Court Opinion

ID: 4120058
Source: CourtListenerOpinion
Date Created: 2017-01-27 22:44:55.278514+00
Date Added: 2024-06-11T14:46:49.925540
License: Public Domain

Questions Raised by the Attorney General’s Service as a
      Trustee of the National Thist for Historic Preservation

No conflict of interest o r breach o f fiduciary duty is created w here the Attorney G eneral is responsible
  for defending a suit brought against the Arm y Corps of E ngineers by the National Trust for H istoric
  Preservation, on whose Board o f Trustees he serves, by statute, as an ex officio m em ber A s an ex
  officio trustee, the Attorney G eneral is alw ays presum ed to be representing the interests o f the
  United States, especially in those situations in which the interests o f the Trust and those o f the
  United States conflict, so that no question of divided loyalty arises.

While the A ttorney G eneral is authorized to participate in litigation involving the N ational Trust if he
  considers it to be in the interests o f the United States, the National Trust is not a federal agency such
  that the A ttorney G eneral has the authonty to supervise and control all litigation to w hich the Trust
  is a party.

The term s “officer, director, or trustee" in 18 U .S .C . § 208 do not include an ex officio m em ber o f an
  essentially private body, whose service in that body derives only from an office o f public trust.

While a trustee ordinarily owes a duty of loyalty to the beneficiaries o f the trust, that requirem ent may
  be altered by the term s of the trust, in this case the statute which established the Trust and w hich
  made the A ttorney General an ex officio trustee

                                                                                         July 14, 1982

      MEMORANDUM OPINION FOR THE ASSISTANT ATTORNEY
       GENERAL, LAND AND NATURAL RESOURCES DIVISION

   This responds to your request for our opinion whether a suit filed by the
National Trust for Historic Preservation in the United States (National Trust or
Trust) against the Army Corps of Engineers creates a conflict of interest or breach
of fiduciary duty for you or the Attorney General. The question arises because the
Attorney General is designated by statute as an ex officio member of the Board of
Trustees of the National Trust, a responsibility he has delegated to you in your
capacity as Assistant Attorney General of the Land and Natural Resources
Division, while you and the Attorney General also have supervisory authority
over the defense of the suit on behalf of the Corps of Engineers. For the reasons
set forth below, we conclude that no conflict of interest or breach of fiduciary duty
arises because of these dual responsibilities.1

  1 A preliminary issue we have considered is whether the Attorney General has the authority under 28 U .S .C .
§ 519 to control litigation filed by the Trust. Section 519 provides in relevant part that
       (e)xcept as otherwise authonzed by law, the Attorney General shall supervise all litigation to which
       the United States, an agency, o r officer thereof is a party . . .
Although, as we have concluded on previous occasions, the Attorney General may participate on behalf of the
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                                                 I. Background

A . N a tio n a l Trust

   The National Trust was established by Congress in 1949 as a “charitable,
 educational, and nonprofit corporation” and given a mandate:

            to receive donations of sites, buildings, and objects significant in
            American history and culture, to preserve and administer them for
            public benefit, to accept, hold, and administer gifts of money,
            securities, or other property of whatsoever character for the
            purpose of carrying out the preservation program, . . .

 16 U .S.C . § 468. Since its creation, the National Trust has focused its efforts on
administering properties and funds designated for historic preservation, acquir­
ing historic properties, and cooperating with and/or financing state, local, and
private historic preservation efforts. For example, the Trust owns and manages a
number of historic properties, such as the Decatur House in Washington, D.C.,
and the Woodlawn Plantation in Mount Vernon, Virginia.
   The members of the Trust include individuals, private corporations, and
organizations concerned with historic preservation, such as historic societies and
museums. The enabling statute provides that the affairs of the Trust shall be under
the general direction of a board of trustees. 16 U.S.C. § 468b. Three federal
officials— the Attorney General, the Secretary of the Interior, and the Director of
the National Gallery of Art—are designated as ex officio members of the Board of
Trustees. Each may delegate his responsibilities and, under the Trust’s bylaws, is
entitled to vote on matters coming before the Board. The remainder of the Board
is composed of not less than six general trustees2 chosen by the members of the

