STATE ETHICS REFORM AND ITS IMPACT ON PUBLIC UNIVERSITIES
April 20, 2007
Elizabeth Minott
Rutgers, The State University of New Jersey
New Brunswick, New Jersey
I
State Ethics Reform
Political corruption is endemic in state governments. So are efforts to control and
uproot it. State ethics reform seeks to impose a code of behavior on state employees that
discourages them from misusing their official position for personal gain. This is a laudable
and uncontroversial goal. Yet legislation aimed at preventing malfeasance in the legislature
and in state agencies often has unintended and negative results when applied indiscriminately
to public institutions of higher education. For convenience I will refer to such institutions
collectively as “universities.” 1 Also, for the most part, this article will only address how
ethics reform affects universities with relation to faculty, researchers and administrators who
also have an academic appointment. The ethics laws apply equally to university staff and
administrators but in a manner that usually is not that different from staff and administrators
at other kinds of state agencies.
All universities have internal policies that address ethical issues. The federal
government and funding agencies, such as NIH, also extensively regulate financial conflicts
of interest issues in government funded research. These policies and regulations, however,
are specifically tailored to the culture and activities of a university. The NIH regulations, for
instance are aimed at preventing bias in research. (45 CFR 50, Subpart F).
Typical provisions in state government ethics statutes do not necessarily apply easily
to university culture and practices. In Colorado and New Jersey statutory language meant to
curb bribery and payoffs to state officials currently bar academics from accepting the Nobel
Prize, or at least the money that comes with the Nobel Prize. Nobel Prize winners are of
course just the kind of internationally acclaimed scholars any university would most want to
attract and retain. It is also pretty clear that in neither state was it the intent of ethics
reformers to deny academic prizes to faculty or to discourage the very best researchers from
coming to work for state universities.
1
For the purposes of this article that term encompasses 4-year and 2-year colleges; graduate schools, medical
research centers and any other public institutions that have as their primary mission teaching, research and/or
education.
2. See, Summary of Full Report of the Special Ethics Counsel to the Governor of the State of New Jersey Ethics
Reform Recommendations for the Executive Branch of New Jersey Government, March 14, 2005, Full Report
available at http://www.nj.gov/ethics_report.pdf
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Very generally, among the usual provisions in state ethics statutes and regulations are
the following:
 Prohibitions on using state office for personal gain (e.g. taking a bribe)
 Prohibitions on “side switching,” which is when state officials leave state employ and
then lobby or otherwise represent private interests that are adverse or regulated by the
agency in which the former state employee worked, especially as this representation
relates to specific matters on which the state employee worked while at the state
 Prohibitions on use of state time or state resources for personal purposes (working on
personal business during business hours, or using state equipment or personnel for
personal purposes (e.g. requiring your staff to baby-sit for your children))
 Prohibitions on the receipt of gifts and other items of value by a state official when
these are offered to the official on account of his position at the state, or are related to
his official duties (e.g. regulator for the state allowing regulated entity to wine and
dine him)
 Strict regulation or prohibition on outside employment while also employed at the
state, especially in those circumstances where the outside employment is or could be
perceived as in conflict with the state employee’s state duties
 Prohibition or strict regulation on receipt of compensation for publications, speeches
and public appearances which the state employee undertakes in his capacity as a state
employee
These are, for the most part, commonsense provisions to ensure that public officials do not
abuse the public trust – that regulators are not co-opted by the entities that they regulate; that
people cannot influence public officials in the conduct of their public responsibilities by
money, gifts or other perquisites; that a public officials’ primary commitment is to his state
job and that the public official is not converting public interests and resources into private
ones. It is equally important that the state official also not create the perception of doing any
of the above.
II
Lost in Translation: State Ethics Provisions in the University Context
The commonsense aspect of these provisions can get lost in the university context. For
instance, unless they have pre-approval, the New Jersey Uniform Code of Ethics (“Code”)
prohibits State employees from using State time and resources to publish works. This makes
good sense for an official in the State Department of Transportation (“DOT”). His
publications are most likely assignments (a work for hire) or something that he needs preapproval to do because it will take time away from his normal responsibilities. That approval
depends on whether the proposed publication serves the interest of the DOT. That DOT
employee will not be allowed to write a novel (or any other unassigned and unapproved work)
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on the taxpayer’s dime. By contrast, it is entirely appropriate for a creative writing professor
at a university to write a novel and consider it a legitimate work-related activity. Universities
not only encourage such endeavors, but the professor’s job may depend on productions of
published works. “Appointments, reappointments and promotions may be made in recognition
of accomplishments:... artistic accomplishment in the fields of literature, which is most often
demonstrated through publication, in professionally recognized settings, usually outside the
University.” (Rutgers Policy 60.5.14 Criteria for Appointment, Reappointments and
Promotions).
A. Academic Freedom
Read narrowly, the Code requires the creative writing professor to have each creative
work pre-approved by the university administration. This immediately raises concerns about
censorship, coercion and academic freedom. Regulation routine to other state agencies
challenges the core precepts around which universities are organized. “Since the very nature
of a university and its value to society depend upon the free pursuit and dissemination of
knowledge and free artistic expression, all members of the faculty of this University are
expected, in the classroom, laboratory, and studio, in research and professional publication,
freely to discuss subjects with which they are competent to deal, to pursue inquiry therein, and
to present and endeavor to maintain their opinions and conclusions relevant thereto.” (Rutgers
Policy 60.5.1 Academic Freedom).
B. Outside Compensation
It is a different question whether a faculty member is entitled to compensation for his
published work beyond his State salary (also prohibited by the Code unless the arrangement
has been pre-approved). It is arguable that if a professor earns a State salary then the
economic value of what he produces on State time (however defined) should belong to the
State. The practice in academia, however, is that faculty own their own scholarly work
(books, articles, poems and textbooks (etc.)) and are entitled to the royalties earned on these
works. “By longstanding academic custom and tradition, faculty are free to publish scholarly
and artistic works they have created … This policy reaffirms the faculty’s rights to retain
copyright ownership to the scholarly and artistic works they create … without regard to the
extent of university resources involved in the creation of these works.” (Rutgers Policy 50.3.7
Copyright Policy).
Even when faculty creators are required to disclose and assign ownership of their work
to the University (e.g. patentable inventions) they share the royalties earned on that work with
the University. The usual criterion by which a university claims ownership to intellectual
property “IP” created by faculty is whether the IP was created within the scope of their
employment or with use (often restricted to significant or substantial use) of university
resources. Rutgers Patent Policy requires “all other persons with inventions that result in
whole or in part from use of University facilities or resources” who “make[s] or reduce[s] to
practice an invention or discovery during the course of, or related to his/her University
activities …are required to assign their individual rights to inventions … to the University.”
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(Rutgers Policy 50.3.1 Patent Policy). Typically, use of university resources does not include
salary, normal computer use or use of an office.
C. Official Duties of Faculty
The Code regulates activities related to a State employee’s official duties. It is not
easy to define the official duties of a faculty member. The Collective Agreement between
Rutgers and the AAUP defines “Professional Duties” in the following language “ The
professional duties required of the faculty shall be in accordance with the mission of the
University. Individual workload assignments of members of the bargaining unit shall be
consistent with the practice of their department, program, or unit.” (Collective Agreement
Between Rutgers and Rutgers Council of the AAUP (2003-2007) Article XV). That is vague
and, in practice, only controls teaching and service, since the direction and form of research is
generally left to the discretion of the faculty member. Very few duties of faculty are really
specified, though there are certainly expectations of scholarly and creative work.
