              Delegation of Cabinet"Members’ Functions as
             Ex Officio Members of the Board of Directors
          of the Solar Energy and Energy Conservation Bank

Under settled principles o f adm inistrative law, Cabinet mem bers serving as ex officio m em bers o f the
  Board of D irectors o f the Solar Energy and Energy Conservation Bank may delegate their
  directorial functions to subordinates, even though the legislation establishing the Bank does not
  expressly authorize such delegation.


                                                                                                  May 21, 1982

         MEMORANDUM OPINION FOR THE GENERAL COUNSEL,
         DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

   This responds to your request for our opinion whether ex cfficio members of
the Board of Directors of the Solar Energy and Energy Conservation Bank (Bank)
are authorized to delegate their functions to Substitute Directors, or whether
actions taken by such Substitute Directors pursuant to this delegation are invalid
absent subsequent ratification by the statutorily named Directors. For the reasons
stated below, we believe that the ex cfficio members may delegate their functions
and, accordingly, that the actions taken by their duly appointed delegees are
valid.
   The Bank was created by Title V of the Energy Security Act of 1980, Pub. L.
No. 96-294 , 94 Stat. 611, 719, 12 U.S.C. § 3601 (Act) to provide financial
encouragement for the installation and use of energy conservation devices and
solar energy systems. See 12 U.S.C. § 3601 (Supp. V 1981) and H.R. Rep. No.
1104, 98th Cong., 2d Sess. 278-291 (1980) (Conference Report). Established
“ in the Department of Housing and Urban Development,” the Bank has “ the
same powers as those powers given to the Government National Mortgage
Association by [12 U.S.C. § 1723a(a)].” 12 U.S.C. § 3603(a).1 The General
Accounting Office is responsible for auditing the financial transactions of the
Bank. 12 U.S.C. § 3603(b).
   The Bank is governed by a Board consisting of five ex cfficio Directors: the
Secretaries of Housing and Urban Development, Energy, Treasury, Agriculture,
and Commerce. The Secretary of HUD chairs the Board, and three Board


   1 T hese pow ers include the pow er to en ter into and perform contracts with federal an d state agencies an d p n v ate
persons; to sue and be sued “ in its corporate nam e” ; to lease, purchase and d ispose o f property; to co n d u c t its
business “ w ithout reg ard to any qualification o r sim ilar statute” in any state, and to prescribe ru les and regulations
for the conduct o f its b usiness. 12 U .S C § 1723a(a)


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members constitute a quorum. See 12 U.S.C. § 3604(a), (b) and (c). The
President of the Bank is a presidential appointee and serves as Secretary of the
Board. See 12 U .S.C . §§ 3604(a) and 3605(a). The Board is responsible for
establishing the policy and carrying out the functions of the Bank, and it is
authorized and directed to issue such regulations as it deems necessary to this
end. 12 U.S.C. §§ 3603(e) and 3618. Among other things, the Board is directed
to determine levels of financial assistance for various energy projects, 12 U.S.C.
§ 3608, designate financial institutions for participation in the Bank’s programs,
 12 U .S.C . § 3611, and establish criteria for approving eligible solar technology
and conservation measures. 12 U.S.C. §§ 3612 and 3613. In addition, the Board
appoints members of the B ank’s two advisory committees and directs the
President and other Bank officers in the management of the Bank’s affairs. 12
U .S.C . § 3605(c).
   In September of 1980 the Board of Directors of the Bank met and adopted by­
laws, including a provision permitting the designation of “ Substitute Directors”
by each of the statutorily named Directors. See 24 C.F.R. § 1895.1 (1980)
(Section 3.02). Each Substitute Director is to be designated “ under the estab­
lished delegation provisions” o f the particular Cabinet agency involved, except
that each must occupy a position at least equivalent to that of Assistant Secretary.
In the absence of the designating Director, the Substitute Director “ will be
deemed to be a member of the Board and will have all the powers and duties of the
designating Director.” We understand from your request that, pursuant to this by­
law provision and the applicable delegation authorities of the five Cabinet
agencies,2 Substitute Directors were named, have met on several occasions to
conduct the statutory business o f the Bank, and have taken a number of actions in
the name of the Bank that have not been adopted or confirmed by the statutorily
named Directors. The question you have asked us to address is whether the ex
cfficio members were authorized to delegate their directorial functions and,
accordingly, whether these actions by the Substitute Directors are valid.
   The terms of the Act do not provide for delegation of the directorial functions
of the ex cfficio Board members. It is clear, however, as a “ general proposition”
of administrative law, that “ merely vesting a duty in [a Cabinet officer] . . .
evinces no intention whatsoever to preclude delegation to other officers in the
[Cabinet officer’s agency] . . . .” U nitedStates v. Giordano, 416U .S. 505, 513
(1974).3 See also 1 Davis, Administrative Law Treatise, § 3:17 (2d ed. 1978);

   l See 4 2 U .S .C § 3535(d) (Supp. V 1981) (H U D ); 42 U .S C . § 7252 (S upp V 1981) (Energy); 31 U .S .C .
§ 1007 (1 9 7 6 ) (T reasury); S ection 4 of R eorganization P lan N o. 2 o f 1953, 67 S tat. 633 (A griculture), S ection 2 of
R eorganization P lan N o. 5 o f 1950, 64 Stat 1263 (C om m erce) T h e H U D delegation provision is ty pically worded.

