SRQ Guy,
I, too, question the validity of your statement concerning govt miles. In addition, I have about 1/4M (govt) miles per year to the contrary.
Government agencies can permit their employees to retain ff miles. However, these miles can only be used to upgrade on government related business, and only for a one-class upgrade.
The specific agency can enforce more stringent rules if they desire. E.g., they can forbid their employees to accumulate miles. This is very rare. The only agency which I have heard of which does this is the State Department. Reason being that they are also the only agency where persons openly used miles for their own (personal) benefit on personal travel. The case was prosecuted, and the offending parties had to reimburse the govt for the miles which they used for personal reasons.
-They got what they deserved. 'Tis a fine use of the miles for upgrades on government travel, and those persons who abuse the rules run the risks.