101). The knowledge base created by the agencies' use of FFRDCs often serves as a foundation for commercially relevant efforts in the private sector. Internationally, the New Public Management (NPM)17 movement, coupled with the movement toward privatization of governmental agencies and programs, became the reigning orthodoxy. 622(8). 543-560. Henry M. Jackson Foundation, Annual Report 2007 (HMJF: Rockville, MD: 2008), p. 1, at http://www.hjf.org/about/HJF-AR2007.pdf. U.S. Commission on Organization of the Executive Branch of the Government, The Hoover Commission Report (New York: McGraw-Hill Book Company, 1949), p. 7. AMTRAK argued, on the other hand, that its legislation provides that it "will not be an agency or establishment of the United States government" and thus is not subject to constitutional provisions governing freedom of speech. Lester Wolff, Jon D. Holstine, and David J. Lewis, eds., A Legislative History of the Taiwan Relations Act, vol. 4415(a)). See Johanns, Secretary of Agriculture, et.
The OPIC investment funds are not in the business of directly providing capital themselves, rather they provide guarantees to private lenders who, in turn, lend money to recipients.
1, Fall 1990, pp. This desire for independence is an apparently innate characteristic of administrative behavior." Their purpose was to develop the respective national private sectors through "loans, grants, equity investments, feasibility studies, technical assistance, training, insurance, guarantees and other measures" (22 U.S.C. The appointment process to the board is the Secretary's principal insurance that the NPF will adhere to the general policy framework of the department. The intent of Congress in SEED was to create venture capital funds that would be designed along private sector lines, managed by private sector executives, and be free of most government administrative constraints. The board elects a president of the foundation who serves at its pleasure. Stephen Barr, "OPM, In a First, Acts to Convert an Operation Into Private Firm," Washington Post, April 14, 1996, p. A4. The Secretary of the Interior is chairman of the board and the Director of NPS is secretary to the board. CRS Report RL31246, Independent Counsel Law Expiration and the Appointment of "Special Counsels," by [author name scrubbed] (pdf). A quango, on the other hand, is essentially a private organization that is assigned some, or many, of the attributes normally associated with the governmental sector.3 Under this schema, the Legal Services Corporation, for example, would be a quago, while the Red Cross would be a quango. Koppell, "Managing the U.S. Government's Venture Capital Portfolio," pp. One mission. In testimony before the Senate Banking Committee, Federal Reserve Board Chairman Alan Greenspan, noted a paradox facing Congress in "fixing" the regulatory apparatus for GSEs. The United States, some contend, is not as effective as other nations in taking the results of basic research and transforming them into commercially viable products to be sold in world markets.50 FFRDCs are intended to promote and facilitate this transfer and development process.51. "[W]orld-class regulation, by itself, may even worsen the situation if market participants infer from such regulation that the government is all the more likely to back GSE debt." U.S. White House Office, Office of the Press Secretary, "Fact Sheet: Polish American Freedom Foundation" (Washington: June 15, 2001). (New York: Oxford University Press, 1998), p. 213. This brief description of theUSIS, concludes this selective review of entities within the quasi government.
