erminations ultimately was vested in the respondent, the Administrator of General Services, under the following sequence of events: The functions of the Price Administrator and the Economic Stabilization Director were transferred to the Temporary Controls Administrator by Executive Order 9809, issued December 12, 1946, 11 F.R. 14281, 50 U.S.C.A.Appendix, § 601 note. Then the functions of the Temporary Controls Administrator with respect to subsidies were transferred to Reconstruction Finance Corporation when it became successor by Executive Order 9841, effective May 4, 1947, 12 F.R. 2645, 50 U.S.C.A.Appendix, § 601 note. Finally, these functions were transferred to the respondent by Reorganization Plan No. 1 of 1957, 71 Stat. 647, 22 F.R. 4633, 15 U.S.C.A. § 601 note. Thus were coalesced in the Reconstruction Finance Corporation, and finally in the respondent, the responsibilities of both certification and payment. San Antonio Packing Co. v. Reconstruction Finance Corp., Em.App. 1950, 182 F.2d 614, 618. Amendment 11 to Directive 41, issued by the Temporary Controls Administrator effective April 8, 1947, 12 F.R. 2408.
Without elaborating upon the terms of the Act and implementing directive, we think it sufficient at this time to say that we agree that payments made on invalid claims can be recaptured, and that the invalidity of the claim may be established in the action brought to recapture such payments. United Meat Co. v. Reconstruction Finance Corp., 85 U.S.App.D.C. 9, 174 F.2d 528, 530; cf. San Antonio Packing Co. v. Reconstruction Finance Corporation, Em.App., 182 F.2d 614. The time within which illegally paid subsidies may be recovered is not limited by statute. See Taylor Richards v. Reconstruction Finance Corporation, Em.App., 193 F.2d 877.
8 FR 13696; 14251. The complainant next contends that since no criminal proceedings were pending against it for wilful violation of War Food Order No. 75 the respondent had no right under section 7003.10(a) of the regulation to invalidate its claims on that ground. It urges that the provisions of section 7003.10(a) must be limited by the overriding directions of section 7(b)(1) of Directive 41 to those wilful violations only which have been referred to the United States Attorney for prosecution. It is undoubtedly true, as this court indicated in San Antonio Packing Co. v. Reconstruction Finance Corp., Em.App., 1950, 182 F.2d 614, 618, that the operation of section 7003.10(a) is to be limited by section 7(b)(1) of Directive 41. 10 FR 4494, 4495; 11 FR 1215.
However, the invalidation of subsidy claims or payments does not constitute "damages or penalties" within the meaning of this section of the Act. San Antonio Packing Co. v. R.F.C., Em.App., 1950, 182 F.2d 614. Judgment will enter dismissing the complaint.
In any event, the objection is not well taken. Armour Co. v. R.F.C., Em.App., 1947, 162 F.2d 918, 922; San Antonio Packing Co. v. R.F.C., Em.App., 1950, 182 F.2d 614, 618-619; Evergreen Meat Co. v. R.F.C., Em.App., 1951, 188 F.2d 368, 375-376. As we have in previous cases pointed out, the administrative agencies charged with authority to promulgate a program of government subsidies were invested by law with very wide discretion in determining the extent to which subsidies would be granted.
All that Amendment No. 15 to the subsidy regulation did, with its sliding scale of deductions from subsidy claims, was to fix an outside limit of tolerance for excess cattle costs — two per cent — beyond which an applicant would be wholly deprived of the subsidy for the accounting period in question. It cannot be said that this amounted to an arbitrary "penalty" grossly disproportionate to the amount of the applicant's violations of MPR 574. The purpose of the provision was not "to penalize violators but to prevent the diversion of subsidy funds from the accomplishment of the object for which they were intended". San Antonio Packing Co. v. R.F.C., Em.App., 1950, 182 F.2d 614, 618. See also Federated Meat Corp. v. R.F.C., Em.App., 1950, 183 F.2d 588, 592.