Establishment of the President's Council for International Youth Exchange

Establishment of the President’s Council for
International Youth Exchange

Proposed establishm ent o f the P resident’s Council on International Youth Exchange (Council) within
the United States Inform ation Agency (USIA), for the purpose of soliciting funds from the private
sector for the U SIA ’s youth exchange program s, is generally perm issible, although the C ouncil’s
activities would be subject to certain lim itations and its continued operation after a year would
depend upon a specific congressional appropriation.

U nder the Fulbnght-H ays A ct, em ployees of the USIA are perm itted actively to solicit private
contributions to support the U SIA ’s exchange program s. However, under 5 U .S .C . § 3107, any
publicity in this connection would have to be carefully tailored to further only the U S IA ’s
fundraising activities and not generally to aggrandize the USIA or its officials, in accordance with
guidelines o f the General A ccounting Office.

U nder 31 U .S .C . § 673, creation of the Council m ust be "authorized by law " in order for public
funds to be used for its expenses or for USIA em ployees to assist in its operation. W hile § 673 does
not require specific statutory authorization for the establishm ent of governm ent councils and
com m issions, it does require that such entities and their functions be authorized “ in a general
w ay” by law. W hether the Council m eets this test may depend upon its size and functions.

U nder the Russell A m endm ent, 3 1 U .S .C . § 696, non-statutory councils and com m issions w hich are
vested with authonty to take substantive action on the governm ent's behalf must receive specific
budgetary support from Congress w ithin a year of their establishm ent in order to continue
operating beyond that date.

T he functions of the proposed Council in connection with fundraising and advising activities, as well
as its proposed relationship with the USIA, would be such as to require that its m embers be made
em ployees of the federal governm ent.

September 16, 1982

MEMORANDUM OPINION FOR THE GENERAL COUNSEL,
UNITED STATES INFORMATION AGENCY

This memorandum responds to your request for our comments regarding the
establishment of a new government council within the United States Information
Agency (USIA). You and other officials of the USIA have outlined in several
letters and meetings the proposed structure and functions of the council, which
would be named the “ President’s Council for International Youth Exchange”
(Council). As presently planned, the Council would be composed of approx­
imately 300 private citizens who would solicit contributions from the private
sector for the USIA and submit an advisory report to the President and to the

541
Director of the USIA (Director) outlining ways for the USIA to increase private
contributions to the USIA.
For the reasons outlined in detail in this memorandum, we conclude that most
of the proposed activities of the Council that you have described are generally
authorized by law. We caution, however, that there are certain legal restrictions
that may affect the operations of the Council. These are discussed in more detail
below. In our view, moreover, the USIA will be required to obtain specific
congressional appropriations for the proposed Council within a year of its
creation for it to continue to operate beyond that date. In light of these potential
difficulties, the USIA may wish to consider seeking legislation authorizing the
proposed Council before its creation, rather than rely on existing statutory
authority to establish the Council. Securing such explicit congressional autho­
rization would avoid the possibility that Congress may substantially reorganize
the Council, or even abolish it, after a year, resulting in a substantial loss of time
and effort by members of the Council and the USIA. The decision whether to
seek such prior authorization obviously involves an exercise of judgment that you
and other officials of the USIA are best equipped to make. We defer to your sound
discretion in this matter, and simply raise the issue for your consideration.

I. Background

Because the proposed size and functions of the Council have changed signifi­
cantly over the past three months, it is appropriate to review the history of this
proposal and to outline the current plan for the Council. This Office initially
reviewed and expressed no objection to suggested language for a presidential
speech announcing the establishment of the Council. According to this language,
which was ultimately included in the President’s announcement of May 24,
1982,1 the Council was to be a federal advisory committee organized to advise
the President and the Director about ways to increase private contributions to the
USIA for its newly planned programs on International Youth Exchange (Youth
Exchange Programs). See Federal Advisory Committee Act, 5 U.S.C. App. I
(FACA) (authorizing establishment of advisory committees to the President and
heads of agencies). The Youth Exchange Programs seek to stimulate awareness
and appreciation of American society among European youth by subsidizing and
generally encouraging private efforts to bring European youths to the United
States for study or for work.
Subsequent to the President’s speech, we were advised that the proposed
functions of the Council had been expanded so that its members would also solicit
contributions to the USIA for its Youth Exchange Programs, in addition to
advising the President and Director on ways to increase such contributions. This

1 In announcing the establishment of the Council, the President stated that “ I plan to form a Presidential
Committee to advise me and to help Charlie W ick [the Director o f the USIA], who is my personal representative for
this effort, [to] help [him] find ways to stimulate greater private involvement across the country.” Remarks of
President Ronald Reagan, White House Meeting on International Youth Exchanges, White House (May 2 4,1982)
at 2.

