I have a related question...a few of my friends have LOA's yet they will still interview with the Congressman. Obviously, they all can't have the appointment so I'm assuming the academies will find noms for them. If that's the case why bother interviewing? I would think that the congressman would give the nom to someone without an LOA so as to get the most people in from the district. Is this usually the case?
The MOC's can do it any way they want to ... that said, the majority will recognize the LOA and give them a nom. The MOCs work closely with each SA. It is in the MOC best interest to have as many qualified kids from their district get an appointment. The only way to guarantee that their LOA candidate will get an appointment is to give them a nom. Without a nom, there is no guarantee that the SA will provide the appointment. Yes, the SA MAY have access to other nom sources and they MAY choose to use it on a candidate that did not get a MOC nom, but they are
not obligated to do so. The SA is charged with making the strongest class possible, within the restrictions inherent in the nomination process. If a candidate does not apply for all noms for which they are eligible (presumably because they figure the SA will "find" them a nom), it is quite possible that the SA will elect not to come through for that student. If, however, that student applied for all possible noms and did not get one, then the SA is more inclined to come through for the candidate. It is rare for an LOA recipient not to get an appointment but I have seen it happen on more than one occasion. Typically, the applicant did not apply for all that they were eligible (some not applying for any noms at all).
To reiterate your question of why a MOC would given any LOA a nom, the answer is that while not many LOAs are granted, if every MOC decided not to give any LOA a nom, the SA would be in a pickle and lots of LOAs would not get an appointment - and an LOA that did not get an appointment when they did apply to their MOC is a bad thing. A MOC that does not give an LOA (that applied for a nom) - and as a result of not getting that nom the LOA recipient then does not get an appointment can be bad press for the MOC. Imagine the local top notch kid whom the SA has granted an LOA (in essence telling the world that the kid is going to be accepted IF they get a nom). Now they don't get a nom and the small town press has a field day. Why didn't the MOC give this apparently top notch kid a nom? The decision not to give the nom changes the future of the kid. MOCs typically prefer the sure deal and an LOA recipient is a sure deal.
Now, in very competitive districts that I am aware of, the MOC may have more than 10 LOA recipients in the district. The MOC can only give 10 noms (per opening). If the LOA students all applied to ALL NOM SOURCES FOR WHICH THEY ARE ELIGIBLE and they are ranked #11 on their MOC list - they will not get the nom but they will likely get a nom from another source. However, if they did not apply to all sources they will not get that nom and the message they sent to the SA was that they did not cross their "t's" or dot their "i's" because they didn't apply to all for which they were eligible - some in that scenario will not get an appointment.
On a side note - typically the candidates have no way to know how many LOAs have been given in their district. I doubt a MOC would release that information. Our district certainly would not.
Hope that makes sense.