March 21, 2000

Mr. Eric C. Michaux

N.C. Board of Transportation

c/o Michaux & Michaux, P.A.

Post Office Box 2152

Durham, North Carolina 27702

Re: Department of Transportation

Dear Mr. Michaux:

I am happy to respond to your March 4, 2000, request regarding conflicts of interest and the appearance of conflict of interest in the context of your service on two transportation-related public boards -- the Board of Transportation ("the BOT") and the Triangle Transit Authority ("TTA" or "the Authority"). Before I do, however, you need to be aware of several limitations on the scope of this response. First, the Department of Transportation ("the Department" or "DOT") and the BOT are covered by other laws, rules, and policies which apply to this situation. For example, North Carolina General Statutes ("NCGS") §143B-350 sets out the general powers and duties of the BOT, including the obligation to carry out its duties "consistent with the needs of the State as a whole" without sacrificing "the general statewide interest to the purely local desires of any particular area." Section143B-350 (h) mandates that BOT members appointed to represent a particular transportation engineering division be consulted before the BOT makes a decision affecting that division. Section143B-350 (k) deals with the Board’s ethics policy in general and conflicts of interest/appearances of conflict in particular. Section 160A-600 et seq (the "Regional Public Transportation Authority Act") and section 160A-630 et seq (the "Regional Transportation Authority Act") deal with the creation of regional transportation authorities like the TTA. Finally, as you know, the BOT has its own ethics policy which may have a direct bearing on your questions.

Definitive interpretation of these and other applicable statutes and policies, as well as their specific application to your situation, is a matter for the Department's legal counsel. The Board of Ethics ("BOE" or "the Board") is charged with interpreting and enforcing Executive Order 127, as modified by Executive Order 131 (collectively "EO 127" or "the Order"). Any conflict between a provision of the Order and other North Carolina law is resolved in favor of the law. EO 127, §4 (i). In answering your questions, however, I have worked closely with your representative in the Attorney General’s office, and he concurs with the approach taken in this opinion.

With the foregoing limitations in mind, the following preliminary advisory opinion is issued by Board staff according to the Board's "Rules and Regulations" and may be relied upon until and unless it is formally modified or rescinded by the full Board. Once the Board formally approves, modifies, or otherwise disposes of the preliminary opinion, all pertinent parties will be so notified.

All advisory opinions, both preliminary and final, are based upon the particular facts presented and issues raised in the specific request for an advisory opinion. As such, the scope of each opinion is limited to the request made and should only serve as a recommendation to the particular parties involved. It may, however, serve as a general guide to other individuals similarly situated.

I understand the basic facts to be as follows. You are the "Division 5" representative on the BOT. By virtue of this position, you have also been appointed to an ex officio nonvoting position on the TTA Board of Trustees. See NCGS § 160A-605 (a) (4). The TTA is a "Regional Public Transportation Authority" whose purpose is to finance and operate a public transportation system for the Authority’s service area. See NCGS § 160A-608. The Authority consists of 13 members: 10 voting and three nonvoting ex officio members appointed by the Secretary of Transportation. Trustees receive per diem compensation in the amount of $50.00 for attendance at each duly conducted Authority meeting. See NCGS § 160A-605 (f). The Authority can and does apply for and receive funding from the DOT. See NCGS § 160A-613 and -640. If I am mistaken about any of the foregoing facts, or if there is additional relevant information needed for a complete understanding of the issues involved, please let me know at once.

Your question is essentially, as a sitting BOT member, would your participation in discussion and voting on specific requests by the TTA constitute a conflict of interest or create the appearance of a conflict of interest given your membership on both public bodies? While you would certainly be free to recuse yourself should you determine that your "personal relationship" with the TTA would compromise your ability to protect the overall public interest and fulfill the legislative mandate of NCGS §143B-350 (not sacrifice the general statewide interest to the purely local desires of any particular area), Executive Order 127 does not require BOT members serving as ex officio nonvoting members of legislatively-mandated regional transportation authorities to recuse themselves from matters involving those boards that come before the BOT.

The basic rule of conduct for all covered Public Officials is that they "perform their official duties in a manner to promote the best interests of the public." EO 127, § 7. This general statement is followed by rules governing both conflicts of interest and appearances of conflict.

