Independent Agencies & Government Corporations
One corollary of limited central management oversight of government corporations is the lack of answers to fundamental issues regarding when and how government corporations ought to be created and utilized. There are at least two schools of thought respecting the proper use of the government corporation option relating to its structure, authority, and financial systems. One school holds that government corporations, including agencies called corporations but which do not perform commercial activities, should be encouraged, provided maximum policy and financial autonomy, and be subject to such oversight as is appropriate for other agencies and instrumentalities in the same policy field. The legal responsibilities of the corporation should be located in its enabling statute. The government corporation model has been utilized by the federal government for over a century.
And the new governments realize that a privatization scheme is only as efficient as it is politically palatable. In Poland, the recently adopted method for privatizing the massive state industrial sector involves issuing shares in newly privatized companies and putting all the shares of many companies into a mutual fund. A number of mutual funds would then control the shares of all the companies. Citizens would receive shares in the mutual funds that would not be tradable for, say, one year. As these and countless other examples make clear, there is a pragmatic way to view privatization.
Section 66a of former Title 31 was repealed by Pub. 97–258, §5, Sept. 13, 1982, 96 Stat. 1068, and reenacted by the first section thereof as section 3512 of this title.
Which required Government pension plans to be subject to 29 U.S.C. 1023, except for officers or employees of the Central Intelligence Agency unless the President specifically approves application of the requirements of section 1023 in writing for such officers and employees. A surety corporation is liable to the United States Government for a civil penalty of at least $500 but not more than $5,000 for violating section 9304, 9305, or 9306 of this title. A civil action under this section may be brought in a judicial district in which a civil action may be brought against the corporation under section 9307 of this title. A penalty imposed under this section does not affect the validity of a contract made by the surety corporation.
A Government corporation shall provide the President, the Director of the Office of Management and Budget, and the Comptroller General of the United States a copy of the management report when it is submitted to Congress. A Government corporation shall submit an annual management report to the Congress not later than 180 days after the end of the Government corporation’s fiscal year. Activities of the Comptroller General of the United States under this section are in lieu of any audit of the financial transactions of a Government corporation that the Comptroller General is required to make under any other law. Amendment effective Sept. 13, 1982, see section 2 of Pub. 104–134, title III, §3117, Apr. 26, 1996, 110 Stat.
It took some 10 years and an investment of $8 billion by the federal government to bring Conrail up to industry standards before entertaining a reasonable expectation that the railroad would be attractive to private investors. There is, at present, little central management agency oversight or supervision of government corporations as a category of agency in the executive branch. Nor is there any central unit charged with designing government corporations from the perspective of presidential or central management interests. A board of directors is the trademark of a government corporation, according to many lawmakers and attorneys. Marshall Dimock, an academic writing in 1949, argued that a board of directors was considered an essential element for an “authentic” government corporation. “Being a separate and distinct entity, headed by its own board of directors, the corporation is inherently better able to succeed than the ordinary department of government.”
In 1990, as part of the CFOA, GAO’s recommendation that government corporations be subject once again to annual audits was accepted. Henceforth, however, the audit is to be conducted by the corporation’s inspector general “or by an independent external auditor, as determined by the inspector general or, if there is no inspector general, the head of the corporation,” according to accepted government auditing standards. Many Members of Congress feel somewhat uneasy with broad, “business type budgets,” also referred to as “budget programs.” To be sure, Congress can alter these budget programs and can limit the use of corporate funds for any purpose, but this option is seldom employed.
The MTR Corporation was formed as a Crown corporation, mandated to operate under “prudent commercial principles”, in 1975. The Kowloon-Canton Railway, operated under a government department, was corporatised in 1982 to imitate the success of MTR (see Kowloon-Canton Railway Corporation). MTR was privatised in 2000 although the Hong Kong Government is still the majority shareholder. KCR was operationally merged with MTR in 2007. In the postwar years, Hong Kong’s colonial government operated under a laissez-faire economic philosophy called positive non-interventionism.
Corporate interests can vastly outspend labor or public interest groups on elections. For example, in 2014, business interests spent $1.1 billion on state candidates and committees compared to the $215 million that labor groups spent. That same year, business political action committees, or PACs, spent nearly $380 million in federal elections, while labor union PACs gave close to $60 million. In 2016, it is estimated that $1 out of every $8 that went to super PACs came from corporate sources. Super PACs—which didn’t exist before 2010—raised almost $1.8 billion for the 2016 elections.