 United States in litigation involving the National Trust if he considers participation to be in the interests of the United
 States, see 28 U S C § 518(b), we do not believe that the National Trust is a federal “agency" within the meaning of
 § 519 such that the Attorney General has the authority to supervise or control all litigation to which the Trust is a
 party The legislative history o f the statute that created the Trust, Ch. 7 5 5,63 Stat. 927 (1949), 16 U .S.C. § 468,
 makes it clear that Congress intended the Trust to be a nongovernmental, voluntary entity organized for the purpose
of encouraging and facilitating private cooperation in historic preservation efforts See S Rep. No 1110, 81st
Cong , 1st Sess. 1-2, reprinted in [1949] U S. Code Cong & Ad N ew s2285-86 The composition of the Board of
Trustees (see text infra at 3) is consistent with the view that Congress did not intend the Trust to be a federal agency
subject to the litigating control of the Attorney G eneral. With the exception of the three federal trustees, who serve ex
officio, the trustees are all selected by the members of the Trust, without federal involvement. Since the federal
trustees do not form a majority of the Board, the Trust is simply not subject to executive control In fact, were the
Trust an agency of the Executive Branch, the method of selecting trustees might raise serious constitutional
questions under the Appointments Clause (Art II, § 2, cl. 2), in that the trustees, who would then presumably be
“officers” of the United States, are not appointed by the President Moreover, as far as we have been able to
determine, the Trust has historically engaged in litigation on its own behalf, either through staff or private counsel
The Trust has occasionally requested the cooperation or assistance of the Department of Justice in particular
litigation when the United States' interests have appeared to be the same as the Trust’s, but neither the Tnist nor the
Department o f Justice has ever taken the position that, absent such a request and a finding of a federal interest
justifying the D epartm ent’s participation, the Attorney General could or should supervise and control litigation
involving the Trust. Therefore, we see no reasonable basis upon which the Attorney General could assert authonty
to control the present litigation.
   2 The Board of Trustees may, in its discretion, increase the number of general trustees. 16 U S.C § 468b At
present, there are 30 general trustees

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Trust. The Chairman of the Board of Trustees is elected by a majority vote of the
members of the Board. Id.

B. Present Litigation

   By memorandum dated June 21, 1982, Michael L. Ainslie, President of the
National Trust, informed the Board of Trustees that the Trust and three private
historic preservation organizations would file suit against the United States Army
Corps of Engineers on June 22, 1982, in the United States District Court for the
Southern District of Ohio, seeking injunctive relief and a declaratory judgment to
halt an alleged violation by the Corps of § 106 of the National Historic Preserva­
tion Act of 1966, Pub. L. No. 89-665, 80 Stat. 917, 16 U.S.C. § 470f.3The basis
for the complaint is the alleged failure of the Corps to afford the Advisory
Council on Historic Preservation a “reasonable opportunity to comment” prior to
the Corps’ issuance of a permit for construction of a coal-barge loading facility on
the Ohio River in Cincinnati, Ohio. This permit will allegedly have an adverse
effect on the Anderson Ferry, a property that has been determined to be eligible
for inclusion on the National Register of Historic Places.
   As far as you are aware, neither this suit nor the facts upon which its allegations
were framed have been discussed at any meeting of the Board of Trustees of the
National Trust. You and the Attorney General first became aware of the suit when
your representative on the Board received Mr. Ainslie’s memorandum of June 21,
1982.4

                                                  II. Analysis

   You are concerned that the Attorney General or you, as his representative on
the Trust, may face a conflict of interest because questions concerning the
conduct of the litigation by the Trust against the Corps or confidential information
about the basis for the litigation may be brought before the Board for its
consideration. If the subject matter of the litigation were brought to the Board,
either at the request of the Trust’s staff or at the Board’s own initiative, you or the
Attorney General could be placed in the position of voting on whether or how to
conduct litigation against a client agency of the Department of Justice, or could
be given information that would be helpful to the defense by the Department of
Justice of the Corps of Engineers in the litigation, and therefore potentially
harmful to the interests of the Trust. While it could be politically awkward for you
or the Attorney General to be placed in that position, and you might therefore

