AO 99-015

September 8, 1999

Mr. Ricky Wright, Commissioner

Alcoholic Beverage Control Commission

4307 Mail Service Center

Raleigh, North Carolina 27611-6687

Re: ABC Commission

Conflict/Appearance of Conflict regarding Gale Force exemption petition

AO-99-015

Dear Mr. Wright:

I am happy to respond to your August 27, 1999, request for an advisory opinion regarding any potential conflict or appearance of conflict in the context of your participation in the Alcoholic Beverage Control Commission's ("ABC Commission" or "the Commission") decision on Gale Force Sports and Entertainment's ("Gale Force") exemption petition given your membership in the NC State Student Aid Association, Inc. (commonly known as the "Wolfpack Club").

The following preliminary advisory opinion is issued by the staff of the Board of Ethics ("BOE" or "the Board") according to the Board's "Rules and Regulations" and may be relied upon until and unless it is formally modified or rescinded by the full Board. 1 Once the Board formally approves, modifies, or otherwise disposes of the preliminary opinion, all pertinent parties will be so notified.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. Among other things, the ABC Commission oversees the sale, purchase, transportation, manufacture, consumption, and possession of alcoholic beverages in North Carolina. On August 4, 1999, Gale Force petitioned the Commission for an exemption from the exclusive outlet provision (N.C.G.S. §18B-1116). The petitioner (Gale Force) is seeking permission to engage in cooperative advertising with Anheuser-Busch, Inc., an industry member. Gale Force proposes to be the exclusive retailer/concessionaire at the Raleigh Entertainment and Sports Arena ("Sports Arena" or "the Arena"). The North Carolina State University basketball team will play its home games in the new Sports Arena. The Wolfpack Club is a non-profit organization which provides scholarships for North Carolina State University ("NCSU") student-athletes. It currently has over 12,000 members. You have just become a lifetime member of the Wolfpack Club. The Wolfpack Club does not have any direct financial relationship with the Arena. 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.

As you acknowledge, as a covered "Public Official," you are subject to Governor Hunt's Executive Order 127 (as modified by Executive Order 131) (collectively, "EO 127" or "the Order").2 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 involves avoiding both conflicts of interest and the appearance of conflicts of interest. A Public Official shall not knowingly use his or her position in any manner which will result in financial benefit, direct or indirect, to the Official or a "business" with which the Official is associated. EO 127, § 7 (a) (1).

Section 7 (b) of the Order addresses appearances of conflict of interest. Public Officials must 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. An appearance of conflict may exist even in the absence of a true conflict of interest. EO 127, § 7 (b) (1).

I do not believe the present situation rises to the level of a prohibited conflict of interest or the appearance of conflict of interest. The Wolfpack Club has no business or financial relationship with Gale Force, Anheuser-Busch, or the Sports Arena. The granting or denying of an exemption to Gale Force and Anheuser-Busch will not bestow any reasonable, measurable financial benefit on either the Wolfpack Club or you.

While a lifetime member, you are not currently an officer, director, or otherwise in a policy-making position in the Wolfpack Club. Generally, the mere fact of membership in an organization does not, in and of itself, give rise to a conflict of interest or the appearance of conflict in a matter involving such organization.

As to the appearance of conflict, a "reasonable person" would not conclude, under the current circumstances, that membership in a non-profit State university athletic booster organization would unduly influence a Public Official's decision on whether to grant an exemption to two private businesses who wish to be the exclusive concessionaire at the arena where the university plays its basketball games. Any "personal interest" in this matter is extremely tenuous at best and not the type or degree addressed by the Order.

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 questions raised in your request, but if it does not, please do not hesitate to call on me for further discussion and analysis.

Sincerely,

Perry Y. Newson

Executive Director

cc: Chairman, ABC Commission

Ms. Jane F. Finch

1 Normally, the Board's Chairman reviews the Executive Director's preliminary opinion prior to release. Because of the Chairman's relationship with the ABC Commission, however, the Vice-Chairman, Jane F. Finch, has assumed that role and approved this preliminary advisory opinion.

2 Executive Orders 127 and 131 superseded and replaced former Executive Order 1.