b"Division of Powers and Responsibilities Between the\nChairperson of the Chemical Safety and Hazard Investigation\nBoard and the Board as a Whole\nU nder th e C lea n A ir A ct Am endm ents o f 1990 and general principles governing the operation of\nboards, the day-to-day adm inistration o f C hem ical Safety and Hazard Investigation Board m atters\nand ex ecution o f B oard policies are the responsibilities o f the chairperson, subject to Board over\xc2\xad\nsight, w hile substantive policym aking and regulatory authority is vested in the B oard as a whole.\nIn disp u tes o v er the allocation o f authority in specific instances, the B oard\xe2\x80\x99s decision controls, as\nlong as it is not arbitrary o r unreasonable.\n\nJune 26, 2000\nm em orandum\n\nO p in io n f o r t h e G e n e r a l C o u n s e l\n\nC h e m ic a l S a fet y a n d H a z a r d I n v e s t ig a t io n B o a r d\n\nY o u have asked for our opinion regarding the legal division of powers and\nresponsibilities between the chairperson of the United States Chemical Safety and\nHazard Investigation Board (\xe2\x80\x9c Board\xe2\x80\x9d ) and the Board as a whole. This memo\xc2\xad\nrandum responds to your request.\nThe Board was established under section 301 of the Clean Air Act Amendments\nof 1990 (the \xe2\x80\x9c A ct\xe2\x80\x9d ) as a tenure-protected agency charged with investigating and\nmonitoring accidental chemical releases at industrial facilities and in transport.\nSee Pub. L. No. 101-549, \xc2\xa7301, 104 Stat. 2399, 2565-70 (1990) (codified at\n42 U.S.C. \xc2\xa77412(r)(6) (1994)). The Act provides that the Board \xe2\x80\x9c shall consist\nof 5 members, including a Chairperson, who shall be appointed by the President,\nby and with the advice and consent of the Senate.\xe2\x80\x9d 42 U.S.C. \xc2\xa7 7412(r)(6)(B).\n\xe2\x80\x9c The Chairperson,\xe2\x80\x9d the Act continues, \xe2\x80\x9c shall be the Chief Executive Officer of\nthe Board and shall exercise the executive and administrative functions of the\nBoard.\xe2\x80\x9d Id. The Act vests in the Board a range of powers and responsibilities\nrelating to investigating, monitoring, and reporting accidental chemical releases.\nSee id. \xc2\xa7 7412(r)(6)(C)-(S). It further provides that \xe2\x80\x9c [t]he Board is authorized\nto establish such procedural and administrative rules as are necessary to the exer\xc2\xad\ncise of its functions and duties.\xe2\x80\x9d Id. \xc2\xa7 7412(r)(6)(N).\nAs we understand it, a basic disagreement has existed for some time between\nthe former chairperson of the Board, who resigned as chairperson on January 12,\n2000, but is still a Board member, and the other Board members regarding the\nrelative authority of the chairperson and the Board as a whole under this statutory\nschem e.1 The former chairperson maintains that \xe2\x80\x9c the statute provides [the chair\xe2\x80\x99 T he Board\xe2\x80\x99s Office o f General Counsel, at the request of the Board, examined this issue and presented a written\nopinion to the Board on August 30, 1999. See Memorandum for the Chemical Safety and Hazard Investigation\nBoard, from Christopher Warner, General Counsel, Re: Board Governance Issues (Aug. 30, 1999) ( \xe2\x80\x9c Warner Memo\xc2\xad\nrandum \xe2\x80\x9d ). When this opinion failed to resolve the dispute, both the chairperson and the other Board members,\nin separate letters, requested our views on the subject See Letter for Beth Nolan, Assistant Attorney General, Office\n\n102\n\n\x0cDivision o f Powers and Responsibilities Between the Chairperson o f the Chemical Safety and Hazard\nInvestigation Board and the Board as a Whole\n\nperson] . . . with complete authority over all aspects of the [Board] except that\nall of the Board Members must vote on three items: approval of Board Investiga\xc2\xad\ntion Reports, recommendations to the Administrator of [the Environmental Protec\xc2\xad\ntion Agency (EPA)] and the Secretary of Labor, and approval of regulations to\nbe published in the Federal Register .\xe2\x80\x9d December Hill Letter at 1. The Board,\nby contrast, believes that the Act places day-to-day administration of the Board\nin the chairperson\xe2\x80\x99s hands, subject to the Board\xe2\x80\x99s general policies and directives,\nwhile conferring on the Board responsibility for the various substantive functions\nthat are outlined in its statute; that the Board decides whether a matter is an\nadministrative concern of the chairperson or a substantive concern of the Board,\nas long as its views are reasonable; and that, in the absence of Board policy on\na specific issue, the chairperson possesses substantial discretion to act on his own.\nSee Warner Memorandum at 2; November Board Letter (stating that the Board\nbelieves that the Warner Memorandum is correct).\nWe believe that, under the Act and general principles governing the operation\nof boards, the day-to-day administration of Board matters and execution of Board\npolicies are the responsibilities of the chairperson, subject to Board oversight,\nwhile substantive policymaking and regulatory authority is vested in the Board\nas a whole. In disputes over the allocation of authority in specific instances, the\nBoard\xe2\x80\x99s decision controls, as long as it is not arbitrary or unreasonable.\nWe note at the outset that we do not address the details of how these principles\napply to specific management and governance areas in which disagreements might\narise between the chairperson and the Board.2 Indeed, when addressing a similar\nset of questions regarding the relative authority of the chairman of the Interstate\nCommerce Commission (\xe2\x80\x9c Commission\xe2\x80\x9d ) and the Commission members over the\nadministrative and substantive affairs of the Commission, we observed that \xe2\x80\x9c this\nOffice is neither well-suited nor sufficiently well-versed, as a practical matter,\nin the internal workings of the Commission to provide more than a general\nresponse\xe2\x80\x9d to the questions being addressed. Memorandum for Reese K. Taylor,\nJr., Chairman, and Heather Gradison, Commissioner, Interstate Commerce\nCommission, from Theodore B. Olson, Assistant Attorney General, Office of\nLegal Counsel at 1 (Dec. 8, 1983). We think that an apt observation in the Board\xe2\x80\x99s\ncase as well. Nevertheless, we believe that our discussion of the Board\xe2\x80\x99s organiza\xc2\xad\ntion and of the background principles governing deliberative bodies against which\nit operates should be sufficient to guide you in resolving disagreements about\nthe proper balance of authority in the Board\xe2\x80\x99s affairs.\nof Legal Counsel, from the Chemical Safety and Hazard Investigation Board (Nov 16, 1999) ( \xe2\x80\x9c November Board\nLetter\xe2\x80\x9d ); Letter for Randolph D. Moss, Acting Assistant Attorney General, Office of Legal Counsel, from Paul\nL. Hill, Jr., Chairperson, Chemical Safety and Hazard Investigation Board (Dec I, 1999) (\xe2\x80\x9c December Hill Letter\xe2\x80\x9d ).\nBoth have agreed to be bound by our opinion See November Board Letter; December Hill Letter at 2.\n2 See Warner Memorandum at 18-31, 18 (analyzing specific management and governance areas with an eye toward\n\xe2\x80\x9c lirrut[ing] areas o f potential disagreement\xe2\x80\x9d ). By this statement, we mean neither to call into question nor to affirm\nthe specific legal conclusions o f the Board\xe2\x80\x99s General Counsel in this regard\n\n103\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 24\n\nWe begin with the language of the Act. As noted above, the Act provides that\nthe chairperson \xe2\x80\x9c shall be the Chief Executive Officer of the Board and shall exer\xc2\xad\ncise the executive and administrative functions of the Board.\xe2\x80\x9d 42 U.S.C.\n\xc2\xa7 7412(r)(6)(B). The terms \xe2\x80\x9c Chief Executive Officer\xe2\x80\x9d and \xe2\x80\x9c executive and\nadministrative functions\xe2\x80\x9d are decidedly vague, and nowhere does the Act define\nthem. Even so, the terms do provide some general guidance on the proper division\nof authority between the chairperson and the Board as a whole. They make clear\nthat it is the \xe2\x80\x9c executive\xe2\x80\x9d and \xe2\x80\x9c administrative\xe2\x80\x9d aspects of the Board\xe2\x80\x99s business \xe2\x80\x94\nas opposed to its substantive and policymaking functions as laid out in the rest\nof the statute (see id. \xc2\xa7 7412(r)(6)(C)-(S)) \xe2\x80\x94 that are the province of the chair\xc2\xad\nperson as chairperson. The chairperson, in other words, superintends and carries\nout the day-to-day activities necessary to effectuate the Board\xe2\x80\x99s substantive\ndecisions.3 He does not, absent some form of Board approval (such as an express\ndelegation by the Board or the Board\xe2\x80\x99s acquiescence in the chairperson\xe2\x80\x99s actions,\nsee infra pp. 108-10), make those decisions by himself.\nThe Act also empowers the Board to \xe2\x80\x98\xe2\x80\x98establish such procedural and administra\xc2\xad\ntive rules as are necessary to the exercise of its functions and duties.\xe2\x80\x9d 42 U.S.C.\n\xc2\xa7 7412(r)(6)(N); see also S. Rep. No. 101-228, at 236 (1989), reprinted in 1990\nU.S.C.C.A.N. 3385, 3620 ( \xe2\x80\x9c The Board is given authority to promulgate adminis\xc2\xad\ntrative rules as may be necessary to carry out its functions.\xe2\x80\x9d ). These could include\nrules bearing on matters of internal Board governance (such as voting procedures\nand the delegation of Board authority and responsibilities) as well as rules gov\xc2\xad\nerning the conduct of Board business with the public (such as investigations and\nhearings). To the extent the Board establishes such rules, the chairperson, as the\nBoard\xe2\x80\x99s administrative and executive officer, must put them into practice.