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B-237858 1 (1991-04-15)

handle is hein.gao/gaobadnwe0001 and id is 1 raw text is: C Wver GoaenA ofth Uatd ama WadM.., DC1 NOW Decision Matter of: United States Information Agency--Debt Conversion Activities rile: B-237858 Date: April 15, 1991 DIGEST 1, Unless otherwise'aufhorized, the United States Information Agency (USIA) may not uae appropriated funds to engage in debt'for equity swaps to fund educational and cultural exchange activities, The authority contained in the Mutual Educational and Cultural Exchange Act, 22 U.S.Cr § 2451, to finance educational and cultural exchange activities by grant, contract, or otherwise does not include the authority to purchase discounted foreign debt from commercial lenders, 2. USIA may accept donations of foreign debt for the purpose of funding international educational and cultural activities. Under 22 U.S.C. 5 2697, USIA may accept conditional gifts. Congress specifically provided that USIA may hold, invest, reinvest, and use the principal and income from any such conditional gift in accordance with the conditions of the gift to carry out authorized functions. DECISION This responds to a request from the Generai Counsel, .united States Information Agency,'(USIA), regardingthe agency's authority to-ehgage in transactions, commonly referred to as debt for equity swaps, that are part of af6reign country's program to reduce the amount of its outstandLng'U.S. dollar denbuinated debt, The General Counsel asks ihether the agency may engage in tuch transactions to fund educational and cultural exchange programs. For the followig reasons, we conclude that USIA may not use appropriated funds to purchase foreign debt and convert it to foreign currency or foreign currency denominated bonds. However, under its statutory authority to accept and invest gifts in accordance with their conditions, USIA may accept donations of foreign debt and use such donations to engage in the proposed activities.

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