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revision contemplated a Council composed of approximately 50 prominent
representatives of corporations, foundations, and educational institutions serving
in both an advisory and operational capacity. The solicitation of contributions, as
we understood at the time, was to be accomplished by members of the Council
making telephone calls and individually contacting persons in the private sector
to contribute to the Youth Exchange Programs. Because of the members’ opera­
tional duties, they were to be appointed by the Director as part-time employees of
the USIA. The members, however, were not to receive any salary from the
government for their activities, although they would have received reimburse­
ment for their expenses.
More recently, the scope of the Council’s proposed operational efforts has been
significantly expanded, and the responsibilities within the Council have been
divided. Under the latest proposal, as we understand it, the Council would be
composed of approximately 300 major corporate leaders, who would be divided
into two groups— “directors” and “ members.” The “ directors,” who would
number about 30, would oversee the operations of the Council through their
service on three committees— an Executive Committee, a Public Relations
Committee, and a Program Committee. Although the division of responsibilities
among these committees has not been determined finally, we understand that the
chairman of each committee would serve on the Executive Committee, which
would be responsible for overseeing the Council’s overall fundraising and ad­
visory activities. The Public Relations Committee would be comprised largely of
publicity experts from public relations firms. These advertising experts would
develop and run a publicity campaign, which would include television and
magazine advertising soliciting contributions to the USIA. Although the respon­
sibilities of the Program Committee have not been finalized, it would probably
examine and make recommendations to the Executive Committee on ways to
improve the Youth Exchange Programs.
The “ members” of the Council, who would apparently number about 270,
would not be actively engaged as a group in the direction of the Council, but
would be available as a resource to assist in the projects undertaken by the
directors. Thus, their contributions, financial and otherwise, would vary from
individual to individual. The Council as a group would submit an advisory report
to the President and the Director on ways to increase contributions to the USIA,
and perhaps also on ways the contributed money should be spent by the USIA.
Any final decision on the raising or disbursement of the funds would be made by
the Director.
It is contemplated that the proposed Council would be a government entity.
Members and directors would be appointed by the Director and would be subject
to his control when performing Council activities. This government connection
and support is important, we understand, to symbolize the government’s commit­
ment to Youth Exchange Programs, to elicit private participation in this effort,
and to ensure USIA control over the disposition of contributed funds. Establish­
ment of the Council as a government entity within the USIA would also permit
the Council to use the facilities, staff, and funds of the USIA. According to your

543
most recent proposal, however, the directors and members of the Council would
not be employees of the federal government as a result of their Council service.
Thus, under the current plan, the Council would be composed of 300 corporate
executives who would solicit private contributions on behalf of the USIA, would
be appointed and supervised by the Director of the USIA, but would not serve as
USIA employees.
In the balance of this memorandum, we identify the following four areas in
which the USIA’s operation of the Council would be subject to certain restric­
tions: first, the USIA’s authority to undertake an advertising campaign to solicit
contributions; second, the USIA’s authority to expand the size and operations of
the Council beyond that which has been proposed; third, the USIA’s authority to
operate the Council after a year unless it receives specific budgetary support from
Congress; and fourth, the USIA’s authority to select and supervise members and
directors of the Council, and yet not to make them employees of the USIA.2

II. Authority of the USIA to Solicit Contributions to
Youth Exchange Programs

We first consider the restrictions on the authority of the USIA to solicit
contributions for the USIA’s Youth Exchange Programs.
The authority of the USIA to undertake exchange programs is derived from the
Fiilbright-Hays Act, Pub. L. No. 87-256, 75 Stat. 527, as amended, 22 U.S.C.
§§ 2451-2459, which was passed in 1961.3 Section 105 of that Act, 22 U.S.C.
§ 2455(f), grants the USIA authority to obtain private funding for these exchange
efforts. That section states in full:
Foreign governments, international organizations and private in­
dividuals, firms, associations, agencies, and other groups shall be

