2014\nand OMB Report to the Congress on the Joint Committee Reductions for Fiscal Year\n2014 at 34 (Apr. 10, 2013, as corrected May 20, 2013), http://www.whitehouse.gov/\n\n63\n\n\x0c37 Op. O.L.C. 63 (2013)\n\nThe Board has asked us whether OMB was correct to deem the Board\xe2\x80\x99s\naccount subject to sequestration under BBEDCA section 251A. In the\nBoard\xe2\x80\x99s view, it should not have been included in the President\xe2\x80\x99s budget,\nand therefore the statutory sequestration provisions should not apply to it,\nbecause it is a private, non-governmental entity that does not use U.S.\nTreasury funds. 2 OMB, which submitted a memorandum containing its\nviews, 3 points out that BBEDCA subjects every account listed in the\nPresident\xe2\x80\x99s budget to sequestration except for those specifically exempted, and that Congress did not exempt the Board from sequestration. In any\nevent, OMB counters that the Board has properly been included in the\nPresident\xe2\x80\x99s budget based on longstanding budgetary principles.\nWe conclude that OMB properly designated the Board\xe2\x80\x99s funds as subject to sequestration under BBEDCA section 251A, because Congress was\naware that the list of accounts in the President\xe2\x80\x99s budget included the\nBoard; Congress chose to impose sequestration on all accounts listed in\nthe President\xe2\x80\x99s budget; and Congress decided not to include the Board\namong the dozens of accounts exempt from sequestration. We further\nconclude that the Board\xe2\x80\x99s account contains budgetary resources subject to\ncancellation under BBEDCA.\nI.\nThree different legal regimes are relevant background in understanding the Board\xe2\x80\x99s request for our opinion: (i) the provisions that prescribe\nsequestration, (ii) the organic statute that created the Board, and (iii) the\nprinciples governing the President\xe2\x80\x99s budget.\nsites/default/files/omb/assets/legislative_reports/fy14_preview_and_joint_committee_\nreductions_reports_05202013.pdf (last visited ca. Sept. 2013).\n2 See Memorandum for Virginia Seitz, Assistant Attorney General, Office of Legal\nCounsel, and Benjamin Mizer, Deputy Assistant Attorney General, Office of Legal\nCounsel, from J. Gordon Seymour, General Counsel, Public Company Accounting\nOversight Board, Re: Whether the Public Company Accounting Oversight Board Is\nSubject to Sequestration Under the Balanced Budget and Emergency Deficit Control Act\nof 1985, as Amended by the Budget Control Act of 2011 (Mar. 25, 2013) (\xe2\x80\x9cPCAOB\nMemorandum\xe2\x80\x9d).\n3 See Memorandum for Benjamin Mizer, Deputy Assistant Attorney General, Office\nof Legal Counsel, from Thomas S. Lue, Acting General Counsel, Office of Management and Budget, Re: Status of Public Company Accounting Oversight Board Under\nthe Balanced Budget and Emergency Deficit Control Act, as Amended (May 17, 2013)\n(\xe2\x80\x9cOMB Memorandum\xe2\x80\x9d).\n\n64\n\n\x0cSequestration of Public Company Accounting Oversight Board Funds\n\nA.\nIn the Budget Control Act of 2011, Pub. L. No. 112-25, 125 Stat. 240,\nCongress made various changes to BBEDCA, the most significant of\nwhich was to create a new sequestration trigger. This trigger, which\nbecame BBEDCA section 251A, required across-the-board cancellation\nof budgetary resources if a special joint committee failed to propose, and\nCongress failed to enact, legislation that reduced the budget deficit by\n$1.2 trillion by a statutory deadline. See 2 U.S.C. \xc2\xa7 901a. Because Congress did not enact such legislation, the President ordered sequestration\nof fiscal year 2013 budgetary resources on March 1, 2013. See Sequestration Order for Fiscal Year 2013 Pursuant to Section 251A of the Balanced Budget and Emergency Deficit Control Act, as Amended, 78 Fed.\nReg. 14,633 (Mar. 1, 2013). The President further ordered sequestration\nof fiscal year 2014 budgetary resources on April 10, 2013, as required by\nBBEDCA. See Sequestration Order for Fiscal Year 2014 Pursuant to\nSection 251A of the Balanced Budget and Emergency Deficit Control\nAct, as Amended, 78 Fed. Reg. 22,409 (Apr. 10, 2013).\nSequestration under BBEDCA section 251A requires \xe2\x80\x9cthe cancellation\nof budgetary resources provided by discretionary appropriations or direct\nspending law.\xe2\x80\x9d 2 U.S.C. \xc2\xa7 900(c)(2) (definition of \xe2\x80\x9csequestration\xe2\x80\x9d). The\nstatute defines various terms. \xe2\x80\x9cDiscretionary appropriations\xe2\x80\x9d are \xe2\x80\x9cbudgetary resources provided in appropriation Acts,\xe2\x80\x9d while \xe2\x80\x9cdirect spending\xe2\x80\x9d\nrefers to budget authority provided by other laws, including entitlement\nauthority. Id. \xc2\xa7 900(c)(7)\xe2\x80\x93(8). 4 \xe2\x80\x9cBudgetary resources\xe2\x80\x9d means \xe2\x80\x9cnew budget\nauthority, unobligated balances, direct spending authority, and obligation\nlimitations,\xe2\x80\x9d id. \xc2\xa7 900(c)(6), and \xe2\x80\x9cbudget authority\xe2\x80\x9d means \xe2\x80\x9cthe authority\nprovided by Federal law to incur financial obligations . . . including the\nauthority to obligate and expend the proceeds of offsetting receipts and\ncollections,\xe2\x80\x9d id. \xc2\xa7 622(2); see id. \xc2\xa7 900(c)(1) (incorporating definition of\n\xe2\x80\x9cbudget authority\xe2\x80\x9d in 2 U.S.C. \xc2\xa7 622(2)). Section 251A of BBEDCA\nprovides that sequestration reductions must be applied to each \xe2\x80\x9caccount\xe2\x80\x9d\nthat is not included in a list of exempt accounts in 2 U.S.C. \xc2\xa7 905 or\n\xe2\x80\x9cEntitlement authority\xe2\x80\x9d refers to programs \xe2\x80\x9cin which the Federal Government is\nlegally obligated to make payments or provide aid to any person who, or State or local\ngovernment that, meets the legal criteria for eligibility.\xe2\x80\x9d OMB Circular No. A-11, at\n20-5 (2013). Examples include Social Security, Medicare, Medicaid, and unemployment insurance. See id.\n4\n\n65\n\n\x0c37 Op. O.L.C. 63 (2013)\n\nsubject to a special sequestration rule set forth in 2 U.S.C. \xc2\xa7 906. See id.\n\xc2\xa7 901a(7)\xe2\x80\x93(8). 5 An \xe2\x80\x9caccount\xe2\x80\x9d is an item specified in an appropriations act\nor, when used to refer to items not provided for in appropriations acts\n(i.e., when referring to direct spending), \xe2\x80\x9can item for which there is a\ndesignated budget account identification code number in the President\xe2\x80\x99s\nbudget.\xe2\x80\x9d Id. \xc2\xa7 900(c)(11). The statute sets forth a process for OMB to use\nin determining the amount of funds that must be canceled in each nonexempt account. See id. \xc2\xa7 901a(2)\xe2\x80\x93(4), (7)\xe2\x80\x93(8).\nSection 905 lists several dozen budget accounts and activities exempt\nfrom sequestration. It identifies each exempt account by name and \xe2\x80\x9cthe\ndesignated budget account identification code number set forth in the\nBudget of the United States Government 2010\xe2\x80\x94Appendix, and an activity\nwithin an account is designated by the name of the activity and the identification code number of the account.\xe2\x80\x9d Id. \xc2\xa7 905( j). Congress revised the\nlist of exempt programs most recently in the Statutory Pay-As-You-Go\nAct of 2010, Pub. L. No. 111-139, 124 Stat. 8. The Board has never been\nlisted as exempt from sequestration.\nB.