\nFurthermore, the chairperson is subject in the exercise of his functions and\nduties as chairperson to oversight by the Board as a whole and to such general\npolicies and decisions that the Board is authorized to make. Indeed, that this must\nbe so flows from the very nature o f the chairperson\xe2\x80\x99s office as the executor and\nadministrator of the Board\xe2\x80\x99s decisions and policies, which the Board can modify\nor amend as circumstances or programmatic objectives require. It is also spelled\nout in the A ct\xe2\x80\x99s legislative history, which unambiguously states that \xe2\x80\x9c [t]he chair\xe2\x80\x99s\nconduct of the executive function is subject to oversight by the Board as a whole.\xe2\x80\x9d\nS. Rep. No. 101-228, at 229, reprinted in 1990 U.S.C.C.A.N. at 3613.\nTo be sure, this does not mean that the Board, exercising its oversight authority\nand its powers to make substantive decisions and \xe2\x80\x9c such procedural and adminis\xc2\xad\ntrative rules as are necessary to the exercise of its functions and duties,\xe2\x80\x9d may\nor should attempt to address itself to the plethora of minute administrative prob\xc2\xad\n3 W ebster\xe2\x80\x99s Third New International Dictionary o f the English Language defines \xe2\x80\x9c execute\xe2\x80\x9d as, among other things,\n\xe2\x80\x9c to put into effect\xe2\x80\x9d and \xe2\x80\x9c to carry out fully \xe2\x80\x9d W ebster\xe2\x80\x99s Third N ew International Dictionary o f the English Language,\nU nabridged 794 (1993). It defines \xe2\x80\x9c administer\xe2\x80\x9d as, among other things, \xe2\x80\x9c to manage the affairs o f \xe2\x80\x9d Id at 27;\nsee also W ebster's Ninth N ew Collegiate Dictionary 434 (1986) (stating that \xe2\x80\x9c execute\xe2\x80\x9d and \xe2\x80\x9c administer\xe2\x80\x9d both\nmean \xe2\x80\x9c to carry out the declared intent of another\xe2\x80\x9d ).\n\n104\n\n\x0cDivision o f Powers and Responsibilities Between the Chairperson o f the Chemical Safety and Hazard\nInvestigation Board and the Board as a Whole\n\nlems bound up with the operation of a complex organization. Some degree of\nmanagerial discretion is inherent in the concept of an executive or administrative\noffice, and the statutory assignment of the Board\xe2\x80\x99s executive and administrative\nfunctions to the chairperson necessarily vests the chairperson with a degree of\nmanagerial autonomy on which the Board, in the proper exercise of its powers,\ncannot trench. Likewise, some day-to-day aspects of Board affairs may be so unre\xc2\xad\nlated to the Board\xe2\x80\x99s effective execution of its statutory responsibilities that they\ncannot be said to be proper objects of the full Board\xe2\x80\x99s authority. At the same\ntime, however, any number of Board activities or day-to-day aspects of Board\nbusiness, while at least in part administrative and even seemingly mundane, may\ninvolve or affect the Board\xe2\x80\x99s duties and functions in ways that are of legitimate\nconcern to the Board as a whole. Where that is the case, it is the prerogative\nof the Board to pass upon such issues in ways appropriate to its function as a\npolicymaking and rule-setting body.\nAside from the general delineation of powers, the Act itself does not address,\nwith specificity or precision, when particular aspects of Board business should\nbe said to be a legitimate concern of the Board as a whole or, in contrast, should\nbe left to the chairperson as the Board\xe2\x80\x99s executive and administrative officer. The\nAct\xe2\x80\x99s legislative history does state that, while the Board has the power to hire\nstaff, \xe2\x80\x9c [t]he chairperson of the Board is given authority for directing the work\nand assignments of the staff except that each Board member shall be assigned\nsuch personal staff as are necessary to carry out responsibilities of a member.\xe2\x80\x9d\nS. Rep. No. 101-228, at 229, reprinted in 1990 U.S.C.C.A.N. at 3613. Imme\xc2\xad\ndiately following this statement, however, is the declaration that \xe2\x80\x9c [t]he chair\xe2\x80\x99s\nconduct of the executive function is subject to oversight by the Board as a whole.\xe2\x80\x9d\nId. So even when it comes to directing staff work and assignments, the legislative\nhistory appears to contemplate that the chairperson may have to answer to the\nBoard in some respects. Again, however, the statute does not specify the precise\nbounds of the Board\xe2\x80\x99s oversight authority.\nIn light of the lack of explicit statutory guidance on the issue, we believe that,\nunder the general principles of corporate common law that we have previously\nfound instructive in similar cases, the Board as a whole, acting reasonably, has\nthe final authority to resolve disputes over whether a specific matter is within\nits oversight authority or is an administrative or executive concern of the chair\xc2\xad\nperson or a legitimate concern of the Board as a whole. Our past opinions\naddressing governance issues raised by multi-member boards and commissions\nhave repeatedly recognized that basic and well-established principles of corporate\ncommon law make clear \xe2\x80\x9c that the basic premise governing deliberative bodies\nis that the majority rules.\xe2\x80\x9d Letter for Mason H. Rose V, Chairperson, United\nStates Architectural and Transportation Barriers Compliance Board, from Larry\nL. Simms, Deputy Assistant Attorney General, Office of Legal Counsel at 2 (Sept.\n17, 1981) ( \xe2\x80\x9c Rose Letter\xe2\x80\x9d ); see also S. Rep. No. 101-228, at 229, reprinted in\n105\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 24\n\n1990 U.S.C.C.A.N. at 3613 (stating that \xe2\x80\x9c [t]he Board will operate by majority\nvote\xe2\x80\x9d ).4 In resolving a dispute between members of the Architectural and\nTransportation Barriers Compliance Board (\xe2\x80\x9c Compliance Board\xe2\x80\x9d ) and its chair\xc2\xad\nperson over the authority to call an additional meeting of the Compliance Board,\nfor example, we relied on the majority-rule principle to conclude that the Compli\xc2\xad\nance Board had the authority to call an additional non-emergency meeting despite\nthe lack of a rule authorizing it to do so. See Rose Letter at 4. We observed\nthat, given that principle, \xe2\x80\x9c [i]t would . . . be anomalous to conclude that the\nBoard cannot deal with the situation because the rules are silent\xe2\x80\x9d on the issue.\nId. Likewise, on separate occasions, we applied general principles regarding a\nboard\xe2\x80\x99s authority to act to conclude that both the Federal Home Loan Bank Board\nand the Advisory Board of Cuba Broadcasting could meet and conduct business\nwithout a properly appointed chairperson. In both cases we pointed out that, in\nthe absence of specific statutory prohibitions barring the boards from acting with\xc2\xad\nout a chairperson, business transacted at board meetings would be valid so long\nas the meetings complied with basic rules of corporate common law governing\nnotice to and attendance of board members. See Federal Home Loan Bank\nB oard \xe2\x80\x94 Chairm an \xe2\x80\x94 Vacancy\xe2\x80\x94 Reorganization Plan No. 3 o f 1947 (5 U.S.C.\nApp. 1), Reorganization Plan No. 6 o f 1961 (5 U.S.C. App.), 3 Op. O.L.C. 283,\n284 (1979); A uthority o f the Advisory Board fo r Cuba Broadcasting to Act in\nthe Absence o f a Presidentially D esignated Chairperson, 24 Op. O.L.C. 24, 25\xe2\x80\x94\n27 (2000). Finally, we noted when passing on an issue concerning the legal\nauthority o f the National Commission on Neighborhoods to enter into a proposed\nagreement that where a statute \xe2\x80\x9c is silent as to [a c]ommission\xe2\x80\x99s internal organiza\xc2\xad\ntion, practices, and procedures[, t]he clear implication is that these matters are\nto be decided by the members of the [cjommission.\xe2\x80\x9d National Commission on\nNeighborhoods (Pub. L. 95-24) \xe2\x80\x94 P o w ers \xe2\x80\x94 Appropriations, 2 Op. O.L.C. 366,\n367 n.5 (1977); cf. Memorandum for Tim Saunders, Acting Executive Clerk,\nExecutive Clerk\xe2\x80\x99s Office, from Richard Shiffrin, Deputy Assistant Attorney Gen\xc2\xad\neral, Office of Legal Counsel, Re: Appointment o f a Chairperson o f the World\nWar II M em orial A dvisory Board at 2 (Nov. 21, 1994) (noting that, if a chair\xc2\xad\nperson were appointed to the World War II Memorial Advisory Board, the board\nwould remain \xe2\x80\x9c free under general parliamentary law to make or amend its own\nrules for such matters as conducting business and calling meetings\xe2\x80\x9d ). These prin\xc2\xad\nciples, we believe, apply with equal force here.\nThese principles also undermine the former chairperson\xe2\x80\x99s view that the Act\xe2\x80\x99s\ndesignation of the Board\xe2\x80\x99s chairperson as its \xe2\x80\x9c Chief Executive Officer\xe2\x80\x9d signifi\xc2\xad\ncantly expands the chairperson\xe2\x80\x99s statutory responsibilities and powers beyond\n4W ith regard to these common-law principles, see, e.g., 2 William Meade Fletcher et al., Fletcher Cyclopedia\no f the Law o f Private Corporations \xc2\xa7\xc2\xa7392, 495 (perm. ed. rev vol. 1998); Robert S. Stevens, Handbook on the\nLaw o f Private Corporations \xc2\xa7\xc2\xa7145, 161 (2d ed. 1949); William J. Grange, Corporation Law fo r Officers and\nDirectors A Guide to Correct Procedure 381-89 (1935), see also General Henry M Robert, Robert's Rules o f\nO rder\xe2\x80\xa2 Newly Revised \xc2\xa7 1, at 4, \xc2\xa7 43, at 395 (9th ed 1990).