such matters. Beyond such appropriate deference, however, I believe that the health of our political system would dictate that the proper procedure is the one that has been developed over the years since our constitutional structure was established and the one followed in the case of the Panama Canal treaties: close consultation at all appropriate stages between the Executive and the Senate. Before concluding, let me turn briefly to the remaining issue, that of the constitutionality of the appointment by the President of Panamanian nationals to the Panama Canal Commission. This is not a new issue to the Department. It has been previously dealt with in congressional testimony by the Department of Justice, as well as in State Department correspondence with Members of Congress and the public. The Panama Canal Treaty and the legislation adopted by the Congress in 1979 to implement it provide that four of the nine members of the Board of the Commission will be Panamanians proposed by Panama for appointment to the Board by the President. As we understand it-and the point was made again by Dr. Breecher a few moments ago-the argument is that Presidential appointment of Panamanian nationals to the Canal Commission contravenes provisions of article II of the Constitution governing appointment and removal of officers of the United States. Dr. Breecher referred to testimony at the earlier hearings by the Justice Department's Office of Legal Counsel. The executive branch has consistently found no merit to the constitutional arguments advanced; neither presumably did the Congress, which was confronted with these arguments during its consideration of the implementing legislation, and nevertheless passed a law adopting a system of appointment of Panamanians to the Canal Commission. Rather than entering a detailed discussion of these constitutional arguments, for which I would in any event have to refer the committee to the Justice Department's statement, I would like to submit for the record a copy of the 1979 testimony of the Office of Legal Counsel on this subject. In substance, that testimony concludes that the Panamanian board members are not officers of the United States in the constitutional sense, and that the Canal Treaty may constitutionally give a voice in the control of the canal to persons who are not officers of the United States. I believe that the elaboration of those conclusions in the Justice Department opinion handles this issue of Panamanian appointment to the Canal Commission in a comprehensive manner. I would like to close my statement by simply noting that the Panama Canal treaties have now been in force for well over 3 years. President Reagan has reiterated on several occasions that these treaties are the law of the land and that the United States will continue to abide by them. As I have indicated in this statement, the Department of State does not believe that there is any impediment, legal or otherwise, to the United States carrying through on the President's commit ment. I am grateful to the committee for its attention and would be pleased to answer any questions the chairman may have. Thank you. Dr. FRANCIS. Thank you, Mr. Dalton. Without objection, the Foy memorandum will be entered in the record. [Material submitted by Mr. Dalton follows:] CANAL OPERATION UNDER 1977 TREATY-PART 2 HEARINGS BEFORE THE SUBCOMMITTEE ON THE PANAMA CANAL OF THE COMMITTEE ON MERCHANT MARINE AND FISHERIES HOUSE OF REPRESENTATIVES NINETY-SIXTH CONGRESS FIRST SESSION ON H.R. 111, H.R. 454, H.R. 1511, H.R. 1716, PROVIDING A BASIS FOR THE EFFICIENT OPERATION OF THE FEBRUARY 14, 15, 26, 28; MARCH 7, 13, 14, 1979-WASHINGTON, D.C. FEBRUARY 23, 24, 1979-BALBOA, CANAL ZONE Serial No. 96-2 Printed for the use of the Committee on Merchant Marine and Fisheries 44-394 O U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1979 Mr. HUBBARD. No objection. Thank you. STATEMENT OF H. MILES FOY, ATTORNEY-ADVISER, OFFICE OF LEGAL COUNSEL, DEPARTMENT OF JUSTICE Mr. Chairman: I want to thank the committee for inviting the Department of Justice to participate in these hearings. You have asked us to comment on ten specific questions involving legal aspects of the proposed implementing legislation and the Panama Canal Treaty itself. In these prepared remarks I will focus on five of these questions: (1) the constitutionality of Panamanian participation on the Panama Canal Commission, (2) the effect of the treaty on the federal income tax liability of U.S. citizens in the Canal Zone, (3) the extent of U.S. authority during the transition period, (4) the legal consequences of a failure to enact implementing legislation, and (5) the constitutionality of payments to Panama by the Panama Canal Commission in the absence of "appropriations" for such payments. CONSTITUTIONAL QUESTIONS SURROUNDING PANAMANIAN PARTICIPATION ON THE PANAMA CANAL COMMISSION As you know, Panama will assume administrative and legislative jurisdiction over the Canal Zone on October 1, 1979, but Panama will not assume full responsibility for managing the canal itself until the end of the century. Until then, the United States will manage the canal through a new agency called Panama Canal Commis sion. The treaty establishes a framework for an orderly transition to full Panamanian control by the year 2000. It provides that Panamanians will participate in the management and operation of the canal from the outset. The intent is that by the end of the century Panamanian policy-makers, managers, and employees will be in place and will be fully prepared to assume the responsibilities that will devolve upon Panama when the treaty terminates. Panamanian participation will take a number of different forms. The treaty and the ancillary agreements provide that Panamanians will participate on bilateral committees, that the Panama Canal Commission will employ Panamanians “at all levels," that until 1990 the Deputy Administrator of the Commission will be a Panamanian proposed by Panama for appointment to that position by the United States, and that after 1990 the Administrator of the Commission will be a Panamanian proposed and appointed in the same way. Finally, and more significantly, the treaty provides that four of the nine members of the governing board of the Commission will be Panamanians proposed by Panama for appointment to the board by the United States and subject during their tenure to removal at the request of Panama. The provisions regulating the selection, appointment and removal of the Panamanian board meers have given rise to several constitutional questions. The basic question is whether these provisions comport with the clauses of Article II of the Constitution that regulate the appointment and removal of "Officers of the United States." Does Article II allow us to establish an arrangement under which candidates for appointment to public office will be proposed by a foreign