\nCongress established the Board in the Sarbanes-Oxley Act of 2002,\nPub. L. No. 107-204, 116 Stat. 745 (\xe2\x80\x9cSarbanes-Oxley\xe2\x80\x9d), to oversee\npublic company audits \xe2\x80\x9cin order to protect the interests of investors and\nfurther the public interest in the preparation of informative, accurate,\nand independent audit reports.\xe2\x80\x9d 15 U.S.C. \xc2\xa7 7211(a). Sarbanes-Oxley\ngave the Board significant authority to carry out that function. Public\naccounting firms are required to register with the Board before they\nmay conduct an audit of a public company. Id. \xc2\xa7 7212(a). The Board\npromulgates binding rules governing the conduct of these registered\npublic accounting firms. Id. \xc2\xa7 7213. It is also empowered to inspect\nthese firms for compliance with its rules and professional standards, id.\n\xc2\xa7 7214; to investigate reports of noncompliance, id. \xc2\xa7 7215(b); and to\ninitiate disciplinary proceedings and sanction companies found to have\nviolated its rules, id. \xc2\xa7 7215(c). Penalties may include fines of up to\n5 To the extent that a budget account contains funds that fall into more than one of\nthese four categories, OMB must apply the category with the highest percentage reduction\nto that account. See 2 U.S.C. \xc2\xa7 906(k)(2)\xe2\x80\x93(3).\n\n66\n\n\x0cSequestration of Public Company Accounting Oversight Board Funds\n\n$15,000,000 and temporary or permanent revocation of registration\nwith the Board. Id. The Board\xe2\x80\x99s sanctions determinations are, however,\nsubject to review by the Securities and Exchange Commission (\xe2\x80\x9cSEC\xe2\x80\x9d\nor \xe2\x80\x9cCommission\xe2\x80\x9d). Id. \xc2\xa7 7217(c). The Commission may also censure\nthe Board or relieve it of any of its authority if the SEC concludes that\ndoing so is in the public interest. Id. \xc2\xa7 7217(d).\nThe Board is part of the government for constitutional purposes, and\nits members are officers of the United States who exercise significant\ngovernment authority. See Free Enter. Fund, 130 S. Ct. at 3148. Some\nprovisions of Sarbanes-Oxley, however, reflect Congress\xe2\x80\x99s intent to\nconfer a measure of independence on the Board. The statute provides that\nthe \xe2\x80\x9cBoard shall not be an agency or establishment of the United States\ngovernment,\xe2\x80\x9d and the Board is, except as otherwise provided, afforded\nthe treatment of a nonprofit corporation chartered in the District of Columbia. 15 U.S.C. \xc2\xa7 7211(b). Sarbanes-Oxley further states that \xe2\x80\x9c[n]o\nmember or person employed by, or agent for, the Board shall be deemed\nto be an officer or employee of or agent for the Federal Government by\nreason of such service.\xe2\x80\x9d Id. Board members are appointed for five-year\nterms by the SEC. Id. \xc2\xa7 7211(e)(5). 6 With the approval of the Commission, the Board may establish its own budget, id. \xc2\xa7 7219(b), and establish\nand collect annual accounting support fees and registration fees that fund\nits activities, id. \xc2\xa7\xc2\xa7 7212(f ), 7219(d). These fees \xe2\x80\x9cand other receipts of\nthe Board . . . shall not be considered public monies of the United\nStates.\xe2\x80\x9d Id. \xc2\xa7 7219(c)(1). Finally, the Board is not \xe2\x80\x9csubject to procedures\nin Congress to authorize or appropriate public funds.\xe2\x80\x9d Id. \xc2\xa7 7219( i ).\nC.\nFederal law requires the President to \xe2\x80\x9csubmit a budget of the United\nStates Government for the following fiscal year.\xe2\x80\x9d 31 U.S.C. \xc2\xa7 1105(a)\n(2006 & Supp. V 2012). Section 1105 contains a lengthy list of required\nelements of the President\xe2\x80\x99s budget, including \xe2\x80\x9cinformation on activities\nand functions of the Government,\xe2\x80\x9d \xe2\x80\x9cinformation on costs and achievements of Government programs,\xe2\x80\x9d and \xe2\x80\x9cother desirable classifications of\ninformation.\xe2\x80\x9d Id. \xc2\xa7 1105(a)(1)\xe2\x80\x93(3). In practice, the determination whether\n6 Under the statute as enacted, Board members were removable before the expiration of\ntheir terms only for good cause, but the Supreme Court ruled the good-cause protection\nunconstitutional. See Free Enter. Fund, 130 S. Ct. at 3147.\n\n67\n\n\x0c37 Op. O.L.C. 63 (2013)\n\nto include an item in the budget \xe2\x80\x9cis made jointly\xe2\x80\x9d by OMB, the Congressional Budget Office (\xe2\x80\x9cCBO\xe2\x80\x9d), and the Budget Committees of Congress.\nOMB, Budget of the United States Government, Fiscal Year 2014\xe2\x80\x94\nAnalytical Perspectives 141 (2013).\nOMB generally makes budgetary designations in accordance with principles outlined in the 1967 Report of the President\xe2\x80\x99s Commission on\nBudget Concepts. See id. at 123, 141. That report called for the budget to\n\xe2\x80\x9cbe comprehensive of the full range of Federal activities. Borderline\nagencies and transactions should be included in the budget unless there\nare exceptionally persuasive reasons for exclusion.\xe2\x80\x9d Report of the President\xe2\x80\x99s Commission on Budget Concepts 25 (1967) (\xe2\x80\x9c1967 Report\xe2\x80\x9d). The\n1967 Report concludes, for example, that trust fund activities should be\nincluded in the budget even though the funds in theory \xe2\x80\x9cdo not belong to\nthe Federal Government\xe2\x80\x9d and despite their \xe2\x80\x9cpartial isolation from the\nbudget and appropriations processes,\xe2\x80\x9d based on the Federal Government\xe2\x80\x99s\nunquestioned \xe2\x80\x9cresponsibility for determining the size and shape\xe2\x80\x9d of these\nprograms, \xe2\x80\x9cor for altering or redirecting these programs by appropriate\nchanges in legislation.\xe2\x80\x9d Id. at 26. Similarly, the 1967 Report concluded\nthat the Federal Deposit Insurance Corporation should be included in the\nbudget, despite being exempted by statute from the budgetary review\nprocess, because its structure and function are governmental in nature. Id.\nat 30. On the other hand, federal lending entities established by Congress\nthat were privately owned and that operated in essentially the same way as\nprivate banks were considered appropriately excluded from the budget. Id.\nat 29\xe2\x80\x9330.\nII.\nA.\nThe Board contends that subjecting its funds to sequestration is contrary to Sarbanes-Oxley and BBEDCA. In particular, it maintains that its\nprogram receipts and expenditures have been improperly included in the\nPresident\xe2\x80\x99s budget\xe2\x80\x94and therefore categorized as subject to BBEDCA\nsequestration\xe2\x80\x94because provisions in Sarbanes-Oxley indicate that Congress intended to exclude the Board from the President\xe2\x80\x99s budget. See\nPCAOB Memorandum at 8. Although we summarize and address below\nthe Board\xe2\x80\x99s chief arguments, we find that most of them do not directly\n68\n\n\x0cSequestration of Public Company Accounting Oversight Board Funds\n\nbear on the point we find dispositive: that Congress clearly identified in\nBBEDCA and its amendments the entities that it intended to exempt from\nsequestration, and the Board was not one of them.\nThe Board\xe2\x80\x99s position rests principally on the language of SarbanesOxley, which provides that (i) \xe2\x80\x9c[t]he Board shall not be an agency or\nestablishment of the United States Government,\xe2\x80\x9d (ii) the Board\xe2\x80\x99s receipts\n\xe2\x80\x9cshall not be considered public monies of the United States,\xe2\x80\x9d and (iii) the\nBoard shall not be \xe2\x80\x9csubject to procedures in Congress to authorize or\nappropriate funds.