Is the Pay Czar Unconstitutional?

           Professor (and former judge) Michael McConnell has written this Wall Street Journal op-ed arguing that Kenneth Feinberg, the “pay czar,” is an officer of the United States and therefore subject to the Appointments Clause.   Under the Appointments Clause, all officers must be appointed by the President, with the advice and consent of the Senate, unless Congress has by law provided for a different method of appointment.  Since Congress has not done so, McConnell contends, Feinberg was unconstitutionally appointed and his decisions regarding executive compensation were without legal authority. 

            This appears to be a very powerful argument.  The authority to cap executive compensation, which was given to the Secretary of the Treasury as part of the TARP legislation, would clearly seem to be the type of significant legal authority that can only be exercised by an officer of the United States.  As I have noted before, officers of the United States have included ministerial officials with little, if any, discretionary authority (eg, deputy postmasters or deputy clerks of court),  It is hard to imagine that the authority to limit private sector compensation, even for a limited group of individuals, would not qualify. 

            I can think of only two plausible arguments that the administration might make in response.  First, it might claim that Feinberg has no authority to act on his own and merely makes recommendations to the Secretary of the Treasury.  However, according to McConnell, Feinberg actually signed orders on executive compensation.  If this be true, it would be very hard to argue that his role is purely advisory, even if his orders were subject to review by the Secretary of the Treasury. 

            Second, the administration might argue that Feinberg’s functions are not “continuing” because they only relate to TARP, which is a temporary program.  The Office of Legal Counsel has opined that an officer of the United States must exercise “continuing” legal authority so that being sent on a special diplomatic mission, for example, is not enough to make one an officer.  I tend to doubt that Feinberg’s role is of such a limited and temporary nature so that he would not qualify as an officer, but there is no bright line test that would enable one to make that judgment with complete confidence. 

            This could be the subject of some interesting litigation.    

Leave a Reply

Your email address will not be published. Required fields are marked *