The autonomy that faculty enjoy to schedule their time, to decide what to work on, to
determine how to do their research, to choose how and when to publish their work, even to
choose where to do their work make them a unique kind of State employee. The practices,
expectations and freedoms of academic life can mesh uncomfortably with ethics regulations
that are imposed in an undifferentiated manner on all State employees. In their work, State
officials represent the State position and are often required to apply State regulations to other
parties. When they speak or act in their official capacity - they speak and act for the State. A
faculty member pursuing teaching or research does not regulate other parties in the manner of
State officials and is not expected to speak or act for the State or even the university when
teaching or conducting his own research. They are in many respects independent actors
despite their official status as State employees.
III
New Jersey Ethics Reform
This article will touch on the following topics 1. Origins of recent ethics reform in
New Jersey; 2. Relevant provisions of the Code and its possible implications; 3. The initial
application of the Code to the State universities; 4. The response of the universities; 5.
Relevant examples related to ethics reforms from other states and, finally, Rutgers’
compliance plan (with reference to policies at other state universities). What follows is a
description of the ethics law in New Jersey and its ongoing implementation, and its potential
impact on State universities.
In forming its response to the new ethics laws and regulations, Rutgers relied
extensively on the experience in other states that had similar reforms. We looked for
examples in the law that addressed the particular issues of state universities. We also
borrowed from other state universities to find well crafted university policies and guidelines
that explain and implement the complexities of these ethics statutes and regulations.
University counsel in New York, Texas, Minnesota and California in particular have done a
lot of hard work in drafting policies, guidelines, websites and other materials to comply with
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ethics statutes. At the end of this paper, websites are cited where some of these excellent
models can be found.
A. Origins of Recent Ethics Reform in New Jersey
The impetus for recent ethics reform in New Jersey was a series of scandals in which
public officials abused their official positions for personal gain. These resulted in bi-partisan
support for sweeping ethics reform. In this climate, arguing for exemptions or exceptions to
general ethics regulation, even for the highest-minded reasons, has become a delicate and
politically volatile challenge. An added complication in the New Jersey context is that
universities have themselves been caught up in several high-profile corruption scandals. This
has focused the attention of ethics reformers on institutions of higher learning.
B. Special Ethics Counsel
In 2004 a former judge and law professor were appointed as Special Ethics Counsel to
the Governor. In their final report on the state of government ethics in New Jersey, the
Counsel made the following recommendations which were subsequently implemented. 2
 Strengthen the authority of the State Ethics Commission
 Require the Ethics Commission to conduct mandatory ethics training
for all State employees
 Enable the Ethics Commission to carry out regular “Ethics Audits”
 Enact a Uniform Ethics Code to be distributed to all State employees
 Promulgate a Plain Language Ethics Guide to be distributed to all State
employees
 Require every State employee to certify that he or she has read the
Code and Plain Language Guide, understands the law and will abide by
its terms
 Adopt rigorous post-State employment restrictions especially with
regard to the use of confidential information
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C. Rutgers Autonomy
The New Jersey conflicts of interest statute (NJSA 52:13D-12 et seq.) applies to all
“state agencies,” which are defined, in part, as all departments, divisions and instrumentalities
created within the executive branch of the State government. (NJSA 52:13D-13(a)). Rutgers
has a uniquely autonomous status for a public university in New Jersey because it used to be a
private university and was transformed by special statute into the State University of New
Jersey. There is a complicated set of cases and regulatory decisions trying to define what
Rutgers is, exactly, in relation to state government. This gives the University some possible
flexibility on how to implement the new Code and guidelines internally.
The law differs in each state as to the exact legal status of public universities vis a vis
the state. Depending on what it says, this definitional law may influence the degree to which
the university can control the implementation and administration of ethics laws and
regulations internally.
D. The Uniform Ethics Code
In September 2006 the Ethics Commission promulgated the new Uniform Code of
Ethics which is now the primary code for ethics for all state agencies in New Jersey. (Full text
available at the Commission’s web site www.nj.gov/ethics). The State specifies that the Code
will govern in the case where the agency’s own code of ethics is less stringent than the
Uniform Code (presumably, though unstated, “less stringent” in the opinion of the Ethics
Commission). Confusingly, nowhere does the Code state whether its own provisions or the
provisions of the conflicts of interest statute already on the books are more authoritative.
Mostly, they overlap, but certain provisions of the conflicts statute allow activities on which
there is seemingly a blanket prohibition in the Code. As of yet, the State has provided no
specific guidance on the matter and the Code simply states that both the Code and the
conflicts of interest statute must be considered when approving actions regulated under either
set of laws.
The Code includes the following provisions that are pertinent to universities:
(i)
Ethics Liaison Officer
 Required appointment in each agency of an “Ethics Liaison Officer”,
defined as the individual designated by the agency to implement and
enforce the ethics laws and codes (“ELO”) (Code Article I)
At Rutgers the ELO is the Executive Vice President of Academic Affairs. The
University decided it was important to have as ELO someone from the highest administrative
levels of the University to make clear the importance of new ethics policies and procedures
and to lend the full authority of the University administration to the compliance effort. Other
universities in the State have appointed lower-level administrators who can devote themselves
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full-time to compliance issues. In the Code the authority of the ELO to delegate
responsibilities is not clearly spelled out.
(ii)
Definition of Adjunct Faculty
 “Special State officer or employee” is defined, in part, as any part-time
employee (other than a legislator) of any State agency (Code Article I)
This is significant because adjunct faculty fall in this category and some of the new
requirements in the Code do not apply to Special State Employees. For instance the
requirement to disclose all outside activities (even volunteer ones) does not apply to this
category of employee. This avoids a huge administrative burden on both the universities and
the adjunct faculty. It is entirely possible, however, that this careful reading of the Code
results in an unintended loophole that either the Ethics Commission or the legislature will
move to close.
(iii) Confidential Information
 No State officer or employee is permitted to disclose (whether for
money or not) any information not generally available to members of
the public that he/she receives or acquires in the course of State
employment (Code Article II)
Read strictly, this stops publication of academic research dead in its tracks. Any
worthwhile research involves original information (i.e. not generally available) and publishing
such research would undeniably be disclosing it. Clearly the statutory language is aimed at
State employees who use confidential information obtained in the course of their State
employment in inappropriate ways for personal gain. Its purpose is not to prohibit publication
of academic research. Because the statutory language is so broad, however, State universities
need either a binding interpretation by the Ethics Commission, or an opinion from the
Attorney Generals or a legislative amendment that makes explicit that academic research does
not fall under the kind of “information not generally available to the public” that is envisioned
in the Code.
Despite the dire implications of the provision, the argument to exempt academic
research from the confidential information provision is actually one of the easier arguments to
make, because it involves permitting an activity that is so central to the mission of a
university, and because it is so obvious that the ethical problem the provision attempts to
regulate has nothing to do with academic research. The change we seek here is unlikely to be
politically difficult to achieve, and in informal discussions with the Ethics Commission it has
indicated that it has no intention of applying this confidentiality provision to academic
research in a way that will block ordinary scholarly activity.