\xe2\x80\x9d 15 U.S.C. \xc2\xa7\xc2\xa7 7211(b), 7219(c)(1), 7219( j). The Board\nmaintains that the President\xe2\x80\x99s budget, as the \xe2\x80\x9cbudget of the United States\nGovernment,\xe2\x80\x9d 31 U.S.C. \xc2\xa7 1105, may only include government agencies\nand establishments, and that the Board, by virtue of these provisions of\nSarbanes-Oxley, is not part of the government for purposes of the President\xe2\x80\x99s budget. PCAOB Memorandum at 8\xe2\x80\x939. This conclusion, the Board\nsubmits, is compelled by Lebron v. National Railroad Passenger Corp.,\nin which the Supreme Court, in considering whether Amtrak is a government actor for First Amendment purposes, stated (in dicta) that a\nstatutory provision providing that Amtrak \xe2\x80\x9cwill not be an agency or\nestablishment of the United States Government,\xe2\x80\x9d 45 U.S.C. \xc2\xa7 541 (1992),\n\xe2\x80\x9cis assuredly dispositive of Amtrak\xe2\x80\x99s status as a Government entity for\npurposes of matters that are within Congress\xe2\x80\x99s control.\xe2\x80\x9d 513 U.S. 374,\n392 (1995). The Board maintains that whether it should be included in\nthe budget and subject to sequestration is just such a matter \xe2\x80\x9cwithin\nCongress\xe2\x80\x99s control,\xe2\x80\x9d and that Congress spoke directly to this question in\nSarbanes-Oxley. PCAOB Memorandum at 9. The Board adds that it\nshould not be subject to sequestration when Congress modeled it on other\nprivate self-regulatory organizations, such as the New York Stock Exchange, that are not included in the President\xe2\x80\x99s budget and are not subject\nto sequestration. Id. at 14\xe2\x80\x9315.\nAccording to OMB, however, the language of Sarbanes-Oxley is not\nconclusive of the question presented here. Whether to include an item in\nthe President\xe2\x80\x99s budget, OMB explains, is \xe2\x80\x9clargely a policy judgment\xe2\x80\x9d\nthat is guided principally by the 1967 Report\xe2\x80\x99s \xe2\x80\x9cgeneral rule\xe2\x80\x9d that\n\xe2\x80\x9c[b]orderline agencies and transactions should be included in the budget\nunless there are extremely persuasive reasons for exclusion.\xe2\x80\x9d See OMB\nMemorandum at 6; 1967 Report at 25. OMB argues that nothing in 31\nU.S.C. \xc2\xa7 1105 prevents the President from including in his budget the\n69\n\n\x0c37 Op. O.L.C. 63 (2013)\n\ncongressionally authorized receipts and outlays of an entity whose authorizing statute provides that it is not a federal \xe2\x80\x9cagency or establishment\xe2\x80\x9d for statutory purposes. OMB Memorandum at 7. What is important\nhere, OMB notes, is that OMB has taken the position that the Board\nshould be included in the budget since the Board was established in\n2003. See OMB, Budget of the United States Government, Fiscal Year\n2004 \xe2\x80\x94Analytical Perspectives 463 (2003) (\xe2\x80\x9cEven though the statute says\nthe Board is not an agency or establishment of the Government, its\nsources of funding and activities are governmental in nature.\xe2\x80\x9d). The CBO\nhas also consistently considered the Board to be an on-budget entity (i.e.,\none that is included in the budget) because it \xe2\x80\x9cexercis[es] the sovereign\npower of the federal government\xe2\x80\x9d and is \xe2\x80\x9csubject to a significant level\nof federal control\xe2\x80\x9d\xe2\x80\x94conclusions reflected in Sarbanes-Oxley\xe2\x80\x99s preenactment legislative history. S. Rep. No. 107-205, at 61 (2002) (\xe2\x80\x9cCBO\nReport\xe2\x80\x9d). OMB further observes that the President\xe2\x80\x99s budget includes\nseveral other entities subject to sequestration whose organic statutes\ncontain similar provisions stating that they are not agencies or establishments of the United States and that their funds are not government\nfunds. See OMB Memorandum at 9. OMB submits, however, that the\ncritical point is not the merits of the underlying designation, but rather\nthat the Board has consistently been designated as on-budget and that\nCongress knew and understood that fact when it enacted BBEDCA\nsection 251A. See id. at 1.\nWe begin our analysis by focusing on the text of BBEDCA. Under that\nstatute, an agency\xe2\x80\x99s funds are subject to sequestration if the agency\xe2\x80\x99s\naccount is included in the President\xe2\x80\x99s budget. See 2 U.S.C. \xc2\xa7 900(c)(11).\nThe Board recognizes, as it must, that it has long been included in the\nbudget, but believes that its inclusion has been a mistake. In the Board\xe2\x80\x99s\nview, once this mistake is corrected, the consequence will be the exclusion of its funds from BBEDCA sequestration. We interpret BBEDCA\ndifferently. We think that the key question is whether Congress understood the Board to be within the category of accounts subject to sequestration when it amended BBEDCA. Put another way, when it amended\nBBEDCA in 2010 and 2011, Congress understood the Board to be part of\nthe President\xe2\x80\x99s budget and declined to exempt it from sequestration. See\nBragdon v. Abbott, 524 U.S. 624, 645 (1998) (Congress is presumed to be\naware of settled administrative interpretations of legislative commands);\n70\n\n\x0cSequestration of Public Company Accounting Oversight Board Funds\n\nGoodyear Atomic Corp. v. Miller, 486 U.S. 174, 184\xe2\x80\x9385 (1988) (stating\nthat Congress \xe2\x80\x9cis knowledgeable about existing law pertinent to the legislation it enacts\xe2\x80\x9d). In these circumstances, even if the Board had mistakenly been included in the budget in the first place, 7 that would not overcome\nCongress\xe2\x80\x99s more specific intent in BBEDCA to subject the Board to\nsequestration. Cf. Nitro-Lift Techs., LLC v. Howard, 133 S. Ct. 500, 504\n(2012) (invoking the \xe2\x80\x9cancient interpretive principle that the specific\ngoverns the general\xe2\x80\x9d).\nBy its terms, sequestration under BBEDCA section 251A applies to\neach \xe2\x80\x9caccount\xe2\x80\x9d that is not listed as exempt in section 905 of title 2. See\n2 U.S.C. \xc2\xa7 901a(7). BBEDCA defines an \xe2\x80\x9caccount\xe2\x80\x9d as: (i) \xe2\x80\x9can item for\nwhich appropriations are made in any appropriation Act and, [(ii)] for\nitems not provided for in appropriation Acts, . . . an item for which there\nis a designated budget account identification code number in the President\xe2\x80\x99s budget.\xe2\x80\x9d Id. \xc2\xa7 900(c)(11). The universe of \xe2\x80\x9caccounts\xe2\x80\x9d subject to\nsequestration therefore includes, among other things, all items with an\naccount identification code number in \xe2\x80\x9cthe President\xe2\x80\x99s budget\xe2\x80\x9d (unless\nexempted by section 905). Congress\xe2\x80\x99s reference to \xe2\x80\x9cthe President\xe2\x80\x99s\nbudget\xe2\x80\x9d plainly means the budget that OMB prepares and the President\nsubmits to Congress according to the requirements of 31 U.S.C. \xc2\xa7 1105.\nTo the extent that OMB had settled on and abided by a consistent understanding of the requirements of section 1105\xe2\x80\x94including which entities\nshould and should not be included in the budget\xe2\x80\x94we presume that\nCongress intended to adopt this understanding when it substantially\nrevised BBEDCA in 2010 and 2011. See Bragdon, 524 U.S. at 645. In\nother words, we presume that, when Congress referred to the list of\nentities in the President\xe2\x80\x99s budget, Congress knew what was on that list.