\n\n106\n\n\x0cDivision o f Powers and Responsibilities Between the Chairperson o f the Chemical Safety and Hazard\nInvestigation Board and the Board as a Whole\n\nthose which he might otherwise have (i.e., as simply the \xe2\x80\x9c chairperson\xe2\x80\x9d ). October\nHill Letter at 1-2. The term \xe2\x80\x9c Chief Executive Officer\xe2\x80\x9d (\xe2\x80\x9c CEO\xe2\x80\x9d ) comes from\ncorporate law. CEOs and presidents of corporations, as a matter of corporate\ncommon law, are \xe2\x80\x9c subordinate in legal authority\xe2\x80\x9d to their corporations\xe2\x80\x99 boards\nof directors. Grange, supra note 4, at 450; see 2 Fletcher et al., supra note 4,\n\xc2\xa7495, at 528; Stevens, supra note 4, \xc2\xa7 164, at 768. Their specific powers derive\nin large part from the resolutions and by-laws passed by those boards and from\nthe practice and custom of the particular corporation. See, e.g., Grange, supra\nnote 4, at 451-52 (stating that the \xe2\x80\x9c chief determining factor is the usage of the\nparticular corporation\xe2\x80\x9d and that \xe2\x80\x9c [i]n brief, the president exercises such powers\nas he is given by the board, or as he may assume with the board\xe2\x80\x99s acquiescence\xe2\x80\x9d );\n2A William Meade Fletcher et al., Fletcher Cyclopedia o f the Law o f Private\nCorporations \xc2\xa7 553, at 14 (perm. ed. rev. vol. 1982) (observing that the powers\nof a corporate president may be enlarged by a board\xe2\x80\x99s \xe2\x80\x9c practice of permitting\nhim to do certain things without objection\xe2\x80\x9d ). Thus, while it may not be unusual\nfor a president and CEO of a corporation to possess substantial authority over\ncorporate affairs, such.authority exists largely as a matter of the board\xe2\x80\x99s grace\nand does not deprive the board of its ultimate authority to manage corporate busi\xc2\xad\nness. See, e.g., 2 Fletcher et al., supra note 4, \xc2\xa7495, at 528-29 (a board\xe2\x80\x99s delega\xc2\xad\ntion of authority to corporate officers does not mean that the board has abdicated\nits authority and does not deprive the board of its stated authorities and respon\xc2\xad\nsibilities); Stevens, supra note 4, \xc2\xa7 164, at 768 (whatever the precise duties and\npowers of a corporate president, \xe2\x80\x9c the authority and duty to manage the corporate\nbusiness is vested exclusively in the board of directors\xe2\x80\x9d ). Nothing in the Act\nsuggests that this general understanding of what it means to be a CEO should\nnot obtain in the specific case of the Board.\nWe do not agree that the Act provides the chairperson \xe2\x80\x9c with complete authority\nover all aspects of the [Board] except that all of the Board Members must vote\non three items: approval of Board Investigation Reports, recommendations to the\nAdministrator of EPA and the Secretary of Labor, and approval of regulations\nto be published in the Federal Register.\xe2\x80\x9d December Hill Letter at 1. In support\nof that reading, the former chairperson points out that \xe2\x80\x9c [t]he Congress has repeat\xc2\xad\nedly segregated these responsibilities through \xe2\x80\x98reorganization plans\xe2\x80\x99 of various\nmulti-member boards and commissions in the past.\xe2\x80\x9d Id. But whatever the import\nof such reorganization plans,5 the Act itself in no way suggests that the Board\xe2\x80\x99s\n5 A large number o f reorganization plans exist, most o f which can be found in appendix I to title 5 of the United\nStates Code, and we have not examined the provisions of each one in detail However, our bnef review of the\nplans has revealed no evidence o f the repeated segregation o f responsibilities o f the sort described in the former\nchairperson\xe2\x80\x99s submission. See generally 5 U.S.C app. 1. In fact, such plans are generally intended only to improve\nthe efficiency of the housekeeping and day-to-day operations o f multi-member bodies by placing primary responsi\xc2\xad\nbility for such affairs with a chairperson, not to effect a large-scale transfer o f significant powers and authorities\nto the chairperson from the body as a whole. See, e.g., David M. Welbom, Governance o f Federal Regulatory\nAgencies 9 (1977) (discussing reorganizations), see also Special Message to the Congress Transmitting Reorganization\nPlans 1 Through 13 o f 1950, Pub. Papers o f Harry S. Truman 199, 202 (1950) ( \xe2\x80\x9c [T]hat under these . . . plans\nContinued\n\n107\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 24\n\nchairperson is vested \xe2\x80\x9c with complete authority over all aspects\xe2\x80\x9d of Board busi\xc2\xad\nness except the three responsibilities just mentioned. Indeed, as we explain above,\nthe language of the Act and the general principles of corporate common law\nagainst which it must be read belie that conclusion. The A ct\xe2\x80\x99s legislative history\ndoes mention these responsibilities in the context o f delegation, stating that the\nBoard \xe2\x80\x9c may (by vote) delegate responsibilities to the chairperson or other\nmember, except that it shall require a majority vote of the full Board to issue\na report on the cause or probable cause of an accident, make a recommendation\nto the Administrator [of EPA] or the head of another Federal agency, or promul\xc2\xad\ngate a rule.\xe2\x80\x9d S. Rep. No. 101-228, at 229, reprinted in 1990 U.S.C.C.A.N. at\n3613. This statement, however, only makes clear Congress\xe2\x80\x99s intent that the Board\nnot delegate these responsibilities to the chairperson or any other single member.\nIt does not suggest that these responsibilities are the only ones that are, in the\nfirst instance, vested in the full Board. In fact, by stating that the Board may\ndelegate all other responsibilities, it suggests the opposite, for the Board could\nnot make the delegation if those responsibilities were committed to the chairperson\ninstead of the Board as a whole.\nAlong similar lines, we do not attribute great significance to the fact that, as\nis apparent from the Act\xe2\x80\x99s legislative history, Congress contemplated that the\nBoard would be \xe2\x80\x9c modeled on the structure, activities and authorities of the\nNational Transportation Safety Board (NTSB), an independent Federal agency\nwhich investigates accidents in the transportation industry.\xe2\x80\x9d S. Rep. No. 101\xe2\x80\x94\n228, at 228, reprinted in 1990 U.S.C.C.A.N. at 3612. Even if the chairperson\nof the NTSB is the chief moving force on the NTSB and principally responsible\nfor executing its policies, it does not follow that the Board\xe2\x80\x99s chairperson also\nshould be understood to have expansive authority over nearly all of the Board\xe2\x80\x99s\naffairs. See October Hill Letter at 2; December Hill Letter at 1. The division of\nauthority at the NTSB upon which the former chairperson focuses is much less\na matter of statutory mandate than it is a matter of the development, through\ncollegial practice and over time, o f the NTSB\xe2\x80\x99s own internal policies concerning\ndelegation of authority to the NTSB chairperson, the NTSB\xe2\x80\x99s acquiescence in the\nchairperson\xe2\x80\x99s assertion of authority over certain substantive areas, and the general\nevolution of the NTSB\xe2\x80\x99s current allocation of responsibilities. See, e.g., Letter\nfor Randolph D. Moss, Acting Assistant Attorney General, Office of Legal\nCounsel, from the Chemical Safety and Hazard Investigation Board at Attach.\n1 (Dec. 27, 1999) (discussing development of division of responsibilities at the\nNTSB). Indeed, as it existed in 1990, when the Act was passed, the statute estab\xc2\xad\nlishing the NTSB stated that \xe2\x80\x9c [t]he Chairman . . . shall be governed by the gen\xc2\xad\neral policies established by the Board, including any decisions, findings, deter\xc2\xad\nthe commissions retain all substantive responsibilities deserves special emphasis. The plans only eliminate multiheaded supervision o f internal administrative functioning. The commissionls] retain policy control over administrative\nactivities since these are subject to the general policies and regulatory decisions, findings, and determinations of\nthe com m issions.\xe2\x80\x9d ).\n\n108\n\n\x0cDivision o f Powers and Responsibilities Between the Chairperson o f the Chemical Safety and Hazard\nInvestigation Board and the Board as a Whole\n\nminations, rules, regulations, and formal resolutions.\xe2\x80\x9d Pub. L. No. 93-633,\n\xc2\xa7 303(b)(3), 88 Stat. 2156, 2167 (1975).6 The legislative history emphasized this\npoint. \xe2\x80\x9c The Chairman,\xe2\x80\x9d it provided, \xe2\x80\x9c is to be the chief executive officer of the\nBoard, but in acting as such, he is subject to the decisions and policies decided\nupon by the entire Board, and it is intended that each member shall participate\nactively in all aspects of the executive function.\xe2\x80\x9d S. Rep. No. 93-1192, at 43\n(1974).\nThat the NTSB\xe2\x80\x99s chairperson may, as a matter of internal NTSB policy and\nlongstanding practice, exercise significant authority and influence over many sub\xc2\xad\nstantive and procedural aspects of NTSB operations does not dictate that the\nBoard\xe2\x80\x99s chairperson be allowed to do the same. Had Congress intended that result,\nit could have looked to the specifics of the division of authority within the NTSB\nin 1990 and spelled out a similar division of authority more explicitly in the Act.\nIt did not do so. Instead, as discussed above, the Act leaves the Board free to\nshape and structure the details of its own internal operations in large part as it\nsees fit, and to do so in a practical matter, over time and on a case-by-case basis\nas its goals and agenda demand. The Board ultimately may or may not think\nit appropriate to follow a course similar to that of the NTSB. In any event, the\nBoard\xe2\x80\x99s determination of the appropriate division of authority between itself and\nits chairperson will of necessity turn on considerations of internal administration\nand practical working arrangements within the Board.\nRANDOLPH D. MOSS\nActing Assistant Attorney General\nOffice o f Legal Counsel\n\n6 Al the time of the Act\xe2\x80\x99s passage, the NTSB\xe2\x80\x99s organic statute provided in pertinent part as follows\nThe Chairman shall be the chief executive officer o f the Board and shall exercise the executive and adminis\xc2\xad\ntrative funcuons o f the Board with respect to the appointment and supervision of personnel employed\nby the Board, the distribution o f business among such personnel and among any administrative units of\nthe Board; and the use and expenditure of funds\n. . The Chairman . . . shall be governed by the general\npolicies established by the Board, including any decisions, findings, determinations, rules, regulations, and\nformal resolutions\nPub L No 93-633, \xc2\xa7 303(b)(3), 88 Stat. 2156, 2167(1975)\n\n109\n\n\x0c"