nation (Panama)? Can "Officers of the United States" be subject to removal at the request of a foreign nation? Can foreigners (Panamanians) be Officers of the United States? These questions are based on an assumption-the assumption that the Panamanian board members will indeed be "Officers of the United States" in the Article II sense. I want to examine that assumption. Unless the treaty itself, the Constitution, or some other law makes these Panamanians "Officers of the United States" or requires us to regard them as such, we need not test the manner of their selection or removal against the requirements of Article II. The treaty provides that the Panama Canal Commission will exercise the powers that devolve upon the United States under the treaty. Whenever they concur with the American majority, the Panamanian minority on the board will participate in the exercise of those powers; but the manifest intention of the treaty is that they will represent, not the interests of the United States, but the interests of Panama. They will of course be bound by the treaty, which is a law of the United States, but their function will be to represent the views of a foreign nation, our partner in this joint enterprise. Are these Panamanians "Officers of the United States" in the Article II sense? The Supreme Court has not given us a precise definition of that constitutional phrase. We know that "Officers of the United States" are persons engaged "in the administration and enforcement of public law," see Buckley v. Valeo, 42 U.S. 1, 141 (1975); but in the reported cases we find little guidance beyond that general pronouncement. The safest course is to examine Article II itself. It contains no actual definition, but it sheds light on the question by implication. For example, it provides that "civil Officers of the United States" will be subject to removal from office on impeachment for, and conviction of, “treason.” Because a person cannot commit "treason" unless he "owes allegiance" to the sovereign against whom the treason is committed, see Young v. U.S., 97 U.S. 39 (1877), Article II appears to contemplate that Officers of the United States will be persons who "owe allegiance" to the United States under our law. I should add that one does not have to be a citizen of the United States in order to "owe allegiance" to the United States in this sense; but the basic point still holds. Article II appears to contemplate that Officers of the United States will be persons whose basic loyalty is to this country and whose basic objective in the performance of their duties is to advance the interests of this country. I return to the question at hand. Does this treaty contemplate that the Panamanian board members will be "Officers of the United States" in the constitutional sense? We think it does not. Their primary allegiance will be to Panama, and their function under the treaty will be to represent Panamanian interests during the transition to full Panamanian control. This brings us to the nub of the matter. The real question here is whether this treaty can give a voice in the control of the canal to persons who are not "Officers of the United States" in the constitutional sense. The answer to that question is yes. As implemented by the legislation establishing the Commission (enacted pursuant to Congress' undoubted power under Article IV), this treaty can transfer control over the Panama Canal to Panamanians. Indeed, the treaty itself is sufficient. That issue, or an issue very much like it, was resolved last Spring by the Court of Appeals for the District of Columbia Circuit in Edwards v. Carter (opinion filed April 17, 1978). There the Court of Appeals held that the disposition of our interests in the Canal Zone is a proper subject for negotiation between this Nation and Panama, that this subject is therefore within the treaty power, and that our interest may therefore be transferred to Panama by treaty. This decision was supported by the history of the treaty cause, by treaty practice, and by the weight of scholarly authority. If the Constitution permits us to give control of the Panama Canal to Panamanians, we think there can be no substantial constitutional question that control can be transferred as contemplated by this treaty-that is, by first giving Panama a voice, but not a controlling voice, in the operation of the canal, by employing Panamanians in increasing numbers to do the actual work involved in the operation of the canal, and then by transferring full control to Panama at the end of the century. I will conclude this discussion by emphasizing the point I have just made. If the United States entered into a treaty with, say, Canada, providing that the Secretary of Defense would be a Canadian proposed by Canada and subject to removal at the request of Canada, the constitutional problem with that arrangement would be fundamental. Control over the Department of Defense cannot be transferred to a foreign power by treaty or by any other law. That control must be exercised by an individual who owes allegiance to the United States and is subject to the full administrative power of the United States; and in constitutional terms this means that he must be an "Officer of the United States" in the sense contemplated by Article II. Control over the Panama Canal, however, can be constitutionally transferred to Panama. That is the critical point. Control over the Panama Canal can be placed in the hands of Panamanians who are not Officers of the United States in the constitutional sense, and this is what the Panama Canal Treaty is designed ultimately to do. I have two final points. First, the preceding analysis should not be taken to suggest that the Administrator and Deputy Administrator of the Commission are on the same legal footing as the Panamanian Board members. They are fully subject to U.S. control and are responsible to us. Second, the approaches taken in the Adminis tration's bill and in Chairman Murphy's bill differ on the question of the mode of appointment of the board members. The Administration's bill provides that they will be appointed by the President. Chairman Murphy's bill provides that they will be appointed by the President with the advice and consent of the Senate. For the reasons I have just given, neither of these modes of appointment presents a constitutional problem with respect to the Panamanian members; but I should add that to the extent that the advice and consent requirement seems to suggest that the Panamanian members must answer to us in their opinions and policies, this arrangement seems inconsistent with the theory upon which the treaty is based. Our remedy is to exercise control through the American majority. I note that on this point both the Administration's bill and Chairman Murphy's bill provide explicitly that the board can take no action in the absence of an American majority. 25-309 O- 84 - 9 |