(iv) Gifts
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 No State officer or employee can accept any gift related to his/her
public duties. Any gift received or offered has to be reported to the
ELO and the gift itself must be remitted to the ELO who has to keep a
record of the incident. “Gift” is defined as anything of value.(Code
Article III; Appendix A)
This is a stricter definition than in the previous ethics code and represented a new
“zero-tolerance” attitude to receipt of gifts by State employees. There is no really good
reason to argue that University employees should be exempt from this stricture. It is difficult,
however, to figure out how to enforce this rule. For one thing, as noted, it is hard to precisely
define the “official” or “public” duties of an academic employee. It is clear, for instance, that
contracting officials at the University should not accept valuable gifts from vendors that could
be reasonably expected to influence their judgment in awarding contracts. On the other hand,
does the University now have to prohibit distribution of Christmas cookies at holiday time to
a professor? The Code certainly suggests that if the professor received those Christmas
cookies for something “related” to his “public duties” at the University (whatever that may
mean), then he should not accept the cookies. The requirement that all gifts are remitted to
the ELO and that a report is made on each one is clearly burdensome.
Implementation of this regulation will be difficult for two reasons. The difficulty of
defining “public duties” of faculty makes providing clear guidance a real challenge.
Additionally Rutgers is a huge and disaggregated institution. Enforcement of a gifts policy
and monitoring that enforcement to ensure compliance will be difficult outside of certain
offices higher up in the central administration. These administrative offices are the ones with
the most authority to make decisions on behalf of the University, so it is most incumbent on
them to not be swayed or to be perceived to be swayed by gifts. The University can therefore
address the most substantial ethical issues associated with gift-giving by applying strict
compliance to certain key offices and more generally to the higher levels of academic
administration. The question remains, however, as to how strict the Ethics Commission will
be about enforcement of this provision and how far down the organizational structure of the
University it will expect this policy to be implemented in full.
(v)
Attendance at Outside Events and Honoria
 Prior approval by the ELO is required for attendance at any event that
is not sponsored by the State
 State employees may not accept honoraria (Code Article IV; Appendix
B)
Faculty and other researchers at typically participate in professional organizations
related to their fields; attend and present at conferences symposia and colloquia; travel to and
give talks at other universities or other organizations with an interest in their research, and
otherwise share their work and collaborate and cooperate with others in their field. This is
activity that enriches scholarship and research and enhances the reputation of the researcher
and, often, the university at which the researcher works. Universities, encourage their
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employees to participate in this scholarly activity. To impose a requirement that every
employee receive preapproval for attendance at any event outside the State is untenable for a
major research university like Rutgers. First of all, to suggest that faculty require specific
permission to conduct the regular activities of their profession challenges notions of academic
freedom. Even if it were understood that permission would be routinely granted there would
still be a principle at stake.
The definition of event in the Code is broad, “ ‘event’ means a meeting, conference,
seminar, speaking engagement, symposium, training course, ground-breaking, ribbon-cutting,
meal, open house, cocktail party, fundraiser, social function, or similar event that takes place
away from the State official’s work location, is sponsored or co-sponsored by a supplier or
non-State government source and the invitation for which is extended to the State official
because of his or her official position” (Code, Section 1). Under this definition almost any
gathering is an event. It once again brings up the question of what exactly constitutes the
“official” duties or position of academic employees. While college administrators such as the
President may well be invited to events specifically because of their Rutgers’ title, a professor
is presumably invited to speak at a conference on Medieval Studies because he is a
medievalist, not so much because of his position at Rutgers. Without further guidance from
the State, it is unclear if and how such a distinction can be made in the implementation of the
Code. As with so many aspects of this Code the administrative requirements of compliance
are potentially very burdensome, especially if the State ultimately concludes the provision
applies equally to faculty and researchers doing academic work as it does to administrators
and other university staff acting in their official capacities.
Honoraria are a separate, but related issue. Such payments form an important and
customary type of compensation for faculty and researchers. In addition, the fact that their
participation in academic events is funded, or at least subsidized, increases the opportunities
researchers and other academics have to participate in vital activities of academic life such as
conferences and the like. A blanket prohibition on honoraria would impede researchers in
pursuing their scholarship. It would also be prohibitively expensive for Rutgers or any state
institution to step in a replace the lost compensation.
The language in the Code is unambiguous. “A State employee is prohibited from
accepting honoraria in connection with his/her attendance or participation in an event.” (Code
Article IV). The Code cites N.J.S.A. 52:13D-24 to support this provision. That part of the
conflicts of interest statute, however, makes no reference to honoraria. While it states that
State employees should not receive compensation other than from the State for activities
related to their public duties, it actually excepts from this restriction “reasonable fees for
speeches.” The Ethics Commission has not explained this apparent inconsistency. If the
State ultimately decides to fully enforce the no honoraria rule even in an academic setting, in
addition to the negative consequences discussed above, it will also make it more difficult to
recruit and retain employees who would not be subject to restrictions elsewhere.
(vi)
Travel Expenses
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The whole issue of reimbursement of travel expenses is a vexing one. (Code Appendix
B) The Code has imposed an extensive regulatory scheme that appears to contradict the
language in the conflicts of interest statute. The latter allows State employees to accept from
source other than the State, “reimbursement of actual expenditures for travel and reasonable
subsistence” for which no reimbursement or payment is made by the State. (N.J.S.A. 52:13D24).
In the Code, there are rules that apply if the sponsor is an “interested party (defined
broadly), and different ones that apply when the sponsor is a non-profit, or a non-profit that
provides goods, materials, equipment or services to the State or one that does not. The rules
also change depending on whether the travel is within the State outside the State. State
employees can eat a meal that is provided by a sponsor if it is in a group setting with all
attendees present. Otherwise, they can eat the meal, but they have to pay for it themselves.
State employees are not allowed to accept reimbursement for attendance at events sponsored
by interested parties. This does not apply, however, if the event is designed to disseminate
information or exchange ideas and the State employee is speaking, participating on a panel or
is an “accompanying resource person” for such a speaker or participant. It is hard to conceive
of a situation when someone is giving a speech and is not “disseminating information,” or at
least intending to do so.
Under the Code, State employees cannot accept recreational items such as theater
tickets or golf outings from a sponsor. Allowable reimbursement from a sponsor is generally
limited to $500.00 per trip (which actually may not be enough to cover travel and lodging
expenses for a lot of trips). It is not entirely clear how, or if, deficits are reimbursed. The
State employee must seek pre-approval in writing and the approval must be kept by the
agency for five years. It gets fairly complicated to explain to employees what they can do and
can’t do and what they can eat and can’t eat. The clearest limitation is that alcohol is never
reimbursable.
Besides the intricacies of the various rules and limitations, the requirement that travel
and travel expenses are pre-approved will be extremely hard apply to faculty. Depending on
their fields of expertise, a lot of faculty travel extensively and it can be on little notice.
Monitoring them is going to raise issues of academic freedom. Reimbursement of expenses
by an event sponsor gives faculty to opportunity to participate in more scholarly gatherings.
It will be a financial strain on cash-strapped public universities if they are now expected to
pay what previously would have been reimbursed by an event sponsor. It may curtail useful
and necessary travel for the faculty.
(vii)
Publication
The provisions in the Code concerning publication are especially worrisome. Some of
the concerns have been discussed above. This is another section of the Code that differs from
the language in the conflicts of interest statute.