           T h e S ecretary m ay delegate any o f his functions, pow ers, and d uties to such officers an d
        em p lo y ees o f the D epartm ent as he m a y designate, m ay authorize such successive redelegations o f
        su ch functions, pow ers, and duties a s he m ay deem d esira b le, and m ay m ake such rules and
        regulations as m ay be necessary to c a rry out his functions, pow ers, and duties.

42 U .S .C . § 3535(d) (S upp. V 1981)
   3    G iordano involved a statu to ry provision that vested the authority to approve w iretaps u n d er Title III o f the
O m n ib u s C rim e C o n tro l and S afe Streets A ct o f 1968 in “ the A ttorney G eneral o r any A ssistant A ttorney G eneral
sp ecially d esig n a ted by the A ttorney G en eral." 416 U S at 5 1 4 . T h e governm ent argued that delegation to the
A ttorney G e n e ra l’s E xecutive A ssistant w as perm issible under the D ep artm en t o f Ju stice 's general delegation


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FTC v. Gibson, 460 F.2d 605 (5th Cir. 1972) (FTC may delegate to field officer
power to issue subpoena); Wirtz v. Atlantic States Construction C o., 357 F.2d
442 (5th Cir. 1966) (Secretary of Labor may delegate to regional attorneys
authority to institute suit under the Fair Labor Standards Act of 1938). To be sure,
the legality of a particular administrative delegation is primarily a function of
legislative intent. See, e .g ., Hall v. Marshall, 476F. Supp. 262, 272 (E.D. Penn.
1979). Nevertheless, as summarized in Sutherland’s treatise on statutory
construction,
           Where the statute is silent on the question of redelegation and the
           delegation was to a single executive head, it is almost universally
           held that the legislature, understanding the impossibility of per­
           sonal performance, impliedly authorized the delegation of au­
           thority to subordinates.
1 C. Sands, Sutherland Statutory Construction, § 4.14 (4th ed. 1972).
   The practical necessities underlying this administrative law principle are
equally applicable where ex officio functions are involved. Indeed, they may be
especially applicable. It can be fairly assumed that when Congress selects
particular government officials for ex officio service, it is because their official
duties bear a reasonable relationship to the functions of the body to which they are
attached ex officio. In so designating political officials who serve individually
only for the length of time they remain in their official posts, Congress expects
both to take advantage of their agency’s specialized knowledge and experience,
and to ensure its continuous availability. It is reasonable to conclude in these
circumstances that Congress expects the agency head to operate as he would
normally in running his agency, and thus to conform to the accepted admin­
istrative practice of delegating authority to subordinates for the performance of
many of his official duties. An opposite conclusion would often lead to frustration
of the legislation establishing the body in question, as well perhaps as other laws,
since a rigid requirement that a Cabinet member give his personal attention to
every one of his many official functions would be impossible of fulfillment.4
   In this case, nothing in the legislative history of the Bank’s organic act suggests
that Congress intended to depart from settled administrative law practice with

statute, 28 U S .C § 5 1 0 The C o u rt disagreed. W hile finding no “ precise language forbidding d e le g a tio n ," the
C o u rt held that the 1968 statute, “ fairly read, was intended to lim it the power         to the A ttorney G eneral h im se lf
and to any A ssistant A ttorney G eneral he m ight desig n ate." Id T h e C o u rts op inion includes an extensive discu ssio n
o f the 1968 statute’s legislative history, in w hich it notes in particular C o n g ress’ concern that the individual
responsible for authorizing w iretaps be responsive to the political process In reaching this co n clu sio n , how ever, the
C o u rt noted, as a general “ unexceptionable” proposition, that functions vested in the A ttorney G eneral m ay be
d elegated unless the m atter of delegation has been otherw ise “ expressly addressed " Id.
   4 C ongress has som etim es m ade specific provision for the delegation of ex officio functions o f C abinet m em b ers
and o th er high governm ent officials serving on boards and advisory groups See, e.g., 40 U S C . § 872 (ex cfficio
m em bers of P ennsylvania Avenue Redevelopm ent C orporation Board of D irectors may d esignate alternates); 45
U S C § 711 (sam e, U nited States Railw ay A ssociation); 16 U .S C § 468 (sam e. N ational Trust for H isto ric
Preservation). B ut for every express provision perm itting delegation o f directorial functions in statutes creatin g
governm ent co rp o ratio n s, there are several w hose boards include C abinet m em bers serving ex cfficio w hich contain
no express delegation provisions. See, e g., 15 U .S .C . § 714g(a) (C om m odity C redit C orporation), 16 U .S .C .
§ 19(0 (N ational Rark Foundation); 45 U .S .C . § 543(a) (N ational Railroad F^ssenger C orporation), 4 2 U .S C.
§ 8103 (N eighborhood R einvestm ent C orporation), 2 9 U S C . § 1302(c) (Pension Benefit G u aran ty C orp o ratio n )