2 Pursuant to conversations with members o f yo u r office, we have not examined several other issues raised by the
creation o f the Council. First, we have assumed that the establishment of the proposed Council would satisfy the
requirement o f § 5(b) & (c) o f FACA, 5 U .S .C . App. § 5(b)&(c) This section generally provides that a new
advisory committee should not be established if its functions are o r could be performed by one or more agencies or
by an advisory committee already in existence, or by enlarging the mandate of an existing advisory committee
Second, because we have not been advised as to the specific backgrounds of members and directors of the Council,
we have not considered whether their backgrounds would satisfy the requirement in FACA that the committee’s
m embership be “ fairly balanced in terms of the points of view represented and the functions to be performed by the
advisory committee ” 5 U .S .C . App. § 5(b)(2). In this regard, we suggest that you consider whether “ points of
view ” will be balanced if membership is limited to corporate leaders, particularly if the USIA ultimately decides to
have the Council advise the Director on the distribution of the funds it collects, rather than simply raising funds and
advising on how to raise funds. We are not, of course, expressing any judgment on this issue, but only advising that
the subject should be considered. Finally, we have not considered what laws and regulations regarding conflicts of
interest would apply to the persons serving on the Council. We note, however, that our conclusion that Council
members must be considered government employees, discussed infra, necessarily means that some conflicts laws
and regulations would apply to the Council members.
3 The USIA has two authonzing statutes U nder the first, the Rilbnght-Hays Act, as amended, 22 U.S.C.
§§ 2451-2459, the USIA is charged with promoting by “ grant, contract, or otherwise” “ educational” and
“ cultural” exchanges between the United States and foreign countries. See 28 U .S.C. § 2452 These exchanges
frequently occur under the auspices of private organizations which receive support through USIA grants, contracts,
or other forms of assistance. The proposed Youth Exchange Programs fall within the broad mandate of this Act The
USIA also serves, pursuant to the Smith-Mundt Act of 1948, as amended, 22 U .S.C §§ 1431-1479(1976 & Supp.
II 1978), as “ an information service to disseminate abroad information about the United States, its people, and
policies . ” 22 U .S .C . § 1431. See also 22 U.S C. §§ 1461, 1461-1 (Supp. II 1978) In discharging this
responsibility, the USIA operates the Voice of Am erica, a government radio network which broadcasts to countries
abroad. See 22 U .S .C . § 1463.

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 encouraged to participate to the maximum extent feasible in
carrying out this chapter and to make contributions of funds,
property and services which the [Director] is authorized to accept,
to be utilized to carry out the purposes of this chapter. Funds made
available for the purposes of this chapter may be used to contrib­
ute toward meeting the expenses of activities carried out through
normal private channels, by private means, and through foreign
governments and international organizations.
(Emphasis added.)4 Under this provision, the USIA has clear authority to accept
and to use contributions to meet the “ expenses of activities carried out through
normal private channels, by private means,” such as youth exchanges operated
by private institutions.5 A separate question is presented, however, whether and
in what manner USIA employees may actively solicit such contributions. By
providing that private groups, firms, individuals, and organizations “ shall be
encouraged to participate to the maximum extent feasible . . . and to make
contributions,” the section raises two questions: may employees of the USIA
generally encourage contributions and, if so, may they do so through a media
publicity campaign?

A . Who M ay Encourage Contributions

The use of the phrase “ shall be encouraged” leaves some ambiguity regarding
the precise scope of the USIA’s authority because the phrase could arguably
constitute only a congressional statement of encouragement for contributions,
rather than an authorization for USIA employees actively to solicit contribu­
tions.6The use of the term “ shall be,” however, more likely indicates that entities
other than Congress, namely the USIA, have authority to encourage private
contributions. If Congress had intended this phrase to serve merely as a statement
of congressional encouragement, Congress presumably would have used the
words “ are encouraged,” rather than the phrase “ shall be encouraged,” thereby
indicating an understanding that encouragement would take place in the future
and by some persons or entities other than Congress itself.
In support of the foregoing interpretation, we note that § 2455(f) is based on an
analogous section in the International Cultural Exchange and Trade Fair Par­
ticipation Act of 1956, Pub. L. No. 860, § 4, 70 Stat. 778, which, according to
one of its sponsors “ call[ed] for continued encouragement of private contribu­
tions in support of this program.” 102 Cong. Rec. 14103 (remarks of Rep.
Thompson) (1956) (emphasis added). Furthermore, § 2455(0 is not written in a

4 When this provision was originally passed, the President was authorized to accept contributions made under this
chapter. Reorganization Plan No 2 of 1977, § 7(a)(2), 42 Fed. Reg. 62461, 91 Slat 1637 set out in 22 U .S.C 1461
note, transferred these functions to the Director.
5 This provision would also give the USIA authority to accept voluntary “ services,” such as those of the
Council’s members
6 Ambiguous language in the two committee reports could be interpreted to provide some support for the view
that encouragement was to be provided by Congress rather than the USIA. See H Rep No 1094, 87th Cong , 1st
Sess. 14 (1961), S. Rep No. 372, 87th Cong., 1st Sess. 16 (1961).

545
manner which would suggest that Congress was authorizing the USIA simply to
accept contributions. By using the phrase “ shall be encouraged,” Congress
seems to have intended that contributions would be an acceptable, indeed
desirable, method of augmenting the funds available for the USIA’s tasks relative
to exchange programs. It seems unlikely that Congress would have enacted this
provision if it did not want the USIA to take reasonable steps necessary to make it
effective. Thus, the section, in our view, authorizes continued encouragement by
the USIA of private contributions, rather than simply announcing Congress’
support for private contributions to the USIA’s programs.
This interpretation is also consistent with the underlying intent behind the
Fulbright-Hays Act to promote close cooperation between the USIA and private
entities in undertaking exchange efforts. The USIA is charged generally with
“ encourag[ing] private institutions in the United States to develop their own
exchange activities, and providing] assistance for those exchange activities
which are in the broadest national interest.” 22 U.S.C. § 1461-1. Since USIA
employees are authorized to “encourage” private entities to undertake their own
exchange efforts, it is not illogical to conclude that they would also be authorized
to solicit private contributions for the USIA’s own programs.7