 Prior approval by the ELO is required for a State employee to receive
compensation for any publication or speech. Publication by a State
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employee – requires prior approval; the published work must not use or
disclose information not generally available to the public; the State
employee must not use State time or resources in connection with the
published work; the State employee must not use his/her official title in
connection with publication or promotion of the published work; the
State employee cannot promote, advertise or solicit sales of the
published work to co-workers or individuals with whom he/she has
official dealings; the published work must not have been prepared as
part of the State employee’s official duties.(Article XII and Appendix
E)
To rephrase this slightly a State employee may not accept compensation for any
published work that forms part of his official duties or that uses State time or resources. The
employee must still seek pre-approval to accept compensation for any published work that is
not part of his public duties and which he writes entirely on his own time using his own
resources. There is no exception made in the Code for whether the publication relates in any
way to the employee’s public duties. In fact, the hypothetical in Appendix E of the Code
describes a situation in which a State deputy attorney general sought permission to write a
book on psychics and the paranormal. She was allowed to proceed on the understanding that
she would use her maiden name, not mention her job, refrain from legal analysis and not use
State time or resources. Not only did she have to ask permission of her employing agency,
but the agency apparently felt the situation presented issues complicated enough that they
wanted the Ethics Commission to make the final decision.
There is a complete disconnect between this provision and academic life. While it
may be hard to define precisely what constitute the public duties of a faculty member,
publication of their research and other creative works is a central part of the expectations the
University holds of them. Faculty that do not publish do not get promoted. They have trouble
getting funding and their academic reputations suffer. Those that do publish are expected to
promote those works by participating and speaking about the publications at conferences and
other academic events. The University not only commits its resources to support its faculty in
publishing, but also relies on the University’s association with well regarded academic
publications to recruit students and faculty, to get research funding, to raise money more
generally for the University and in other ways to promote the University and its mission. It is
very important to the University that the scholarly publications of faculty feature the Rutgers
name.
The conflicts of interest statute, (N.J.S.A. 52:13D-24), as mentioned, provides that
State employees may receive compensation from outside entities for published works
produced within official duties. This language is directly in conflict with the language of the
Code and there is no guidance as to which has the greater legal authority.
(viii)
Textbooks
The language concerning of solicitation of sales for a published work has potential
implications for the way textbooks are selected at universities. A professor teaching in his
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specialty may be a leading authority in the field. His textbook could be among the most
widely accepted and respected textbooks in the field. Does the Code prohibit the professor’s
colleagues from assigning the book? Does it prohibit the professor from assigning it himself?
In this particular example of a reputable textbook the better pedagogical solution is to permit
the professors to pick the text, that in their judgment, are the most appropriate for the course
they are teaching. This also conforms to theories of academic freedom in which faculty have
considerable rights to teach what they want (within the constraints of what the department
needs) and to teach in the way they want.3
The question of textbooks is a university-specific issue on which the State authorities
show a particular inclination to stand firm. The initial, informal guidance we have received is
that a professor who assigns his own textbook to his class should not receive the royalties as
personal income, but that, instead, the royalties should go to his department. This preserves
the academic freedom of the professor to teach the text he wants to teach, but removes any
incentive of personal financial gain to peddle his works. The related question of whether
colleagues can assign the book has not been definitively answered, but one solution that
appears to be a reasonable compromise is to have a process that is not bureaucratically too
cumbersome to confirm that texts assigned to classrooms are reasonable in the context. In
practice, whether it is a committee, an administrator or some other entity that provides this
confirmation, the faculty member’s own judgment about what is most suitable for his course
is likely to be honored unless the choice is really egregious. For one thing, faculty will want
to preserve for themselves the right to control their syllabi.
(ix)
Outside Employment and Disclosure
The Code sets new regulations on disclosure of outside activities and business
interests of State employees, but does not prohibit such activities. Within academia,
especially certain areas of research, outside consulting and/or working for, or even founding,
an outside business venture are common and potentially lucrative endeavors for faculty.
These activities can also serve a wider public interest in that they allow faculty to transmit
knowledge, promote technological innovations and, especially in the case of start-ups, can
help the local economy. 4
3
Yet there is potential for abuse. When I was a graduate student the standard text used in my field was a book
known to be outdated, that espoused historical arguments that were widely discredited and that completely
ignored new discoveries in the field. But the book had been written by a founder in the field who was a legend
on the faculty, who was retired but still alive and who had been the PhD advisor for most current faculty in the
department. Deference and respect for a lifetime of scholarship trumped pedagogical standards.
4
The connection between such outside activities and the broader mission of a university is well expressed in the
following language from the Ohio State University Policy on Paid External Consulting – “Participation by
faculty members of The Ohio State University in activities of government, in industry and in other private
institutions generally serves the academic interests of the University. As a result of such activities, the people of
Ohio benefit from the dissemination of knowledge and technology developed within the University and students
benefit from experiences that faculty bring to the classroom. Moreover, the professional experience and
recognition that such participation brings to the faculty member is shared indirectly by the University.” (found at
http://oaa.osu.edu/handbook/paidexternal.html).
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 All State officers and employees must complete an “Outside Activities
Form” which must detail all their outside employment or service,
whether compensated or not. This includes volunteer work and holding
office or title on the governing or advisory board of any entity. They
must also seek preapproval before engaging in these activities (Code
Article VI, Appendix E)
There is a carve-out to this provision – “a State agency may exempt disclosure of
specific kinds of outside employment or activities if the agency is satisfied that such activity
or employment does not present a conflict of interest.” (Id). In addition, the term “State
officers and employees” does not include part-time employees, so adjuncts would not be
subject to the disclosure requirement. Many universities already require disclosure of outside
financial interests from faculty and other key employees. Funding agencies such as NIH have
regulations specifying that financial interests related to funded research must be disclosed by
researchers. There are already annual disclosure obligations at Rutgers for the Boards
Governors and Trustees and University Officers (Rutgers Policy 50.1.12, Conflicts of Interest
Policy for Members of the Board of Governors and Trustees and University Officials). This
Code disclosure requirement is much broader. This regulation requires a greater degree of
disclosure from a broader category of employees for a wider range of activities than has been
the practice at the University up to now. The University has authority under the statute to
exempt certain categories of activities and certain categories of employees from this
provision. Those that do not fall into the exempted categories will now need to disclose and
seek preapproval for most outside activities and business interests.
Most employees, even if subject to disclosure obligations, will not have outside
interests that could reasonably be considered a conflict of interest with their University
employment. Therefore, the disclosure form, ideally, should not require these employees to
go into a lot of detail about these non-relevant activities and should make pre-approval, if
necessary at all, pretty much automatic.
The process, however, must be sensitive enough to capture the necessary information
from those employees who do have outside interests that could be in conflict with their
university work. These employees will need to provide sufficient detail about these activities
so that the University can make a determination as to the nature and/or severity of the conflict
and how to manage it, if possible. There therefore needs to be a process to identify these
conflicts and then to analyze and resolve them. In addition there needs to be clear guidance
about what activities and interests require pre-approval. The general, but detailed,
information about outside financial activities, in most cases, should overlap with the federal
conflicts of interest disclosure rules. While the latter are particularly concerned to identify
and manage conflicts that could or could reasonably appear to bias research, the questions on
a disclosure form can be adapted to address both state and federal ethical concerns.
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IV
Initial Application of the Ethics Code to Universities
A. Plain Language Guide
The Ethics Commission has distributed a Plain Language Guide of about seventeen
pages to provide guidance in simplified terms for State employees. Its brevity and attempt to
be clear means that it includes some stark statements such as “your [State] paycheck is your
only permitted compensation” (p.1) and “you must obtain prior approval from your ELO to
attend any event” (p.4). These statements are certainly consistent with the provisions of the
Code but they allow for little nuance. The State universities expect, with some
encouragement from the experience of other states, that there will be certain exemptions or
friendly interpretations made with respect to recognizing their unique status and mission
among State agencies. The hope is that the university will be able to modify or supplement
the Plain Language Guide to make it more specific and relevant to university employees. An
internal university plain language guide will not only make the changes to university policies
and procedures more comprehensible but also more palatable.