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respect to the delegation of ex cfficio board members’ authority. Indeed the
statutory scheme lends support to the presumption favoring delegation. As in
most instances where Congress selects particular government officials for ex
cfficio service, the choice of the five Cabinet members in this case was based not
on individual personal attributes, but on the contribution Congress believed each
one’s agency could make to the Bank’s operations. See, e.g.. Conference Report
at 278 (“The Conferees expect the Board will rely on DOE and HUD to determine
the reliability, safety, and performance of such new energy conserving improve­
ments. . . .” ). We think it reasonable to conclude, therefore, that the general
delegation authority available to each of these five Cabinet members is sufficient
to accomplish the delegation of functions provided in the Board’s by-Laws.5
   The district court for the District of Columbia has sustained a delegation of ex
officio authority in a case similar to this one. In D .C . Federation of Civil
Associations v. Airis, 275 E Supp. 533 (D.D.C. 1967), the court held that ex
cfficio members of the National Capital Planning Commission properly appoint­
ed alternates to vote and otherwise act in their behalf, in spite of the absence of
any specific statutory authorization for the delegation.6 In so holding, it noted that
            obviously, the ex cfficio members of the Commission are not
            expected to and cannot devote their entire time to its work. On the
            contrary, their services as members of the Commission are only
            one feature of their numerous activities. It has become the usage
            for the ex cfficio members to appoint alternates to act in their
            behalf.
275 F. Supp. at 539.
   The general rule of private corporate law prohibiting delegation of a Director’s
voting authority has no relevance in this context. Even if the Bank more closely
resembled a private corporation in its structure and functions,7the law applicable
to it would remain that contained in its own organic statute and in general
principles of administrative and constitutional law applicable to similar govern­
ment entities. See Rainwater v. United States, 356 U.S. 590 (1958). See also
D 'O ench, Duhme & Co. v. FDIC, 315 U.S. 447, 472 (1942) (Jackson, J.,
concurring). Like the Commodity Credit Corporation, whose status under the
False Claims Act was at issue in the Rainwater case, the Bank is “ simply an
administrative device established by Congress for the purpose of carrying out
[energy] programs with public funds.” 356 U .S. at 592. Unlike the Commodity
Credit Corporation, it does not even have “ a corporate name . . . to distinguish it

   5 In d eed , this delegation p ro b ab ly would b e perm issible even w ith o u t the form al adoption by the B oard o f the
“ S u b stitu te D irecto r” by-law
   6 T he court did not say w h eth e r any of the statutorily ap pointed officials involved— w ho in clu d ed th e C h ie f of
E n g in eers o f the A rm y, the D irecto r of the N ational Park S ervice, the Federal Highway A dm inistrator, and the
C h airm en o f th e H ouse an d Senate D istrict C om m ittees— w ere otherw ise authorized by law to delegate th eir
fu n ctio n s, as are the C ab in et m em bers in th is ca se. See note 2 , supra.
   7 W hile the B an k ’s authorities are described m the legislative histo ry as “ corp o rate p o w ers,” it is not subject to the
G o v ern m en t C orporation C ontrol A ct, 3t U .S .C §§ 8 4 1 -8 7 0 (S upp. V 1981). See list o f w holly ow ned governm ent
corp o ratio n s in 31 U S .C § 846 (Supp. V 1981), and o f m ixed-ow nership corporations in 31 U S .C § 856 (Supp.
V 1981).


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from the ordinary government agency.” Id. Nor is there any suggestion in the Act
or its legislative history that Congress intended the Bank to be subject to
principles of private corporation law.
   Based on applicable administrative law principles permitting delegation by
agency heads of ex officio functions in the absence of legislative directives to the
contrary, we conclude that the directorial functions were properly delegated in
this case and that actions taken by the Substitute Directors were not tainted by any
improper delegation.

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




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