\nSee id.; Goodyear Atomic Corp., 486 U.S. at 184\xe2\x80\x9385.\nThat list has, at all relevant times, included the Board. Before the enactment of Sarbanes-Oxley, the CBO concluded that the Board should\nbe included in the budget, and the bill\xe2\x80\x99s pre-enactment Senate Report\nreflected the CBO\xe2\x80\x99s conclusion. See CBO Report at 61 (2002) (quoted\nsupra p. 70). OMB agreed with the CBO\xe2\x80\x99s judgment and included the\nBoard in the President\xe2\x80\x99s budget beginning in the year the Board was\nestablished; OMB also included in an accompanying report a full para7 We express no view on this question, but note that the President does appear to have\nsignificant discretion about what is included in the budget. See supra Part I.C.\n\n71\n\n\x0c37 Op. O.L.C. 63 (2013)\n\ngraph explaining the reasons for this decision. See OMB, Budget of the\nUnited States Government, Fiscal Year 2004\xe2\x80\x94Appendix 1104 (2003);\nOMB, Budget of the United States Government, Fiscal Year 2004\xe2\x80\x94\nAnalytical Perspectives 463 (2003). OMB has designated the Board as\non-budget in every year since then. 8 Thus, we presume that, when\nCongress directed OMB to use the list of entities covered in the President\xe2\x80\x99s budget in implementing sequestration under section 251A, it was\naware of OMB\xe2\x80\x99s settled practice and understood that the Board would\nbe among the affected entities.\nThis conclusion finds strong support in the structure of BBEDCA.\nCongress specifically exempted dozens of accounts and activities from\nsequestration in the statute. If Congress had intended to exempt the Board\nfrom sequestration, it could simply have added the Board\xe2\x80\x99s account to its\nlengthy list of accounts and activities exempt from sequestration under\nsection 905, either in 2010 when it fully revised the list of exempt accounts and activities, or in 2011 when it enacted section 251A. Significantly, there can be no doubt that Congress referred to the President\xe2\x80\x99s\nbudget in the course of drawing up these lists: each exempt account in\nsection 905 \xe2\x80\x9cis identified by the designated budget account identification\ncode number set forth in the Budget of the United States Government\n2010\xe2\x80\x94Appendix.\xe2\x80\x9d 2 U.S.C. \xc2\xa7 905( j). The 2010 budget appendix\xe2\x80\x94like\nevery budget appendix going back to the Board\xe2\x80\x99s creation in 2003\xe2\x80\x94\nincluded the Board. And Congress had yet another opportunity to exempt\nthe Board from sequestration. In August 2012, Congress enacted the\nSequestration Transparency Act, Pub. L. No. 112-155, 126 Stat. 1210\n(2012), which required OMB to submit a comprehensive report the following month explaining which accounts would be subject to sequestration reductions. Congress required OMB to submit the report in advance\n8 See OMB, Budget of the United States Government, Fiscal Year 2005\xe2\x80\x94Appendix\n1184 (2004); OMB, Budget of the United States Government, Fiscal Year 2006\xe2\x80\x94\nAppendix 1223 (2005); OMB, Budget of the United States Government, Fiscal Year\n2007\xe2\x80\x94Appendix 1207 (2006); OMB, Budget of the United States Government, Fiscal\nYear 2008\xe2\x80\x94Appendix 1126 (2007); OMB, Budget of the United States Government,\nFiscal Year 2009\xe2\x80\x94Appendix 1229 (2008); OMB, Budget of the United States Government, Fiscal Year 2010\xe2\x80\x94Appendix 1288 (2009); OMB, Budget of the United States\nGovernment, Fiscal Year 2011\xe2\x80\x94Appendix 1329 (2010); OMB, Budget of the United\nStates Government, Fiscal Year 2012\xe2\x80\x94Appendix 1299 (2011); OMB, Budget of the\nUnited States Government, Fiscal Year 2013\xe2\x80\x94Appendix 1405 (2012); OMB, Budget of\nthe United States Government, Fiscal Year 2014\xe2\x80\x94Appendix 1317 (2013).\n\n72\n\n\x0cSequestration of Public Company Accounting Oversight Board Funds\n\nof implementing sequestration reductions in order to \xe2\x80\x9cobtain information\nabout how this sequester will be applied and its effect on both nondefense\nand defense programs,\xe2\x80\x9d with the ultimate aim of \xe2\x80\x9cprovid[ing] both the\nPresident and the Congress [with] improved tools to reconsider spending.\xe2\x80\x9d\nH. Rep. No. 112-577, at 5, 10 (2012). The Sequestration Transparency\nAct gave Congress the opportunity to preview OMB\xe2\x80\x99s determination of\nwhich accounts and activities were subject to sequestration, and allowed\nCongress time to revise BBEDCA before sequestration reductions took\neffect if it disagreed with any of OMB\xe2\x80\x99s determinations concerning the\nstatute\xe2\x80\x99s application. OMB\xe2\x80\x99s report, submitted in September 2012, included the Board. See OMB Report Pursuant to the Sequestration Transparency Act of 2012 at 218 (2012) (describing Board\xe2\x80\x99s budget account as\ncontaining budget authority subject to sequestration). Had Congress\nwanted to exempt the Board from sequestration following receipt of this\nnotice from OMB, it could have added the Board to the section 905 list\nwhen it amended BBEDCA in January 2013. It did not do so. Cf. Whether\nReservists Must Exhaust Available Leave 5 U.S.C. \xc2\xa7 6323(b) Before Taking Leave Under 5 U.S.C. \xc2\xa7 6323(a), 36 Op. O.L.C. 129, 149\xe2\x80\x9350 (2012)\n(stating that Congress may be understood to have ratified an administrative interpretation when there is evidence to suggest that Congress was\naware of that interpretation, citing Brown v. Gardner, 513 U.S. 115, 121\n(1994)). 9\nGiven the strong textual indicia of congressional intent to subject the\nBoard to sequestration, we cannot accept the Board\xe2\x80\x99s contrary arguments.\nAs noted above, the Board emphasizes Lebron\xe2\x80\x99s statement that statutory\nlanguage resembling the referenced provisions of Sarbanes-Oxley is\nThe Board objects that this reasoning \xe2\x80\x9coverlooks that an entity requires an exemption\nonly if it is properly subject to sequestration in the first place.\xe2\x80\x9d Memorandum for Virginia\nSeitz, Assistant Attorney General, Office of Legal Counsel, and Benjamin Mizer, Deputy\nAssistant Attorney General, Office of Legal Counsel, from J. Gordon Seymour, General\nCounsel, Public Company Accounting Oversight Board, Re: Whether the Public Company\nAccounting Oversight Board Is Subject to Sequestration under the Balanced Budget and\nEmergency Deficit Control Act of 1985, as Amended by the Budget Control Act of 2011\nat 9 (June 10, 2013) (\xe2\x80\x9cPCAOB Reply\xe2\x80\x9d). We agree that, if Congress had not included the\nBoard in the entities subject to sequestration as an initial matter, it would have had no\nreason to list the Board as exempt in section 905. But as explained above, we believe\nCongress subjected the Board to sequestration when it defined the covered accounts to\ninclude those OMB had listed in the budget. In this context, Congress\xe2\x80\x99s failure to list the\nBoard as exempt evinces its intent to subject it to sequestration.\n9\n\n73\n\n\x0c37 Op. O.L.C. 63 (2013)\n\n\xe2\x80\x9cassuredly dispositive of [the Board\xe2\x80\x99s] status as a Government entity for\npurposes of matters that are within Congress\xe2\x80\x99s control.\xe2\x80\x9d Lebron, 513 U.S.