3. The Defense Production Act does not require that a WOC employed to assist in carrying out the provisions of the act shall be limited to participation in defense matters. Rather, it leaves the President free to provide exemptions on such terms as he deems appropriate. This he has done by Executive orders which provide for exemptions without distinction as to the degree of defense interest involved, or even a requirement that a defense interest be present in each matter he handles. It is sufficient if a substantial part of his duties relate to defense production matters. 4. WOC's employed in BDSA today under the Defense Production Act have the same protection that they have always had. Basically, they may not today, nor could they prior to the formation of BDSA (a) Negotiate contracts with their private employers, (c) Prosecute claims during and for 2 years after their Government em ployment involving matters in which they had any responsibility. 5. However, the basic exemption-permission to receive compensation from the private employer while in the Government service--exists today as it did prior to BDSA. 6. It should be plain, therefore, that a WOC employed today by BDSA under the Defense Production Act possesses the same privileges that existed during the Korean emergency. In other words, the immunities that he has been entitled to since 1950 remain unimpaired today. Mr. WALDEN. At this juncture I would like to insert in the record and read part of the opinion of Louis F. Dahling of Bodman, Longley, Bogle, Armstrong & Dahling, which I understand is the counsel for the Automobile Manufacturers Association. This letter is addressed to the managing director of the Automobile Manufacturers Association, and reads: We had intended to drop you a line after Mr. Honeywell's visit in connection with the WOC service by corporate executives but we have been so very busy with year-end matters that we have had to put it aside until now. As this matter may come up again, we would like to lay before you some further thoughts on this subject. Mr. Honeywell emphasized the importance of having executives from the automotive industry serve on a WOC basis with the BDSA to assist in carrying out its functions under the Defense Production Act and said that the automotive industry was the only one not cooperating in this program. We have already advised you that so long as WOC executives are confined to defense matters they could continue to receive their corporate salaries without violating the Federal Criminal Code. But Mr. Honeywell, on being asked, said that their activities would not be limited to defense and the Secretary's order establishing BDSA speaks of using this agency to increase "the range of cooperation with private industry in fields of domestic commerce and industry and defense production." Mr. Honeywell called attention to the opinion of the General Counsel of the Commerce Department to the effect that WOC executives could serve the Department while receiving their corporate salaries without violating any criminal statute whether these executives concerned themselves with defense production or not and that if it should be decided that the law was violated the only result would be a cease-and-desist order. We are unable to agree with this conclusion. The criminal statute dealing with this matter makes both the executive involved and his company subject to a fine of $1,000 or imprisonment of not more than 6 months, or both. The only exemption from the Criminal Code is found in the Defense Production Act and the regulations issued by the President in pursuance thereof. This act authorizes WOC employment under certain conditions and authorizes the President to exempt such persons, but this power of exemption is limited to the extent that the President deems it necessary and appropriate in order to carry out the provisions of this act. Furthermore, the regulations issued by the President delegating his power to employ WOC personnel provides that the appointment must be supported by the written certificate by the head of the Department that the appointment is "necessary and appropriate to carry out the provisions of the Defense Act." Mr. Honeywell stated that opinion of the General Counsel for the Department had been released more than a year ago and had never been questioned. We do not know whether the question has ever been raised but the opinion certainly would not be binding upon the Department of Justice. It is quite likely that the opinion has never been questions because up to date the WOC executives have been engaged in defense activities. It may well be that the Department of Justice would take no action to enforce the provisions of the Criminal Code above referred to so long as the present emergency exists and even though a part of the activities of WOC executives was not limited to defense production. But the situation presented by the statute is, in our opinion, just what we have set out above, and to the extent that WOC executives engaged in nondefense activities, we know of no protection afforded by any statute or regulation. Do you agree with this opinion of the association counsel? The CHAIRMAN. That will be received in the record. (The document referred to and related documents are as follows:) BODMAN, LONGLEY, BOGLE, ARMSTRONG & DAHLING, Detroit, Mich, January 18, 1955. Mr. WILLIAM J. CRONIN, Managing Director, Automobile Manufacturers Association, DEAR MR. CRONIN: We had intended to drop you a line after Mr. Honeywell's visit in connection with the WOC service by corporate executives, but we have been so very busy with year-end matters that we have had to put it aside until now. As this matter may come up again, we would like to lay before you some further thoughts on this subject. Mr. Honeywell emphasized the importance of having executives from the automotive industry serve on a WOC basis with the BDSA to assist in carrying out its functions under the Defense Production Act and said that the automotive industry was the only one not cooperating in this program. We have already advised you that so long as WOC executives are confined to defense matters they could continue to receive their corporate salaries without violating the Federal Criminal Code. But Mr. Honeywell, on being asked, said that their activities would not be limited to defense and the Secretary's order