Going back to Bill Gates, KBE, I find nothing in the Constitution forbidding him from calling himself Sir William Gates (as far as U.S. law in concerned - but British law still prohibits it). The only two references to titles of nobility are contained in Article I:
"No title of nobility shall be granted by the United States: and no person holding any office of profit or trust under them, shall, without the consent of the Congress, accept of any present, emolument, office, or title, of any kind whatever, from any king, prince, or foreign state."
"No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility."
The first merely says that the U.S. cannot knight someone, and no public officer or elected official can be royalty. The second one says that Billy can't be made Emperor of Redmond, either. Clearly, neither one applies in this case. Also, since he's an American citizen, and thus not under jurisdiction of British law, they really can't tell him not to run around calling himself Sir Billy. What's their legal recourse if he does? Of course, there may be some fine print in the Knighthood EULA, so when he gets the knighthood installed he's bound by their terms whether he actually agrees to them or not (I wonder if Sir William actually reads the EULAs on other companies' software when installing...?). =)
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