Official Service by State Department Employees on the Boards
            of American-Sponsored Schools Overseas
O fficial service by S tate D epartm ent em ployees on the boards o f A m erican-sponsored schools overseas
     is au th o rized by statute and does not violate 18 U.S.C § 2 0 8

                                                                                                  September 11, 1998


                       L e t t e r O p in i o n f o r t h e D e p u t y L e g a l A d v i s e r
                                          Depa rtm en t o f Sta te


   This is in response to your letter of August 10, 1998, asking for our opinion
whether 18 U.S.C. §208 (1994), absent a waiver, bars employees of the State
Department from serving in their official capacities on the boards of American-
sponsored schools overseas. We agree with your conclusion that such service is
authorized by statute and does not violate § 208.
   Section 208 forbids employees from taking official action in which they have
a financial interest. The statute also imputes to an employee the financial interests
of “ his spouse, minor child, general partner, organization in which he is serving
as officer, director, trustee, general partner or employee, or any person or
organization with whom he is negotiating or has any arrangement concerning
prospective employment.” 18 U.S.C. § 208(a) (emphasis added). We have pre­
viously concluded that because employees who serve on outside boards in their
official capacities necessarily take official actions affecting the organizations’
financial interests, this provision “ prevents] a government employee from serving
on the board of directors of an outside organization in his or her official capacity,
in the absence of: (1) statutory authority or a release of fiduciary obligations by
the organization that might eliminate the conflict of interest, or (2) a waiver of
the requirements of § 208(a), pursuant to 18 U.S.C. § 208(b).” Service on the
Board o f Directors o f Non-Federal Entities by Federal Bureau o f Investigation
Personnel in Their Official Capacities, 

, 379 (1996). You have
asked whether there is statutory authority for employees of the State Department
to serve on the boards of overseas schools, so that § 208 would not raise a bar.
   By statute, the Secretary of State may, “ in such manner as [she] deems appro­
priate and under such regulations as [she] may prescribe, establish, operate, and
maintain primary schools, and school dormitories and related educational facilities
for primary and secondary schools, outside the United States, make grants of funds
for such purposes, or otherwise provide for such educational facilities.” 22 U.S.C.
§2701 (1994). The Secretary has implemented this authority through regulation:

         The principal officer [at U.S. Missions abroad] designates an officer
         to be responsible for coordinating the post’s interest in school
         activities. I f possible, the officer should be a member o f the board

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   Official Service by State D epartm ent E m ployees on the Boards o f A m erican-Sponsored Schools
                                              O v erse a s

       o f the local school receiving assistance. When the administrative
       officer is personally responsible for administration of the grant, the
       administrative officer should not be a member of the school board.

2 FAM §613 (TL: GEN-241; 8-26-86) (emphasis added). See Kauffman v. Anglo-
American School o f Sofia, 

, 1224 (D.C. Cir. 1994) (State Department
employees serve on board of school).
   In our view, the statute, as implemented in the regulation, authorizes official
service on the boards of the schools. We recently observed that “ Congress has
enacted a variety of arrangements contemplating, directly or indirectly, that federal
employees will participate in outside organizations, including by serving on their
boards, and it would frustrate these arrangements if such service were considered
a disqualifying ‘director[shipJ’ under 18 U.S.C. §208.” Application o f J8 U.S.C.
§ 208 to Service by Executive Branch Employees on Boards o f Standard-Setting
Organizations, 

, 211 (1998) (citation omitted). Therefore, if
“ Congress has specifically provided for participation in outside organizations and
such participation, to carry out the statutory purposes, entails service on a board,
statutory authorization may be inferred.” 

has enabled the Sec­
retary to “ operate” schools or “ otherwise provide for such educational facilities”
abroad “ in such manner as [she] deems appropriate and under such regulations
as [she] may prescribe.” 22 U.S.C. §2701. Congress thus has vested a wide
authority in the Secretary to direct employees of the State Department to take
part in the management of overseas schools, and the Secretary has carried out
this authority by issuing a regulation expressly permitting service on outside
boards. Under these circumstances, it would “ frustrate [the] arrangements”
enacted by Congress to read § 208 as a bar to service on these boards.

                                                                     BETH NOLAN
                                                             Deputy Assistant Attorney General
                                                                 Office o f Legal Counsel




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