Office of General Counsel

Conflicts of Interest

 

Introduction

General Considerations

Conflicts of Interest Definitions

Conflicts of Interest Rules

Disclosure of Substantial Interest—Who, When, and How?

 

Introduction

There are certain conflicts of interest situations that must be avoided by ASU faculty and staff. These situations are prescribed by Arizona state law. The Office of General Counsel has developed this Briefing Paper in question and answer format to help faculty and staff understand their obligations under the policy.

It is the responsibility of every staff member working for ASU to be familiar with the ASU Conflict of Interest Policy. Under the policy and state law, it is the obligation of the employee to recognize a potential conflict of interest, and to disclose that interest using the University’s Disclosure of Substantial Interest Form, (Word) or (PDF).

The ASU conflicts of interest policy for both staff and faculty is found in the Academic Affairs ManualACD 204–08, "Conflict of Interest." Researchers are also responsible for, and subject to, the policy pertaining to researchers in the Research and Sponsored Projects Manual, RSP 206, "Objectivity in Research—Disclosure of Financial Interests and Management of Conflicts of Interest."

If after reviewing the policies, the briefing paper, and the disclosure form, you still have questions about your responsibilities, please contact the Office of General Counsel.

General Considerations

Are there any conflicts of interest considerations when ASU faculty or other ASU employees desire to do work for another Arizona public entity?

Yes. If an ASU employee desires to work for another Arizona public entity, the ASU faculty member or other employee should consider the application of the Arizona conflicts of interest laws in two respects. First, the ASU employee should evaluate how the conflicts of interest laws apply to him or her as an ASU employee. Second, the ASU employee should consider how the Arizona conflicts of interest laws apply to this or her role with the other Arizona public entity.

Are there any differences between what researchers need to file versus general ASU employees?

Yes. If you are an ASU researcher, regardless of whether the potential conflict of interest originates with the research being conducted, you must file disclosure of substantial interest with the Office of Research Integrity and Assurance.

What are the possible consequences of not complying with the conflicts of interest rules?

Yes. Violation of the conflicts of interest rules may result in employee discipline; including dismissal, as well as criminal prosecution.

Conflicts of Interest Definitions

What terminology do I need to review in order to understand the conflicts of interest policy?

Refer to "Definitions" in the Academic Affairs ManualACD 204–08, "Conflict of Interest."

Conflicts of Interest Rules

What is the most common conflicts of interest rule?

Refer to Rule One (A.R.S. § 38-503 A and B) in the Academic Affairs ManualACD 204–08, "Conflict of Interest."

Note: This rule is complex due to very broad definitions of "relative" and "substantial interest." (Refer to and review the complete list of definitions in the policy.) For example, regarding "pecuniary interest," if the ASU employee "moonlights" for an employer that is about to enter into a transaction with ASU, the ASU employee has a monetary interest because the ASU employee earns compensation from the company. Likewise, if an ASU employee's spouse or other relative works for an employer that is about to enter into a transaction with ASU, the spouse or relative has a monetary interest in the transaction because the spouse or relative receives compensation from the employer.

May an ASU employee do business with ASU? Are there any special requirements?

Yes an employee may do business with ASU, but must follow standard policies and procedures. Refer to Rule Two (A.R.S. § 38-503 C) in the Academic Affairs ManualACD 204–08, "Conflict of Interest."

What other conflicts of interest rules apply to ASU employees?

Refer to the following in the Academic Affairs ManualACD 204–08, "Conflict of Interest":
  • Rule Three (A.R.S. § 38-504 A)
  • Rule Four (A.R.S. § 38-504 B)
  • Rule Five (A.R.S. § 38-505 A)
  • Rule Six (A.R.S. § 38-504 A)
  • Rule Seven (A.R.S. § 38-511)

Can more than one Conflict of Interest rule apply?

Yes. These rules are not mutually exclusive. More than one may apply in any situation. The conduct of the ASU employee must comply with each applicable rule.

Disclosure of Substantial Interest—Who, When, and How?

