Reimbursement of the Internal Revenue Service for Investigative
          Services Provided to the Independent Counsel

To the extent that Internal Revenue Service agents detailed to an independent counsel perform work
   that is related to the type of work for which the IRS receives its appropriations, the detail falls
   within an exception to the general rule against non-reimbursable details. Reimbursement by the
   independent counsel is appropriate for work performed by the detailed agents that is not IRS-re-
   lated.
                                                                                      September 30, 1988
            M e m o r a n d u m O p in io n f o r t h e A s s is t a n t A t t o r n e y G e n e r a l
                                         FOR ADMINISTRATION

                                   Introduction and Summary
   This responds to your memorandum asking for the opinion of this Office con­
cerning the propriety of reimbursing the Internal Revenue Service (“IRS”) for
the services of IRS agents assigned to assist Independent Counsel Lawrence E.
Walsh and James C. McKay.1The IRS, which entered into agreements to be re­
imbursed by the independent counsel for the services of IRS agents, contends
that it must receive reimbursement and that reimbursement cannot be waived.
For the reasons stated below, we conclude that to the extent that an IRS agent de­
tailed to an independent counsel performs activities related to the purposes of the
IRS, the detail falls within an exception to the general rule against the reim­
bursable details. This conclusion is consistent with a recent congressional com­
mittee report which, while only a matter of legislative guidance, suggests that re­
imbursement by the independent counsel to the IRS is inappropriate where
“agents will presumably be performing IRS work—investigating federal tax
fraud.” However, with respect to all work that does not fall within that excep­
tion, the IRS should seek reimbursement from the independent counsel.
                                    Analysis
  A federal agency must spend its funds on the objects for which they were ap­
propriated. 31 U.S.C. § 1301(a). A corollary to this statutory rule is that an agency
may not augment its appropriations from outside sources without specific statu­
   1 Memorandum for Charles J. Cooper, Assistant Attorney General, Office of Legal Counsel, from Harry H.
Flickinger, Assistant Attorney General for Administration, Justice Management Division (May 6, 1988).

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tory authority. See generally United States General Accounting Office, Office of
General Counsel, Principles of Federal Appropriations Law 5-62 to 5-63 (1st
ed. 1982) (explaining the augmentation theory). The statute and its corollary com­
bine to create a general prohibition on the detail of employees from one federal
agency to another on a non-reimbursable basis. “To the extent that agencies de­
tail employees on a nonreimbursable basis . . . they may be avoiding congres­
sional limitations on the amount of moneys appropriated to the receiving agency
for particular programs.” 64 Comp. Gen. 370, 380 (1985).2
   There are several recognized exceptions to the rule against non-reimbursable
details. First, there is a de minimis exception for details that have a negligible ef­
fect on the loaning agency’s appropriations. See 65 Comp. Gen. 635,637 (1986).
Second, non-reimbursable details are permissible if the detail involves a matter
related to the loaning agency’s appropriations and which would aid the loaning
agency in accomplishing the objects of its appropriations. Id:, see also 64 Comp.
Gen. at 380. Third, Congress may expressly permit non-reimbursable details in
certain instances. See, e.g., 5 U.S.C. § 3343 (authorizing details to international
organizations).
   We believe that non-reimbursable details to the independent counsel are per­
missible in this case under the second exception. In this regard, the IRS concedes
that non-reimbursable details are appropriate “to the extent that IRS employees
are assigned to investigations concerning violations of the internal revenue laws.”
Memorandum for Associate Chief Counsel (Litigation) from Director, General
Legal Services Division at 2 (Sept. 23, 1987). This is so because the IRS is ap­
propriated funds for “necessary expenses of the Internal Revenue Service for in­
vestigation and enforcement activities.” Act of Dec. 22, 1987, Pub. L. No. 100-
202,101 Stat. 1329,1329-395. Accord Act of Oct. 30,1986, Pub. L. No. 99-591,
§ 101(m), 100 Stat. 3341, 3341-312.
   We have examined your letter to Mr. Brennan and agree that it is reasonable
to conclude that the IRS agents detailed to the independent counsels would ap­
pear to be working on matters related to the IRS appropriation. Under the agree­
ment, IRS employees are “to perform assigned financial investigative activities,
including tracing of funds and net worth computations.” Memorandum of Un­
derstanding between the Internal Revenue Service and the Office of Independent
Counsel at 1 (Mar. 6, 1987) (“MOU”). As you noted in your letter to Mr. Bren­
nan:
           At our meeting with you on September 29, 1987, Anthony Lan-
           gone, Assistant Commissioner for Criminal Investigations, IRS,
           confirmed that to the best of his knowledge this was in fact the
           type of work performed by the IRS employees in this investiga­
   2 The Comptroller General is an officer of the legislative branch, see Bowsher v. Synar, 478 U.S. 714, 727-32
(1986), and, historically, the executive branch has not considered itself bound by the Comptroller General’s legal
opinions if they conflict with the legal opinions of the Attorney General or of this Office. However, the opinions
do supply valuable guidance and, in this instance, the Comptroller General's construction of appropriations law is
not inconsistent with our reading of the law.