   3 Section 106 of Ihe National Historic Preservation Act provides in pertinent part that the head of any federal
agency or department with authority to license a federal or federally assisted undertaking shall, p n o rto approval or
issuance of any license or expenditure of any federal funds, lake into account the effect of the undertaking on
districts, sites, buildings, structures, or objects eligible for inclusion in the National Register, and must afford the
Advisory Council on Historic Preservation “a reasonable opportunity to comment with regard to such undertaking ”
16 U S C. § 470f.
   4 Filing of the suit was apparently approved by the Trust's Executive Committee, a body authorized by the bylaws
to exercise powers of the Trustees between meetings of the Board, subject to the control of the Board No federal
trustee currently sits as a member of the Executive Committee

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choose to refrain from participating in any discussion or consideration of the
litigation by the Board, we do not believe that any actual or apparent conflict of
interest is created under applicable federal statutes and regulations or the Code of
Professional Responsibility.
    The only provision of the conflict of interest laws that remotely could be said to
bear on this question is 18 U.S.C. § 208. This provision prohibits, inter alia, an
Executive Branch officer from personally and substantially participating, as such
officer, in any particular matter as to which an organization in which he is serving
as “officer, director, [or] trustee” has a “financial interest.”5 Even assuming that
the National Trust has a “financial interest” in the litigation, which seems
doubtful,6 in our view the Attorney General does not serve as an “officer, director,
[or] trustee” of the Trust within the meaning of § 208, because he serves as trustee
only in an ex officio capacity.
    Section 208 is premised on the concern that a federal officer or employee who
is also an officer, director, or trustee of an organization may act in the interests of
that organization, rather than in the interests of the United States, in any matter
that he, acting as a federal officer or employee, can influence. An ex officio
member of an organization, however, serves only by virtue of his holding a
particular office. When the office from which his service derives is not an office in
the organization itself, and is in fact a public office of trust, the reasonable
inference to be drawn is that the ex officio member serves only in the interest of
his outside office, and not in the interest of the organization, except to the extent
that those interests are consistent. Therefore, it is the position of the Office of
Legal Counsel that “officer, director, [or] trustee,” as used in § 208, should not be
read to include an ex officio member of an essentially private body, whose service
in that body derives only from a public office of trust.7
   That is, the Attorney General, as an ex officio member of the National Trust, is
charged with the responsibility o f representing the interests of the United States
in matters that come before the Trust.8 If the Trust’s interests and those of the
United States are the same with respect to a particular matter coming before the
Board, the Attorney General can, in effect, further the interests of the Trust.

   5 Section 208 is restated, with modifications not relevant here, in the Department of Justice's conflict of interest
regulations. 28 C.F.R. § 45 7 35-5 (1981). T h e remaining regulations dealing with conflicts of interest for
D epartment o f Justice officers or employees are not applicable here.
   6 The National Trust apparently does not ow n or manage the Anderson Ferry, which is the historic property
allegedly threatened by the C orps o f Engineers’ actions, and therefore it is difficult to see how the Trust would have
any financial interest at stake in the litigation.
   7 This Office has previously taken this position in response to a possible conflict of interest raised by participation
by the Attorney General and Deputy Attorney General ui a decision whether to file an antitrust suit against the
A merican Bar Association (ABA), in light o f their ex officio membership in the ABA House of Delegates. See
M emorandum to Thomas E. Kauper, Assistant Attorney G eneral, Antitrust Division, from Mary C Lawton,
Deputy Assistant Attorney G eneral, Office o f Legal Counsel (May 21, 1976).
   8 The legislative history of 16 U .S.C § 468b is silent on the reason for inclusion of the Attorney General as an ex
officio trustee of the National Trust. The most reasonable inference to be drawn, particularly as Congress did not
contem plate that the Trust would be subject lo control by the Executive Branch (see note 1, supra), is that Congress
intended the Attorney General to represent th e interests of the United States— not that Congress intended the
Attorney General to provide legal representation for the Trust.

