cise general control over the Retirement System's day-to-day financial transactions but only to conduct an audit." In fact, as the December 7, 1948 letter expressly states, what the GAO asserted the right to conduct was an "audit pursuant to the provisions of the Government Corporations Control Act," which is a commercial-type audit (31 U. S. C. Ch. 91 (1982)), not an exercise of control over day-to-day transactions. Moreover, the December 7, 1948 letter expressly denied the GAO's (and TVA's) right to conduct an audit of the Retirement System without reference to any exercise of control, saying that "we cannot acknowledge the right of the General Accounting Office to audit the financial transactions of the Retirement System." Furthermore, this attempted distinction is, to put it mildly, disingenuous. Zigrossi's original proposal was not merely to make an audit but rather a total investigation of benefits, contributions, investment policies, and any other subject relating to the System. Within days of the TVA Board's request that I leave TVA, Zigrossi sought immediate access to "all files relating to TVA Retirement System matters." His agents demanded that immediate access in Zigrossi's name as well as in the Board's. Although the Swidler memorandum purports to defend only TVA's right to make a limited audit to determine whether there is any substance to allegations related to the System against two individuals (Eugene Stephens and me), it is obviously viewed by TVA as much more. Indeed, according to press reports quoting his public comments, Zigrossi is already citing the Swidler memorandum as providing justification for a broad investigation of the kind he sought to conduct in the first place. c. The Swidler memorandum also states that in 1948 "TVA in fact took responsibility, in its role as parent, founder and principal source of funds for the System, to undertake to protect the System against outside interference." The December 7, 1948 letter refers to no such role. The GAO's proposal to audit the System had been communicated to TVA, not to the System. TVA naturally responded--in a letter drafted by or under the supervision of, and approved by Swidler, the Chairman of the Retirement System Board as well as TVA's General Counsel--and in so doing not only stated that GAO had no right to make such an audit, but also expressly recognized that TVA had no right to do so either. No amount of present-day sophistry by Swidler or anyone else can change those facts. Further, it should be noted that the ultimate resolution of the issue--an audit by a private accounting firm secured by GAO--was agreed to between GAO and the Retirement System, not between GAO and TVA. d. The Swidler memorandum states (at 9-10) that the Retirement System Rules and Regulations were "not negotiated across a bargaining table" but "are in the form of a pact between a concerned employer and the agency of its creation [i. e., the Retirement System itself]." This assertion provides an astounding contrast with that drafted or approved by Swidler, shortly after the establishment of the System and while memories were no doubt sharper, for inclusion in the December 7, 1948 letter, which reads: the System represents, in large measure, the product of negotiation between TVA and its employees; and the Rules and Regulations agreed upon as the basis for its establishment constitute for all practical purposes a contract between TVA and its employees. The minutes of the September 6, 1939 TVA Board meeting at which the System was established show that the Board's action was upon the recommendation of a TVA Joint Management-Employee Committee. This TVA Board which acted on the Joint Committee's recommendation for a Retirement System was the same Board which in the same year adopted and implemented the historic TVA Employee Relationship Policy, upon which TVA's decades of successful labor relations was built, and which recognized the value of joint committees as a central tenet. Thus, far from some unilateral grant of paternalistic beneficence by TVA, the System was a product of TVA's early recognition with its employees of each others' respective and mutual interests. Further, even if Swidler's present contention that the contract was between TVA and the System rather than between TVA and its employees--which it obviously is not--the employees and retirees would unquestionably be third-party beneficiaries entitled to performance of the contract in strict accordance with its terms. e. The Swidler memorandum attempts to buttress its claim to authority for TVA to audit the System by referring to various powers given TVA under the Rules and Regulations--e.g., to appoint three members of the Retirement System Board, approve the System's selection of investment managers, and veto the System Board's proposed amendments to the Rules and Regulations. Interestingly, it was just these types of powers which were referred to by GAO in 1948 in support of its claim to audit the System. The December 7, 1948 letter stated in response: The general reservations in the TVA Board which have been discussed above and have been cited as the basis for your conclusion that TVA retains administrative control over the Retirement System appear to us to constitute nothing more that checks on the basic framework of the System. In contrast to these general reservations we should like to direct your attention to the fact that the responsibility for administration of the System, including its financial transactions, is vested solely in the Board of Directors of the Retirement System. This point was made not only in the December 7, 1948 letter but also in Swidler's August 5, 1949 letter to the Comptroller General setting out the ultimate agreement, in which he stated: 4. The agreement of the Retirement System to this 3. Apart from its glaring incompatability with the 1948 and 1949 letters, the Swidler memorandum is patently fallacious in other respects as well. The Thus, the Swidler memorandum seemingly argues that Section 3 of the TVA Act, by imposing a duty on the TVA Board to "provide a system of organization to fix responsibility and promote efficiency," somehow gives it authority as to the Retirement System which is not set out in the System's Rules and Regulations. System is not TVA and, indeed, the Rules and Regulations specifically state that any amendments to the Rules and Regulations are to be initiated by the System Board. Thus, Swidler's argument is absurd. TVA performed its duty under Section 3 when it approved the Rules and Regulations in the first place--just as it did when, for example, it entered into collective bargaining agreements under the authority of Section 3 with unions representing its employees. Such contracts have been enforced--against TVA where the language called for such action--in strict accord |