B. Prize and Award Issue
The Ethics Commission also sent a trainer around the State to kick start
implementation of the new ethics Code. At one of these sessions it was suggested that the
Code prohibits faculty from accepting the financial portion of prizes and awards such as the
Nobel Prize because such it would be non-State compensation. Though this is an
interpretation consistent with the exact language of the Code this was not a consequence of
ethics legislation that the university had previously considered. It called into question the
degree to which the Ethics Commission would be inclined to make exceptions for
universities. It was also an issue of immediate interest to Rutgers as one of our faculty
members won a substantial financial award as part of the Crafoord Prize.
C. Post-Employment Grants Issue
An Ethics Commission staff member also suggested, as a matter of first impression,
that the post-employment provisions of the Code prohibit faculty from taking research grants
with them if they were to leave State employment. This was another issue that the university
had not previously viewed as a problem. It is an expectation of certain granting agencies that
their grants travel with the Principal Investigator. It would be a real problem for research
universities in the State if there were impediments to researchers continuing with research
and/or funding of that research if they leave the state. If this really is explicit State policy it
will be a considerable recruitment and retention challenge and will also put the universities up
in conflict with funding agencies making receipt of federal grants more problematic.
D. Administrative Burden of Implementation
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Those State institutions that started implementing the Code in full as drafted were
overwhelmed by the administrative burdens and encountered stiff faculty resistance. There
were considerable anecdotal accounts of faculty jumping ship, at least partially, as a result of
the new regulations. Certainly the strain on these institutions was considerable. It became
abundantly clear that some of the provisions of the Code fit uncomfortably with the practices
and expectations of universities. The question is in what ways can the Code is amended or
interpreted to accommodate universities and in what ways are universities going to have
reform their procedures and practices to comply with the Code. The likely answer is that
some of both will happen.
V
Response of State Universities
The State universities decided the best strategy was to coordinate their response and to
approach regulators and legislators with a limited, clearly defined set of concerns on which
there was general agreement. It has not been easy to corral the entire higher education
community. Institutions with doctors (MD’s) are particularly concerned about consulting;
community colleges care most about application of the ethics code to adjunct faculty;
institutions that have implemented the ethics regulations need urgent relief because of faculty
discontent and overburdened administrators; Rutgers priority is research and academic
freedom issues while these are much less central to the smaller two and four year colleges. In
addition, the faculties at certain institutions are pressuring their unions to push for immediate
legislative exceptions on the issues of receipt of honoraria and travel expenses.
After some discussion the State university community has decided to take a multifaceted approach of working with the Ethics Commission to explain the issues of particular
importance to universities and also continuing to work with sympathetic legislators to make
statutory changes if this proves necessary. In this regard, it has been important to open lines
of communications with the faculty unions so that they are not working at cross-purposes with
the universities. On the ethics issues, the universities and the faculty unions for the most part
have the same interests.
Despite the pressure some institutions are experiencing from faculty demanding
immediate relief from the travel and honoraria strictures, most institutions have come to a
somewhat tenuous agreement that it would be a mistake to advocate for quick legislative
relief. The concern is that doing so might persuade the legislators either that they have solved
the problem and no further legislation is required or that, having obtained some relief, future
requests for additional exemptions from universities will be viewed less favorably.
To make things more complicated, the Ethics Commission has indicated that it does
not particularly want legislative action on issues it thinks it can handle itself. Many of the
initial conversations with the Commission have been positive. The Commission’s procedures
move at a slower pace than those of the Legislature and the two institutions are on completely
different schedules. Therefore, trying to get them to move in tandem is impossible. The
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principle concern is that the higher education community currently has the ear of the relevant
legislators, but we cannot know exactly what we need from them until the Ethics Commission
has made its final determinations. If the Legislature acts now its solution may be incomplete
and may be premature in that the Commission would have resolved the same issues in time
and would have done so with more detailed and reasoned guidance. If the universities wait on
the Commission they may have lost the momentum for legislative change. For the moment,
the decision is to wait on legislation until the Commission responds to the concerns of the
universities.
The issues that the universities want the Commission to address regarding faculty
include definition of “official duties”; academic freedom issues; prohibition on honoraria;
travel restrictions; prohibitions on reimbursement of travel expenses; prohibition on receipt of
academic awards and prizes; publication restrictions; post-employment restrictions;
restrictions on gifts (how widely enforced?); the application of the new ethics regulations on
part-time and/or adjunct faculty; restrictions on textbook choice and use.
There has been disagreement on the degree to which the universities want the
Commission to provide additional guidance on outside employment and business interests.
The Code does not prohibit these, though it requires extensive disclosure. The concern is that
additional guidance may result in more detailed and formal proscriptions.
VI
Ethics Reform in Other States
New Jersey is not the first State to undergo comprehensive ethics reform. The experiences in
other states have been very instructive as to how state institutions of higher learning are
treated under ethics codes and regulations. California, Texas, Ohio, Colorado and New York
all have strict and detailed ethics laws that apply to state employees including those at
universities. The statutes and/or regulations in these states all have some provisions that
relate specifically to university faculty and impacts how the ethics laws apply to them. In
certain cases the opinions of the state ethics commission have also been instructive. This is a
fairly limited group of examples that speak to issues of concern to Rutgers.
A. Academic Prizes and Awards
Some of the guidance provided by the Commission has suggested that the Code could
be interpreted to prohibit faculty in New Jersey from accepting the financial portion of
academic prizes such as the Nobel Prize. This precise dilemma has resulted from Colorado’s
recent ethics reform. The President of the University of Colorado system requested a State
Attorney General’s opinion as to whether the recently passed ethics legislation prohibits
faculty at state universities from accepting the financial portion of the Nobel Prize. The
opinion, published on December 28, 2006, finds that the statute, as drafted, prohibits the
retention of the Nobel Prize award money. It reasons that Colorado case law does not support
an argument that past performance could be considered consideration for the prize. In other
words, under Colorado law, one could not make the argument that the Nobel and like prizes
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are a kind of “lifetime achievement awards” and, therefore, not directly or exclusively related
to the prize winner’s current state employment.
The opinion is clear that the legislators did not seek such a result, but concludes that
the language of the statute is unambiguous (it prohibits government employees from
accepting anything of value more that $50 dollars from any person other than the
government). Further, the opinion states that the legislature cannot solve the problem by
simply clarifying the statutory language – there will need to be corrective legislation passed.5
In Colorado, ethics legislation passed despite the objections and warnings of the state
public higher education community. When efforts to modify the legislation prior to
enactment failed the only option left has been was to bring into high relief the unintended and
harmful consequences of the legislation by requesting this opinion. We have brought this
example to the attention of the Commission and State legislators in New Jersey. Both have
indicated that there is no intent to prohibit faculty from keeping the financial portion of
awards and prizes such as the Nobel Prize in New Jersey.
B. Definition of Public Employee
Ohio’s ethics statute indirectly solves the problem of defining the public duty of a
faculty member. It simply removes faculty who are not also administrators or supervisors
from the definition of public employee:
“Public official or employee does not include a person who is a teacher, instructor,
professor, or other kind of educator whose position does not involve the performance
of, or authority to perform, administrative or supervisory functions.” (Ohio Revised
Code Chapter 102.01(B)).
