28o ORGANIZING SCIENTIFIC RESEARCH FOR WAR 



Institution authority to act on its behalf in all future negotiations with 

 OSRD. 



Bush sought and obtained a ruling on his own case. During the time 

 NDRC was a part of the Council of National Defense it had entered into 

 several contracts with the Carnegie Institution of Washington of which 

 he was President. The Executive Order creating OSRD provided that 

 OSRD should assume the NDRC contracts. On August 8, 1941, Bush 

 addressed a letter to Wayne Coy, Liaison Officer for the Office of Emer- 

 gency Management, requesting legal opinion as to his authority as Di- 

 rector of OSRD to take over contracts with the Carnegie Institution of 

 Washington and to enter into new contracts with that Institution. Bush 

 pointed out that he received compensation as President of the Institution 

 but not as Director of OSRD; that the Institution was a nonprofit cor- 

 poration, and that contracts between NDRC or OSRD and the Institution 

 would be for research work for which the Institution would be paid only 

 its out-of-pocket expenses. 



On August 21, 1 94 1, Coy replied enclosing an opinion by Oscar S. Cox, 

 counsel for the Office for Emergency Management, concluding that there 

 would be no violation of any law if Bush, as Director of OSRD, should 

 take over or enter into contracts with the Carnegie Institution. In his opin- 

 ion, Cox stated that Section 41 of the Criminal Code was the only one 

 which raised any question in the situation. The purpose of that statute was 

 to protect the Government in its business transactions with corporations 

 from being represented by an officer who might have an interest adverse 

 to the United States due to his connection with the corporation involved. 

 The danger sought to be avoided was the temptation of the officer to favor 

 the corporation at the expense of the Government for his own financial gain. 

 The instant case was one in which Bush's relationship to the Institution 

 offered no opportunity directly or indirectly for personal financial gain 

 from the corporation's "pecuniary projects or contracts," and therefore there 

 was no possibility of his having an interest adverse to the Government in 

 its transactions with the Institution. Since the Institution itself was a non- 

 profit educational corporation, it was not within the intent of the statute, 

 as the nature of its operations precluded its officers from any financial in- 

 terest direct or indirect in its contracts or business transactions. 



Having taken care to avoid actual conflicts of interest, OSRD felt that 

 opinions of the Attorney General (e.g.. Op. Attorney General, Vol. 40, 

 Opinion No. 47, April 27, 1942) were adequate to insure that there was 

 no impropriety in the use of WOC personnel. This belief was rudely jarred, 

 however, by an opinion of the Attorney General dated December 9, 1943, 

 involving members of local OPA War Price and Rationing Boards in which 

 Sections 109 and 113 of the Criminal Code were construed to be more gen- 

 erally applicable than had theretofore been indicated. 