b'Importation of Morphine Sulfate for Placement\nin the National Defense Stockpile\nThe Attorney G eneral m ay authorize the General Services Adm inistration to im port m orphine sulfate\nfrom Turkey for placem ent in the National D efense Stockpile under an exception in 21 U .S .C .\n\xc2\xa7 952(a)(2)(A ), if h e determ ines that acquisition by im port is necessary due to an em ergency in\nwhich dom estic supplies are inadequate to m eet a legitim ate need of the U nited States.\nA reasonable argum ent can be m ade that the prohibition in 21 U .S .C . \xc2\xa7 952(a) does not apply to the\nim portation o f drugs by the U nited States, notw ithstanding long-standing and consistent adm in\xc2\xad\nistrative practice and interpretation to the contrary.\n\nJuly 19, 1982\nMEMORANDUM OPINION FOR THE ACTING ADMINISTRATOR,\nDRUG ENFORCEMENT ADMINISTRATION\nYou asked whether the Attorney General1may, in light of 21 U.S.C. \xc2\xa7 952(a),\npermit the General Services Administration (GSA) to import, for placement in\nthe National Defense Stockpile, morphine sulfate manufactured in Turkey.\nAssuming that \xc2\xa7 952(a) applies to the importation of drugs by the United States,\nalthough a reasonable legal argument can be made that it does not, we conclude\nthat the Attorney General may nevertheless be in a position to sanction the import\nif the facts indicate that it would fall within an exception to the \xc2\xa7 952(a)\nprohibition.2\nSection 952(a) provides:\nIt shall be unlawful to import into the customs territory of the\nUnited States from any place outside thereof (but within the\nUnited States), or to import into the United States from any place\noutside thereof, any controlled substance in schedule I or II of\n1 Your question is phrased in terms of the authority of the Attorney General. We note, however, that the Attorney\nGeneral s authority under 21 U.S C. \xc2\xa7 952(a) has been delegated to the Administrator of the Drug Enforcement\nAdministration, 28 C .F.R. \xc2\xa7 0 100, and has, in the past, been exercised by him. E .g.. 39 Fed Reg 44033 (1974).\nFor the purposes o f consistency, both with the language of your request and with that of the statute, we will refer\nthroughout our opinion to the authority o f the Attorney General under \xc2\xa7 952(a). It should be understood, however,\nthat the Administrator o f the Drug Enforcement Administration is the official who actually exercises that authority\n2 You asked also that we consider, if we conclude that \xc2\xa7 952(a) prohibits the import, whether other, superior legal\nauthority is available to authorize it We have researched this point and have found no statute which by its terms or by\nfair implication would authorize the President, the Attorney General, or any other Executive Branch official to\npermit an import otherwise prohibited by \xc2\xa7 952(a) Nor do we know of a constitutional power of the Executive,\napplicable in present circumstances, to override a valid law enacted by Congress and made applicable to the United\nStates.\n\n455\n\n\x0csubchapter I of this chapter or any narcotic drug in schedule III,\nIV, or V of subchapter I of this chapter, except that\xe2\x80\x94\n(1) such amounts o f crude opium and coca leaves as the\nAttorney General finds to be necessary to provide for medical,\nscientific, or other legitimate purposes, and\n(2) such amounts of any controlled substance in schedule I or\nII or any narcotic drug in schedule III, IV, or V that the\nAttorney General finds to be necessary to provide for the\nmedical, scientific, o r other legitimate needs of the United\nStates\xe2\x80\x94\n(A) during an emergency in which domestic supplies of\nsuch substance or drug are found by the Attorney General to\nbe inadequate, or\n(B) in any case in which the Attorney General finds that\ncom petition among domestic manufacturers of the con\xc2\xad\ntrolled substance is inadequate and will not be rendered\nadequate by the registration of additional manufacturers\nunder section 823 o f this title,\nmay be so imported under such regulations as the Attorney\nGeneral shall prescribe. No crude opium may be so imported for\nthe purpose of manufacturing heroin or smoking opium.\nMorphine sulfate is a schedule II controlled substance within the meaning of\n\xc2\xa7 952(a). 21 C.F.R. \xc2\xa7 1308.12 (1981). It is not crude opium. Under the plain\nlanguage of \xc2\xa7 952(a) its importation into the United States is, therefore, unlawful\nunless one of the exceptions of subsection (2) applies. You have informed us that,\nin your view, competition among domestic manufacturers of morphine sulfate is\nadequate and that the exception contained in \xc2\xa7 952(a)(2)(B) is, for this reason,\nunavailable on the facts. We accept this assessment and our opinion does not treat\nthat exception. You observe also that \xe2\x80\x9c today, no shortage of morphine sulfate is\nknown to exist.\xe2\x80\x9d This observation calls into question the applicability of the\nexception provided for in \xc2\xa7 952(a)(2)(A). We are reluctant, however, to con\xc2\xad\nclude, on the basis of your observation\xe2\x80\x94 notwithstanding the recognized exper\xc2\xad\ntise of the Drug Enforcement Administration (DEA) concerning the normal needs\nof the country for morphine sulfate and the adequacy of domestic supplies to meet\nthose needs\xe2\x80\x94 that the availability of a \xc2\xa7 952(a)(2)(A) exception is necessarily\nforeclosed under the facts in the case at hand. Our reluctance stems from our\nbelief that agency expertise in addition to that of DEA should appropriately be\nconsulted to permit full factual development and to assist in making or rejecting\nthe finding required by \xc2\xa7 952(a)(2)(A).\nAs stated above, GSA wishes to import morphine sulfate from Turkey for\nplacement in the National Defense Stockpile. Under the Strategic and Critical\nMaterials Stock Piling Act, 50 U.S.C. \xc2\xa7\xc2\xa7 98-98h-4 (Supp. Ill 1979), the\nPresident is charged with responsibility to \xe2\x80\x9c determine from time to time\n(1) which materials are strategic and critical materials for the purposes of [the\n456\n\n\x0cAct], and (2) the quality and quantity of each such material to be acquired for the\npurposes of [the Act] and the form in which each such material shall be acquired\nand stored.\xe2\x80\x9d 50 U.S.C. \xc2\xa7 98b(a). He is directed to acquire and store materials\ndetermined to be strategic and critical, 50 U.S.C. \xc2\xa7 98e(a)(l) and (2), in the\n\xe2\x80\x9c interest of national defense,\xe2\x80\x9d and in quantities \xe2\x80\x9c sufficient to sustain the United\nStates for a period of not less than three years in the event of a national\nemergency.\xe2\x80\x9d 50 U.S.C. \xc2\xa7 98b(b)(l) and (2). The basic purpose which Congress\nintended the Act, and thus the authority of the President, to serve is \xe2\x80\x9c to decrease\nand to preclude, when possible, a dangerous and costly dependence by the\nUnited States upon foreign sources for supplies of [strategic and critical mate\xc2\xad\nrials] in times of national emergency.\xe2\x80\x9d 50 U.S.C. \xc2\xa7 98a(b). It is clear that the\nacquisition and maintenance of adequate supplies of strategic and critical mate\xc2\xad\nrials in the National Defense Stockpile is, under the Act, a high national priority\nand an important responsibility of the President.\nThe President has delegated to various officials his functions and authority,\nalthough not his ultimate responsibility, see 3 U.S.C. \xc2\xa7 301, under the Strategic\nand Critical Materials Stock Piling Act. Executive Order No. 12155 of Sept. 10,\n1979, 44 Fed. Reg. 53071, reprinted in 50 U.S.C. \xc2\xa7 98 note (Supp. Ill 1979).\nRelevant here, he has authorized the Director of the Federal Emergency Manage\xc2\xad\nment Agency (FEMA) to determine on his behalf which materials are to be\ndesignated strategic and critical and in what quantity, quality and form they are to\nbe acquired for storage in the National Defense Stockpile. Executive Order No.\n12155, \xc2\xa7 1-101. In addition, he has delegated to the Administrator of General\nServices authority to acquire the designated materials. Executive Order No.\n12155, \xc2\xa7 1-102.\nPursuant to this delegation, the Director of FEMA has, we are informed,\ndesignated opium salts in the form of morphine sulfate as a strategic and critical\nmaterial and has made it one of the highest priority items for acquisition for the\nNational Defense Stockpile. At present, in spite of this high priority, the supply\nof opium salts, together with an equivalency in raw opium from which the salts\nmay be processed, is 58,697 AMA (anhydrous morphine alkaloid) lbs., or\napproximately 45 percent, below the goal of 130,000 AMA lbs. which the\nDirector of FEMA has set. The Administrator of General Services is attempting\n\xe2\x80\x9c to correct this critical shortage\xe2\x80\x9d and plans to acquire approximately 44,000\nAMA lbs. of opium salts within one year. The Administration has determined that\n20,000 AMA kilograms (approximately 44,000 AMA lbs.) of morphine sulfate,\nthe form of opium salts which FEMA has specified as its first preference for\nstorage in the National Defense Stockpile, can be acquired from the Turkish Soil\nProducts Office within the established one-year time period.\nWe doubt that it can be disputed that the acquisition of morphine sulfate for the\nNational Defense Stockpile is, within the terms of \xc2\xa7 952(a), in furtherance of a\nlegitimate need of the United States. The factual question remains, however,\nwhether such acquisition by import from Turkey (as opposed to by purchase from\nU.S. manufacturers) is necessary due to an emergency in which domestic\nsupplies of morphine sulfate are inadequate to meet this legitimate need. This is\n457\n\n\x0cthe finding required by \xc2\xa7 952(a)(2)(A). To answer this question, we believe it is\nessential first to identify precisely what that need is, second to determine whether\nfailure to fulfill that need creates an emergency situation, and finally to examine\nwhether domestic supplies are adequate to meet the need as identified, within the\ntime period set by FEMA and GSA.