Synthetic Fuels Corporation—Investment Bank or Government Agency?

In order to encourage the development of synthetic fuels, Congress established the Synthetic Fuels Corporation to provide financial assistance, and stated that it was to function much like a private corporate entity. Amendments prior to passage have left its non-governmental character in question. T...

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Bibliographic Details
Published in:The Business lawyer 1981-04, Vol.36 (3), p.953-968
Main Author: POZEN, ROBERT C.
Format: Article
Language:English
Subjects:
Alternative energy sources
Business structures
Corporate regulation
Corporations
Criminal solicitation
Development
Energy security
Federal law
Federal legislation
Financing
Fuel, Synthetic
Fuels
Government
Government agencies
Investment banking
Synthetic
Synthetic fuels
Venture capital
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Summary:In order to encourage the development of synthetic fuels, Congress established the Synthetic Fuels Corporation to provide financial assistance, and stated that it was to function much like a private corporate entity. Amendments prior to passage have left its non-governmental character in question. The Corporation is designed to look like a private corporation, with a Board of Directors, a President, and the government as the sole shareholder, but it is also subject to: 1. the Sunshine Act, 2. audit supervision by the Inspector General, 3. the Freedom of Information Act, and 4. review by an Advisory Committee consisting of government officials. The Corporation will solicit applications, award financial assistance from funds appropriated by Congress, and set the terms of the award. With regard to its corporate status, the Corporation is to be treated differently from a government agency, but it is immune from suit other than on a written contract, will be subject to a mixed taxation scheme, and is treated as a government agency with respect to the Davis-Bacon Act, federal securities laws, and federal antitrust laws. The fundamental tension between the desire to allow the Corporation to function as a private investment entity and the desire to maintain public accountability could become destructive. This could be avoided by exertion of independence by the top management of the Corporation.
ISSN:0007-6899
2164-1838