AO 90-003

October 4, 1990

Mr. Daniel F. McLawhorn, Special Deputy Attorney General, Post Office Box 629, Raleigh, North Carolina 27602-0629

Re: Clarification of opinions regarding conflicts of interest by members of State boards and commissions

Dear Mr. McLawhorn:

It is the position of the Board of Ethics that appointees to state boards and commissions as well as state employees should not use their public position for private gain.

As such, a board member or state employee should not participate in, vote on, influence, or attempt to influence an official decision if he or a business or organization with which he is associated has;

a. a financial interest in, or

b. a reasonably foreseeable benefit from the subject under consideration by the governmental entity he is serving.

Regulatory boards and licensing boards have industry member appointees as mandated by the statutes governing them, we certainly have no quarrel with this requirement. However, this requirement does not relieve the member from his obligation to protect the statewide public interest. So the question is how do you carry out official duties in such a way that you do not have a conflict of interest between your private interests and your official duty.

We believe one should never vote on any matters affecting him or his affiliations only. Some examples are: permits, licenses, and disciplinary actions.

We believe one should enter into the official record any potential conflict of interest that he may have. It should be noted that while sunshine does not eliminate the potential for conflict of interest, it does go a long way toward making it acceptable.

In cases where the official decision would primarily benefit the appointee, or his affiliations, even though it could be considered a statewide rule, he should abstain. For example, an appointee has ocean front land that he is unable to build on because of the setback regulations. He should not initiate or take part in any matters causing the statewide setback requirements to be changed simply because he wants to build on his own property. However, if the available data indicates that it is in the best interests of the public for the statewide setback requirements to be changed, and it just happens to benefit the appointee as well, then he should be allowed to participate in the official decision making process.

Since we do not know all the variables of the various situations, it is extremely difficult to set forth concrete rules for appointees or employees to follow in order to avoid even the appearance of conflict of interest. However, we will attempt to clarify our position by addressing your hypotheticals.

1. May a commercial fisherman or a fish dealer who is a member of the Marine Fisheries Commission vote or participate in discussions on a proposed rule increasing the size limit for species he harvests or sells?

Yes, unless the action is taken to primarily benefit him or a small group rather than the statewide public interest.

2. May a coastal property owner, including a homeowner, vote on rules that will affect the economic value of their property?

Yes, unless the rules are designed specifically to benefit him or a small group rather than the statewide public interest.

3. May a paid professional consultant vote on rules affecting industries or other regulated entities which may employ or have employed the member?

Appointees in this category have high potential for conflict of interest as well as the appearance of conflict of interest.

An appointee is always open to a conflict of interest charge if he has had clients who are affected by commission actions. Even if actual conflict of interest is ruled out, the appearance of conflict of interest destroys citizen confidence and gives the impression that the commission is not protecting the statewide public interest.

Therefore, consultant type appointees must always stay on guard to keep potential conflicts of interest from developing into an actual conflict of interest.

If the water quality standards, stream classifications, and air emission limits are of a statewide nature, the potential for conflict of interest would probably not develop into an actual conflict of interest for an appointee. However, as previously stated in the Charles Baker letter dated July 16, 1990, it is our recommendation that any commission members as well as chairmen should abstain from discussions and votes on matters in which they have any personal pecuniary interest. Each commission member has to make this personal determination for his or herself. Each commission member will have to live with their decision to participate or abstain. We believe that they should err on the side of remaining absolutely out of matters that could put them in a potential conflict of interest posture.

Sincerely,

K. D: Kennedy, Jr., Chairman

cc: Board of Ethics

' Mr. Charles Baker, Chairman, EMC

Mr. James Harrington, Chairman, CRC

Mr. Thomas Bennett, Chairman, MFC

Secretary William Cobey, DEHNR

Mr. John Hunter, General Counsel, DEHNR