\nSince FEMA is the government agency with both the authority and primary\nresponsibility under Executive Order No. 12155 to determine what the need is,\nand with the expertise to know whether failure to meet that need creates an\nemergency with respect to the defense preparedness of the United States, its\nviews on these issues should be solicited and will be entitled to considerable\nweight. It is also apparent that GSA, which is charged with fulfilling the need, is\nin a position to have or to develop the facts concerning the adequacy and\navailability of domestic supplies to satisfy the need according to the terms set by\nthe two agencies.\nWe cannot, of course, predict whether, after FEMA and GSA have been\nconsulted and additional information made available to DEA from other sources\nhas been considered, the facts will establish the availability of a \xc2\xa7 952(a)(2)(A)\nexception for the importation from Turkey of morphine sulfate for the National\nDefense Stockpile. We cannot rule out the possibility, however, that an inquiry\nproperly focused on the relevant facts would establish that \xc2\xa7 952(a)(2)(A) is\napplicable to the proposed import. Such an inquiry should give due consideration\nto the requirements and views of FEMA and GSA, as well as to the facts\npresented by them and by other interested parties,3 including: the need for the\nspecific substance morphine sulfate in the National Defense Stockpile; the\nquantity and quality of morphine sulfate needed; the period of time within which\nthat need must be met; the consequences to national defense preparedness if that\nneed is not fulfilled within that time period; whether those consequences would\nconstitute an emergency; and whether domestic supplies of morphine sulfate are,\nor will be, adequate during the relevant time period to meet that need, both as to\nquantity and quality, given that the medical, scientific, and other legitimate needs\nof the United States, including the maintenance by private industry of sufficient\nreserve supplies, for opium-based drugs must be met simultaneously.\nAs we noted earlier, a legal argument can be made that \xc2\xa7 952(a) is inapplicable\nin the case of an import by the United States, through one of its agencies, of a\ncontrolled substance otherwise within the scope of this statute. This argument is\nbased on a line of Supreme Court cases best typified by U nited S tates v. U nited\nM in e W orkers, 330 U.S. 258 (1947), which hold that, as a matter of statutory\nconstruction, unless extraneous and affirmative reasons (such as the legislative\nhistory or the context within which a statutory scheme operates) indicate other\xc2\xad\nwise, \xe2\x80\x9c statutes which in general terms divest pre-existing rights or privileges will\nnot be applied to the sovereign without express words to that effect.\xe2\x80\x9d Id. at 272.\nS ee a lso H an cock v. Train, 426 U .S. 167 (1976); U nited States v. Wittek, 337\nU.S. 346(1949); U n ited States v. H erron , 87 U.S. (20 Wall.)251 (1874); U nited\n3 A formal hearing on the availability of a \xc2\xa7 952(a)(2)(A) exception is nol required. 21 U .S.C . \xc2\xa7 958(h).\n\n458\n\n\x0cS ta te s v. Knight, 3 9 U.S. (1 4 P et.)301 (1840);a n d 2 6 Op. Att\xe2\x80\x99yGen. 415 (1907)\n\n(Statute prohibiting, on penalty of forfeiture, transportation of merchandise from\none United States port to another in foreign-owned vessels inapplicable to the\nshipment of property owned by the United States).\nWithout going into detail, we observe that nothing specific in the language of\n\xc2\xa7 952(a) or of its predecessor statute, the Narcotic Drugs Import and Export Act\nof 1922, Pub. L. No. 227, \xc2\xa7 2(b), 67th C ong., 2d Sess., 42 Stat. 596,21 U.S.C.\n\xc2\xa7 173 (1964) and little in their combined legislative histories indicates clearly\nthat they were intended to restrict the actions of the United States. Thus applica\xc2\xad\ntion to \xc2\xa7 952(a) of the rule of construction that general statutes do not divest the\nsovereign of pre-existing rights is not clearly precluded. The argument that\n\xc2\xa7 952(a) should not be construed to prohibit importation by the United States is\nstrengthened when one considers the statutory mechanisms chosen by Congress\nto enforce it: criminal prosecution, 21 U.S.C. \xc2\xa7 960, and forfeiture to the United\nStates, 21 U.S.C. \xc2\xa7\xc2\xa7 965, 880. Both penalties are inappropriate for application\nto the United States.\nOther arguments, however, support the conclusion that the prohibition of\n\xc2\xa7 952(a) should be applied to the United States. Primary among these is that\nDEA and its predecessor agencies responsible for enforcing \xc2\xa7 952(a) and its\nprogenitor have long interpreted the provisions as applicable to the United States,\ne.g., 21 C.F.R. \xc2\xa7\xc2\xa7 1311.24-25 (Exempting military personnel and certain\nfederal law enforcement personnel from import and export registration require\xc2\xad\nments). The United States, as an administrative practice, has never imported\nnarcotics in violation of these provisions. This interpretation by the agency\nresponsible for administering the statute, and the long and consistent admin\xc2\xad\nistrative practice, would, we believe, carry great weight with the courts. E. g.,\nU nited S tates v. Rutherford, 442 U.S. 544, 553-54 (1979). Moreover, although\ndirect evidence is scanty, there is some indication in the legislative history that\n\xc2\xa7 952(a) is intended, at least in part, to foster a United States industry to produce\nopium-based drugs and to protect that industry from foreign competition. See\ngenerally C on trolled D angerous Substances, N arcotics an d D rug C ontrol L aw s:\nH earings B efore the H ouse C om m ittee on Ways an d M eans, 91st Cong., 2d\nSess., 458-62 (1970) (Statement of Stephen Ailes). S ee also 21 U.S.C. \xc2\xa7 958(h)\n\n(Giving U.S. manufacturers certain hearing rights before imports may be autho\xc2\xad\nrized). Failure to apply the law to the United States, a substantial consumer of\nsuch drugs, arguably would be inconsistent with such an intent. Further,\n\xc2\xa7 952(a), like its predecessor, places an absolute ban on the importation of opium\nfor manufacturing heroin or smoking opium. Since this prohibition was derived\nfrom \xc2\xa7 952(a)\xe2\x80\x99s predecessor and since that statute was enacted in large part in\nreaction to adverse congressional and public opinion concerning the increase in\ndrug use in the United States for non-medical purposes\xe2\x80\x94 particularly opium\nsmoking\xe2\x80\x94 it seems doubtful that Congress meant to exempt the United States\n\n459\n\n\x0cfrom this particular prohibition. Finally, \xc2\xa7 952(a) must be read in p a ri m ateria\nwith 21 U.S.C. \xc2\xa7 953(a)4, dealing with the export of controlled substances. We\nnote that the prohibitions of that section almost certainly are applicable to exports\nby the United States since they are intended to implement the treaties and\ninternational conventions cited in that section and those treaties and conventions\napply, by their terms, to actions of the United States government.\nIn conclusion, an argument can be made, as outlined briefly above, that\n\xc2\xa7 952(a) does not bind the United States. Nevertheless, a contrary legal argu\xc2\xad\nment can be made, based on administrative practice and interpretation, that it\ndoes. In these circumstances, we conclude that it would be imprudent to rely\nsolely on this argument to attempt to justify the proposed import by GSA of\nmorphine sulfate from Turkey without first carefully examining the relevant facts\navailable to FEMA and GSA to determine whether the \xc2\xa7 952(a)(2)(A) exception\nis available. Should you determine that the facts do not support an exception\nunder that section, we would be pleased to explore more fully the legal question\nof the applicability of \xc2\xa7 952(a) to imports of controlled substances by the United\nStates.\nT\n\nheodore\n\nB. O\n\nlson\n\nA ssista n t A ttorney G eneral\nOffice o f L egal Counsel\n\n4 Both are sections of the Controlled Substances Import and Export Act, which was enacted as Title III of the\nComprehensive Drug Abuse Prevention and Control Act of 1970, Pub L No 91-513, Title III, 91st Cong , 2d\nSess., 84 Stat. 1285.\n\n460\n\n\x0c'


b'Applicability of the Privacy Act to the White House\nT h e P rivacy A ct does not apply to the W hite H ouse O ffice, w hich is also known as the O ffice of\nthe P resident\n\nSeptember 8, 2000\nSta tem en t B efore\nS u b c o m m it t e e\n\non\n\nand\n\nC o m m it t e e\n\nthe\n\nC r im in a l J u s t ic e , D r u g P o l ic y\nH u m a n R esources\non\n\nG o v ern m en t R eform\n\nU n it e d S ta t e s H o u s e\n\nof\n\nR e p r e s e n t a t iv e s\n\nGood morning, Mr. Chairman and Members of the Subcommittee. I am pleased\nto be here today to testify regarding the Department of Justice\xe2\x80\x99s (\xe2\x80\x9c Department\xe2\x80\x9d )\nlongstanding position that the Privacy Act of 1974 (\xe2\x80\x9c Privacy Act\xe2\x80\x9d ), 5 U.S.C.\n\xc2\xa7 552a (1994 & Supp. IV 1998), does not apply to the White House Office, which\nis also known as the Office of the President. In my testimony today, I will gen\xc2\xad\nerally refer to that Office as the White House Office. In explaining our position\nregarding the White House Office, I will set forth the standards that also govern\nthe applicability of the Privacy Act to the other components of the Executive\nOffice of the President (\xe2\x80\x9c EOP\xe2\x80\x9d ).1\nThe Department\xe2\x80\x99s legal position that the Privacy Act does not apply to the\nWhite House Office was stated in an Office of Legal Counsel opinion in April\n1975, less than four months after the Privacy Act was enacted, by then Assistant\nAttorney General Antonin Scalia,2 and it has been reiterated in subsequent Office\no f Legal Counsel opinions and briefs filed by the Department in litigation. As\nI will explain, the position rests on three premises. First, the Privacy Act, by\nits terms, applies only to \xe2\x80\x9c agencies.\xe2\x80\x9d Second, the Privacy Act defines the term\n\xe2\x80\x9c agency\xe2\x80\x9d to mean the same thing as the term means in the Freedom of Informa\xc2\xad\ntion Act, 5 U.S.C. \xc2\xa7552 (1994 & Supp. II 1996). Third, the Supreme Court has\nconcluded that the White House Office is not an \xe2\x80\x9c agency\xe2\x80\x9d within the meaning\nof the FOIA.