\nat 392. But the Court further explained in Lebron that such statutory\nlanguage bears on the applicability of laws that expressly depend on the\nentity\xe2\x80\x99s status as part of the federal government or as a government agency, such as the Administrative Procedure Act, 5 U.S.C. \xc2\xa7 551 et seq.\n(2012), the Federal Advisory Committee Act, 5 U.S.C. app. \xc2\xa7 1 et seq.,\nand the laws governing federal government procurement, 41 U.S.C. \xc2\xa7 5 et\nseq. (2006 & Supp. V 2012). See Lebron, 513 U.S. at 392. As set out\nabove, BBEDCA\xe2\x80\x99s applicability does not depend on an entity\xe2\x80\x99s governmental status for the purposes addressed in this passage of Lebron. 10 And\nin other instances in which Congress has sought to make clear that funds\nare exempt from BBEDCA sequestration, it has said so clearly and with\nexpress reference to BBEDCA. See 39 U.S.C. \xc2\xa7 2009a(3) (2006 & Supp.\nV 2012) (providing that Postal Service Fund receipts and disbursements\n\xe2\x80\x9cshall be exempt from any order issued under part C of the Balanced\nBudget and Emergency Deficit Control Act\xe2\x80\x9d); Pub. L. No. 101-508,\n\xc2\xa7 13301(a), 104 Stat. 1388, 1388-623 (1990) (stating that Social Security\ntrust funds \xe2\x80\x9cshall not be counted as new budget authority, outlays, receipts, or deficit or surplus for purposes of . . . the Balanced Budget and\nEmergency Deficit Control Act of 1985\xe2\x80\x9d).\nFinally, we note that the Board is not the only federal entity subject to\nsequestration despite a congressional statement that it is not an \xe2\x80\x9cagency or\nestablishment of the United States,\xe2\x80\x9d or that its funds are not \xe2\x80\x9cGovernment\nfunds or appropriated monies.\xe2\x80\x9d Cf. PCAOB Memorandum at 14 \xe2\x80\x9317. As\nOMB notes, OMB Memorandum at 9, other entities are in the same position. See, e.g., 15 U.S.C. \xc2\xa7 78ccc(a)(1)(A) (Securities Investor Protection\n10 For the same reason, the analysis contained in a 2007 opinion from our Office does\nnot apply here. See Status of the Public Company Accounting Oversight Board Under 18\nU.S.C. \xc2\xa7 207(c), 31 Op. O.L.C. 47 (2007) (\xe2\x80\x9c2007 Opinion\xe2\x80\x9d). In the 2007 Opinion, we\nconcluded that a former SEC employee representing the Board before the SEC was not\nacting \xe2\x80\x9con behalf of . . . the United States\xe2\x80\x9d for purposes of 18 U.S.C. \xc2\xa7 207(c). Applying\nLebron, we reasoned that the statutory provision stating that the Board is not \xe2\x80\x9can agency\nor establishment of the United States Government\xe2\x80\x9d was dispositive of the Board\xe2\x80\x99s status\nas an agency or instrumentality of the United States Government for purposes of the\nconflict of interest laws. Id. at 51. As was the case in Lebron (and not the case here)\nthe applicability of those laws, specifically 18 U.S.C. \xc2\xa7 207(c), depended on the entity\xe2\x80\x99s\nstatus as part of the United States Government.\n\n74\n\n\x0cSequestration of Public Company Accounting Oversight Board Funds\n\nCorporation); 22 U.S.C. \xc2\xa7 2131(b)(1) (2006 & Supp. V 2012) (Corporation for Travel Promotion); 12 U.S.C. \xc2\xa7 16 (2012) (Office of the Comptroller of the Currency); id. \xc2\xa7 5497(c)(2) (Consumer Financial Protection\nBureau); 15 U.S.C. \xc2\xa7 78d(i)(4) (SEC Reserve Fund). The fact that similarly situated entities are included in the budget and not exempted from\nsequestration by section 905 of BBEDCA supports OMB\xe2\x80\x99s conclusion\nthat Congress intended to subject the Board\xe2\x80\x99s funds to sequestration.\nB.\nThe text of BBEDCA refers to the President\xe2\x80\x99s budget to determine\nwhether an entity\xe2\x80\x99s funds are subject to sequestration. As a result, the\nBoard, which has consistently been included in the President\xe2\x80\x99s budget, is\nsubject to sequestration. The analysis does not end there, however, because section 251A sequestration applies only to \xe2\x80\x9cbudgetary resources,\xe2\x80\x9d\n2 U.S.C. \xc2\xa7\xc2\xa7 900(c)(2), 901a(7)(A), which means \xe2\x80\x9cnew budget authority,\nunobligated balances, direct spending authority, and obligation limitations,\xe2\x80\x9d id. \xc2\xa7 900(c)(6). The Board asserts that even if its operating funds\nare held in an \xe2\x80\x9caccount\xe2\x80\x9d within the meaning of BBEDCA, that account\ndoes not contain \xe2\x80\x9cbudgetary resources\xe2\x80\x9d subject to sequestration.\nBecause none of the other categories of \xe2\x80\x9cbudgetary resources\xe2\x80\x9d applies\nhere, the resolution of this argument turns on whether the Board possesses \xe2\x80\x9cbudget authority.\xe2\x80\x9d The Board argues that it lacks budget authority. It\nrelies on a Government Accountability Office (\xe2\x80\x9cGAO\xe2\x80\x9d) publication\ndefining budgetary authority as the \xe2\x80\x9c[a]uthority provided by federal law\nto enter into financial obligations that will result in immediate or future\noutlays involving federal government funds.\xe2\x80\x9d GAO, A Glossary of Terms\nUsed in the Federal Budget Process 20 (2005); see PCAOB Memorandum at 11\xe2\x80\x9312; PCAOB Reply at 2\xe2\x80\x933. The Board argues that, under\nSarbanes-Oxley, it does not have the authority to incur obligations that\nwill result in outlays on behalf of the federal government, and therefore\ndoes not have \xe2\x80\x9cbudget authority\xe2\x80\x9d under that definition of the term.\nBut BBEDCA contains its own, broader definition of \xe2\x80\x9cbudget authority\xe2\x80\x9d: \xe2\x80\x9cthe authority provided by Federal law to incur financial obligations,\xe2\x80\x9d\nconsisting of, among other things, \xe2\x80\x9cprovisions of law that make funds\navailable for obligation and expenditure (other than borrowing authority),\nincluding the authority to obligate and expend the proceeds of offsetting\nreceipts and collections.\xe2\x80\x9d 2 U.S.C. \xc2\xa7 622(2)(A); see id. \xc2\xa7 900(c)(1) (incorporating definition of \xe2\x80\x9cbudget authority\xe2\x80\x9d in section 622). The defini75\n\n\x0c37 Op. O.L.C. 63 (2013)\n\ntion also includes \xe2\x80\x9coffsetting receipts and collections as negative budget\nauthority, and the reduction thereof as positive budget authority.\xe2\x80\x9d Id.\n\xc2\xa7 622(2)(A)(iv). BBEDCA therefore defines \xe2\x80\x9cbudget authority\xe2\x80\x9d as funds\nmade available pursuant to authority provided by federal law, irrespective\nof whether the funds are labeled \xe2\x80\x9cfederal government funds\xe2\x80\x9d or otherwise.\nThe Board\xe2\x80\x99s funds plainly satisfy BBEDCA\xe2\x80\x99s definition of \xe2\x80\x9cbudget authority.\xe2\x80\x9d They are funds collected (as SEC-approved mandatory registration and accounting support fees) and obligated (consistent with an SECapproved annual budget) for expenditure consistent with the congressional\nauthorization provided in Sarbanes-Oxley. In other words, the Board\xe2\x80\x99s\nactivities are funded under \xe2\x80\x9cprovisions of law that make funds available\nfor obligation and expenditure.\xe2\x80\x9d Id. \xc2\xa7 622(2)(A). They are therefore\nbudgetary resources subject to sequestration under BBEDCA. 11\nThe Board also argues that subjecting it to sequestration would \xe2\x80\x9clead to\nincongruous results\xe2\x80\x9d because the Board may continue to collect receipts at\nits normal pace but may not obligate those funds or send them to the\nTreasury Department. See PCAOB Memorandum at 12 n.10. Funds may\ntherefore be escrowed and not made available for obligation by the Board\nuntil BBEDCA section 251A sequestration is no longer in effect; in the\nmeantime, sequestration reductions imposed on the Board \xe2\x80\x9cwill not decrease the federal deficit by a single dollar.