180-191. 40707) from the audit requirements otherwise applicable to Title 36 corporations (36 U.S.C. Elaine Ciulla Kamark, "The End of Government As We Know It," in John D. Donahue and Joseph S. Nye, Jr., eds., Market-Based Governance: Supply Side, Demand Side, Upside, and Downside (Washington: Brookings Institution, 2002), pp. National Performance Review, Report, p. 14. Skeptics of the new entrepreneurial management paradigm say the centrality of public law is displaced by the centrality of economic axioms; the focus of management, once the citizen, is now the customer; and departmental integration as the norm is replaced by agency dispersion and managerial autonomy. Each GSE is created sui generis with its attributes defined by Congress in its enabling legislation. The foundation provides research and grants management services to military medical researchers; manages clinical trials and develops private-public partnerships; and provides general support for military medical education. These values, originating with the founding fathers, as reinterpreted by the Progressives, featured the centrality of public law, departmental integration and political accountability. All received audits are sent to the Government Accountability Office for review.93 Public access to the records and reports of Title 36 corporations varies. Mitre IRS FFRDC website, at http://www.mitre.org/about/ffrdcs/cem.html; and CRS Report RS21542, Department of Homeland Security: Issues Concerning the Establishment of Federally Funded Research and Development Centers (FFRDCs), by [author name scrubbed]. 19o (f)(2)), Hybrid organizations assigned by Congress to the quasi government perform a wide variety of functions in both the domestic and international arenas. Public Administration Review, vol. FFRDCs have an advantage in competing with private firms for contracts: as nonprofit corporations, they are exempt from most taxation; their facilities and equipment are owned or financed, for the most part, by the federal government, and they receive fees for operating expenses without having to assume business risks or costs associated with competing for most federal work. FFRDCs often have privileged access to government information, plans, data, employees, and facilities which may be difficult to insulate from private partners involved in for-profit activities.52 Critics maintain that unbiased advice may also be difficult to provide when the future or fate of the advising FFRDC may be adversely affected. In April 1992, House Subcommittee on Immigration and Claims Chairman Barney Frank announced that the subcommittee would no longer consider requests for charters. Because they occupy a realm between the private and the public, a quasi governmental entity may find it in its interest to assert its private or governmental status. The traditional tools for holding executive agencies accountable, such as the budget and general management laws, are inapplicable in most instances, often leaving these hybrids with the freedom to pursue their own institutional interests, which may or may not conform to the public interest as defined by the nation's elected leadership. By 2009, federal civilian employment was 2,804,000, or 2.00% of the U.S. employment total. Since 1987, OPIC has committed (as of FY2005) over $2.6 billion in funding to 32 private equity funds."73. 1636) to assure that cash and securities held in brokerage firms are protected from loss caused by securities firms' failures. This report will be updated in the event of a significant development. 5421(c)). In January 2002, Congress authorized the Department of the Army to create a "non-profit venture capital corporation" (P.L. The medical center research organizations concept is not without its critics. Many of the public law advocates, not unexpectedly, tend to see quasi governmental entities as instruments of relatively small constituencies whose interests are promoted over the interests of the whole people as represented in their democratic institutions. In chartering patriotic, charitable, and professional organizations under Subtitle II, such as the National Academy of Public Administration (36 U.S.C. Subsequently, more independent regulatory commissions would be added. Some NPCs have been faulted for expending funds on items not directly related to research (such as gifts and entertainment) and have been cited as in need of improved "accountability and oversight related to the administration of funds. The President designates the chairman, who is also the corporation's chief executive officer. The foundation is not on-budget and its employees are not federal employees. The 2004 omnibus appropriation act (P.L. The nine-member board of the foundation includes two current Senators and two Representatives serving in an ex-officio capacity. 105-391; 16 U.S.C. 83, Venture capital funds in which the federal government participates, either as the only party, or in cooperation with other parties, are often controversial. Critics have also pointed to the interflow of personnel between government agencies, FFRDCs, and companies that work for FFRDCs. 2003)); and United States v. United Foods, Inc. (533 U.S. 405 (2001)) In other instances, these programs have been found to be constitutional. They see political accountability and due process being superseded by the primacy of performance and results, however defined. (New York: Oxford University Press, 1975), ch. The report will be revised and updated as new information and analyses become available. "85 Typical among these chartered organizations is the Agricultural Hall of Fame; Big Brothers and Sisters of America; and the American Legion. The directors and employees of the corporation "shall be subject to Federal laws and regulations applicable to Federal employees with respect to conflicts of interest in the performance of official functions" (38 U.S.C. "Statement by Secretary Henry M. Paulson, Jr., on Treasury and Federal Housing Finance Agency Action to Protect Financial Markets and Taxpayers," press release, September 7, 2008. 365; 47 U.S.C. Nonetheless, the independent agencies generally remained full government agencies operating under all the general management laws,10 except where exempted.
