July 18, 2003

Francis W. Crawley

Special Deputy Attorney General

North Carolina Department of Justice

Post Office Box 629

Raleigh, North Carolina 27602-0629

Conflict of interest and the appearance of conflict of interest in the context of

a Public Official’s limited, contract employment with an environmental advocacy organization

Dear Mr. Crawley:

This final advisory opinion is in response to your letters of April 22 and May 5, 2003, as well as supplemental information provided to the Board on July 17, 2003, dealing with conflict of interest and the appearance of conflict of interest in the context of Mr. Besse’s membership on the Environmental Management Commission ("EMC" or "the Commission") and his new contract employment with the Conservation Council of North Carolina ("CCNC" or "the Council"). Specifically, you ask whether given Mr. Besse’s recent change from full-time employment with the CCNC to that of an independent contractor on a project-by-project basis, with a corresponding change in employment responsibilities, do the standards and restrictions of previous advisory opinions dealing Mr. Besse still apply?

As you know, on May 13, 2003, I issued a preliminary advisory opinion according to the Board of Ethics’ ("BOE" or "the Board") "Internal Operating Procedures," which preliminary opinion could be relied upon until and unless formally modified or rescinded by the full Board. The Board met on Friday, July 18, 2003, and considered the preliminary opinion and Mr. Besse’s suggested changes thereto. This is the Board’s final advisory opinion on this request.

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.

As you know, the impact of Mr. Besse’s employment with the CCNC was the subject of two advisory opinions in late 2000. See AO-00-007-A and AO-00-007-B (the latter opinion superceded the former for the most part). Unless noted otherwise, I understand the basic facts pertaining to the EMC and CCNC remain the same, and they are incorporated herein by reference. I will repeat only those that need emphasis in light of the new request.

Mr. Besse was formerly employed as the Conservation Political Director for the CCNC, an environmental advocacy organization. The Council is a membership organization. It has both individual and organizational members. While organizational members do not set Council policy or direct staff members, they may be represented on a Lobbying Advisory Council ("LAC") which advises the Council on policy issues. Among other things, member groups of the LAC advise and guide CCNC’s lobbying efforts by helping develop CCNC’s legislative agenda. LAC members also have access to the Council’s full-time environmental lobbyist and are given special briefings during the legislative sessions.

CCNC has as many as 1500 individual members. Prospective members are not "screened" in any way. All that is required to become a member is to provide some basic personal information (name, address, phone number) and submission of the appropriate membership contribution (from $10 to $30).

In addition to the basic "membership contributions" (dues), both individual and organizational members sometimes make donations to the CCNC. Some of these donations are significant. CCNC members receive an annual contribution solicitation letter for general organizational support. On behalf of its "attached" political action committee ("PAC"), the CCNC solicits donations from certain members. As Conservation Political Director, Mr. Besse would sometimes personally call select members to ask for additional donations. He did not solicit donations from group members.

Mr. Besse’s employment relationship with CCNC has changed. He is no longer a Council employee in general or the Conservation Political Director in particular. As of May 1, 2003, Mr. Besse became an independent contractor. He now provides contract services on a project-by-project basis. His initial contract will involve writing and editing a weekly bulletin on state legislative and political environmental news. He will not regularly attend or participate in CCNC board meetings. Moreover, his present contract does not involve the solicitation of contributions from CCNC members, and Mr. Besse does not anticipate performing that type of service in the future.

In AO-00-007-B, the Board of Ethics established the general parameters for when Mr. Besse should be allowed to participate in (a) contested cases or (b) rulemaking proceedings involving (i) his employer (CCNC) or (ii) its members, given his current financial and/or "personal" relationship with each. While all opinions are fact-specific, this one made special note of the unique connection between Mr. Besse, his employer, and the employer’s members:

This case involves a significant, and perhaps even extreme, financial interest in the form of not only an employer-employee relationship but also a relatively unique and near-symbiotic relationship between employee, employer, and employer-members. There is direct involvement here between the employee/Public Official and at least some of his employer’s members. This case involves much more than a situation where someone "draws a paycheck" from an entity involved in the public decision-making process. In that respect, it may help define the limits of allowable participation in quasi-legislative rulemaking.

AO-00-007-B (October 9, 20020), page 4. Indeed, the Board determined that despite this significant personal and financial relationship, Mr. Besse should generally be allowed to participate in rulemaking proceedings when either CCNC or its members merely comment on proposed rules. The same result obviously holds true under the current situation.

Likewise, on the other end of the spectrum, Mr. Besse recognizes and acknowledges that he should not participate in either a contested case involving his contract employer, CCNC, or in a rulemaking proceeding when CCNC is the petitioner.

The most difficult question involves Mr. Besse’s possible participation when a CCNC member is a party to a contested case or a petitioner in a rulemaking proceeding. In AO-00-007-B, the Board found that Mr. Besse should not so participate "[b]ecause of the significant relationship, both financial and otherwise, between Mr. Besse, CCNC, and CCNC’s members." AO-00-007-B, page 5. The Board made it clear that it was dealing with "a significant, and perhaps even extreme, financial interest" in the original Besse situation. That situation appears to have changed.

Consequently, based on the facts of this case, Mr. Besse should generally be allowed to participate in both contested cases and rulemaking proceedings when a mere CCNC member is a participant. There are many caveats, however, and Mr. Besse should exercise extreme caution to avoid real or apparent conflicts in particular cases.

For example, Mr. Besse should not participate in cases involving members whom he has personally solicited for donations while the CCNC’s Conservation Political Director, or with whom he has worked on a specific project or program, or with whom he had or has a significant relationship. In addition, because of their access to and close association and relationship with CCNC’s leaders and policymakers, including the board of directors, Mr. Besse should exercise extreme caution when an LAC member is a party to a contested case or the petitioner in a rulemaking proceeding.

Moreover, Mr. Besse should observe a general "cooling off" period for a reasonable length of time, depending on the nature of the proceeding (contested case vs. rulemaking), the particular member involved, and other relevant factors. See, e.g., AO-02-002 (April 24, 2002); AO-00-008 (September 11, 2000); AO-98-014 (July 31, 1998). This would be determined on a case-by-case basis with an eye toward avoiding even the appearance of a conflict of interest. Executive Order One ("EO One" or "the Order"), section 7 (b). Furthermore, Mr. Besse would always be free to remove himself from the decision-making process if he feels that personal, financial, or professional interests or associations could improperly influence, or appear to influence, his objectivity in a given situation. If doubts still exist, Mr. Besse should seek appropriate guidance from the presiding officer and the Commission’s legal counsel pursuant to section 7 (b) (2) of the Order.

In all cases involving either CCNC or one of its members, Mr. Besse should fully disclose the situation before going forward in the process.

I hope this opinion adequately addresses your request. If you have any questions or would like to discuss Mr. Besse’s potential participation in a specific situation, please do not hesitate to call on me.

Sincerely,

Perry Y. Newson

Executive Director