B. Publicity Campaigns

The general language authorizing the “ encourage[ment]” of private contribu­
tions would also appear to authorize the use of a media campaign by the USIA to
raise funds, even though a publicity campaign is not specifically authorized. As
we have said, Congress viewed the solicitation of private contributions as an
appropriate method for the USIA to fund its operations. A media campaign
represents a reasonable technique for undertaking such solicitation on a mass
scale.
At the same time, however, we must examine carefully the employment of a
promotional campaign or publicity effort because of the requirements of 5
U.S.C. § 3107. That section provides that “ [appropriated funds may not be used
to pay a publicity expert unless specifically appropriated for that purpose.”
According to the brief legislative history of § 3107, its purpose is to prevent an
agency from employing “ publicity” or “ press agents” whose business it is to
“ advertise the work and doings o f that department,” unless their employment is
specifically authorized by Congress. 50 Cong. Rec. 4409 (1913) (remarks of

7 The prohibition in the Smith-Mundt Act on the USIA’s dissemination of political propaganda within the United
States does not affect this conclusion. The Smith-Mundt Act, 22 U .S C. § 1461, which authorizes the “ dissemina­
tion abroad, of information about the United States, its people and its policies,” specifically prohibits the
dissemination of “ such information” within the United States. This restriction, however, only applies to “ such
inform ation,” meaning propaganda information disseminated abroad by the USIA pursuant to the Smith-Mundt
Act. Cf. 1 1 8 C o n g .R e c. 19187, 19188 (1972) (remarks of Senators Javits and Rilbright). Neither the language of
this provision nor its underlying purpose would restrict the USIA’s dissemination within the United States of
information on cultural or educational exchanges undertaken pursuant to the Rilbright-Hays Act, 22 U.S.C.
§ 2455(0. We understand from members of the General Counsel's Office of the USIA that the USIA has traditionally
drawn this distinction as the basis for its authority to disseminate information regarding exchange activities, and we
agree with this analysis.

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Rep. Gillett).8 Because USIA funds and personnel would necessarily be used,
however indirectly, to assist in an advertising campaign run by advertising
executives serving on the Council, a question is raised regarding the permissible
extent of the USIA’s authority to undertake such an effort consistent with § 3107.
In interpreting this provision and an analogous provision discussed below,
both this Office and the Comptroller General originally sought to draw a distinc­
tion, reflected in the legislative history of the section, between activities that are
intended to “ give[ ] to the country information as to the work of [a] depart­
ment,” and activities that seek to “ extol and exploit the virtues of [a] depart­
ment.” 50 Cong. Rec. 4411 (1913) (remarks of Rep. Lever). Under this view,
agencies are authorized to hire employees for their press offices, even without
specific statutory or budgetary authority, because these employees are engaged
primarily in an informational capacity, and not to extol the virtues of the agency.
See, e.g ., 31 Comp. Gen. 311 (1952). This Office has conceded at the same time,
however, that “ [t]he line between information and ‘publicity’ is almost impossi­
ble to draw, since any information about an agency’s activities will publicize the
agency, and almost all publicity will contain information about the government
or about government programs.” 9 Similarly, in a book published only last month
by the General Accounting Office (GAO), that agency recognizes that this
distinction “ does not provide adequate guidelines to distinguish the legitimate
from the proscribed.” Principles of Federal Appropriations Law, 3—148 (1982)
(Federal Appropriations Law). See also B - l 94776 (June 4, 1979); B-177704
(February 7, 1973).
Because this is an area in which the line is so difficult to draw, and because the
issues are directly pertinent to statutory restrictions on the use of appropriated
funds, we believe it is appropriate to accord considerable deference to decisions
of the GAO. That agency is charged with enforcing § 3107 and represents the
interests of the Congress, whose control of executive activities § 3107 seeks to
protect. In Federal Appropriations Law the GAO reviews a series of unpublished
Comptroller General opinions on § 3107. After recognizing the difficulty in
drawing a line between the legitimate dissemination of information, on the one
hand, and “ puffing” of agency activities, on the other, the GAO states that it
does not view 5U .S .C . §3107 as prohibiting an agency’s legiti­
mate informational functions or legitimate promotional functions
where authorized by law. The apparent intent of the statute is to
prohibit publicity activity “ for the purpose of reflecting credit

8 When introducing this provision, its author explained that it is not “ proper for any department of the
Government to employ a person simply as a press agent to advertise the work and doings of that department and it is
to prevent that in any department that this amendment is offered." He went on to state that such positions for
publicity experts "ought not to exist without, as my amendment suggests, a special appropriation by Congress or
special recognition and approval by Congress o f such an official.” 50 Cong. Rec. 4409 (1913) (remarks of Rep.
Gillett). See also id at 4410 (remarks of Rep. Fitzgerald) (“no service of the Government should employ a man
whose duty is to prepare press matter in order to extol or to advertise the work of the service with which he is
connected” ).
9 Memorandum from Norbert A. Schlei, Assistant Attorney General, Office of Legal Counsel, to Joseph Dolan,
Assistant Deputy Attorney General, “ Request of House Subcommittee for Interpretation of 5 U S.C. § 5 4 ,” at 3
(Mar 1, 1963).