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          tion. By its very nature, this type of work tends to uncover
          violations of the revenue laws to the extent that they may be
          present.... [I]n a recent telephone conversation, the Independent
          Counsel’s Office confirmed that the work of the IRS employees,
          at least in part, involved tax related matters.
          In light of these facts, we believe there is a reasonable basis to
          conclude that the work of the IRS employees for the independent
          counsel was in furtherance of an IRS appropriation.
Letter for the Honorable Charles H. Brennan, Deputy Commissioner—Opera­
tions, Internal Revenue Service, Department of the Treasury from Harry H.
Flickinger, Assistant Attorney General for Administration at 2 (Sept. 30, 1987)
(“Flickinger Letter”). Indeed, the work of the independent counsel produced an
indictment against former Lieutenant Colonel North and others for conspiracy to
defraud the IRS. United States v. Poindexter, No. 88-80 (D.D.C. Jan 28, 1987)
(count twenty-three of the indictment). It therefore seems evident that at least
some of the work done by IRS agents was in aid of the IRS’ objective of inves­
tigating violations of the tax laws and supporting enforcement activity against
violators. Therefore, the IRS should not insist upon reimbursement where the
facts indicate the work was in support of the mission of the IRS.3
   The third exception to the general rule—explicit congressional authorization
for non-reimbursable details—does not seem to apply in this case, although there
are legislative statements contemplating non-reimbursement under the second
exception discussed above. An independent counsel may request assistance dur­
ing an investigation pursuant to 28 U.S.C. § 594(d)(1):
          An independent counsel may request assistance from the Depart­
          ment of Justice in carrying out the functions of the independent
          counsel, and the Department of Justice shall provide that assis­
          tance, which may include .. . the resources and personnel neces­
          sary to perform [the] independent counsel’s duties.
Obviously, this provision does not expressly permit federal agencies to detail
agents to an independent counsel on a non-reimbursable basis. Indeed, the pro­
vision only states that an independent counsel may obtain assistance from the De­
partment of Justice—it does not address the issue of how the independent coun­
sel may obtain assistance from other federal agencies or on what basis such
assistance should be provided. Nor is the legislative history of the Ethics in Gov-
     3 Indeed, to require reimbursement for activities within an agency’s mandate may, under some circumstances,
constitute an improper augmentation of funds. As you stated in your letter of September 30, 1987 to Mr. Brennan,
“ [i]t would be an authorized augmentauon of the IRS appropriations for the IRS to be reimbursed for work that
Congress intended to fund out of an IRS appropriation.” Flickinger Letter at 1-2. See also United States Govern­
ment Accounting Office, Office of General Counsel, Principles o f Federal Appropriations Law 5—62 to 5-63 (1 st
ed. 1983).

