2006 Ethics and Lobbying Act Effective January 1, 2007 Presentation to University Council October 24, 2006

Ethics Act - Purpose and Framework To assist individuals in identifying and avoiding conflicts of interest Disclosure of Economic Interests by Covered Persons (and immediate family) Establishes Standards of Conduct Creates Ethics Commission with defined responsibilities for compliance

“Covered Persons” Covered Person for UNC (public servant) Voting Members of the Board of Governors and Board of Trustees President and Vice Presidents Chancellor and Vice Chancellors Others? Boards (other than advisory) created by statute or executive order as determined and designated by the Commission

State Ethics Commission Creates State Ethics Commission Receive and review all SEI’s Receive and investigate complaints Render advisory opinions Implement mandatory ethics education

Mandatory Education Education must be by or approved by, the Ethics Commission For those in office on 1/1/07, before 1/1/08 Within 6 months after appointment or reappointment & every 2 years thereafter In addition to covered persons, all staff who report directly to a covered person

Ethical Standards Use of Public Position for Private Gain Can’t knowingly use public position to result in financial benefit to self, extended family or associated business Can’t mention public position in non-govt. advertising that advances private interest Can’t use state funds for ads/public service announcements that contain person’s name, picture, voice

Ethical Standards Additional Compensation Can’t accept outside compensation for carrying out official responsibilities Strict rules on acceptance of honoraria

Ethical Standards Use of Information for Private Gain Can’t use or disclose non-public information for private financial benefit (includes financial benefit to members of extended family or businesses with which person is associated) May not improperly use or disclose any confidential information

Ethical Standards Participation in Official Actions With limited exceptions, a covered person may not participate in any discretionary official action in which person has an economic interest if it could be reasonably inferred that the interest would impair the person’s independence of judgment. Employment and supervision of members of covered person’s family May not cause employment or appointment of member of extended family to position which person supervises or supervise, manage or participate in employment decision a family member without authorization of NCSU.

Ethical Standards - Gifts Anything of monetary value given or received without valuable consideration by or from a lobbyist lobbyist principal a person doing or seeking to do business with NCSU or A person who is regulated or controlled by NCSU

Gifts Not a gift if FMV or face value is paid for it It is a commercially available loan made on terms not more favorable than generally available and not for purpose of lobbying It is a contract or business agreement made in the normal course of business and not for purpose of lobbying It is an academic or athletic scholarship It is a campaign contribution properly reported

Gifts – 5 basic rules Don’t ask for or accept anything of value in return for being influenced Don’t solicit charitable contributions from subordinate employees (except generic written solicitations to a class of employees) Don’t accept a gift directly or indirectly from a lobbyist or a lobbyist’s principal

Gifts – 5 basic rules (cont’d) Don’t accept a gift from an entity you know or should know is doing business with, seeking to do business with or regulated or controlled by NCSU Don’t accept gift from persons having a financial interest that may be substantially affected by public servant’s official action.

10 Gift Exceptions Food/beverages for immediate consumption at public events Informational material relevant to the persons duties Travel and registration expenses in connection with attendance at educational meeting or participation as speaker or panel member (if meets detailed requirements) Plaque or similar memento recognizing service

Gift Exceptions (cont.’d) Gifts accepted on behalf of/for benefit of the State Gifts distributed to the general public or all state employees Gifts from extended family or member of same household Travel expenses associated with public business of industry recruitment, promotion of international trade or promotion of travel and tourism for employee with these official responsibilities

Gift Exceptions (cont.’d) Gifts worth less than $100 as part of an overseas trade mission if it is customary protocol Gifts given or received as part of a relationship that is business, civic, religious, fraternal, personal or commercial The relationship is not related to the person’s public service or position A reasonable person would conclude that gift was not given for purposes of lobbying

What to do with a prohibited gift Decline it Return it Pay FMV for it Immediately donate it to charity or to the State

Civil Sanctions for Violations Willful failure to comply with the Act subjects public servants who are employees to disciplinary action by their employer Willful failure to comply with the Act subjects public servants who are board members to removal from office Fines may be levied for late filing of SEI Non filing of SEI may result in being fired or not being able to take the position Knowingly concealing or failure to disclose material information is misdemeanor Providing false information is a felony

Lobbying Law Covers “Designated Individuals” Legislators, Leg.employees and Public Servants NCSU appoints legislative “liaison personnel” who must register and file reports of lobbying expenditures in the same manner as lobbyists [$10 per DI per day [120C-400] No state funds may be used to contract with non-state employees to lobby legislature Bans prohibited gifts from lobbyists, lobbyist principals

What is lobbying? Attempting to influence legislative or executive action through direct communication or activities Developing goodwill through communication or relationship building with the intent of influencing legislative or executive action But not communication or activities that are part of a business, civic or personal relationship not connected to legislative or executive action

Reportable expenditures DI may not accept prohibited gift from lobbyist or lobbyist principal (gift is okay if within gift exceptions of State Ethics Act) If lobbyists have reportable expenditures on behalf of DI, DI’s will be the subject of the lobbyist’s report (gifts) DI must report accepted gift over $200 made for purposes of lobbying from individual outside NC (includes grants in aid to attend conferences/similar events)

Reportable Expenditures Persons exempted or not covered by the Lobbying Act must report reportable expenditures [120C-800(a)] NCSU and officials invited to appear before committees or who appear before governmental agencies as part of their official duties are exempt If NCSU official gives a gift to a designated individual for the purpose of lobbying (which includes attempting to build goodwill) which when aggregated are valued over $200 per calendar quarter per designated individual, then NCSU must report it.

NCSU Athletic Tickets Neither UNC nor any constituent institution may give athletic tickets to any DI for the purpose of lobbying unless the DI is a Board member, a designated senior officer, or a student of a constituent institution Parking tickets Pre-game food Personally owned tickets?

Sanctions Criminal Sanctions for willful violation of reporting requirements Fines may also be levied

Contact NCSU Ethics Liaison: Mary Elizabeth Kurz, Vice Chancellor & General Counsel (919) Questions?