\n\n1The EOP is made up o f a number of different components, one o f which is the White House Office Other\ncomponents o f the EOP include the Office of Management and Budget, the National Security Council, and the\nCouncil o f Economic Advisors As will be discussed infra, both the legislative history of the Freedom of Information\nAcl ( \xe2\x80\x9c FO IA \xe2\x80\x9d ) and Supreme Court caselaw make clear that certain components o f the \xe2\x80\x9c Executive Office of the\nPresident\xe2\x80\x9d are not encom passed in that term as it is used in the FOIA definition of \xe2\x80\x98\xe2\x80\x98agency \xe2\x80\x9d\n2 Letter for the Honorable James T. Lynn, Director, Office of Management and Budget, from Antonin Scalia,\nAssistant Attorney G eneral, O ffice o f Legal Counsel (Apr. 14, 1975) ( \xe2\x80\x9c Scalia Opinion\xe2\x80\x9d ).\n\n178\n\n\x0cApplicability o f the Privacy Act to the White House\n\nI.\n\nThe Privacy Act governs the collection, maintenance, use, and disclosure of\ninformation concerning individuals by federal agencies. As a review of the various\nprovisions o f the Privacy Act will reveal, the requirements o f the Act by their\nterms apply only to federal \xe2\x80\x9c agencies.\xe2\x80\x9d See 5 U.S.C. \xc2\xa7552a.3] See also Dong\nv. Smithsonian Inst., 125 F.3d 877, 878 (D.C. Cir. 1997) (\xe2\x80\x9c requirements of the\nAct . . . apply to \xe2\x80\x98agencies\xe2\x80\x99 \xe2\x80\x9d ), cert, denied, 524 U.S. 922 (1998). In defining\nthe term \xe2\x80\x9c agency\xe2\x80\x9d in the Privacy Act, Congress incorporated by reference the\ndefinition of \xe2\x80\x9c agency\xe2\x80\x9d set forth in the FOIA, providing that \xe2\x80\x9c the term \xe2\x80\x98agency\xe2\x80\x99\nmeans agency as defined in section 552(e) of [the FOIA].\xe2\x80\x9d 5 U.S.C. \xc2\xa7 552a(a)(l).4\nTherefore, the applicability of the Privacy Act to the White House Office turns\non whether the White House Office is an \xe2\x80\x9c agency\xe2\x80\x9d as defined in the FOIA.\nCongress enacted the FOIA definition of \xe2\x80\x9c agency\xe2\x80\x9d in 1974, just 40 days before\nthe Privacy Act was enacted. See 88 Stat. 1561, 1564 (1974). That definition pro\xc2\xad\nvides as follows:\nFor purposes of this section, the term \xe2\x80\x9c agency\xe2\x80\x9d as defined in sec\xc2\xad\ntion 551(1) of this title includes any executive department, military\ndepartment, Government corporation, Government controlled cor\xc2\xad\nporation, or other establishment in the executive branch of the\nGovernment (including the Executive Office of the President), or\nany independent regulatory agency.\nIn enacting this definition, Congress sought to codify the test enunciated by the\nCourt of Appeals for the District of Columbia Circuit in Soucie v. D avid, 448\nF.2d 1067 (D.C. Cir. 1971), under which the term \xe2\x80\x9c agency\xe2\x80\x9d as used in the FOIA\ndoes not include units within the EOP whose \xe2\x80\x9c sole function [is] to advise and\nassist the President.\xe2\x80\x9d Id. at 1073-75. The Conference Report to the 1974 FOIA\namendments provides that:\nWith respect to the meaning of the term \xe2\x80\x9c Executive Office of the\nPresident\xe2\x80\x9d the conferees intend the result reached in Soucie v.\nD avid . . . . The term is not to be interpreted as including the\nPresident\xe2\x80\x99s immediate personal staff or units in the Executive\nOffice whose sole function is to advise and assist the President.\n3See, e g ., 5 U.S.C. \xc2\xa7\xc2\xa7552a(b) ( \xe2\x80\x9c [n]o agency shall . \xe2\x80\x9d ); 552a(c) ( \xe2\x80\x9c [e]ach agency, with respect to each system\no f records under its control, shall .\n\xe2\x80\x9d ), 552a(d) ( \xe2\x80\x9c [e]ach agency that maintains a system o f records shall\n.\xe2\x80\x9d )\n4 Until 1986, the FO lA \xe2\x80\x99s definition o f agency was codified at 5 U.S.C \xc2\xa7 552(e) The Anti-Drug A buse Act of\n1986, Pub L No 99-570, \xc2\xa7 1802(b), 100 Slat 3207. 3207-49, recodified the definition (without substantive change)\nat 5 U S C . \xc2\xa7552(0- No conforming amendment was made to the Privacy Act to reflect the current location of\nFO lA \xe2\x80\x99s definition\n\n179\n\n\x0cOpinions o f the Ofpce o f Legal Counsel in Volume 24\n\nH.R. Conf. Rep. No. 93-1380, at 14-15 (1974); S. Conf. Rep. No. 93-1200, at\n15 (1974), reprinted in 1974 U.S.C.C.A.N. 6267, 6285.\nThe Supreme Court held in Kissinger v. Reporters Committee fo r Freedom o f\nthe Press, 445 U.S. 136 (1980), that the FOIA definition of \xe2\x80\x9c agency\xe2\x80\x9d does not\ninclude the Office of the President (which is also known as the White House\nOffice). The Court stated that \xe2\x80\x9c [t]he legislative history is unambiguous . . . in\nexplaining that the \xe2\x80\x98Executive Office\xe2\x80\x99 does not include the Office of the Presi\xc2\xad\ndent\xe2\x80\x9d because the legislative history plainly specified that \xe2\x80\x9c \xe2\x80\x98the President\xe2\x80\x99s\nimmediate personal staff or units in the Executive Office whose sole function\nis to advise and assist the President\xe2\x80\x99 are not included within the term \xe2\x80\x98agency\xe2\x80\x99\nunder the FOIA.\xe2\x80\x9d Id. at 156 (citation omitted).\nAdhering to the test set forth in K issinger and Soucie, the D.C. Circuit Court\nof Appeals has consistently concluded that the President\xe2\x80\x99s immediate personal\nstaff and units in the EOP whose sole function is to advise and assist the President\nare not considered \xe2\x80\x9c agencies\xe2\x80\x9d for purposes of the FOIA. See Armstrong v. Execu\xc2\xad\ntive Office o f the President, 90 F.3d 553, 557-66 (D.C. Cir. 1996) (National Secu\xc2\xad\nrity Council not an \xe2\x80\x9c agency\xe2\x80\x9d under the FOIA), cert, denied, 520 U.S. 1239\n(1997); M eyer v. Bush, 981 F.2d 1288, 1292-98 (D.C. Cir. 1993) (President\xe2\x80\x99s\nTask Force on Regulatory Relief not an \xe2\x80\x9c agency\xe2\x80\x9d under the FOIA); Rushforth\nv. Council o f Economic Advisers, 762 F.2d 1038, 1040-41 (D.C. Cir. 1985)\n(Council of Economic Advisers not an \xe2\x80\x9c agency\xe2\x80\x9d under the FOIA). See also Ryan\nv. Departm ent o f Justice, 617 F.2d 781, 789 (D.C. Cir. 1980) (the FOIA \xe2\x80\x9c defines\nagencies as subject to disclosure and presidential staff as exempt\xe2\x80\x9d ).5\nIn particular, the D.C. Circuit has made it clear\xe2\x80\x94 as did the Supreme Court\nin K issin ger \xe2\x80\x94 that the White House Office is among the components of the EOP\nthat are exempt from the FOIA definition of \xe2\x80\x9c agency.\xe2\x80\x9d See Meyer, 981 F.2d\nat 1293 & n.3 ( \xe2\x80\x9c [t]he President\xe2\x80\x99s immediate personal staff . . . would encompass\nat least those approximately 400 individuals employed in the White House\nOffice\xe2\x80\x9d ); id. at 1310 (Wald, J., dissenting) (\xe2\x80\x9c [w]e and the Supreme Court have\ninterpreted \xe2\x80\x98immediate personal s ta ff to refer to the staff of the Office of the\nPresident, also known as the White House Office\xe2\x80\x9d ); National Security Archive\nv. A rchivist o f the United States, 909 F.2d 541, 545 (D.C. Cir. 1990) (White House\nCounsel exempt from the FOIA as an entity within the White House Office\nforming part of the President\xe2\x80\x99s immediate personal staff).\nIn sum, because the Privacy Act incorporates by reference the FOIA definition\nof \xe2\x80\x9c agency,\xe2\x80\x9d and because it is settled that the White House Office is not an\nagency under the FOIA, the Department has concluded that the White House\nOffice is not an agency under the Privacy Act.\n5The D C C ircuit has held that the Council on Environmental Quality, another component of the EOP, is an\n\xe2\x80\x9c agency\xe2\x80\x9d under FOLA Pacific Legal Found. v Council on Envll. Quality, 636 F 2d 1259 (D.C Cir. 1980).\n\n180\n\n\x0cApplicability o f the Privacy Act to the White House\n\nII.\nThe District Court\xe2\x80\x99s decision in Alexander v. Federal Bureau o f Investigation,\n971 F. Supp. 603 (D.D.C. 1997), which rejected this analysis, is in our opinion\nincorrectly decided. In that case, Judge Royce Lamberth took the view that the\nFOIA definition does not govern whether the Privacy Act applies to the \xe2\x80\x9c imme\xc2\xad\ndiate staff of the President.\xe2\x80\x9d Id. at 606. In his view, \xe2\x80\x9c agency\xe2\x80\x9d means one thing\nfor the Privacy Act and another for the FOIA because the purposes of the two\nstatutes are different. Congress precluded this interpretative move, however, when\nit affirmatively stated that the term should have the same meaning in both statutes.\nThe text of the Privacy Act is straight-forward. Section 552a(a)(l) provides that,\nfor purposes of the Privacy Act, \xe2\x80\x9c the term \xe2\x80\x98agency\xe2\x80\x99 means agency as defined\nin section 552(e)\xe2\x80\x9d of title 5 of the United States Code \xe2\x80\x94 the FOIA definition\nof agency.6\nCongress could not have been more clear about the relationship of the meaning\nof the word \xe2\x80\x9c agency\xe2\x80\x9d in the two statutes. Thus, as the D.C. Circuit has observed,\nthe Privacy Act \xe2\x80\x9c borrows the definition of \xe2\x80\x98agency\xe2\x80\x99 found in FOIA.\xe2\x80\x9d Dong v.\nSmithsonian Inst., 125 F.3d at 878. The Privacy Act language conclusively bars\nan interpretation that would attach different meanings to the term. As then-Assistant Attorney General Scalia stated in his 1975 Office of Legal Counsel opinion\naddressing which units of the Executive Office of the President are covered by\nthe Privacy Act: \xe2\x80\x9c It is essential, of course, that we apply the same conclusion\nto both the Freedom of Information Act and the Privacy Act.\xe2\x80\x9d Scalia Opinion\nat 2.