2006 State Governmental Ethics Act and Lobbying Act

1. 2006 State Governmental Ethics Act and Lobbying Act Presentation to University Council October 24, 2006

2. Purpose and Framework of Recent Ethics Legislation • To assist individuals in identifying and avoiding conflicts of interest • Establishes certain Standards of Ethical Conduct • Requires Disclosure of Economic Interests • Creates Ethics Commission with defined responsibilities for compliance

3. Who are “Covered Persons” • Covered Person for UNC • Voting Members of the Board of Governors and Board of Trustees • President and Vice Presidents • Chancellor and Vice Chancellors • Others? • Possibly voting members of Boards (other than advisory) created by statute or executive order as determined and designated by the Commission • Under the Lobbying Act, a “Covered Person” is also a “Designated Individual” (DI)

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

5. 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

6. Ethical Standards • Can’t use public position for private gain • Can’t accept outside compensation for carrying out official responsibilities • 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

7. Ethical Standards (continued) • Can’t participate in discretionary official action if a conflict of interest exists • Can’t cause appointment to public position or employment of or participate in employment decisions or supervision of family members without authorization of NCSU • Can’t solicit charitable contributions from subordinate employees

8. Ethical Standards - Gifts • A Gift is anything of monetary value given or received without valuable consideration from • a lobbyist • lobbyist principal • a person doing or seeking to do business with NCSU • A person who is regulated or controlled by NCSU or has financial interests that may be substantially and materially affected by the performance or non-performance of the public official’s duty.

9. 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

10. Gifts – 4 basic rules for Covered Persons • Can’t ask for or accept anything of value in return for being influenced • Can’t solicit charitable contributions from subordinate employees (except generic written solicitations to a class of employees) • Can’t accept a gift directly or indirectly from a lobbyist or a lobbyist’s principle • Can’t accept a gift from an entity you know or should know is doing business with, seeking to do business with, is regulated or controlled by NCSU or whose interest would be affected by your actions

11. 10 Gift Exceptions – permitted gifts • Covered Persons and DI’s may received permitted gifts • Gifts received for the purpose of lobbying are reportable expenditures by DI’s under the Lobbying Act • NCSU may give permitted gifts to DI’s but they are reportable if for the purpose of lobbying (which includes development of good will) • University administrators acting on behalf of UNC must keep track of gifts and NCSU must develop a system for reporting

12. 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

13. Gift Exceptions • 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

14. Gift Exceptions • 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

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

16. 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 • Knowingly concealing or failure to disclose material information is misdemeanor • Providing false information is a felony

17. Lobbying Law • UNC “covered persons” are “designated individuals” who are subject to being lobbied and thus have similar restrictions as those imposed on legislators • UNC and constituent institution legislative liaison personnel who represent us before the legislature are not lobbyists but they must register and report lobbying expenditures • UNC and constituent institutions are not lobbyist principals but must report lobbying expenditures beyond those reported by liaison personnel

18. 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

19. Reportable expenditures • DI may not accept prohibited gifts from lobbyist or lobbyist principle (gift is okay if within gift exceptions of State Ethics Act but reportable) • If lobbyists have reportable expenditures on behalf of DI, DI’s will be the subject of the lobbyist’s report (gifts made for the purpose of lobbing) • 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) – on SEI

20. UNC gifts to Designated Individuals • Permits gifts from UNC and constituent institutions to DI’s but if for the purpose of lobbying they must be reported. • Exception: legislative liaison personnel may not give prohibited gifts to legislators or legislative employees.

21. Reportable Expenditures • Persons not covered by the Lobbying Act must report lobbying expenditures that a legislator or other DI accepts • Thus, if NCSU official gives a gift to a designated individual for the purpose of lobbying (includes good will gifts) which is valued over $200 per calendar quarter per DI, it must be reported. Thus, official must keep record of expenditure and its value.

22. NCSU Athletic Tickets • NCSU may not 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 who gets tickets by virtue of student status on same terms as other students • FMV may be paid • Parking tickets if with ticket must be paid • Pre-game food (public event) • Personally owned tickets?

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

24. Questions?