This makes a clear distinction between faculty whose work for the state consists
exclusively of teaching and doing research and faculty who have authority to make decisions
on behalf of the university. That still leaves a lot of people covered – all higher level staff, for
instance, as well as all administrators. Many other provisions of the ethics statute that would
otherwise be of concern to the university are simply not applicable to most faculty (e.g.
receipt of honoraria). The ethics code therefore only really applies to those employees of the
university who have some kind of public authority that could potentially be suborned. The
corollary to the notion that power corrupts is that there is nothing to corrupt if there is no
power.
C. Use of Confidential Information Obtained in State Employment
The Ohio statute also has a narrow definition of confidential information that exempts
academic research and publication
See also, Karin Fischer, “New Ethics Rules in Colorado Could Bar State Employees From Accepting Nobel
Prize Money,” Chronicle of Higher Education, Tuesday, January 2, 2007.
5
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“No present or former public official or employee shall disclose or use, without
appropriate authorization, any information acquired by the public official or employee
in the course of the public official’s or employee’s official duties that is confidential
because of statutory provisions, or that has been clearly designated to the public
official or employee as confidential when that confidential designation is warranted
because of the status of the proceedings or the circumstances under which the
information was received and preserving its confidentiality is necessary to the proper
conduct of government business.” (Ohio Revised Code Chapter 102.01(B)).
This language clarifies that the confidential; information protected by the state is only
information that is not only identified as such, but, also, is limited to information that has
some legitimate governmental basis for being kept confidential. It prohibits the use of
“insider information” by former state employees when they leave government service but
does not, even by suggestion, impede the free flow of ideas, research and publication at a
university.
D. Honoraria and Travel Expenses
New York State has an exemption from the general proscription on receipt of honoraria and
travel expenses from an entity other than the state for “academic employees”:
“Academic employees of the State University and City University of New York
including all their constituent units who are covered by Sc. 73 of the Public Officers
Law and employees serving in the titles of “Research Scientist”, “Cancer Research
Scientist,” and “Research Physician” who also serve in academic status are exempt
from the limitations on the receipt of honoraria and reimbursement for travel expenses
to the extent that the publication of books and articles, delivery of speeches or
attending meetings or conferences are within the discipline of the individual
involved.” (19 NYCRR Part 930, 930.2 (c) and 930.7).
The definition of honorarium in this statute covers compensation for publications which
makes the exemption cited above more comprehensive than it would otherwise be. The
exemption also generally exempts travel expenses.
This language differentiates the university official acting in an administrative capacity
and faculty engaging in the regular business of scholarship. Even more usefully, it allows
university administrators who are also academics to profit from the exemption when acting in
their academic capacity. This recognizes the dual status of many university administrators.
In Texas there is a state ethics advisory opinion that lays out the argument as to why
honoraria in the academic context are qualitatively different than speaking fees earned by
employees of other state agencies. The opinion states that:
“Thus, an honorarium is permissible as long as the public servant’s official status was
not a deciding factor in the decision to request the public servant to perform the services at
issue. Presumably university employees are often asked to perform services because of their
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academic expertise and not because they hold a position at a particular institution. In such
cases, the honorarium provision would not prohibit them from accepting payment for
performing the services.” (Texas Ethics Commission, Ethics Advisory Opinion No. 305,
March 22, 1996).
It is important to note that the Texas Ethics Commission holds that honoraria include
payments for teaching and speaking, but makes no mention of payments for publication.
The Texas ethics statute separately permits state employees to receive transportation and
lodging expenses in connection with a conference or similar event. (V.T.C.A., Penal Code
Sec. 36.07).
E. Academic Freedom
State Universities in California have been subject to strict and comprehensive ethics
regulations since the Political Reform Act was passed in 1974. Despite the far-reaching
nature of the statute and its accompanying regulations the statutory language specifically
reasserts some of the basic tenets of academic freedom. These include complete freedom to
make decisions about how to teach a class. This suggests that a faculty member does not have
to disclose financial interests when choosing a textbook, so, based on this language, a faculty
member should be able to assign his own textbook and receive compensation for related sales
of the book. (Of course, there are extensive ancillary regulations, and they may interpret this
statutory language differently.) The statute also emphasizes the right of individual faculty
members to choose for themselves the course and methodology of their research.
This complete freedom from disclosure does not apply to university personnel making
decisions on an institution or campus wide basis. Once again, this statute differentiates the
researcher and teacher from the university administrators with authority to make decisions on
behalf of the university.
While the statute asserts the right of faculty to apply for funds to support their
research, it requires principal investigators whose research is funded by non-governmental
entities to disclose this fact and a university committee then needs to review the research to
determine whether conflict of interest concern preclude the investigator from conducting the
research.
(1) ……neither disclosure of financial interests nor disqualification is required ……in
connection with:
(A) Teaching decisions, including selection by a teacher of books or other
educational materials for use within his or her own school or institution, and other
decisions incidental to teaching;
(B) Decisions made by a person who has teaching or research responsibilities at an
institution of higher education to pursue personally a course of academic study or
research, to apply for funds to finance such a project, to allocate financial and
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material resources for such academic study or research, and all decisions relating
to the manner and methodology with which such study or research will be
conducted. Provided, however, that the provisions …..shall not apply with respect
to any decision made by the person in exercise of institution or campus wide
administrative responsibilities respecting the approval or review of any phase of
academic research or study conducted at that institution or campus.
(2) Disclosure [is required] …. in connection with a decision made by a person or
persons at an institution of higher education with principal responsibility for a
research project to undertake such research, if it is to be funded or supported, in
whole or in part, by a contract or grant (or other funds earmarked by the donor for
a specific research project or for a specific researcher) from a nongovernmental
entity, but disqualification may not be required under Government Code 87100,
87302 or any Conflict of Interest Code in connection with any such decision if the
decision is substantively reviewed by an independent committee established within
the institution. (Title 2, Division 6, California Code of Regulations Ethics
Commission. 18702.4).
It is telling as to the breadth and reach of the California ethics statute that it was considered
necessary to specifically except a professor’s choice of research topic and methodology from
the scope of the statute’s disclosure and review obligations. As with some of the other
language discussed, the California statute distinguishes between academic employees acting
in an individual capacity and those making decisions for the institution. It extends this
reasoning to require disclosure and review for the principal investigators (the individual with
the primary administrative and research responsibilities on a project) for all nongovernmentally funded projects.
F.
Outside Compensation
The Ohio Attorney General has broadly confirmed the authority of the trustees of state
universities to set university policy regarding outside compensation including both consulting
and honoraria. It has also affirmed that faculty are not regular 40 hour a week state
employees. (Ohio Attorney General Opinion No. 73-020):
“… the nature of the profession demands irregular hours… Therefore, the fact
that a professor is absent from his office and classroom for one day does not automatically
require him to take 8 hours vacation leave, or to forego part of his regular compensation. The
decision in the matter rests with the Board of Trustees…”
The opinion concludes that it is legal to allow professors to be absent from campus for
speaking and consulting purposes without taking vacation time, foregoing their regular
compensation, prohibiting reimbursement, or prohibiting compensation for these outside
activities. Regulation of such activities is in the discretion of the Trustees, and it is up to them
to decide whether such activities serve the best interests of the university.
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This opinion is based on Ohio statutes that give broad authority to the Trustees of state
universities. More generally, however, it reaffirms that both speaking and consulting
activities by faculty can be in the best interest of universities and are consistent with the
practices of academia and the nature of a faculty members’ professional responsibilities.