establishing BDSA speaks of using this agency to increase "the range of cooperation with private industry in fields of domestic commerce and industry and defense production." In the Secretary's press release (December 18, 1953) it was explained that-"Industry conferences will discuss general subjects which concern business and upon which the Secretary seeks information. Subjects will include legislation affecting business, taxation, labor relations, distribution problems, foreign-trade relations, and other subjects not legally prohibited. * "As long as the threat of war exists, the workload of each industry division will be concentrated on defense responsibilities. If the threat of war diminishes, the emphasis will be suited to serving business and Government in peacetime activities." Mr. Honeywell called attention to the opinion of the General Counsel of the Commerce Department to the effect that WOC executives could serve the Department while receiving their corporate salaries without violating any criminal statute whether these executives concerned themselves with defense production or not and that if it should be decided that the law was violated the only result would be a cease and desist order. We are unable to agree with this conclusion. The criminal statute dealing with this matter makes both the executive involved and his company subject to a fine of $1,000 or imprisonment of not more than 6 months or both. The only exemption from the Criminal Code is found in the Defense Production Act and the regulations issued by the President in pursuance thereof. This act authorizes WOC employment under certain conditions and authorizes the President to exempt such persons, but this power of exemption is limited to the extent that the President deems it necessary and appropriate in order to carry out the provisions of this act. Furthermore, the regulations issued by the President delegating his power to employ WOC personnel provides that the appointment must be supported by the written certificate by the head of the department that the appointment is “necessary and appropriate to carry out the the provisions of the (Defense) Act." Mr. Honeywell stated that opinion of the General Counsel for the Department had been released more than a year ago and had never been questioned. We do not know whether the question has ever been raised but the opinion certainly would not be binding upon the Department of Justice. It is quite likely that the opinion has never been questioned because up to date the WOC executives have been engaged in defense activities. It may well be that the Department of Justice would take no action to enforce the provisions of the Criminal Code above referred to so long as the present emergency exists and even though a part of the activities of WOC executives was not limited to defense production. But the situation presented by the statute is, in our opinion, just what we have set out above, and to the extent that WOC executives engaged in nondefense activities, we know of no protection afforded by any statute or regulation. Very truly yours, Mr. WILLIAM J. CRONIN, LOUIS F. DAHLING. DEPARTMENT OF COMMERCE, Managing Director, Automobile Manufacturers Association, New Center Building, Detroit 2, Mich. DEAR MR. CRONIN: A copy of the opinion of Louis F. Dahling of Bodman, Longley, Bogle, Armstrong & Dahling, addressed to you and dated January 18, 1955, was sent to our Mr Honeywell, Administrator of Business and Defense Services Administration, Department of Commerce, and at his request we have examined the letter and looked further into the question. In addition we have talked with Mr. Dahling and write this letter at his suggestion. While I fully subscribe to the opinion of this Office on the subject, issued December 8, 1953, I can also understand and sympathize with the desire of the members of your industry, as guided by their counsel, to participate only where the activities of the WOC are strictly limited to defense matters. After examining into the actual work which would be performed in connection with the job which is now available in the automotive industry field, it appears to us entirely feasible to meet your desires in this regard. The post is that of Director of the BDSA Automotive Division, which would be filled by a WOC representative of the automotive industry. The Director would devote himself entirely to defense matters and would have no responsibility with regard to any incidental nondefense matters. The latter would be the sole responsibility of the Deputy Director, a career Government employee. The incumbent WOC would not perform any business service activities, and the usual job description issued in connection with his position and his other employment papers would clearly so state. The appointment would be made by the Secretary of Commerce personally in full conformity with the exemption and other provisions of Presidential Executive Order 10182, as amended, which provides for appointments on a without-compensation basis under the Defense Production Act of 1950, as amended. I should state, in the interests of clarification, that we do not by any means advocate enlistment as a WOC where only token or secondary defense activities are contemplated. Each one of these jobs in purpose and in function involves a high degree of direct responsibility in connection with the Defense Production Act. Nevertheless, while we are confident that our WOC positions as established provide full exemption, we are glad to make this suggestion to meet your particular desires. I should be grateful if you would let Mr. Honeywell or me know whether this proposal will meet with the approval of the association and your counsel, if at all possible in advance of the Automotive IAC meeting which is scheduled for February 1. Sincerely yours, PHILIP A. RAY, General Counsel. Presidents' Letter No. 1 To Presidents: AUTOMOBILE MANUFACTURERS ASSOCIATION, LEGAL STATUS OF WOC REPRESENTATIVES IN BSDA A principal item on the agenda of the joint meeting of Passenger Car and Truck Advisory Committees of the Business and Defense Services Administration on February 1 is the matter of supplying company executives to serve without compensation as Director of the Automotive Division of BDSA. When this proposal was first made to the industry in 1953, our counsel raised certain questions concerning the