\xe2\x80\x9d Id. at 2. The Board\xe2\x80\x99s argument appears to be that requiring cancellation of the authority to obligate\ncollected offsetting receipts\xe2\x80\x94and putting collected funds in escrow until\nthe end of sequestration\xe2\x80\x94would not result in deficit reduction, and thus\nwould be inconsistent with (or at least would not advance) BBEDCA\xe2\x80\x99s\nlegislative purpose. But Congress considered the possibility that this\nscenario might occur and expressly provided for it: \xe2\x80\x9cBudgetary resources\nsequestered in revolving, trust, and special fund accounts and offsetting\ncollections sequestered in appropriation accounts shall not be available for\nobligation during the fiscal year in which the sequestration occurs, but\nshall be available in subsequent years to the extent otherwise provided in\nlaw.\xe2\x80\x9d 2 U.S.C. \xc2\xa7 906(k)(6). An argument based on BBEDCA\xe2\x80\x99s general\n11 Congress\xe2\x80\x99s declaration of purpose in the Congressional Budget and Impoundment\nControl Act of 1974, Pub. L. No. 93-344, 88 Stat. 297 (codified at 2 U.S.C. \xc2\xa7 621), does\nnot provide significant guidance in determining BBEDCA\xe2\x80\x99s reach. See PCAOB Reply\nat 2. In BBEDCA, Congress adopted the prior act\xe2\x80\x99s definition of \xe2\x80\x9cbudget authority,\xe2\x80\x9d but\nit did not expressly or implicitly adopt the earlier statute\xe2\x80\x99s declaration of purpose. In any\nevent, section 621\xe2\x80\x99s declaration of purpose is broad and general, and provides little\nassistance in interpreting the phrase \xe2\x80\x9cbudget authority\xe2\x80\x9d in section 622.\n\n76\n\n\x0cSequestration of Public Company Accounting Oversight Board Funds\n\npurpose cannot be used to countermand section 251A, particularly where\nCongress has expressly recognized that some applications of the statute\nmight not directly serve that purpose. See Kloeckner v. Solis, 133 S. Ct.\n596, 607 n.4 (2012). 12\nIII.\nFor these reasons, we conclude that the Board is subject to the sequestration provisions of BBEDCA section 251A.\nBENJAMIN C. MIZER\nDeputy Assistant Attorney General\nOffice of Legal Counsel\n\nThe Board also suggests that if OMB includes it in the list of programs, projects, and\nactivities subject to sequestration, then it must also include \xe2\x80\x9cpurely private\xe2\x80\x9d entities\nranging from \xe2\x80\x9cApple to the local apple cart, as well as state and local activities with no\nfederal involvement.\xe2\x80\x9d PCAOB Memorandum at 12 n.11; see also PCAOB Reply at 3. Our\nreading of BBEDCA, however, does not lead to the absurdity that the Board posits. In our\njudgment, the Board\xe2\x80\x99s funds are subject to sequestration under BBEDCA section 251A\nbecause (i) that section specifies that sequestration applies to entities that are on-budget,\n(ii) the Board has consistently been such an entity since its inception, (iii) Congress did\nnot exempt the Board from sequestration, and (iv) the Board collects and obligates funds\npursuant to authority provided by federal law. Plainly, the entities the Board likens to\nitself do not meet these criteria. In any event, we do not address the circumstances of\nentities not presented here.\n12\n\n77\n\n\x0c'


b'Litigating Authority of the Office of Federal Inspector,\nAlaska Natural Gas Transportation System\nT h e s ta tu to ry assig nm ent to th e A tto rn e y G e n e ra l o f p len ary responsibility for the\nc o n d u c t o f litig atio n in v o lv in g th e U n ited S tates fu rth e rs a n u m b er o f im p o rtan t policy\ng oals, and ex cep tio n s to this p len ary g ran t w ill be n a rro w ly co n stru ed .\nT h e O ffice o f F e d eral In sp e c to r (O F I) o f th e A laska N a tu ra l G as T ra n s p o rta tio n System\nhas n o g en eral p o w e r to c o n d u c t litigation, a lth o u g h it is possible th at O F I m ay h av e a\nd e g re e o f specific a u th o rity d e riv e d from th e in d ep en d en t litigating a u th o rity o f a g e n \xc2\xad\ncies w h o se en fo rc e m e n t p o w e rs w e re tra n sfe rre d to O F I by R e o rg an izatio n Plan N o. 1\no f 1979.\nT h e A tto rn e y G e n e ra l m ay not d ele g a te o r tran sfer his a u th o rity and responsibility to\nsu p erv ise an d c o n tro l litigation, by w a y o f a m e m o ran d u m o f u n d ersta n d in g o r o th e r \xc2\xad\nw ise, to an ag en cy , like O F I , th at d o es not in d e p e n d e n tly possess litigating au th o rity ;\nh o w e v e r, a tto rn e y s from O F I m ay p a rtic ip a te in litigation as p a rt o f a team h ead ed by\na tto rn e y s from th e D e p a rtm e n t o f Justice.\n\nDecember 11, 1980\nMEM ORANDUM OPINION FOR\nT H E ASSOCIATE ATTORNEY G EN ER A L\nYou have asked us certain questions regarding the litigating authority\nof the Office of Federal Inspector (OFI) of the Alaska Natural Gas\nTransportation System. We conclude that OFI has no general authority\nto conduct litigation, but that it may possibly have specific, limited\nauthority derived from agencies which have litigating powers independ\xc2\xad\nent of the Department of Justice. We further conclude that the Depart\xc2\xad\nment of\'Justice may not enter a memorandum of understanding with\nOFI transferring litigating authority to that agency.\nI.\n\nFirst, you have asked for our opinion as to whether OFI has any\nindependent litigating authority, deriving either from the Alaska Natu\xc2\xad\nral Gas Transportation Act of 1976 (ANGTA), 15 U.S.C. \xc2\xa7719, or the\nReorganization Plan No. 1 of 1979, 15 U.S:C. \xc2\xa7 719(e) (Supp. Ill 1979)\n(Reorganization Plan).\nIt is useful to review some basic principles in answering this question.\nTraditionally, the Attorney General has exercised plenary responsibility\nover the conduct of all litigation on behalf of the United States. United\nStates v. San Jacinto Tin Co., 125 U.S. 273, 279 (1888); Confiscation\n820\n\n\x0cCases, 74 U.S. (7 Wall.) 454, 457-58 (1868). This responsibility was first\ngiven statutory recognition in the act which created the Department of\nJustice, 16 Stat. 162 (1870), and is now primarily codified at \xc2\xa7\xc2\xa7516 and\n519 of Title 28, which reserve the conduct of litigation involving the.\nUnited States to the Attorney General and the Department of Justice\n\xe2\x80\x9c[e]xcept as otherwise authorized by law.\xe2\x80\x9d 1\nThis assignment of plenary authority to the Attorney General cen\xc2\xad\ntralizes the conduct of litigation on behalf of the United States and\nthereby furthers a number of important policy goals. It allows the\npresentation of uniform positions on important legal issues, ensures that\ngovernment lawyers will be able to select test cases which present the\ngovernment\xe2\x80\x99s position in the best possible light, and gives the Attorney\nGeneral authority over lower court proceedings so that government\nlitigation will be better handled on appeal and before the Supreme\nCourt. It provides for greater objectivity in the filing and handling of\ncases by attorneys who are not themselves affected litigants. And it\nfacilitates presidential supervision over executive branch policies impli\xc2\xad\ncated in litigation.2\nBecause of the strong policies favoring control of litigation by the\nAttorney General, the \xe2\x80\x9cotherwise authorized by law\xe2\x80\x9d exception in\n\xc2\xa7\xc2\xa7516 and 519 is construed narrowly as permitting litigation by agen\xc2\xad\ncies other than the Department of Justice only when statutes explicitly\nso provide. Marshall v. Gibson\'s Products, Inc. o f Plano, 584 F.2d 668,\n676 n.l 1 (5th Cir. 1978); IC C v. Southern R y Co., 543 F.2d 534, 536 (Sth\nCir. 1976); United States v. Tonry, 433 F. Supp. 620, 622 (E.D. La.