One of the first orders of business was the establishment of executive departments. These boards and councils are authorized by law to finance their activities by collecting "assessments" from members according to a rate structure that has received the approval of the Secretary. U.S. General Accounting Office, Financial Services Institutions: Information for Assessing the Government's Potential Financial Exposure, GAO/GGD-98-125, (Washington: GAO, 1998), p. 3. A unified executive structure, coupled with hierarchical lines of authority and accountability, was a theoretical product of the founding fathers. This is the first instance in which Congress has made Title 36, Subtitle II corporations subject to the provisions of a general management law, and, while the action may be supportable on public policy grounds, it does, to the extent of applicable provisions, diminish the private character of the affected organizations. In their view, the issues are not economic in their fundamentals, but constitutional and legal. "Notwithstanding the fact that the Endowment is not an agency or establishment of the United States Government, the Endowment shall fully comply with all of the provisions of section 522 of Title 5" (22 U.S.C. Harold Seidman, Politics, Position and Power: the Dynamics of Federal Organization, 2nd ed. 419; 47 U.S.C.
The one common characteristic to this melange of entities in the quasi government is that they are not agencies of the United States as that term is defined in Title 5 of the U.S. Code. These management values, however, were challenged in the 1960s by a new management theory (public choice theory) emanating from academia, and found expression in the election of political leaders, here and abroad, committed to market principles. Insofar as NARA provides a defining characteristic for quasi-official agencies, it is that they "are not executive agencies under the definition of 5 U.S.C. Grantees include the National Democratic Institute of International Affairs (NDI); the International Republican Institute (IRI); the American Center for International Labor Solidarity (ACILS);98 and the Center for International Private Enterprise (CIPE), which is affiliated with the U.S. Chamber of Commerce. Although the SIPC is a nonprofit corporation under the D.C. law, it is effectively a subsidiary of the SEC. The board of the NPF has as its members the Secretary of the Interior, the Director of the NPS, ex-officio, and "no less than six private citizens appointed by the Secretary." Koppell, The Politics of Quasi Government: Hybrid Organizations and the Control of Public Policy (New York: Cambridge University Press, 2003). (Lawrence, KS: University Press of Kansas, 1999); and [author name scrubbed], Administrative Renewal: Reorganization Commissions in the 20th Century (Lanham, MD: University Press of America, 2003). In 2003, AMS reported that the assessments for all promotion programs came to over $700 million. 7, winter 1998, pp. Performance in the entrepreneurial context, is usually measured in "output" or "results" terms, rather than in conformance to process regulations. (Washington: GPO, 1965), p. 1. Accordingly, in September 2001, the Polish-American Enterprise Fund (PAEF) returned $120 million of its assets to the U.S. Treasury and transferred $180 million of its assets to the newly created Polish American Freedom Foundationan entity which had previously received $80 million from PAEF.
Robert K. Avery and Robert Pepper, "An Institutional History of Public Broadcasting," Journal of Communications, vol. Quasi official agencies, like other elements of the quasi government, may exist in what has been called "the twilight zone" between the governmental and private sectors.23 This status, while presumably permitting considerable autonomy from regular lines of accountability to managerial agencies (e.g., the Government Accountability Office) is not, as is often argued in their defense, protection from "political influences." The Commission may remove members of the board "for good cause." The first FFRDC was RAND, created by the Air Force in California in 1947.45 This pioneer was followed over the years by such well-known FFRDCs as Mitre Corporation, Aerospace, and the Institute for Defense Analyses. "When I first raised the issue, 'What is a federal charter?' The stories of the SIPC and the PCAOB illustrate how the government can create a hybrid organization, in these instances organizations with predominately private-sector legal characteristics, to implement government policies and regulations. The referendum provisions of the 1996 act are detailed. Exactly which assets were transferred to the USIS in the first place is not clear, but whatever they were was deemed to be worth $28 million. The rapid ascendency of these "new" values in the United States has not been without challenge20 and has had consequences with respect to the quasi government, as will be discussed more fully later in the report. 128-145; and Jonathan G.S. Questions by Congress have led to hearings, warnings, and some changes in law (e.g., Competition in Contracting Act of 1984; 98 Stat. 2367). In effect, the federal chartering process usually is honorific in character. There is a range of opinion as to whether such a hybrid arrangement is necessary to achieve the results intended by the lawmakers.101 Furthermore, critics have accused ther NED of mission creep and asserted that NED has been associated with efforts to influence the outcomes of ostensibly democratic elections.102. If a quasi governmental entity is not an agency of government, what is it?
