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B-130515 1 (1970-08-11)

handle is hein.gao/gaobadazu0001 and id is 1 raw text is: COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON, D.C. 20548 B-130515 AUG 11 1970 Dear Mr. Chairmani By letter dated may 4, 1970, you requested our opinion as to whether the Office of Iconomic Opportunity (OO) can legally fund the Opportunity Funding Corporation (OPa) under Title I-D of the Economic Opportunity Act, as added by section 103 of Ptl ic Law 90-222, approved December 3, 1967, 81 Stat. 688, 42 U.S.C. 2763'et._seS. (Supp. V) and thether such funding carries out the intention of the Congress in authorizing and funding OO programs. On June 29, 1970, 030 funded 070 by a grant from I-D funds in the amount of $3,900,000. Earlier, on June 26, 1970, 030 used $3,500,000 to fund a Pilot Program for the Corporation out of funds augerrized by sec- tion 232 of the Ieonomic Opportunity Act, 42 U.S.C. 2825'(Supp. V), which we understand vill finance the administrative expenses of OP7 and innova- tive projects outside of special impact areas. The OC is a nationally based not for profit corporation organized under the lava of Delaware with its principal place of business in Washington, D.C. It is contemplated that through a wide range of projects OPC will draw on the resources of the private sector to aid in financing local economic development projects. Specifically, it will undertake programs designed to gauge the feasibility of drawing on the financial resources of the private sector to better the lot of low-income people by adapting tools proven in other areas# It proposes to utilize guaran- tees, rediscounts, incentive arrangements and capital protection devices to increase the flow %.d use of private capital and credit in lo-inome cammities. The activities of the corporation are not intended to be in lieu of or to duplicate any existing private or public services cur- rently being rendered in the localities selected bat Vill supplement and complement existing efforts. While section 304 of the Government Corporation Cont Act, approved December 6, 1945, ch. 557, 59 stat. 602, 31 U.S.C. 869(t precludes on or after December 6, 1945, the formation of corporations by agencies of the Goverrent for the purpose of acting as an agency or instrumentality of the United States, we have been advised by 020 and a review of the grant documents abow that the legal relationship between OED and OP is that of grantor and grantee rather than that of an agent. The 0FC is wbolly independent of 020 and is not a Government corporation or an agent or instrumentality of the Government. The creation of the OFC for the l9

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