\n1977). A statutory grant of power to \xe2\x80\x9cbring a civil action\xe2\x80\x9d is not in\nitself conclusive evidence that an agency possesses litigating authority.3\nWhat is generally required is language authorizing agencies to use their\nown attorney to represent them in court.4 The question, therefore, is\n1 Section 516 provides:\nExcept as otherw ise authorized by law, the conduct o f litigation in w hich the United\nStates, an agency, o r officer th ereo f is a party, o r is interested, and securing evidence\ntherefor, is reserved to officers o f the D epartm ent o f Justice, under the direction o f the\nA tto rn ey G eneral.\nSection 519 provides:\nExcept as otherw ise authorized by law, the A tto rn ey G eneral shall supervise all\nlitigation to w hich the United States, an agency, o r officer th ereo f is a party, and shall\ndirect all U nited States attorneys, assistant U nited States attorneys, and special a tto r\xc2\xad\nneys appointed under section 543 o f this title in the discharge of their respective duties.\nSee also 5 U.S.C. \xc2\xa7 3106, w hich states in pertinent part:\nExcept as otherw ise authorized by law. the head o f an Executive departm ent or\nmilitary departm ent may not em ploy an attorney or counsel for the conduct o f\nlitigation in w hich the U nited States, an agency, o r em ployee th ereo f is a party, or is\ninterested, o r for the securing o f evidence therefor, but shall refer the m atter to the\nD epartm ent o f Justice.\n2 See generally ICC v. Southern R y Co., 543 F.2d 534, 536 (5th Cir. 1976); O ffice o f Legal Counsel,\nM em orandum to the D irecto r, O ffice o f M anagem ent and Budget (N ovem ber 29, 1973).\n3 Compare FTC v. Guignon, 390 F.2d 323 (8th Cir. 1968), with SE C v. Robert Collier & Co., 76 F.2d\n939 (2d Cir. 1935).\n4 See, e.g.. 16 U.S.C. \xc2\xa7 825m(c) (F ederal Pow er Commission); 12 U.S.C. \xc2\xa7 1464(d)(1) (F ederal Home\nLoan Bank Board).\n\n821\n\n\x0cwhether there is any provision of law which thus explicitly vests\nlitigating authority in OFI.\nSuch authorization exists, if at all, in the Reorganization Plan, which\nestablished OFI and transferred to it certain functions of other federal\nagencies.5 Section 102 of the Reorganization Plan vests in OFI \xe2\x80\x9cexclu\xc2\xad\nsive responsibility for enforcement of all Federal statutes relevant in\nany manner to pre-construction, construction, and initial operation\xe2\x80\x9d of\nthe approved transportation system. 15 U.S.C. \xc2\xa7 719(e). \xe2\x80\x9cEnforcement\xe2\x80\x9d\nis defined to \xe2\x80\x9cinclud[e] monitoring and any other compliance or over\xc2\xad\nsight activities reasonably related to the enforcement process.\xe2\x80\x9d Section\n102 then lists approximately 50 statutory authorities exercised by seven\nfederal agencies: the Environmental Protection Agency; the Army\nCorps of Engineers; the Department of Transportation; the Department\nof Energy; the Department of the Interior; the Department of Agricul\xc2\xad\nture; and the Department of the Treasury. With respect to each of the\nstatutory authorities, the transferred functions \xe2\x80\x9cinclude all enforcement\nfunctions of the given agencies or their officials under the statute as\nmay be related to the enforcement of such terms, conditions, and\nstipulations [under federal authorizations], including but not limited to\nthe specific sections of the statute cited.\xe2\x80\x9d Finally, as relevant here,\n\xc2\xa7 102(h)(1) vests in OFI \xe2\x80\x9c[t]he enforcement functions authorized by, and\nsupplemental enforcement authority created by [ANGTA].\xe2\x80\x9d\nThese provisions nowhere contain the explicit language needed to\ndivest the Attorney General of his otherwise plenary control over\nfederal litigation. To be sure, the word \xe2\x80\x9cenforcement\xe2\x80\x9d might possibly\nbe read so broadly as to encompass litigation. But such a construction\nwould be inconsistent with the ordinary understanding of that term as\nused in federal statutes and regulations. There are a host of agencies,\nlarge and small, with statutory \xe2\x80\x9cenforcement\xe2\x80\x9d powers, but this authori\xc2\xad\nzation has never been interpreted to constitute a grant of litigating\nauthority. If it were, the reservation of litigation to the Attorney\nGeneral in \xc2\xa7\xc2\xa7516 and 519 would be largely vitiated.\nThat \xe2\x80\x9cenforcement\xe2\x80\x9d does not encompass litigation is evident from the\nReorganization Plan\xe2\x80\x99s transfer to O FI of the \xe2\x80\x9csupplemental\xe2\x80\x9d enforce\xc2\xad\nment powers in ANGTA. A N G T A \xe2\x80\x99s supplemental enforcement\npowers, which are contained in \xc2\xa7 11 thereof, are limited to issuing\ncompliance orders or requesting the Attorney General to commence a\n5\nPreviously, the A laskan oil pipeline project had em ployed a federal inspector to supervise\ncon stru ctio n . In A N G T A , C ongress instructed the President, inter alia, to appoint an officer o r board\nto serve as federal inspector o f an ap proved natural gas transportation system. As contem plated in\n\xc2\xa7 7(a)(5) o f A N G T A , 15 U.S.C. \xc2\xa7719e(a)(5), the federal inspector\xe2\x80\x99s duties w ere restricted to m onitor\xc2\xad\ning and oversight and clearly did not include litigation. T h e President further expanded the federal\nin sp ecto r concept by proposing to grant certain pow ers o v er the term s and conditions to be included\nin federal perm its and o th e r authorizations. Alaska Natural Gas Transportation System: Message from\n\nthe President o f the United States Transmitting His Decision and Report on an Alaskan Natural Gas\nTransportation System. H .R . D oc. No. 225, 95th C ong., 1st Sess. 197-200 (1977). Like A N G T A ,\nho w ev er, the P resident\'s decision itself cannot plausibly be read as em pow ering O F I to engage in\nlitigation.\n\n822\n\n\x0ccivil action. 15 U.S.C. \xc2\xa7 719i.6 If OFI possessed independent litigating\nauthority by virtue of the transfer of enforcement powers, it is unlikely\nindeed that it would need an additional and \xe2\x80\x9csupplemental\xe2\x80\x9d power to\nrequest the Department of Justice to institute a suit.\nFinally, our research has uncovered no references in the legislative\nhistories either of ANGTA, the President\xe2\x80\x99s decision, or the Reorganiza\xc2\xad\ntion Plan indicating that any of the participants\xe2\x80\x94be they the President,\nthe members of the congressional committees, or the witnesses at com\xc2\xad\nmittee hearings\xe2\x80\x94believed that the federal inspector or OFI possessed\ngeneral litigating authority. If such a far-reaching grant of authority\nhad been contemplated, at least some reference to this fact would have\nbeen included in these legislative histories. For the above reasons,\ntherefore, we conclude that OFI possesses no general litigating author\xc2\xad\nity.7\nII.