547
 upon an activity, or upon the officials charged with its administra­
tion, rather than for the purpose of furthering the work which the
law has imposed upon it.”

Federal Appropriations Law at 3-152, quoting A-82332 (Dec. 15, 1936). In the
GAO’s view, “ the statute is not intended to interfere with the dissemination of
information which an agency is required or authorized by statute to disseminate,
or with promotional activities authorized by law.” Federal Appropriations Law, at
3-153; B - 139965 (Apr. 16, 1979). See also B-181254 (Feb. 28, 1975).10
The GAO book gives the same interpretation to a separate but analogous
provision routinely included in the USIA’s appropriation statute which prohibits
the use of any agency funds for “ publicity or propaganda purposes not authorized
by the Congress.” See Departments of State, Justice, and Commerce, the
Judiciary, and Related Agencies Appropriation Act, 1980, Pub. L. No. 96-98,
§ 601, 93 Stat. 416, 435 (1979).11 With respect to this provision, the GAO states
that it is “ reluctant to find a violation where the agency can provide a reasonable
justification for its activities.” Federal Appropriations Law, at 3-148. See also
B - 184648 (Dec. 3, 1975); B-178528 (July 27, 1973). The GAO cites with
approval a Comptroller General opinion which upheld the authority of the
Department of Commerce to undertake a “ national multi-media campaign to
enhance public understanding of the American economic system.” Federal
Appropriations Law, at 3-149. In the GAO’s view, this campaign was a reason­
able means of discharging the Department of Commerce’s function of promoting
commerce and did not “ aggrandize” the Commerce Department. See B-184648
(Dec. 3, 1975). The GAO book cites only two cases in which the Comptroller
General has found an activity prohibited because of the ban on unauthorized
publicity. In the first case, the Comptroller General held that a speech by the
Deputy Assistant Secretary of Defense apparently seeking public assistance in
lobbying for Defense programs was impermissible. See B-136762 (Aug. 18,
1958). In the second case, which predated the appropriation statute, the Comp­
troller General found that attempts by the Federal Housing Administration (FHA)
to promote homeowner improvements were prohibited. The opinion reasoned
that the creation of demand for housing was not an authorized purpose of the
FHA. See 14 Comp. Gen. 638 (1935).
In light of the extremely narrow interpretation given to these provisions in the
Comptroller General opinions, we believe that the Comptroller General would
uphold the limited use of appropriated funds to support a reasonable and carefully
controlled advertising campaign by the Council. Like the Departments of Energy
and Commerce, the USIA has specific authority to promote an activity in the
private sector— namely, the making of contributions of funds, property, and

10 For this proposition, the GAO relies on two Comptroller General opinions. These decisions approved a Federal
Energy Administration (FEA) advertising campaign to conserve energy on the ground that the FEA had the authority
to promote energy conservation. See B-139965 (Apr. 16, 1979); B -181254 (Feb. 28, 1975).
11 This section states in full:
No part of any appropriation contained in this Act shall be used for publicity or propaganda purposes
not authonzed by the Congress

548
services for youth exchange programs. A media campaign represents an effective
method for reaching the public and conveying the need, as in the FEA case cited
in footnote 10, to conserve energy or, in this case, to support exchange programs.
We would caution, however, that the proposed USIA advertising campaign
should be carefully tailored and scrutinized so that it does not unduly emphasize
the accomplishments of the USIA or aggrandize the agency or its officials.
Possibly in contrast with the advertising campaigns previously sanctioned by the
Comptroller General and cited in the GAO report, the proposed advertising
campaign soliciting contributions to the USIA would undoubtedly involve some
degree of favorable comment on the programs of the USIA, albeit with the
purpose of promoting an activity which the USIA is generally authorized to
promote— the donation of funds. For this reason, we believe that the advertising
campaign should focus primarily on the private youth exchange activities, and
not place any undue emphasis on the officials or operations of the USIA itself.
With this caveat, we conclude that a reasonable media campaign would be
approved by the Comptroller General in these unique circumstances.