Generally, the latter category of organizations are established under state or District of Columbia law. USIS, unlike ComSat or the American National Red Cross, has no congressional or federal charter. 19-21. VA regulations for these entities may be found in VA Handbook 1200.17, VA Research and Education Corporations (Washington: VA, 2001), at http://www1.va.gov/vhapublications/ViewPublication.asp?pub_ID=371; and VA Handbook 1400.2, VA Education Corporations authorized by Title 38 United States Code (U.S.C.) No further notices concerning these reforms have been published in the Federal Register. In the governmental sector, the authority and responsibility to establish all agencies and all offices to be filled by appointed officers of the United States is clear.
First, there is the linear spectrum model where the existence of a quasi government between the governmental and private sectors is designated and categories of organizations (e.g., government-sponsored enterprises) and their relationship to the executive branch (and Congress) are described on a descending scale from closest to the most distant. In 1982, Congress passed legislation to establish a Foundation for the Advancement of Military Medicine (P.L. 19, no.
Over the years, departments and agencies have found it useful and advantageous to ask Congress to create, or authorize a department to create, nonprofit organizations to perform functions that the department itself finds difficult to integrate into its regular policy and financial processes. U.S. Congress, House, Committee on the Judiciary, Standards for Granting of Federal Charters to Non-Profit Corporations, committee print, 91st Cong., 1st sess. The Director of OPM, James King, created a first, the establishment by the government of a private corporation whose employees would be persons transferred from a federal agency, the Federal Investigations Division of OPM, to a private firm to be eventually owned by its employees in what is known as a Employee Stock-Owned Plan (ESOP).104 The stated rationale was that it would save the jobs of the approximately 700 investigators who would no longer be needed and that it would save the federal government money by contracting with this new corporate body the investigations formerly performed in-house. (16 U.S.C. Senator John F. Kerry introduced S. 618, the Egyptian-American Enterprise Fund Act, into the 112th Congress on March 17, 2011. The purported, and often realized, strength of entrepreneurial management lies in the flexibility it provides managers to improve the performance of their agencies. Neither the Judiciary Committees of Congress nor the Government Accountability Office tend to look over the shoulder of these organizations, or to conduct audits on their own authority. 2003)); Livestock Marketing Association v. U.S. Department of Agriculture (335 F.3d 711 (8th Cir. In the new entrepreneurial management paradigm, success, proponents say, will be measured by polling the customers on their trust and satisfaction of the delivery of governmental services. 58, May/June 1998, pp. With respect to the National Park Service (NPS), a National Park Trust Fund was established by Congress in 1935 to receive and hold such gifts. Given the great differences between the basic premises guiding the two schools of thought, those favoring traditional public law principles versus those favoring entrepreneurial approaches, it is not surprising that their attitudes towards the quasi government are also at odds.