\nThe Alexander decision stands in stark contrast to the D.C. Circuit\xe2\x80\x99s analysis\nin Rushforth v. Council o f Economic Advisers, 762 F.2d 1038 (D.C. Cir. 1985),\nin which the court addressed the question of whether the President\xe2\x80\x99s Council of\nEconomic Advisers (\xe2\x80\x9c CEA\xe2\x80\x9d ) is an agency for purposes of the Government in\nthe Sunshine Act, which, like the Privacy Act, incorporates the FOlA\xe2\x80\x99s definition\nof agency. After determining that the CEA is not an agency under the FOIA,\nid. at 1040\xe2\x80\x9443, the Court reasoned that \xe2\x80\x9c [i]nasmuch as the [CEA] is not an agency\nfor FOIA purposes, it follows o f necessity that the CEA is, under the terms of\nthe Sunshine Act, not subject to that statute either. The reason is that the Sunshine\nAct expressly incorporates the FOIA definition of agency.\xe2\x80\x9d Id. at 1043 (emphasis\n6 As a practical matter, the suggestion that Congress had different meanings in mind is rebutted by the legislative\nhistory. The Privacy Act was pending in Congress at the same time as the 1974 amendments to the FOIA, and\nbecame law on December 31, 1974, only 40 days after passage o f the FOIA amendments on November 21, 1974\nSee 88 Stat 1896, 1910, 88 Stat 1561, 1565; Duffin v. Carlson, 636 F.2d 709, 711 (D C Cir. 1980) Indeed,\non the same day that the FOLA was passed, Congressman Moorhead, a member of the FOIA Conference Committee,\nstated, during the floor debate on the Pnvacy Act, that \xe2\x80\x9c *[a]gency\xe2\x80\x99 is given the meaning [under the Privacy Actl\nwhich it carries elsewhere in the Freedom of Information Act \xe2\x80\x9d 120 Cong Rec 36,967 (1974) (statement of Cong\nMoorhead). There is no indication in the legislative history o f the Pnvacy Act that the very same Congress which\nhad just amended the FO lA \xe2\x80\x99s definition o f the term \xe2\x80\x9c agency\xe2\x80\x9d had a different understanding of that term in mind\nwhen, only 40 days later, it incorporated that definition by reference, and without further gloss, for purposes of\nthe Pnvacy Act\n\n181\n\n\x0cOpinions o f the Office o f Legal Counsel in Volume 24\n\nadded) (citation omitted). The court did not ask whether the Sunshine Act and\nFOIA served similar purposes; it recognized that Congress had definitively\nresolved the question whether the term \xe2\x80\x9c agency\xe2\x80\x9d had different meanings under\nthe two statutes.\nMoreover, last month District Judge June Green issued an opinion in which\nshe did not follow Judge Lamberth\xe2\x80\x99s analysis, but held instead that the Privacy\nAct does not apply to the White House Office. See Barr v. Executive Office o f\nthe President, No. 99-cv-1695 (D.D.C. Aug. 9, 2000) (memorandum order)\n(Green, J.). The Court concluded that:\nIt is a fair construction of the Privacy Act to exclude the President\xe2\x80\x99s\nimmediate personal staff from the definition of \xe2\x80\x9c agency.\xe2\x80\x9d As the\nPrivacy Act borrows the FOIA definition, it fairly borrows the\nexceptions thereto as provided in legislative history and by judicial\ninterpretation. This construction of the term \xe2\x80\x9c agency,\xe2\x80\x9d applying\nthe FOIA definition equally to the Privacy Act, properly avoids\nconstitutional questions.\nId. at 6.\n\nIn light of our disagreement with the analysis in the Alexander decision, the\nDepartment does not believe that the decision requires that the White House\nmodify its records management practices to come into compliance with the Pri\xc2\xad\nvacy Act. The D.C. Circuit agreed with this view in its recent appellate opinion\nin Alexander, stating that, notwithstanding Judge Lamberth\xe2\x80\x99s decision, \xe2\x80\x9c [i]n\nactivities unrelated to [the Alexander ] case, the White House, as it has done for\nmany years on the advice and counsel of the Department of Justice, remains free\nto adhere to the position that the Privacy Act does not cover members of the\nWhite House Office.\xe2\x80\x9d 7\nWILLIAM TREANOR\nDeputy Assistant Attorney General\nOffice o f Legal Counsel\n\n1 In Re: Executive Office o f the President, 215 F.3d 20, 24 (D C Cir 2000) (noting lhat \xe2\x80\x9c District Court decisions\ndo not establish the law o f the circuit, .\n, nor, indeed, do they even establish \xe2\x80\x98the law of the district\xe2\x80\x99 \xe2\x80\x99\xe2\x80\x99) (citations\nomitted)\n\n182\n\n\x0c'


b'Determination of Wage Rates Under the\nDavis-Bacon and Service Contract Acts\nT he Secretary o f Labor is required to determine \xe2\x80\x9cprevailing\xe2\x80\x9d wage rates under the\nDavis-Bacon and Service C ontract Acts with reference to an objective standard of\npredom inance or currency in a given locality. It is proper to define the prevailing rate\nin terms o f the lowest rate only where the lowest rate is also that which occurs with\nthe greatest frequency. Where no single wage rate is predominant, it would ordinarily\nbe permissible for the Secretary to use an average.\nT he minimum wage rate required by law to be included in all contracts subject to the\nDavis-Bacon and Service C ontract Acts must be at least the prevailing rate as deter\xc2\xad\nmined by the Secretary of Labor.\nIn the absence of a statutory definition o f a term, one must look to the common\nunderstanding o f the word, and to the legislative history and purpose of the statute\ngenerally. In addition, a presumption o f correctness may be accorded the longstanding\nadministrative interpretation o f a term.\n\nJune 12, 1981\nMEMORANDUM OPINION FOR THE COUNSEL TO THE\nDIRECTOR, OFFICE OF M ANAGEMENT AND BUDGET\nThis responds to your request for our opinion on several questions\nrelating to the determination of wage rates under the Davis-Bacon and\nService Contract Acts. Your first two questions implicate the standards\nto be used by the Secretary of Labor in determining the \xe2\x80\x9cprevailing\xe2\x80\x9d\nwage under the two Acts. Specifically, you ask: (1) whether the Secre\xc2\xad\ntary may define the prevailing wage under either Act in terms of the\naverage rate paid a particular class of employees in the relevant locality;\nand (2) whether the Secretary may define the prevailing wage in terms\nof \xe2\x80\x9ca bona fide minimum wage rate,\xe2\x80\x9d by which we understand you to\nmean the lowest wage paid a class of employees in the relevant locality.\nYour remaining questions are premised on the notion that the minimum\ncontractual wage rate required by the two Acts may be something less\nthan the \xe2\x80\x9cprevailing\xe2\x80\x9d rate as determined by the Secretary. If it may\nnot, then the further refinements you suggest are moot.\nWith respect to the first two questions, we conclude that the law\nrequires the Secretary to determine the \xe2\x80\x9cprevailing\xe2\x80\x9d wage with refer\xc2\xad\nence to an objective standard of predominance or currency in a given\nlocality. It would therefore be permissible for him to define the \xe2\x80\x9cpre\xc2\xad\nvailing\xe2\x80\x9d wage in terms of the lowest rate only where that rate in fact\nreflects the wage which occurs most frequently\xe2\x80\x94in short, where it is\n174\n\n\x0cthe prevalent wage paid. Where no single wage is predominant, it\nwould ordinarily be permissible for the Secretary to use an average.\nWith respect to your remaining questions, we believe that the minimum\nwage rate required by law to be included in all contracts subject to the\ntwo Acts must be at least the prevailing rate as determined by the\nSecretary.1\n\nI. Determination of Prevailing Wage Under the\nDavis-Bacon and Service Contract Acts\nThe Davis-Bacon Act, 40 U.S.C. \xc2\xa7 276a, requires that\n[Every covered contract] shall contain a provision stating\nthe minimum wages to be paid various classes o f laborers\nand mechanics which shall be based upon the wages that\nwill be determined by the Secretary of Labor to be pre\xc2\xad\nvailing for the corresponding classes of laborers and me\xc2\xad\nchanics . . . .\nThe Service Contract A ct provides that covered contracts shall specify\nthe minimum wages to be paid various classes of employees \xe2\x80\x9cas deter\xc2\xad\nmined by the Secretary . . . in accordance with prevailing rates for\nsuch employees in the locality . . . .\xe2\x80\x9d 41 U.S.C. \xc2\xa7 351(a)(1). Neither\nstatute contains a definition of the term \xe2\x80\x9cprevailing,\xe2\x80\x9d and neither speci\xc2\xad\nfies the procedure by which the prevailing wage rate should be deter\xc2\xad\nmined by the Secretary. We must therefore look to the common mean\xc2\xad\ning of the word, and to the legislative history and purpose o f the two\nActs. 2A Sands, Sutherland Statutory Construction \xc2\xa7 47.28 (4th ed.\n1973).\nWebster\xe2\x80\x99s Third New International Dictionary (1976) defines the\nterm \xe2\x80\x9cprevailing\xe2\x80\x9d as \xe2\x80\x9cmost frequent\xe2\x80\x9d or \xe2\x80\x9cgenerally current,\xe2\x80\x9d descrip\xc2\xad\ntive of \xe2\x80\x9cwhat is in general or wide circulation or use . . . .\xe2\x80\x9d Unless\nthere is indication to the contrary in the legislative history, we assume\nthat Congress believed it was codifying this common understanding of\nthe term. See Addison v. Holly Hill Co., 322 U.S. 607, 618 (1944)\n(\xe2\x80\x9clegislation when not expressed in technical terms is addressed to the\ncommon run of men and is therefore to be understood according to the\nsense of the thing, as the ordinary man has a right to rely on ordinary\nwords addressed to him\xe2\x80\x9d).\nThere is no suggestion in the legislative history of either the DavisBacon or the Service Contract Acts that Congress believed it was\nestablishing a wage standard other than one based on frequency or\ncurrency. Indeed, testimony at the hearings leading up to the 1935\n\xe2\x80\x98We should note that we have had an opportunity to review the memorandum prepared by the\nSolicitor of Labor, which deals with these same questions. While we ordinarily, in matters o f statutory\ninterpretation, accord substantial weight to the views of the agency charged with administering the\nstatute, our opinion is based on an independent assessment o f the terms of the statutes at issue, their\nintended purpose, and their legislative history. That our conclusions are essentially the same as those\nof the Solicitor of Labor confirms our confidence in them\n\n175\n\n\x0camendments to the Davis-Bacon Act, which first made provision for\npredetermination of the prevailing wage rates by the Secretary of\nLabor, indicates a common understanding by spokesmen for labor and\nmanagement, as well as individual legislators, that the \xe2\x80\x9cprevailing\xe2\x80\x9d\nwage was the wage paid to the largest number of workers in the\nrelevant classification and locality. See, e.g., Regulation o f Wages Paid to\nEmployees by Contractors Awarded Government Building Contracts: Hear\xc2\xad\nings on H.R. 12, 122, 7005, 7254 and H.J. Res. 38 before the House\nCom mittee on Labor, 72d Cong., 1st Sess. 8, 103, 149-50, 186 (1932). See\nalso R eport of the General Subcommittee on Labor of the Committee\non Education and Labor, Administration o f the Davis-Bacon Act, 88th\n\nCong., 1st Sess. 7-8 (Comm. Print 1963). The legislative history o f the\n1965 Service Contract A ct reflects an assumption that the term \xe2\x80\x9cpre\xc2\xad\nvailing\xe2\x80\x9d as used in that A ct would be construed and applied in this\nsame fashion. See H.R. Rep. No. 948, 89th Cong., 1st Sess. 2-3 (1965);\nS. Rep. No. 798, 89th Cong. 1st Sess. 3-4 (1965).