Conflict of interest rules are aimed primarily at avoiding undue financial gain as a result of one's official position. The basic conflict provision is found in section 7 (a) (1):

This is consistent with the BOT’s own ethics policy. See §§ III (4) and IV (1). Nothing in the present situation indicates that any possible financial benefit would accrue to the BOT member voting on a TTA proposal before the Board.

Appearances of conflict cover a broader spectrum of conduct. Section 7 (b) (1) states,

A Public Official shall make every effort to avoid even the appearance of a

conflict of interest. An appearance of conflict exists when a reasonable person

would conclude from the circumstances that the Public Official's ability to protect

the public interest, or perform public duties, is compromised by personal interests.

Section 7 (b) (2) adds,

Your question raises appearance of conflict issues similar, but not identical, to those addressed by the Board of Ethics in its "Coastal Resources Commission" ("CRC") opinion. In all situations, Public Officials must "make every effort to avoid even the appearance of a conflict of interest." This is a flexible, open-ended standard applicable on a case-by-case basis. The "personal interests" that can give rise to an impermissible appearance of conflict are broader than strictly financial or familial interests. If the intent was to restrict an appearance of conflict to purely financial situations, the Order could and presumably would have said so. In addition, reading sections (b)(1) and (b)(2) together, "personal" must mean something other than "familial" or "financial" or it is redundant. Thus, a reasonable construction is that the Governor intended that "personal interests" include non-financial interests in the proper situations.

In certain situations, the appearance of conflict is so great that Public Officials cannot participate in the decision-making process. This occurs when the Official's impartiality might reasonably be questioned due to a "familial, personal, or financial relationship with a participant in the proceeding" (emphasis added). A "personal" relationship includes one in a policy-making position in an organization or group. This would include membership in the governing body, such as officers and directors. Finally, a "participant" includes an organization or group which has petitioned for some action or has some specific, unique, and substantial interest, financial or otherwise, in the requested decision.

Several factors distinguish the present situation from that dealt with in the CRC opinion. First, the legislature designed the regional transportation authority boards (like the TTA) to have nonvoting representation from the BOT. See NCGS § 160A-605 (a) (4). The legislative intent may in fact have been for the BOT member to act as a liaison between the two boards. In addition, the fact that the BOT member is a nonvoting, ex officio member of the TTA calls into question his status as a full-fledged member of the governing body and thereby his "personal relationship" with that group. Furthermore, NCGS section 143B-350 (h) mandates that BOT members appointed to represent a particular transportation engineering division be consulted before the BOT makes a decision affecting that division. A total prohibition of discussion and voting could defeat the purpose of this statutory directive. Finally, and perhaps most significantly, unlike in the CRC situation, the two potentially conflicting boards here are both public bodies charged with the same overall mandate of serving the public interest, not personal or private interests.

Based upon the relatively unique facts of the present case, I believe that you should not be prohibited from participating in discussion or voting on TTA issues or proposals which come before the BOT. I also believe that reasonable people would not conclude under the present circumstances that your ability to protect the public interest and perform your public duties is compromised by "personal interests," thereby giving rise to an appearance of conflict. If, however, you come to believe that your personal relationship with the TTA is such that you cannot perform your statutory or ethical obligations, you can and should disclose your misgivings to the Secretary and consider recusing yourself from votes directly and specifically involving requests by the TTA. See EO 127, § 7 (b) (2).

As mentioned above, because of the Department’s superseding or at least concurrent jurisdiction in this matter, I have consulted with the BOT’s legal counsel in the Attorney General’s office, and he concurs with the result reached in this opinion. He also believes it is consistent with the BOT’s own ethics policy and other applicable statutes.

Finally, your request shows a high degree of sensitivity to the ethical ramifications, both real and perceived, of your public service, and I commend you for seeking clarification and advice when you have any doubt whatsoever about the proper course of action. I hope this opinion adequately addresses the specific questions raised in your request, but if it does not, please do not hesitate to call on me for further discussion and analysis.

cc: Mr. George F. Bason, Chairman, NC Board of Ethics

Secretary David McCoy

Mr. Robert O. Crawford, Special Deputy Attorney General