Does The Miscellaneous Receipts Act Apply To The President?

There is much uncertainty concerning President Trump’s plans with regard to revenue from Venezuelan oil. Now, there is some chatter now whether Trump may violate the Miscellaneous Receipts Act. This law provides, in part, “an official or agent of the Government receiving money for the Government from any source shall deposit the money in the Treasury as soon as practicable without deduction for any charge or claim.”

Of course, the chatter has skipped over the threshold question: is the President subject to this statute? Ed Whelan does not resolve this issue in his post:

Whether or not the president is “an official … of the Government” for purposes of this provision, the subordinates who would be taking part in the actual receipt of the money surely are.

I think the most likely answer is that the President is not subject to this statute.

First, we have to consider the Clear Statement Rule in light of Franklin v. Massachusetts and Trump v. United States, coupled with OLC opinions from William Rehnquist and Antonin Scalia. Seth and I discussed this background in our recent post on the Posse Comitatus Act. This statute does not expressly reference the President, and we should not presume this prohibition should apply to the President.

Second, other elements of the statute reinforce the conclusion that the President should not be subject to this statute. Paragraph (f), for example, provides “(f) When authorized by the Secretary [of the Treasury], an official or agent of the Government having custody or possession of public money, or performing other fiscal agent services, may be allowed necessary expenses to collect, keep, transfer, and pay out public money and to perform those services.” Do we really think the President needs to seek authorization from the Secretary of the Treasury, his subordinate? Paragraph (d) provides, “An official or agent not complying with subsection (b) of this section may be removed from office.” I am fairly confident this provision is not referring to the impeachment process, especially of the President. Congress was referring to the firing of a civil servant.

Third, there is a relevant historical precedent. In 1805, the Tunisian Envoy arrived in the United States. He gave President Jefferson several valuable horses as a gift. Jefferson did not keep these gifts as his personal property, nor did he seek congressional consent to keep these gifts, but rather sold the horses to fund the envoy’s stay in the United States. Jefferson did not ask Congress for permission before selling the horses. Jefferson basically kept the money from the sale of the horses in trust for the benefit of the envoy. (Seth Barrett Tillman and I wrote about this at page 332-337 in Part V of our series.) This history suggests that in the context of foreign policy, there may be very good reasons why the President would need to hold onto foreign money, and not deposit it into the treasury. All the more reason to follow the Clear Statement Rule.

There is a fourth argument that Seth shared with me. The Third Circuit addressed the meaning of the Miscellaneous Receipts Act in American Federation of Government Employees, AFL-CIO, Local 1647, Petitioner v. Federal Labor Relations Authority, 388 F.3d 405 (3d Cir. 2004). Judge Chertoff’s opinion stated:

For purposes of the appropriations power, public money is defined broadly. As Justice Story observed in his Commentaries, it includes “all the taxes raised from the people, as well as revenues arising from other sources.” 2 Joseph Story, Commentaries on the Constitution of the United States § 1348 (3d ed. 1858), quoted in Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 427, 110 S. Ct. 2465, 110 L. Ed. 2d 387 (1990). By law, public money includes money from any source such as taxes, customs and user fees, and other proceeds of government agency activities. See 31 U.S.C. § 3302 (Miscellaneous Receipts Act). The purpose of the Clause is to place authority to dispose of public funds firmly in the hands of Congress, rather than the Executive. Richmond, 496 U.S. at 425-27, 110 S. Ct. 2465; Cincinnati Soap Co. v. United States, 301 U.S. 308, 321, 57 S. Ct. 764, 81 L. Ed. 1122 (1937). This not only allows Congress to guard against “extravagance,” Story, supra, but hands the Legislative Branch a powerful tool to curb behavior by the Executive. See generally Kate Stith, Congress’ Power of the Purse, 97 Yale L.J. 1343 (1988). Without congressional permission, therefore, no money may be paid by the Treasury. Richmond, 496 U.S. at 427-28, 110 S. Ct. 2465; Reeside v. Walker, 52 U.S. (11 How.) 272, 291, 13 L. Ed. 693 (1850) (alternate holding).

Seth explained to me:

The goal of this statute is to protect government revenues by making a consolidated/unified Treasury where funds can only be removed by statute. But funds arising in connection in with Venezuelan oil are not property of the US — unless there is some contract or other lawful basis to claim this property (and funds from its sale) belongs to the US. If not, then this is not “public money” and the statute is, in my opinion, not applicable.

Indeed, there is also a related issue of in what capacity the President might even accept these funds. Seth and I discussed the capacity issue here.  I’m sure professors will invariably circle back to the Foreign Emoluments Clause. I sometimes feel like I’m living the ConLaw version of Groundhog Day.

Everyone needs to pump their brakes on whether President Trump might violate the Miscellaneous Receipts Act.