Ohio State University requires faculty to disclose all outside paid consulting and
requires prior approval for such consulting that causes or could be perceived to cause a
Conflict of Interest. It also requires that faculty get prior approval for any absence from
campus for consulting reasons that is longer than one full business day or that result in a
missed commitment .
Ohio State University Policy on Paid External Consulting at
http://oaa.osu.edu/handbook/paidexternal.html.
G. Annual Disclosure
The New York State Ethics Commission has made clear in various advisory opinions
that state employees holding academic titles must make annual disclosures of outside
financial interests.6 Beginning in 2002 all academic employees earning above a certain salary
or who are designated as policy-makers have been required to file a new, longer form of
annual financial disclosure statement with the Commission. At the time this change was made
the state universities argued that imposition of such a requirement would put them at a
“competitive disadvantage in trying to attract the best talent to serve, considering that each
University recruits nationwide and other universities have no such requirement.” (State of
New York State Ethics Commission Advisory Opinion No. 2003-6). More recently the
universities and unions representing university employees have again argued before the
Commission that additional financial disclosure reporting requirements could hamper
recruitment and retention of the best faculty. The Commission is not accepting that argument.
It has stated curtly “attracting eminent scholars and enforcing the State ethics statutes are not
mutually exclusive.” (Id).
The New York Ethics Commission initially imposed a restricted set of disclosure
obligations on university employees. Then, a few years later, it modified and expanded its
disclosure requirements. In the interim, the Commission had investigated implementation of
its initial disclosure obligations and was dissatisfied with the results. It concluded that, in its
opinion, the universities in the state system were not doing enough to detect and manage
conflicts of interest. It found that the designated officials at the state campuses were not
qualified to identify conflicts. At the same time the Commission noted an increased need for
substantive conflicts review because state universities were becoming increasingly
entrepreneurial and the ties between universities and university personnel with private
business interests were increasing exponentially. For these reasons the Commission thought it
important to focus more closely on academic employees and require them to give more than
the minimal information previously required. (Advisory Opinion No. 2003-6).
6
Academic titles include, among others, the faculty ranks of professor, associate professor, assistant professor,
instructor, lecture, and all the foregoing whose appointments contain such terms as research, adjunct, visiting, or
clinical. (State of New York State Ethics Commission Advisory Opinion No. 90-15).
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H. Continuous Ethics Reform
Universities are becoming more entrepreneurial and this does lead to more potential
conflicts of interest. It is a challenge for a university to find an effective way to identify,
analyze, manage and monitor these conflicts. The New York State university system is a
large one and individual campuses made a good faith effort to comply with the Commissions
disclosure obligations. This example shows that compliance with ethics regulations is an
ongoing process. As new situations arise that implicate ethical issues, (such as more faculty
start-ups that contract with the university, or in which the university holds a financial
interest), there will be a constant need for universities to ensure that they have policies and
procedures in place to make appropriate decisions about these situations and remain
compliant with the ethics rules and regulations.
As universities expand their activities, ethics issues become something of a moving
target. The existing law may not be clear as to the proper course of action in a given situation.
Any university would prefer to regulate itself in areas not specifically defined by statute or
regulation. This entails being proactive and ensuring that ethical issues are considered at a
high level of authority within the university administration. There may be faculty resistance
to increased disclosure, but whatever disclosure the university requires is likely to be less
onerous than what the state government bureaucracy will impose.
VII
Internal Implementation of Ethics Reforms
While pursuing the external processes of working with the regulatory agencies, the
policies legislature, the unions and the other institutions of higher education in the State to
respond to ethics reform, Rutgers also needs to take a series of actions internally to comply
with the new ethics regulations. It is important to identify and review all university policies
and procedures that touch on ethics issues and to amend and tighten them as necessary so that
they will be compliant. What follows is a checklist of policies related to ethics that we are in
the process of reviewing. Many of the policies already exist at the University, but we are
assessing whether they need to be amended or expanded to comply with the new ethics laws
and regulations. If we find that we lack policies to address necessary issues we will adopt
new ones.
After each listing, I have noted the policy number, name and, if relevant, the web address of
policies from various public universities around the country that concern ethics related issues.
Some policies are required of most research universities (e.g. conflicts of interest in research
to comply with federal regulations). In these instances a model is cited because it is
particularly coherent, complete or in some other way might serve as a good model even if
your institution already has such a policy. Other policies are included because they address
specific issues that not all institutions have policies to handle (e.g. institutional conflicts of
interest). Those are included to give guidance on some issues or language that your university
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may not have considered. I have not included the specific language of any of these policies
because the exact language needed depends on individual state law, state regulations and the
policies and practices of each institution. The examples are listed as starting points.
 Conflicts of Interest in Research / Faculty
This kind of policy address faculty financial interests in outside entities that could have
significant and inappropriate influence on the faculty member’s duty to the university,
especially in research. These policies typically follow the federal guidelines on conflicts of
interest in research. The university then adds any language it deems necessary under state law
or advisable for university policy.
(See e.g. Ohio State University’s (“OSU”) Financial Conflict of Interest Policy for Faculty, f
at http://oaa.osu.edu/handbook/coipolicy.html
University of Texas Policy and Procedures for Promoting Objectivity in Research by
Managing, Reducing or Eliminating Conflicts of Interest at
http://www.utexas.edu/policies/hoppm/ho511.html).
 Conflicts of Commitment
This deals with (and generally prohibits and/or monitors) the involvement of, (especially
ostensibly full-time), faculty in any outside activities that is so substantial in terms of time and
effort as to interfere with what should be that faculty member’s primary obligations to the
university. Conflicts of commitment often overlap with conflicts of interest and are often
regulated in the same policy. Some universities, however, break them down separately
(See OSU Conflict of Commitment Policy at
http://oaa.osu.edu/handbook/conflictofcommitment.html).
 Institutional Conflicts of Interest
As universities collaborate more with industry and encourage faculty to be entrepreneurial,
increasingly situations arise where the university as an institution, or its decision-makers in
their capacity as university officials have a conflict of interest because of a significant
financial interest in an outside entity. One basic example is when the university invests in a
faculty start-up company. If the faculty member is important to the university then the
relevant administrators may make investment or resource use decisions in a way that profits
that company (and indirectly its investors) rather than making an objective business decision
keeping the university’s financial interests paramount. The same kind of problem can arise if
university officials are tempted to make decisions that direct funding or research priorities in a
direction that profits that outside company and/or in a way that favors the financial interests of
the university over its primary academic mission. Another variant is if the university official
with authority to make decisions regarding contracts or licenses with an outside company has
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a financial interest in that company. That is both a personal and an institutional conflict of
interest.
(See University of Kansas Institutional Conflict of Interest at
http:www.kumc.edu/pulse/policy/icoi.html.
University of Minnesota Institutional Conflict of Interest - Managing Potential Institutional
Conflicts of Interest University of Minnesota Procedure 2.1.19.1.
University of Minnesota - Managing Potential Institutional Conflicts of Interest - Investment
University of Minnesota Procedure 2.1.19.2).
 Other Financial Conflicts of Interests for Persons With Fiduciary
Obligations to the University

Board of Trustees/Governors
Such a policy sets the rules that manage or prohibit potential conflicts of the governing board
of the university. Some universities, such as Rutgers, currently collapse this policy with one
that addresses the potential conflicts of senior university administrators. Generally, there is
one or more policy that addresses conflicts of interest specifically for those persons with a
fiduciary obligation to the university. This can include all principal personnel with decision
making authority at the university. These policies tend to concern personal conflicts of
interest that interfere or could be perceived to interfere with the fiduciary’s primary duty of
loyalty to the university when acting their official capacity.