III. Authority to Establish a Council to Solicit Contributions

A second legal issue arises from the USIA’s plan to solicit contributions by
creating a new council staffed by persons who would be part-time volunteers of
the USIA. Section 673 of Title 31 (1976) states:

No part of the public moneys, or of any appropriation made by
Congress, shall be used for the payment of compensation or
expenses of any commission, council, board, or other similar
body, or any members thereof, or for expenses in connection with
any work or the results of any work or action of any commission,
council, board, or other similar body, unless the creation of the
same shall be or shall have been authorized by law. . . .

Under this section, the use of any money for the expenses of any council is
prohibited “ unless the [council] shall have been authorized by law.” Thus, while
solicitation of contributions by USIA employees may be authorized, creation of
the Council itself must be “ authorized by law” within the meaning of this section
in order for public funds to be used for its expenses or for USIA employees to
assist it in its operations.
The requirements of this section have never been clearly articulated, although
this section apparently does not require specific authorization for the establish­
ment of committees. Immediately following its passage, the Attorney General in
a 1909 opinion concluded that authority for the creation of a council “ would be
sufficient if their appointment were authorized in a general way by law.” 27 Op.
Att’y Gen. 432,437 (1909). The Comptroller General adopted a similar position
that a council is authorized if its “ duties or functions can be performed only by

549
such a group or if it is generally accepted that such duties can be performed best
by such a group.” 40 Comp. Gen. 478, 479 (1961).12
Even though § 673 would not require specific statutory authorization for the
creation of the Council, a question remains whether the Council will be “ autho­
rized in a general way by law.” No clear legal lines can be drawn in this area,
especially before the Council has begun operations. We believe that, as presently
planned, the Council would be authorized in light of Congress’ preference for
private funding of USIA programs and close cooperation between the USIA and
private organizations. In our view, however, the larger the Council and the more
diverse its functions and structure become, the greater the risk that Congress or a
court could determine that it is not “ authorized in a general way by law.” We
leave it to the judgm ent of the General Counsel’s Office of the USIA to determine
at what point it believes the size and operation of the Council may exceed prudent
bounds.

IV. Comgressiioiroal A ppropriations

A third limitation on the operation of the Council is the requirement that it
obtain specific congressional funding for its expenses after the first year of its
operation. Section 696 of Title 31 requires that no money may be spent for any
“ agency or instrumentality” after it has been in existence for more than one year
“ if the Congress has not appropriated any money specifically for such agency or
instrumentality or specifically authorized the expenditure of funds by it.” (Em­
phasis added.)13 The purpose of this provision, commonly referred to as the
Russell Amendment after its author, Senator Richard Russell, is “ to retain in the
Congress the power of legislating and creating bureaus and departments of the
Government.” 90 Cong. Rec. 3059 (1944) (remarks of Sen. Russell). Before

12 The passage o f the so-called Russell Amendment, 31 U .S .C . § 696, provides further support for the view that
§ 673 does not require specific statutory authorization for the creation of a committee. Section 696 requires, as we
discuss in detail infra, that no money may be spent for an "agency o r instrumentality" after it has been in existence
for more than one year " if the Congress has not appropriated any money specifically for such agency or
instrumentality or specifically authorized the expenditure of funds by it ” The purpose of this provision was to assure
congressional control over various government commissions that had come into existence over the years without
statutory authorization See generally 90 Cong. Rec. 3059, 3060, 3064 (1944) (remarks of Sen. Russell). By
introducing this enforcement mechanism, Congress may have implicitly recognized that the Executive Branch has
some discretion to create commissions, at least for a year, w ithout clear statutory authorization.
13 Section 696 states in full:
A fter January 1, 1945, no part of any appropriation o r fund made available by this or any other Act
shall be allotted or made available to, or used to pay the expenses of, any agency o r instrumentality
including those established by Executive order after such agency or instrumentality has been in
existence for more than one year, if the Congress has not appropriated any money specifically for
such agency or instrumentality or specifically authorized the expenditure of funds by it. For the
purposes of this section, any agency o r instrumentality including those established by Executive
order shall be deem ed to have been in existence during the existence of any other agency or
instrumentality, established, by a pnor Executive order, if the principal functions of both of such
agencies or instrumentalities are substantially the same or similar When any agency or instrumen­
tality is or has been prevented from using appropriations by reason of this section, no part of any
appropriation or fund made available by this or any other Act shall be used to pay the expenses of the
performance by any other agency or instrumentality o f functions which are substantially the same as
or sim ilar to the principal functions of the agency or instrumentality so prevented from using
appropriations, unless the Congress has specifically authorized the expenditure of funds for perform­
ing such functions.