                                                          446
 However, if those interests conflict, the responsibility of the Attorney General is
 clear; he must represent the interests of the United States in accordance with his
 responsibilities as chief federal law enforcement officer. No question of divided
 loyalties is presented, and we believe therefore that the proscriptions of § 208 do
 not apply.
    We have also considered those canons of the Code of Professional Respon­
 sibility that might be said to bear on your question. Three canons are possibly
 relevant: Canon 4, which provides that a lawyer should preserve confidential
 information of his client; Canon 5, which provides that a lawyer should exercise
 independent professional judgment on behalf of his client; and Canon 9, which
 provides that a lawyer should avoid “even the appearance of professional
 impropriety.”
    Each of these canons applies to professional participation by a lawyer in a
matter in which he or she has or appears to have divided loyalties— for example,
 if he or she represents multiple clients with conflicting interests or has personal
dealings or responsibilities that could influence his or her professional judgment.
As we discussed with respect to applicability of the conflict of interest laws, the
Attorney General has no such divided loyalties here; his only “client” is the
United States, and his responsibility is to represent the interests of the United
States. It is our view, therefore, that no actual or apparent conflict of interest or
appearance of impropriety exists for the Attorney General, or therefore for you,
with respect to the current suit.
    A related question is whether the Attorney General would breach some
fiduciary duty owed to the Trust, for example, by disclosing confidential infor­
mation given to the trustees to Department lawyers responsible for defending the
suit on behalf of the Corps of Engineers. In private trust law, a trustee generally
owes a duty of loyalty to the beneficiaries of the trust and may not put himself in a
position in which it would be to his benefit (here, to the benefit of the United
States) to violate his fiduciary duty. S ee 2 Scott, The Law of Trusts s 170 (3d ed.
 1967). For much the same reason as we discussed above with respect to any
possible conflict of interest, we do not believe that, if the interests of the United
States are at stake, the Attorney General owes a fiduciary duty to the Trust.9 The
Attorney General’s role and responsibility vis-a-vis the Trust are only those
imposed by statute. As we have discussed, his statutory responsibility under 16
U.S.C. § 468b is to represent the interests of the United States. Similarly, his
statutory responsibility under 28 U.S.C. § 519 (see note 1, supra ) is to exercise
his best judgment to determine if and how to defend the Army Corps of Engineers
against the claims filed by the National Trust. We do not see how the Attorney
General could be thought to violate a fiduciary duty to the Trust by carrying out
his statutory responsibilities in a manner that, in his best judgment, is necessary
to serve the interests of the United States.

  9 We do not deal with the question whether the Attorney General stands in a fiduciary relationship, in his capacity
as trustee, with respect to matters that do not involve the interests of the United States.

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   Even if the Attorney General is governed by principles applicable to private
trustees, it is a well-settled principle under private trust law that, while a trustee
ordinarily owes a duty of loyalty to the beneficiaries of the trust, that requirement
may be altered by the terms of the trust:
        [W]here the settlor knew when he drew the trust that the trustee
        whom he proposed to name was then in a position which after the
        acceptance of the trust would expose him to a conflict between
        personal and representative interest, it has been held that there
        was an implied exemption from the duty of loyalty so far as that
        transaction was concerned.
G. Bogert, Trusts and Trustees § 543 at 583 (2d ed. 1960).
   When Congress established the National Trust, it could have foreseen that the
Attorney General might be placed in a position in which there would be a conflict
between the interests of the Trust and the interests of the United States. Thus,
even applying private trust law principles, there is no breach of fiduciary duty
inherent in the Attorney General’s participation in matters coming before the
Board of Trustees while the current litigation is pending, including the subject of
the litigation itself.
   We conclude that you, the Attorney General, or your delegated representative
may continue to participate in all activities of the Board of Trustees during the
pendency of the suit against the Corps of Engineers, and that neither you nor the
Attorney General need disqualify yourself from supervision of the litigation on
behalf of the Corps. If you feel it advisable from a policy standpoint, you may, of
course, discuss any concerns you may have with the Trust, or may choose to
recuse yourself from consideration of any questions concerning the litigation that
may come before the Board. We do not believe, however, that you are obligated to
do so.

                                                    L a r r y L . S im m s
                                          D epu ty A ssistan t A ttorney G en eral
                                                Office c f L egal Counsel

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