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DEPARTMENT OF
VETERANS AFFAIRS
Office of the General Counsel
Washington DC 20420
FEB 7 1995
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In Reply Refer To: 023
Ms. Barbara F. West
Executive Director
National Association of Veterans
Research and Education Foundations
5018 Sangamore Road, Suite 300
Bethesda, Maryland 20816
Re: Management of VA Nonprofit Corporation Funds
Dear Ms. West:
This office has received your recent letter
including the enclosures from Merrill Lynch's Vice President and Senior Counsel,
Kevin Moynihan, regarding the
above-referenced matter. We believe that Mr. Moynihan has addressed
Federal insurance and investment principal concerns raised at our recent
meeting with Bill Odell, a Merrill Lynch Financial Consultant. Mr.
Moynihan states that in the unlikely event that a Federally-insured
institution in which the VA nonprofit corporation invested its funds
through the Merrill Lynch Working Capital Management Account, Insured
Savings Program, is taken over by the Federal Deposit Insurance
Corporation (FDIC), payments by the FDIC would be made directly to the
depositor, here, the Research Corporation. Thus, participants in the
Insured Savings Program will receive full FDIC Protection for the entire
amount of their investment as Merrill Lynch manages their accounts so that
no more than $100,000 is ever deposited with any one FDIC- insured
institution.
We believe that Mr. Moynihan's response indicates
that the Merrill Lynch Working Capital Management Account, Insured Savings
Program, satisfies the requirement (M-3, Part I, Chapter 17, section
17.05(e)) that any investment of the VA nonprofit research corporation
funds must be in Federally-insured accounts or in instruments backed by
the full faith and credit of the United States Government. Other brokerage
firm accounts offering the same financial security or protection as the
Merrill Lynch Working Capital Management Account, Insured Savings Program,
would also satisfy the section 17.05(e) requirement.
Sincerely yours,
Mary Lou Keener
General Counsel
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