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passage of this section, members of Congress had expressed concern over the
establishment of various government councils and commissions without specific
statutory authority. Section 696 sought to make these entities accountable to
Congress by requiring that they receive specific budgetary support within a year
of their establishment. See 90 Cong. Rec. 3059, 3060, 3064 (1944) (remarks of
Sen. Russell).
This Office has previously interpreted this section narrowly. In our view, it
does not apply to “ entities that exist by virtue of statutory authority.” 14Thus, we
have found that “ purely advisory committees” do not need to obtain specific
budgetary approval because they are established under the Federal Advisory
Committee Act (FACA). We have also found that the term “ agency or instrumen­
tality,” as used within this section, covers only entities that are invested “ with
actual authority to take substantive action on [an official’s] or the government’s
behalf.” 15Thus, “ purely advisory committees” would also not be covered by this
section because they take no “ substantive action.”
Even under this narrow interpretation, however, the proposed Council for
International Youth Exchange would be subject to the requirements of 31 U .S.C .
§ 696. First, as a committee performing both advisory and operational functions,
the Council is not specifically authorized by any statute since FACA specifically
authorizes the creation of committees which are only advisory. Second, even
assuming that the Council would have sufficient revenues of its own to cover
operational expenses, it would nevertheless rely on appropriated funds to support
its activities because, as we understand it, it would both require the assistance of
USIA personnel and the use of USIA facilities. The cost of these USIA personnel
and expenses would be covered by appropriated funds, whose use would be
unauthorized after one year unless the Council received specific congressional
appropriations.I6-Finally, the Council would be an “ agency or instrumentality”
within the meaning of 31 U.S.C. § 696 because, as contemplated, it would
discharge responsibilities vested by law in the USIA and would not be purely
advisory. Although this office has interpreted the term “ agency or instrumen­
tality” to cover only entities that take substantive action, we have nonetheless
indicated that an entity that “ acts on behalf of the government or exerts any
governmental power,” such as a commission, should be covered.17 Section 696
was specifically passed to regulate the establishment of government councils and

14 See memorandum from Mary C. Lawton, Deputy Assistant Attorney General, Office of Legal Counsel, to
Robert J. Lipshutz, Counsel to the President, “Application o f Russell Amendment to Purely Advisory Com m it­
tees,” at 6 (June 27, 1979) (Lawton Memorandum).
15 Lawton M emorandum, p. 3.
16 Even if the Council could operate without government assistance after the first year, a question would remain
whether the existence of a council operating on contributed funds contravenes the underlying intent of § 696
Section 696 was passed in order to permit Congress to control through the budgetary process the operation of
government instrumentalities that exercise governmental power. See 90 Cong Rec 3059, 3060, 3064 (1944)
(remarks of Sen. Russell) Creating and operating “ instrumentalities” that perform government functions, but rely
on contributed funds, might be said to contravene that intent. But cf. 90 Cong. Rec. 3067 (remarks of Sen Danaher)
(arguing that borrowing by government corporation should not be an appropriation within this provision) We have
not attempted to resolve this question because we have been informed that the use of USIA facilities, staff, and funds
is contemplated.
17 Lawton M emorandum, p 5.

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commissions, at least if they perform non-advisory functions. See 90 Cong. Rec.
3059 (1944) (remarks of Sen. Russell). Thus, the Council, which would take
substantive action— fundraising— on behalf of the USIA, would be an “ instru­
mentality” using appropriated funds. Accordingly, we believe that it would be
subject to the requirement of § 696 that it obtain specific congressional appropri­
ations within a year of its creation in order for it to continue beyond that date.18

V. Employee Status off Council Members amd Directors

The final problem raised by the establishment of the Council relates to the fact
that the USIA apparently does not wish the Council’s directors and members to be
employees of the USIA within the meaning of the civil service laws. See 5 U.S.C.
§ 2105. Section 2105, Title 5, defines an employee within the meaning of that
Title as a person who is (1) appointed by a federal officer or employee, (2) en­
gaged in the performance of a federal function under law, and (3) subject to the
supervision of a federal officer or employee. As we understand the proposed
functions of the Council, both the director and members would necessarily be
employees within the meaning o f this provision.19
First, they would all be appointed to the Council by the Director of the USIA.
This appointment is necessary, we understand, to elicit private participation in
the project, to symbolize the government’s commitment to Youth Exchange
Programs, and to exercise USIA control over the Council. Indeed, even if the
USIA did not wish to “ appoint” members and directors to the Council, the
regulations of the Office of Personnel Management would require that they be
appointed by the government if they are to assume their proposed respon­
sibilities. According to the Federal Personnel Manual, Chapter 735, App. C,
“ Conflicts of Interest Statutes and Their Effects on Special Government Em­
ployees,” (FPM, App. C), when a person is serving on a government advisory
committee, board, or other group in an independent capacity, rather than present­
ing the views or interests of a particular organization, he must be formally
appointed. See generally Memorandum from J. Jackson Walter, Director, Office
of Government Ethics, to Heads o f Departments and Agencies of the Executive
Branch, “ Members of Federal Advisory Committees and the Conflict-of-interest
Statutes,” p. 6 (July 9,1982) (Walter Memorandum). The members and directors
of the Council would not be “ invited to appear at an agency in a representative
capacity,” but rather to render independent advice and to solicit contributions in
the name of the agency. Accordingly, they would have to be formally appointed.
Second, the directors and members of the Council would be engaged in the
performance of a federal function. In their advisory capacity, these individuals,