\nThe definition o f \xe2\x80\x9cprevailing\xe2\x80\x9d wage as the wage most widely paid is\nconsistent with the general purpose of the tw o statutes, which is to\nprevent the exploitation o f imported labor and the concomitant depres\xc2\xad\nsion of local wage rates. See H.R. Rep. No. 2453, 71st Cong. 3d Sess. 2\n(1931); H.R. Rep. No. 948, 89th Cong. 1st Sess. 2 (1965). See also\nAdministration o f the Davis-Bacon Act, supra, at 2 (\xe2\x80\x9cthe Davis-Bacon\nA ct was designed to ensure that Government construction and feder\xc2\xad\nally assisted construction would not be conducted at the expense of\ndepressing local wage standards.\xe2\x80\x9d) While it would not be inconsistent\nwith this purpose to set the prevailing rate at a higher level than that\nmost widely paid, it was precisely to prohibit payment o f a lower level\nof wages than that prevalent in the community that the statutes were\nenacted.\nFinally, the common understanding o f the term \xe2\x80\x9cprevailing\xe2\x80\x9d as \xe2\x80\x9cmost\ncurrent\xe2\x80\x9d or \xe2\x80\x9cpredominant\xe2\x80\x9d has been incorporated in the Labor D epart\xc2\xad\nm ent\xe2\x80\x99s administrative regulations since 1935, regulations which have\nover the years been discussed at length in oversight hearings and in\nconnection with other proposed amendments to the law. See, e.g.,\nAdministration o f the Davis-Bacon Act, supra, at 7-8. There is, therefore,\nsome reason to regard Congress\xe2\x80\x99 acquiescence in this interpretation as\n\xe2\x80\x9cpresumptive evidence o f its correctness.\xe2\x80\x9d 2A Sutherland Statutory\nConstruction, supra, at \xc2\xa7 49.10.\nW e come then to the specific questions w hether the Secretary may\ndefine the prevailing wage in terms o f the average rate or the lowest\nrate paid in a given locality. As the above discussion indicates, the\nanswers depend upon w hether either rate can be fairly said to reflect\nthe rate most widely paid in the relevant locality. In this regard, there\nappears to us to be no conceptual problem presented where the most\n176\n\n\x0cwidely paid wage is also the lowest.2 The use of an average, however,\nmay be more difficult to justify, particularly in cases where it concides\nwith none of the actual wage rates being paid. As noted in the 1963\noversight hearings, in such a situation \xe2\x80\x9c[u]se of an average rate would\nbe artificial in that it would not reflect the actual wages being paid in a\nlocal community,\xe2\x80\x9d and \xe2\x80\x9csuch a method would be disruptive o f local\nwage standards if it were utilized with any great frequency.\xe2\x80\x9d Adminis\xc2\xad\ntration o f the Davis-Bacon Act, supra, at 8. The fact remains, however,\nthat if no single wage can fairly be said to be \xe2\x80\x9cprevailing,\xe2\x80\x9d and no\nsingle rate \xe2\x80\x9cmost current,\xe2\x80\x9d an average may represent the closest ap\xc2\xad\nproximation of the statute\xe2\x80\x99s requirement.3\nIn sum, we believe that it is proper under both Acts to define the\nprevailing wage rate in terms of the lowest rate only where the lowest\nrate is also that which occurs with greatest frequency. Use of an\naverage is permissible in situations in which no single rate can fairly be\nsaid to be \xe2\x80\x9cgenerally current.\xe2\x80\x9d\n\nII. Relationship Between Contractual Minimum Wage\nand Prevailing Rate\nThe assumption underlying your remaining questions is that the mini\xc2\xad\nmum wage rate required to be contained in every contract covered by\nthe Davis-Bacon and Service Contract Acts may be lower than the\nprevailing rate as determined by the Secretary. While the terms of both\nActs are somewhat ambiguous on this point (contract rates are to be\n\xe2\x80\x9cbased upon\xe2\x80\x9d or set \xe2\x80\x9cin accordance with\xe2\x80\x9d the prevailing rate), a review\nof their legislative histories indicates a clear congressional intent to\nrequire the payment of at least the prevailing wage in all covered\ncontracts. See Watt v. Alaska, 451 U.S. 259, 265 (1981); Train v. Colo\xc2\xad\nrado Public Interest Research Group, 426 U.S. 1, 10 (1976).\nAs originally enacted in 1931, the Davis-Bacon A ct required that the\nwage rates on every covered contract \xe2\x80\x9cbe not less than the prevailing\nrate of wages for work of a similar nature.\xe2\x80\x9d 46 Stat. 1494. No proce\xc2\xad\ndure was established for determining the prevailing rate in advance,\nhowever, and the Secretary of Labor\xe2\x80\x99s statutory role was confined to\nresolving after-the-fact disputes. Almost immediately, efforts to amend\nthe A ct focused on establishing a procedure by which the prevailing\nrate could be predetermined and incorporated into the terms o f every\ncovered contract. In 1932 Congress passed a bill providing that every\n2It is theoretically possible under the Department of Labor\xe2\x80\x99s present regulations that the lowest\npaid 30 percent of the workforce would establish the \xe2\x80\x9cprevailing\xe2\x80\x9d standard applicable to the entire\nrelevant community\n3The Labor Department has, since 1935, identified situations in which it is proper to use an average\nas those in which no single wage rate is paid 30 percent or more employees in the relevant class. See\n29 C.F.R. \xc2\xa7 1.2(a). It now proposes to shift the threshold upwards to permit the use of an average\nwhere anything less than a simple majority of employees is earning a single wage As a general matter,\nwe cannot say that such an approach is necessarily impermissible under either o f the two statutes in\nquestion. Use of an average might be vulnerable, however, if there is a wide variation in rates of\nwages and a large minority of persons paid significantly lower wages, use of an average in such a case\nmight result in a contract wage well below the actual wages paid a majority of employees.\n\n177\n\n\x0ccontract should contain \xe2\x80\x9ca provision stating the prevailing rate of\nwages as determined by the Secretary of Labor.\xe2\x80\x9d 75 Cong. Rec. 8365\n(1932). See S. Rep. No. 509, 72d Cong. 1st Sess. (1932). While the 1932\nbill was vetoed by the President, efforts to improve administration of\nthe A ct bore fruit in 1935.\nT he language of the 1935 Davis-Bacon A ct amendments differed\nfrom that contained in the 1932 bill, but the legislative purpose was\nunmistakably the same: \xe2\x80\x9c [t]o provide that laborers and mechanics . . .\nare guaranteed payment of local prevailing wages,\xe2\x80\x9d and \xe2\x80\x9c[t]o provide\nfor a predetermination o f the prevailing wage on contracts so that the\ncontractor may know definitely in advance o f submitting his bid what\nhis approximate labor costs will be.\xe2\x80\x9d H.R. Rep. No. 1756, 74th Cong.,\n1st Sess. 2 (1936). The House report goes on to state that\nProvision is made for predetermination of the minimum\nwage rates by the Secretary of Labor. This provision\nwould strengthen the present law considerably, since at\npresent the Secretary o f Labor is not permitted to fix the\nminimum wage rates until a dispute has arisen in the\ncourse of construction.\nId. See also S. Rep. No. 1155, 74th Cong., 1st Sess. 2-3 (1935). There\n\ncan be little doubt from this and other similar language in the commit\xc2\xad\ntee reports and in floor debate that the purpose of the 1935 amendments\nwas to provide a more effective mechanism for the enforcement of the\nprevailing wage rate requirement in the 1931 Act, not to relax that\nrequirement. Congress plainly intended that the Secretary\xe2\x80\x99s authority to\npredeterm ine the prevailing wage should include the authority to \xe2\x80\x9cfix\nthe minimum wage rates\xe2\x80\x9d in covered contracts. While the legislative\nhistory of the 1935 amendments contains no discussion of the change in\nlanguage from 1932 to 1935 whereby covered contracts were required\nto contain wage rates \xe2\x80\x9cbased on\xe2\x80\x9d the prevailing rate rather than simply\nthe prevailing rate itself, the most reasonable explanation is that Con\xc2\xad\ngress did not wish to limit contractors who were agreeable to paying\nsomething higher than the prevailing rate. The one thing which is\ncertain is that Congress did not, by using this phrase, intend to permit\ncontracts specifying less than the prevailing rate.\nWhile the terms of the Service Contract A ct are similarly ambiguous\nwith respect to the relationship between the contract minimum and the\nprevailing rate, its legislative history is similary clear. For example, the\nHouse report states that \xe2\x80\x9c [s]ervice employees must be paid no less than\nthe rate determined by the Secretary of Labor to be prevailing in the\nlocality.\xe2\x80\x9d H.R. Rep. No. 948, 89th Cong., 1st Sess. 3 (1965). See also S.\nRep. No. 798, 89th Cong., 1st Sess. 2 (1965).\nW e conclude, therefore, that there is no support in the law for an\nargum ent that employees on contracts covered by either the Davis178\n\n\x0cBacon A ct or the Service Contract Act may be paid less than the\nprevailing rate as determined by the Secretary of Labor.\nL a r r y L . S im m s\n\nDeputy Assistant Attorney General\nOffice o f Legal Counsel\n\n\x0c'