407), raises questions about the limits, if any, to Congress's authority to assign a "private" label to functions of a governmental character.87 While this corporation has some admittedly governmental attributes (e.g., upon the dissolution of the corporation, its assets would be sold and the proceeds revert to the U.S. Treasury), Congress has declared in its enabling statute that "the corporation is a private corporation, not a department, agency, or instrumentality of the United States Government." This set of values with respect to governmental management makes the hybrid organization within the quasi government an attractive option. 60-80. These three categories are not pure by any means.
According to the most up-to-date data available, annual federal obligations to FFRDCs were approximately $9.5 billion in FY2009.48. 9, October 1999, pp. Congress has been interested in FFRDCs almost from their inception. The USIS's official public website says: "On July 8, 1996, USIS was formed on the initiative of the President and Congress as an employee-owned company" (see http://www.usis.com/history/history.html). Indeed, in most instances, organizations were chartered and functioned under state laws before, often long before, receiving federal charters. It is governed by a 15-member board of directors, a number that includes in an ex officio capacity various senior presidential appointees, as well as seven direct presidential appointees (22 U.S.C. 57, 1996, pp. Notwithstanding this mandated oversight, the promotion programs, which cost producers and importers hundreds of millions of dollars a year,55 have been criticized by policy opponents and media critics for inappropriate spending, lax accounting, and lavish entertainments.56 One consequence of this publicity was that the Secretary instituted a task force to make recommendations on how the department might better oversee the boards and their programs. The Henry M. Jackson Foundation provides an example of an organization independent of, but dependent upon, an agency of the federal government.
03-2522, Feb. 24, 2004); Michigan Pork Producers Association, Inc. v. Veneman (348 F. 3d 157 (6th Cir. Advance registration procedures are spelled out in the law, thereby requiring subsequent changes to also be made by law. The impetus for the enterprise fund concept came about from the belief that a non-governmental entity was needed to implement this kind of program. This report was originally written by [author name scrubbed], who retired from CRS.
55, March/April 1995, pp. [author name scrubbed], Constitutional Conflicts Between Congress and the President (Lawrence, KS: University Press of Kansas, 1997), pp. OPIC is a government corporation enumerated in the Government Corporation Control Act and, as such, is a regular agency of the United States subject to the general management laws, except where exempted. Bruce L. R. Smith, The RAND Corporation: A Case Study of a Nonprofit Advisory Corporation (Cambridge, MA: Harvard University Press, 1966). Director King of OPM let a contract to ESOP Advisors, Inc. for a feasibility study of the concept, a study that reported that the privatization process culminating in an ESOP was feasible. (5) the belief that management flexibility requires entity-specific laws and regulations, even at the cost of less accountability to representative institutions. Lebron claimed that his First Amendment rights had been abridged by AMTRAK because it is a government corporation, and therefore an agency of the United States. 290-312. From the decision in the first Congress to give the comptroller in the Department of the Treasury a substantial degree of legal autonomy within the department,5 down to the more recent "independent counsels" functioning in an uneasy relationship with the executive branch,6 not all officers have been directly accountable to the President.7 These exceptions notwithstanding, the prevailing organizational norm has historically been toward an executive accountable to the President.8. CRS Report RL30340, Congressionally Chartered Nonprofit Organizations ("Title 36 Corporations"): What They Are and How Congress Treats Them, by [author name scrubbed]. On the board of directors are private corporate executives from firms such as Lockheed Martin. The institute has generally provided an effective channel for government to government relations. In December 1978, President Jimmy Carter decided to establish full diplomatic relations with the People's Republic of China, and did so effective January 1, 1979; the two countries exchanged ambassadors on March 1, 1979. For example, it ensures that company resources are allocated in the best interests of employee shareholders, and it also approves key strategic decisions. Critics see favoritism when FFRDCs receive large contracts without competitive bidding.
Whatever the value of the quago/quango designations, especially in the comparative international literature on corporate organizations, it shall not be used here. 2, summer 1988, pp. [author name scrubbed] and Robert S. Gilmour, "Rediscovering Principles of Public Administration: The Neglected Foundation of Public Law," Public Administration Review, vol.
