March 26, 2001

Mr. Robert J. Hines, Fishery Grant Coordinator

North Carolina Sea Grant Extension Program

Commerce Development Center

3615 Arendell Street

Morehead City, North Carolina 28557

Re: Sea Grant College Program/Fishery Resource Grant Program &

Review of grant application by employee of MFC chairman AO-2000-005

Dear Mr. Hines:

I will be happy to respond to your March 7, 2000, request regarding potential conflict of interest issues related to the review and award of "sea grants." Before I do, however, you need to be aware of several significant limitations on the scope of this response. First, according to both Executive Order 127 ("EO 127" or "the Order") and the Board of Ethics' ("BOE" or "the Board") "Rules and Regulations," the subject of your inquiry, Ms. Sarah Harris, is neither a covered "Public Official" nor an individual otherwise covered by EO 127. Thus, she is not subject to the Board's jurisdiction. See EO 127, §§3, 4(h), & 9; "Rules and Regulations," §VI. Neither is the "Grants Committee" of the Fishery Resource Grant Program (which in turn is part of the Sea Grant College Program at the University of North Carolina). See EO 127, §§ 3 and 9 for those covered by the Order.

Furthermore, other laws, rules, or policies may also apply to this situation. For example, North Carolina General Statutes ("NCGS") §113-200 covers creation and implementation of the Fishery Resource Grant Program and the award of grants thereunder. This includes the appointment of two Grants Committee members by the chair of the Marine Fisheries Commission ("MFC" or "the Commission"). The Marine Fisheries Act, particularly NCGS §143B-289.54(g) concerning "ethical standards" for MFC members, may also apply to this situation, either directly or indirectly through the chair’s appointment of regional advisory committees. The Board is charged with interpreting and enforcing EO 127. Any conflict between a provision of the Order and other North Carolina law is resolved in favor of the law. EO 127, §4(i). Your legal counsel is the appropriate person to interpret and resolve any discrepancies between the two, but I will be happy to consult with them in doing so.

With the foregoing limitations in mind, the following preliminary advisory opinion is issued by Board staff in the spirit of providing reasonable assistance to Public Officials or other State officials dealing with ethical questions and concerns. See EO 127, §4(a). Subject to the jurisdictional limitations mentioned above, this opinion may be relied upon until and unless it is formally modified or rescinded by the full Board. "Rules and Regulations," §VI(d)(i). 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. Ms. Sarah Harris, through her company (SeaLand Consulting), has applied for a "sea grant" under the Fishery Resource Grant Program which is administered by the Sea Grant College Program. The general procedure for reviewing and awarding sea grants under NCGS §113-200 is as follows. Applicants apply for grant funds to the Sea Grant College Program ("SGCP"). The SGCP conducts an anonymous peer review (through out-of-state reviewers) of all applications. The SGCP then ranks proposals and makes a recommendation to the "Grants Committee." The Grants Committee consists of eleven members, two of whom are MFC members appointed by the Chair of the MFC. Four are members of the official "Regional Advisory Committees" appointed by the respective chairs of those committees. The Grants Committee evaluates all proposals and determines the amount of funding, if any, to be awarded to each grant applicant. This is in effect the "final decision" on the grant application. If approved by the Grants Committee, the SGCP awards and administers the grant.

In addition to her independent consulting company, Ms. Harris works for Washington Crab Company, Inc. Mr. Jimmy Johnson, Chairman of the MFC, is the president of Washington Crab Company. Ms. Harris lists Mr. Johnson as one of the four "Other participant(s)" in her grant application. In addition, she states that the first "picking season" will be spent at the Washington Crab Company. However, Ms. Harris states that Mr. Johnson will be offering the use of his picking/packing areas for data collection only and "will have no responsibility for the actual project completion." Nothing in Ms. Harris’ application or the attached documentation indicates that either Mr. Johnson or the Washington Crab Company will receive any financial benefit for allowing Ms. Harris to use their facilities. Mr. Johnson has confirmed that neither he nor his company has any financial interest in the grant. 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.

You have asked whether awarding a grant to Ms. Harris under the foregoing circumstances and particularly in light of her relationship with Mr. Johnson and the Washington Crab Company would constitute either a conflict of interest or the appearance of a conflict of interest. In the context of Executive Order 127, the basic rule of conduct for Public Officials is that they must perform their official duties in a manner to promote the best interests of the public. EO 127, § 7. This encompasses avoiding not only conflicts of interest but also the appearance of conflicts 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. An appearance of conflict may exist even in the absence of a true conflict of interest.

For the reasons set forth in the introduction to this letter, the Board cannot officially answer this question from the perspective of the Grants Committee. However, I do not believe that considering Ms. Harris’ grant request under these circumstances would create either an actual conflict of interest or enough of a reasonable appearance of conflict of interest to taint the grant process, particularly in the absence of any indication that either Mr. Johnson or the Washington Crab Company will receive any compensation for allowing Ms. Harris to conduct her research at the Company. The only problem in this case is the fact that Mr. Johnson has a connection to both the applicant (as a "participant" and supporter) and the body assigned to pass judgment on the application (the Grants Committee through his two appointees to that 11-member committee). Viewed from the perspective of the "Public Officials" covered by EO 127, I still do not believe the connection is sufficient to create an actual or reasonably perceived conflict of interest. Despite the connection between the MFC chairman, the grant applicant, and the decision-making body, I do not believe a "reasonable person" would conclude that the Grants Committee in general or the two MFC members in particular would allow such a tenuous, non-financial interest to compromise the public interest. If, however, the two MFC members of the Grants Committee feel that their personal relationship with Mr. Johnson is such that they cannot give an unbiased review of Ms. Harris’ grant application, they can and should disclose such relationship to the presiding officer and consider removing themselves from the process. See EO 127, § 7 (b) (2).

If all legal concerns are adequately addressed, the Committee may, as you suggest, be able to significantly reduce if not totally eliminate any appearance concerns by asking Ms. Harris not to rely on Mr. Johnson as a "participant" in the project and/or having the two MFC appointees to the Grants Committee not vote on this grant application. However, I do not believe this conservative approach would be mandated by the Board of Ethics.

Finally, your request shows a high degree of sensitivity to the ethical ramifications, both real and perceived, of public decision-making (whether technically covered by an ethics order or not), 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 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, Board of Ethics

Mr. Jimmy Johnson, Chairman, Marine Fisheries Commission

Mr. Dan McLawhorn, General Counsel