\n\nYou have also asked whether the Attorney General, under \xc2\xa7\xc2\xa7516\nand 519, has authority to transfer litigating authority by way of a\nmemorandum of understanding to agencies that do not possess litigating\nauthority.\nIn the absence of any general provision of law permitting an agency\nto transfer its statutory authority to another agency, such transfers or\ndelegations may normally be accomplished only by legislation or by\nexecutive reorganization under the Reorganization Act. See 5 U.S.C.\n\xc2\xa7 903(a). We have already concluded that the Reorganization Plan did\nnot itself transfer litigating authority from the Department of Justice to\nOFI, and we see nothing in that Plan which can be read as authorizing\nthe Attorney General to delegate such authority. Nor do the statutes\ngenerally applicable to the Department of Justice empower the A ttor\xc2\xad\n6 M ore specifically, \xc2\xa7 11(a) provides:\nIn addition to rem edies available under o th er applicable provisions o f law, w henever\nany Federal officer o r agency determ ines that any person is in violation o f any\napplicable provision o f law adm inistered o r enforceable by such officer or agency or\nany rule, regulation, o r o rd e r under such provision, including any term o r condition o f\nany certificate, right-of-w ay, perm it, lease, o r other authorization, issued or granted by\nsuch officer o r agency, such officer o r agency may\xe2\x80\x94\n(1) issue a com pliance o rd er requiring such person to com ply w ith such provision or\nany rule, regulation, o r o rd e r thereunder, o r\n(2) bring a civil action in accordance w ith subsection (c) o f this section.\n15 U.S.C. \xc2\xa7 719i(a). Subsection (c) provides in pertinent part:\nU pon a request o f such officer o r agency, as the case may be, the A ttorney G eneral\nmay com m ence a civil action for appropriate relief, including a perm anent or tem po\xc2\xad\nrary injunction o r a civil penalty not to exceed $25,000 per day for violations o f the\ncom pliance o rd er issued under subsection (a) o f this section. . . .\n15 U.S.C. \xc2\xa7 719i(c).\n7 It is possible that O F I may enjoy a degree o f specific au thority derived from independent\nlitigating au th o rity previously exercised by a federal agency o th e r than the D epartm ent o f Justice and\ntransferred to O F I by the R eorganization Plan. T hat issue is beyond the scope of o u r present inquiry\nand w ould require an exam ination o f any existing independent litigating authority exercised by any o f\nthe agencies that transferred functions to O F I pursuant to the R eorganization Plan.\n\n823\n\n\x0cney General to delegate authority to other agencies. Indeed, the impli\xc2\xad\ncation of these statutes is clearly to the contrary. Section 516 states\nthat, except as otherwise authorized by law, the conduct of government\nlitigation is \xe2\x80\x9creserved\xe2\x80\x9d to officers of the Department of Justice. Section\n519 in terms imposes a mandatory duty on the Attorney General to\nsupervise all litigation involving the United States, except as otherwise\nauthorized by law. The policy of ensuring centralization of litigation\nwhich underlies \xc2\xa7\xc2\xa7516 and 519 is furthered by a rule prohibiting\ndelegation outside the Department of Justice.\nGenerally speaking the Attorney General may not enter into a\nmemorandum of understanding or other arrangement delegating litigat\xc2\xad\ning authority to an agency that does not independently possess such\nauthority.8 The Attorney General may delegate litigating authority\nwhere specifically authorized to do so by federal statute or by legisla\xc2\xad\ntive history unequivocally expressing congressional intent to permit\ndelegation. For example, we believe that authority to conduct litigation\nmay be delegated when a statute provides that the Attorney General\nmay authorize an agency to appear in court under his overall control\nand supervision. There is, however, no language in the materials rele\xc2\xad\nvant to OFI that can be read to supersede the Attorney General\xe2\x80\x99s\ngeneral obligation not to delegate his responsibility outside the Depart\xc2\xad\nment of Justice.9\nGiven that the Attorney General may not delegate his litigating\nauthority to OFI, the question arises as to what role, if any, attorneys\nfrom O FI could play in that agency\xe2\x80\x99s litigation. It is evident that the\nAttorney General may not transfer to O FI any powers either to \xe2\x80\x9csuper\xc2\xad\nvise\xe2\x80\x9d (\xc2\xa7519) or to \xe2\x80\x9cconduct\xe2\x80\x9d (\xc2\xa7516) litigation. Thus, attorneys from\nO FI may not exercise general supervisory powers over a case or class\nof cases. Nor may they take trial level responsibility for handling a\nparticular case. However, we believe that attorneys from OFI may\nparticipate in depositions, witness examinations, arguments, briefings,\nand all other forms of trial preparation and presentation as part of a\nlitigation \xe2\x80\x9cteam\xe2\x80\x9d headed by an attorney or attorneys from the Depart\xc2\xad\nment of Justice. This would not amount to an impermissible delegation\nof the power to \xe2\x80\x9cconduct\xe2\x80\x9d litigation so long as an attorney from the\nDepartment of Justice participates actively in the litigation in all its\n8 O n the o th er hand, an agreem ent establishing \xe2\x80\x9cagreed boundaries" betw een the D epartm ent o f\nJustice and an agency possessing independent litigating au th o rity w ould appear entirely permissible.\nF o r exam ple, O F I and the D epartm ent o f Justice could en ter into an agreem ent w ith respect to those\nlitigating authorities, if any, w hich the R eorganization Plan transferred to O F I from agencies o ther\nthan the D epartm ent o f Justice. A like arrangem ent could be used to establish the point at w hich\nadm inistrative proceedings w ithin O F I\'s com petence end and judicial proceedings w ithin the sphere o f\nthe D epartm ent o f Justice begin.\n9 T h e D epartm ent o f Justice cu rren tly operates under a num ber o f m em oranda o f understanding\nand o th er inform al agreem ents dividing litigating responsibility w ith o th e r agencies. A lthough w e have\nnot studied the subject exhaustively, it appears that those agreem ents are authorized by federal statute\no r are otherw ise permissible as not am ounting to delegations o f authority. Several o f these m em oranda\na re collected in the D ep artm en t\'s Civil Division P ractice M anual, at \xc2\xa7 3-28.\n\n824\n\n\x0cphases and retains final say over all significant trial decisions, including\nbut not limited to stipulations of facts, removal of issues from the case,\ncompromise, and dismissal. The Department of Justice has frequently\nengaged in this \xe2\x80\x9cteam\xe2\x80\x9d approach to litigation, and we see no legal\nobjection to the practice.10\nJ ohn M. H arm on\n\nAssistant Attorney General\nOffice o f Legal Counsel\n\n10 A lternatively, one o r m ore attorneys from O F I could be appointed to act as special attorneys or\nspecial assistants w ithin the D epartm ent o f Justice. See 28 U.S.C. \xc2\xa7\xc2\xa7 543, 515. Such attorneys w ould be\nable to conduct litigation o r to supervise the conduct o f a case o r class o f cases.\n\n825\n\n\x0c'