18 Section 691, Title 31, provides an exemption from the funding requirement of § 696 for “ interagency groups
engaged in authorized activities o f common interest to such departments and establishments and composed in whole
or in part o f representatives thereof.” As the language of § 691 indicates, however, it only exempts committees
which are established to coordinate common activities between more than one agency. Thus, it would not exempt the
Council, which is organized only to further the exchange activities of the USIA. from the obligation to obtain
funding within one year o f its creation.
19 We have assumed that the members of the Council would be actively engaged in assisting the Council.

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as we have said, would be rendering independent advice to the USIA. See
generally Walter Memorandum, pp. 6-7. In their operational capacity, they
would be soliciting for and in the name of the USIA. See FPM, App. C-5 (“When
an advisor or consultant is in a position to act as a spokesman for the United States
or a Government agency as, for example, in an international conference— he is
obviously acting as an officer or employee of the Government” ).
Third, the members and directors of the Council would be subject to the
supervision of a federal officer or employee. Whether an individual is independ­
ent or supervised depends on “ the detail with which the party for whom the work
is eventually produced actually supervises the manner and means by which the
work is performed.” Lodge 1858, AFGE v. Webb, 580 F.2d 496,504 (D.C. Cir.),
cert, denied, 439 U.S. 927 (1978). According to your proposal, the USIA would
exercise control over the manner of solicitation, the content and targets of the
solicitation, the individuals who would be doing the solicitation, and the manner
in which the money so raised would be expended. The Agency also plans to
provide staff and offices for the Council, which is generally inconsistent with an
independent relationship between the Agency and the Council. Moreover, of­
ficials of the USIA have been and wish to continue to be actively involved in the
creation of the Council. Finally, officials of the USIA do not plan to enter into a
contract with the Council for fundraising, which is generally one indication of an
independent relationship.20 Accordingly, in our view, the activities of the direc­
tors and members of the Council, as you have described them, would require that
they be employees of the federal government within the meaning of Title 5 .21

VI. Conclusion

This memorandum has outlined the various legal questions raised by the
creation of the proposed Council by the USIA. In our view, the USIA may
establish the Council in the manner you have proposed so long as its members
and directors are employees of the USIA, and any publicity effort the Council
undertakes is carefully tailored to further only the fundraising goals of the USIA,
and not unduly to publicize the USIA.22 We also caution that the larger the size of
the Council, and the more diverse its functions, the greater the risk that it could
stray beyond the limits of the “ authorized in a general way by law” exception to
§ 673. Because no bright line can be drawn under this statute, we leave it to your

20 An approach involving a contract between the USIA and the Council for fundraising would raise questions as to
whether the USIA has the authority to enter into a contract for fundraising, and whether such a contract with the
Council would satisfy the procurement laws. We have not examined these issues, since the current proposal does not
contemplate such an approach. In any event, we would generally defer to the initial judgment of your office on
questions such as these relating to the authority of the USIA.
21 As you know, the members and directors of the Council could either be regular government employees or
special government employees, depending upon the length and terms of their service. See FPM, App. C.
22 Although we have not specifically considered what conflicts of interest laws and regulations would apply to the
solicitation o f funds by the Council, our conclusion that Council directors and members must be considered
government employees necessarily means that certain conflicts of interest restrictions would apply. More generally,
because of the unusual functions of the Council, we recommend that the USIA exercise particular care in the
solicitation of contributions to ensure that no improper pressure is placed on members of the public to contribute,
and that no conflicts o f interest would arise in the course of this solicitation.

553
informed judgment to decide whether the proposed Council remains, in its
current form, within prudent bounds.23
If you should like our advice on any more specific aspects of the proposed
Council, please feel free to contact us.

T h e o d o r e B. O lso n
Assistant Attorney General
Office c f Legal Counsel

23 You have raised two other questions about the operation of the Council, neither of which, in our opinion, raises
a legal problem . First, you have asked whether the President can direct through memorandum rather than executive
order that the Council engage in both operational and advisory functions. FACA states that an advisory committee
shall be solely advisory unless specifically provided otherwise by statute or “ Presidential directive." 5 U .S.C . App.
§ 9(b) We believe an executive memorandum is all that is required to satisfy the requirement of a presidential
directive. See Office of M anagement and Budget Circular A -63, 38 Fed. Reg. 2306, 2308 (1973).
Second, you have asked w hether the members and directors of the Council may be appointed by the Director,
although the President would recommend their appointment to the Director. We see no legal problem with the
director of an agency appointing the members o f a committee which advises both him and the President, at least
where the President recommends their appointment.

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