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Department of Veterans Affairs
Office of General Counsel
Washington, DC 20420
O.G.C. Advisory 10-91
February 11, 1991
VA District Counsel (349/02)
1400 N. Valley Mills Drive
Waco, TX 76799
SUBJ: Payment to VA Employees for Work on a Research Project
ISSUE PRESENTED: May a Department of Veterans Affairs (VA)
employee lawfully receive compensation from a non-governmental source
for performing services, which are part of his official duties,
during off-duty time?
DISCUSSION:
1. Your request for our approval of a draft opinion presents this
issue. The draft opinion's file shows: A full-time employee provides
patient care and performs research as a principal investigator. He
conducts research at a VA medical center (VAMC) using a grant
deposited to a special account in the name of an affiliated State
university, from which he directs payments. (A drug company
contracting with the VA made the grant.) The VAMC's Research and
Development (R&D) Committee has approved the research, which
utilizes VA patients and resources. Two other full-time VA employees,
a physician assistant employed under title 38, United States Code,
and a clerical staff person work on the research during duty hours.
They are the investigator's subordinates and have integrated their
research and patient care duties. The investigator wishes to direct
payments from the grant to his two subordinates for research work
performed during their off-duty hours.
2. The draft opinion advises: The employees are violating VA
regulations by performing the work during their duty hours, citing 38
C.F.R. 0.735-12(a)(6) (1990) (employees may not engage in outside
duties which are incompatible with their official duties, including
outside professional activities during duty time). The draft opinion,
however, also advises that the two employees may be paid for the
research activity during non-duty hours and that the physician's
assistant must receive prior approval as required by VA Manual MP-5,
Part II, DM&S Supp., Chapter 13. Although not stated in the draft
opinion, your request advises us that, if the employees are to be
paid for work that is not "outside employment", you question whether
they would be violating 18 U.S.C. 209 (1988), which prohibits receipt
of payment, except from the treasury of State or local government,
for official services.
3. As discussed below, we believe that: as construed by the United
States Office of Government Ethics (0GE), section 209 bars paying the
employees from receiving compensation for this research; no VA
official may approve that Payment; and, because section 209 is
dispositive, discussion of 38 C.F.R. 0.735-12 is unnecessary and
should be deleted from the draft opinion.
4. Section 209 provides, in pertinent part: "Whoever receives any
salary, or any contribution to or supplementation of salary, as
compensation for his services as an officer or employee of the
executive branch of the United States Government... from any other
source other than the Government of the United States" shall be
guilty of a felony. 18 U.S.C. 209 (1988); accord 38 C.F.R.
0.735-12(b) (1990). Noting that, in most cases, the disputed issue
tends to be whether an employee has accepted outside pay for his
Federal services, OGE has advised that "[t]he totality of the
circumstances must be examined in each individual case [implicating
section 209]. No one factor is determinative." Informal Advisory
Letters and Memoranda and Formal Opinions of United States Office of
Government Ethics, 85 x 19 (December 12, 1985) at 604. OGE advises
Federal agencies on the application of section 209 to employee
conduct. Exec. Order No. 12,731, 201 reprinted in 55 Fed Reg. 42547,
42548 (1990).
5. We have found no other case on section 209 where the employee's
Federal supervisor controlled the second source of payment. However,
regardless of the payment's source, the two employees would be
performing duties under orders from their Federal supervisor, who may
assign them work at his discretion. The work will be performed using
VA resources on VA facilities. It is part of the official duties of
the supervisor and the employees, having been approved by the R&D
Committee at the VAMC, virtually eliminating any distinction between
official and ostensibly private activity. Moreover, the successful
completion of the research project will inure to the benefit of the
VA's overall research program, although the supervisor may obtain
some private benefit from it. In light of the employees, off-duty
research activities being interchangeable with their official duties,
their continued use of VA resources and patients to perform that
work, and the benefit provided to VA by their research activities, we
believe the "totality of the circumstances" warrants the conclusion
that payments from tile grant for these off-duty research activities
would be for their Federal services. Accordingly, the employees would
violate section 209 in accepting payment from tile grant for their
off-duty VA research.
6. We believe this result is also consistent with judicial
construction of section 209. Courts construing the law "look not only
to the particular statutory language, but to the design of the
statute as a whole and to its object and policy." Crandon v. United
States, U.S. 110 S. Ct. 997, 1001 (1990). That object addressed
several concerns:" The outside payer has a hold on the employee
deriving from his ability to cut off one of the employee's economic
lifelines... Because of real risks, the arrangement has a generally
unwholesome appearance that breeds suspicion and bitterness among
fellow employees and other observers. The public interpretation is
apt to be that if an outside party is paying a government employee
and is not paying him for past services, he must be paying him for
some current services to the payer during a time when his services
are supposed to be devoted to the Government Association of the Bar
of the City of New York," Conflict of Interest and Federal Service
211 (196). Crandon, supra, at 1005.
7. These concerns are met here. The supervisor could shift the
employees VA workload to reward or punish them for their on-duty or
off-duty work, allowing him to affect their performance of official
duties through control of their second employment. Further, the
greater the employees' outside renumeration, the more likely that
their performance of their official duties may be affected by the
employees' shift of their research work to non-duty time, while their
medical work is likely to be performed during duty hours, regardless
of the VA's interest in having the research or medical care work done
in a timely and efficient manner.
8. Finally, we understand the researcher has asserted that he
cannot perform his approved research unless these employees are
permitted to serve during their off-duty time. In effect, he argues
that their Federal employment requires that they be allowed to take
this particular outside employment. VA, of course, cannot provide
this opportunity to other employees, who could reasonably object
that, if any employees are guaranteed a second income by their
Federal employment, all must be. This would represent the
"bitterness" discussed in the Crandon case. Accordingly, we conclude
that, under both the OPM "totality of the circumstances" test and the
Crandon case, it would be inconsistent with section 209 for these
employees to receive outside payment for their VA research work.
9. We also note that the Fair Labor Standards Act, as amended, and
implementing regulations require Federal agencies to pay non-exempt
Federal employees for work suffered or permitted. See 29 U.S.C.
207(a)(1) (1988); 5 C.F.R. 551.101 (1990). "Suffered or permitted to
work means any work performed by an employee for the benefit of an
agency, whether requested or not, provided the employee's supervisor
knows or has reason to believe that the work is being performed and
has an opportunity to prevent the work from being performed." Id. at
551.102(e). We have been advised that the VAMC has determined that
the physician assistant is exempt under the Act, but the clerical
employee is not exempt. See VA Manual MP-5, Part I, Chapter 512,
paragraph 18 (determinations under the FLSA must be made for each
position). (Given that the employees' supervisor would allow them to
perform work which would benefit the VA research program during
off-duty hours) we believe that the "off-duty" work would create a
liability for VA under the Act for the clerical employee.
Accordingly, we would advise against this outside employment to avoid
a potential violation of the Act.
10. Because the employees may not lawfully be paid for the noted
off-duty VA research, such conduct may not be approved pursuant to
MP-5, Part II, DM&S Supp., Chapter 13.
11. We suggest that you amend your opinion to reflect our
comments.
HELD:
A VA employee who receives pay from a non-governmental source at
the direction of the employee's Federal supervisor for services
performed off-duty which are part of his official duties would
violate 18 U.S.C. 209 (1988).
Audley Hendricks
Assistant General Counsel
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