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emment Act of 1978, Pub. L. No. 95-521, § 601(a), 92 Stat. 1824, 1869-70, the
origin of section 594(d), helpful. The 1978 legislative history does anticipate that
an independent counsel may need assistance from other agencies, but the leg­
islative history does not address the specific issue of whether such assistance is
to be provided on a reimbursable basis. See H.R. Rep. No. 1307, 95th Cong., 2d
Sess. 9 (1978) (“When requested, the Justice Department must also furnish the
special prosecutor with resources and personnel needed by the special prosecu­
tor in order to perform his duties.”); S. Rep. No. 170, 95th Cong., 1st Sess. 68
(1977) (“The special prosecutor may choose to hire his own investigators or may
choose to make some use of the Federal Bureau of Investigation or other federal
investigation services. . . . If the special prosecutor requests the services of the
Federal Bureau of Investigation or any federal investigative service, the Depart­
ment of Justice is directed to provide the personnel and resources needed.”).
   Legislative statements accompanying the 1987 amendments to the indepen­
dent counsel statute do provide, however, some evidence of Congress’ desire to
have assistance provided to an independent counsel on a non-reimbursable ba­
sis. Even though section 594(d)( 1) was not changed when Congress reauthorized
the independent counsel statute in 1987, a Senate report explained that section
594(d)(1) “enables [the independent counsel], standing in the shoes of the At­
torney General, to request assistance from other investigative agencies such as
the Internal Revenue Service, Secret Service, Inspectors General and Customs
Service, which routinely assist the Department of Justice with its criminal in­
vestigations.” S. Rep. No. 123, 100th Cong., 1st Sess. 23 (1987) (emphasis
added). The report then observes:

        [T]he Internal Revenue Service (IRS) has recently demanded that
        an independent counsel sign a reimbursement agreement to use
        IRS investigative agents, even though it appears the IRS does not
        demand similar reimbursement from the Justice Department for
        the assistance of such agents with other criminal cases. Reim­
        bursement appears particularly inappropriate since these agents
        will presumably be performing IRS work—investigating federal
        tax fraud.

Id. at 23. The report adds that “Congress . .. intended other investigative agen­
cies to provide assistance to independent counsels . . . on the same nonreim­
bursable basis available to [the Justice] Department. . . . [F]ederal agencies are
instructed to discontinue the practice of requiring reimbursement agreements
mandated by [section 594(d)].” Id.
   The unmistakable inference from this discussion is that the IRS should not re­
quire reimbursement for assistance it provides to the independent counsel, if it
would not require similar reimbursement from the Department of Justice. Since
IRS assistance to the Department would normally be non-reimbursable where the
assistance advanced the mission of the IRS, these legislative statements suggest,
                                        236
but do not obligate,4 that the IRS should treat details to an independent counsel
in a similar fashion.
                                                 Conclusion
   We believe that the IRS should not insist upon reimbursement from an inde­
pendent counsel for the services of IRS agents to the extent that the portion of
the work being done by the agents is related to the type of work for which the
IRS receives its appropriations. This is consistent with longstanding appropria­
tions law and principles and coincident with legislative statements which suggest
that these principles should be observed with respect to the independent counsel,
just as they are with the Department of Justice. For all non-IRS-related work done
by the detailed agents, however, the general rule requiring reimbursement would
appear to apply.
                                                                       D o u g l a s W . K m ie c
                                                             Acting Assistant Attorney General
                                                                  Office of Legal Counsel




    4 There are two reasons why the 1987 Senate committee report cannot obligate the IRS as a matter of law. First,
the report language that instructs federal agencies to discontinue all reimbursement agreements is not part of the
statute. Committee reports are not statutes and they need not be treated as such. See TVA v. Hill, 437 U S 153,191
(1978), 55 Comp. Gen. 812,819-20(1976); Reed Dickerson, The Interpretation and Application of Statutes 143—45
(1975) Legislative intent is ineffective unless it is embodied in the words of the statute. See Commissioner v Acker ,
361 U.S. 87,92-93 (1959)
       Second, even though one might ordinarily review the legislative history of a statute to discern the meaning
of an ambiguous provision, post-enactment legislative history generally is entitled to little weight This is especially
true when the history is found in a committee report wntten several years after Congress enacted the statute. See
Oscar Mayer & Co v Evans, 441 U.S. 750, 758 (1979) (The Senate report “was wntten 11 years after the [act]
was passed in 1967, and such ‘[legislative observations . are in no sense part of the legislative history.*”) (quot­
ing United Airlines v McMann, 434 U.S. 192,200 n.7 (1977)). In this case. Congress did not change section 594(d)( 1)
in 1987, so the discussion of non-reimbursable details is not related to any statutory action taken by Congress. Nev­
ertheless, the Senate Committee on Governmental Affairs obviously favored non-reimbursable details to the inde­
pendent counsels, and to the extent appropnauons law and principles coincide with this stated reference, they should
be pursued.

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