right of companies to pay and employees to receive their regular salaries while employed in such positions. For your information, I enclose copy of the most recent advice of our counsel in this matter together with copy of letter from the General Counsel of the Department of Commerce. The latter suggests the activities of WOC industry representatives might be limited to defense matters which are exempted by the Defense Production Act from the prohibition against payment or receipt of compensation to Government employees from outside sources. In reply to the General Counsel, I have informed him that in the opinion of our counsel it would overcome the difficulty if the Director's activities were limited to defense matters, but that the matter is one to be decided by the member companies individually, and that if it was not settled at the industry advisory committee meeting and a member later sought the advice of the board of AMA, the board's role would be limited to a recommendation to members which they would be free to accept or reject. WILLIAM J. CRONIN. Mr. WALDEN. What arrangement do you presently have with respect to WOC's in the Automotive Division of BDSA? Mr. HONEYWELL. The present Director of the Automotive Division is the vice president of the American Motors Co. Mr. WALDEN. What arrangements do you have with respect to the services performed and functions performed by the WOC of the Automotive Division? Mr. HONEYWELL. At the request of counsel for the automotive industry, I believe that there was a special arrangement entered into or an agreement or a discussion at least between General Counsel for Commerce and the counsel for the automotive industry and they developed a document which I don't have in front of me. Mr. WALDEN. Would you furnish that for the committee? Mr. MCCLURE. Subject to the consideration of the General Counsel; yes, sir. (The following was supplied by the Department of Commerce:) The Department prepared a description of the duties of the Director of the Automotive Division which limited the responsibilities of this official to activities relating to defense and mobilizaton matters only. A copy of this job description, together with a list of affirmative duties performed by division directors generally, is as follows: [Standard Form No. 75, February 1946] UNITED STATES CIVIL SERVICE COMMISSION POSITION DESCRIPTION 1. Check one: Dept'l X Field 2. Official headquarters: Washington, D. C. 3. Reason for submission: (a) If this position replaces another (i. e., a change of duties in an existing position), identify such position by title, allocation (service, series, grade), and position number: New Position (b) Other: (specify) 4. Agency position No.: BDS E142 5. C. S. C. certification No.: 6. Date of certification: 7. Date received from C. S. C. : 4. Agency position No. BDS E142 5. C. G. S. certification No. 6. Date of certification 7. Date received from C. S. C.: 8. Classification action: Allocation by: a. Civil Service Commisssion: Established in accordance with Section 710 (b) of the Defense Production Act of 1950 and Section 101 (a) of E. O. 10182 b. Department, agency, or establisment: Director, Automotive Division. Class-Series: WOC 9. Organizational title of position (if any): Director, Automotive Division 10. Name of employee (If vacancy, specify V-1, 2, 3, or 4): Vacancy 11. Department, agency, or establishment: Department of Commerce a. First subdivision: Business & Defense Services Administration b. Second subdivision: Automobile Division 12. This is a complete and accurate description of the duties and responsibilities of my position (Signature of employee) 13. This is a complete and accurate description of the duties and responsibilities of this position (Signature of immediate supervisor: H. Dambroger, 3/10/55 14. Certification by head of bureau, division, field office, or designated representative (Signature). Title: Administrator 15. Certification by department, agency, or establishment (Signature): David Harrington, 3/30/55. Title: Position Classifier 16. Description of duties and responsibilities (See Guide to Position Classifiers, Employees, and Supervisors for the Preparation of Position Descriptions, Standard Form No. 75A) INTRODUCTION The Director of the Automotive Division directs the performance of all defense functions of the agency that pertain to the automotive industry area which includes automotive equipment, materials, products, and accessories, a twenty billion dollar industry. As a member of the Administrator's staff, be participates, in collaboration with other division directors, in the consideration and development of policies and program planning as they relate to the defense activities of the agency. In this connection, his recommendations concerning defense matters pertaining to the automotive industry area directly influence the agency's policies and programs. DUTIES The Director is responsible for the administration and direction of all defense activities of the agency as they pertain to the automotive industry, including the following: 1. Defense Materials System: This system is designed to provide assured and prompt fulfilment of all military and AEC production and construction requirements. It operates through the techniques of authorized control material orders, priorities and directives. ACM orders apply to the three controlled materials, steel, copper and aluminum in specified forms and shapes. The priority and directive system complements the regulations as to controlled materials in relation to substantially all other industrial requirements. 2. The Mobilization Readiness Program: The overall objective of this program is to develop a mobilization plan that lies within the nation's material and physical resources and generates the maximum military power that these resources can support, with due consideration of the needs and contributions of the rest of the free world. This involves: (a) studies and investigations, in collaboration with other Government Agencies and with industry, to determine the productive potential of industry to meet all deficiencies in industrial capacity that will be needed in time of emergency; (b) preparation of standby orders for mobilization of the automotive industry; (c) recommendations for tax amortization and loans and determination of goals to meet mobilization requirements; |