Who is covered by the conflict of interest rules and who is responsible for compliance with them?

Arizona's conflict of interest statutes apply to "all public officers and employees...of the State" which includes all ASU employees. Consequently, it is the responsibility of each ASU faculty and staff member:

  • to be aware of the conflicts of interest requirements of state law.
  • to recognize conflicts of interest situations.
  • to take the required action in each conflicts of interest situation.

When must the ASU employee disclose the substantial interest?

The ASU employee must file the substantial interest disclosure form before ASU enters into the contract, makes the purchase or sale, receives the service or before ASU makes the decision.

In many cases, the ASU employee will not know precisely when ASU is about to enter into a contract, make a purchase or sale, receive a service or make a decision. Therefore, it is a good idea to file a substantial interest disclosure form as soon as the ASU employee becomes aware of the substantial interest.

Does it make a difference if the ASU employee and the ASU employee's unit are not involved in the contract, purchase, sale, services or decision?

A literal reading of the statute says that if an ASU employee or a relative of an ASU employee has a substantial interest in a contract with, sale to, purchase from, service for or decision by ASU, the employee is required to file a substantial interest disclosure form. This is regardless of whether the employee or the employee's unit is involved in the contract, purchase, sale, service or decision. The employee and the employee’s unit may be far removed from the ASU decision-making process.

What is meant by the requirement to "not participate in the contract, purchase, sale or decision"?

The general rule is that an ASU employee participates in the contract, purchase, sale or decision, if the ASU employee does any of the following:

  • The ASU employee initiates the internal ASU decision-making process on the contract, sale, purchase or decision.
  • The ASU employee analyzes for ASU or otherwise gives advice to ASU about the contract, sale, purchase or decision.
  • The ASU employee makes a recommendation or otherwise communicates in any manner with anyone involved in the ASU decision-making process. The ASU employee makes the final decision on the contract, sale, purchase or decision.
  • The ASU employee is involved in any other way in the ASU decision-making process.

However, the following will not be considered by ASU as "participating in the contract, purchase, sale or decision":

  • An ASU employee may tell appropriate persons within ASU that a contract, purchase, sale, service or decision is needed by ASU when this is within the ASU employee's job responsibilities.
  • An ASU employee may tell appropriate persons within ASU about the availability of a contract, purchase, sale or service.

What if the ASU employee reporting the substantial interest is the person who normally would make the decision for ASU or who would normally handle the contract, purchase or sale for ASU?

The ASU employee who reported the substantial interest may not make the decision or handle the contract, purchase or sale. These actions should be done by another person who has authority to do them.

May the spouse of an ASU employee do business with ASU?

Yes. The standard rule applies. The employee must complete and file a disclosure of substantial interest form. In addition, the employee must not participate in the decision-making process.

Where or to what unit/office must an ASU employee, or researcher, submit the form?

All ASU employees must file disclosure of substantial interest. Most ASU employees will be filing with the Office of General Counsel.

Note: All ASU researchers, regardless of whether the potential conflict of interest originates with the research being conducted, must file disclosure of substantial interest with the Office of Research Integrity and Assurance.

If you are not certain of where to find or submit the appropriate form, contact the Office of General Counsel for more information and guidance.

Are the Disclosure of Substantial Interest forms that are filed kept confidential?

No. Each Disclosure of Substantial Interest form is a public record of ASU and, as such, is available for public inspection upon request.

Must I ever update a Disclosure of Substantial Interest form after I have filed one?

Yes. Each ASU employee is under a continuing obligation to keep his or her disclosures of substantial interests current. Accordingly, an ASU employee should file a corrected or updated Disclosure of Substantial Interest form with the ASU Office of General Counsel, or the Office of Research Integrity and Assurance, whenever information relevant to his or her disclosure changes. If an employee’s substantial interest ceases to exist, the employee should notify the ASU Office of General Counsel (or if the employee is a researcher, notify the Office of Research Integrity and Assurance) in writing so that ASU may note that in its records.

 

Reviewed December, 2010


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