(See Rutgers Policy 50.1.12 Conflict of Interest Policy for Members of the Board of
Governors and Trustees and University Officers
University of Michigan Board of Regents Policy Sections 1.13, 1.14) at
http://www.regents.umich.edu/bylaws.html).

Technology Transfer Office
Some universities have conflict of interest policies that specifically address their Technology
Transfer Offices (e.g. staff in such offices favoring one licensee or sponsor for personal
financial gain). There is the additional risk that such employees may have access to financial
information not generally available with they can exploit for private ends.
(See University of Michigan Conflict of Interest Policy for OUPR, DRDA, OTT at
http://www.research.umich.edu/policies/um/coi/policies.html).
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 Consulting/Outside employment
These policies set out, in ways consistent with state law, university rules about what kind of
compensated work, and how much compensated work, faculty and other employees can do for
outside entities while in the employ of the university. These usually involve disclosure
obligations and pre-approval for certain kinds of activities. The most useful policy models
clear guidance explaining which activities don’t need to be disclosed; which need to be
disclosed and which both need to be disclosed and pre-approved.
(See University of Minnesota Procedure 2.1.20.1 Outside Consulting and Other
Commitments by Faculty and Professional and Administrative (P&E) staff
University of California Conflict of Commitment & Outside Activities of Faculty Members
APM – 025).
 Textbooks and Other Educational Materials
Some ethics regulations (e.g. New Jersey) contain language that potentially pertains as to
whether and in what circumstances faculty authors can retain the proceeds earned if they
assign their own texts to a class.
(See University of Minnesota Avoiding Conflicts of Interest in Special Situations
Procedure 2.1.16.3
Educational Materials Conflict of Interest, University of Minnesota University Senate Policy).
 Facilities Use Policy
Generally, university facilities are considered state or public property and cannot be casually
made available to particular private interests. Private commercial use of university space and
equipment can also implicate tax exempt bond issues (see Revenue Procedure 97-14).
Nonetheless, many universities consider it part of their mission to share their resources with
local industry, especially emerging technology companies to foster technological innovations
as well as economic development. Whatever uses are permitted under state law or university
policy these must be administered consistently and for fair market rates. Supporting a faculty
start-up (especially one that is licensing IP from the university) by making equipment,
facilities or real estate available at special rates is likely to be a problem.
(See State University of New York University – Industry Cooperative Use of Research
Equipment at
http://www.suny.info/policies/groups/public/documents/policies/pub_suny_pp_039555.htm
State University of New York Use of University Facilities by Emerging Technology
Enterprises, Guidelines
http://www.suny.info/policies/groups/public/documents/policies/pub_suny_pp_037275.htm).
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 Gifts
Policies on gifts especially tend to be drafted specifically to the requirements of governing
state law. (for useful explanations and illustrations see UT’s Guidelines on Giving and
Accepting Benefits http://www.utsystem/edu/ogc/ethics/guidenew.htm).
 Honoraria and Travel
These policies also will be governed by specific related provisions of state law. Many of the
models we reviewed cited the relevant provisions of law and provided clear examples of what
was permitted and what was not.
(See State University of New York Receipt of Honoraria and Travel Reimbursement by
University Employees at
http://www.suny.info/policies/groups/public/documents/policies/pub_suny_pp_030702.html).
 Nepotism
Generally all universities address this in one policy or another. Some have separate policies.
(See University of Texas Employment of Close Relatives at
http://www.utexas.edu/policies/hoppm/04.A.01.html).
 Equity
Increasingly, for some of the reasons discussed above a university’s decision to invest in a
company that is owned by a faculty member or one that licenses University IP can present
conflicts of interest issues.
(See University of California Policy on Accepting Equity when Licensing University
Technology University of California Office of the President 2/16/96 at
http://www.ucop.edu/ott/genresources/equi-pol.html).
A. Rollout
Rutgers is currently planning how to introduce the new ethics regulations to the
university community. This will require not only distribution of certain specific documents
required by the Ethics Commission, but also providing adequate training and sufficient
comprehensible guidelines so that faculty and other employees understand what they need to
do to comply.
The following is based on a checklist distributed by the Ethics Commission noting the
kinds of material that would be the essential ones that the State Ethics Commission would
expect and examine in any audit of the University’s compliance efforts with State ethics laws
and regulations. Where I have cited websites with relevant guidance materials produced by
other universities that is organized or uses language that seems useful. Once again, the
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actually content of such guidelines would have to conform to the policies of each specific
university and the relevant state regulations.
 Distribution of the Code (We are not sure if we have to distribute hard
copies or can we distribute by email)
 Collection of certificate from each employee stating that he/she has
read the Code and will abide by its provisions (we don’t know if these
can be done by email)
Distribution of a Plain Language Guide – Each employee will receive a simplified summary
of the Code. The Ethics Commission has prepared its version. Rutgers will draft an internal
version as well. Whichever version is distributed to employees, according to the Commission
the University is supposed to collect certificates of receipts. (For a good, abbreviated
summary of a state ethics law, see Code of Ethical Conduct for University Officers SUNY, at
http://www.suny.info/policies/groups/public/documents/policies/pub_suny_pp030664.htm).
 Rutgers Ethics Code. There is one already in existence which needs to
be reviewed internally and revised when needed and then approved by
the Ethics Commission.
 Drafting various templates that the Commission requires in its audit
checklist, including model recusal letters from conflicted parties;
model pre-approvals (to the extent we implement them) for events,
travel, outside employment and publications and a holiday gift
reminder memo (i.e. do not accept gift). These are so New Jersey
specific models would not be useful.
 Disclosure of Outside Activities and Commitments. One the most
important new forms we are drafting is a disclosure of outside activities
and interests form. There are many varied models available at other
universities. This form needs to collect enough information that the
Commission (and federal government) will find the University
compliant with their disclosure obligations. It also needs to provide
intelligible guidance for employees filling out the form so that they
include necessary information and don’t include extraneous
information. Finally, it needs to be as quick and easy to complete as is
compatible with these other goals. One open question is whether such
forms should ask the amount of compensation the employee is earning
from outside sources. This is a sensitive issue for faculty (and other
employees) who can find this intrusive and a violation of their privacy.
Some universities ask if the aggregate amount earned is above a certain
sum (e.g. $10, 000 the disclosure trigger in NIH regulations). By
contrast, many disclosure forms ask for assessments of the amount of
time spent on these outside activities. Sometimes the question asked
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simply if the faculty member is spending more than the time allowed
by university policy (usually one day a week). Useful models include:
(See University of Illinois Report of Non-University Activities Explanation and Instructions
at http:www.research.uiuc.edu/coi/COI_Instructions_0607.pdf.
University of California Conflict of Commitment and Outside Activities of Faculty Members
Prior Approval for Compensated Outside Professional Activities (Category I) or for Involving
Students in Outside Professional Activities APM-025 Appendix B.
University of Texas Annual Request for Outside Employment UT-Austin
http://www.utexas.edu/provost/policies/outside_employment.pdf).
B. Guidance
 Conflicts of interest guidance
The most extensive ethics related guidance tends to concern conflicts of interest and
commitment – identifying them, recognizing them, and distinguishing which are permissible
and which are not. If a conflict can be managed, then there may be not need to prohibit or
curtail the underlying activity that gave rise the conflict. University of Texas has a useful
model management plan faculty can use for guidance. If the faculty or other employee
understands which of his activities could be considered a conflict and can structure them so
that the conflict is managed (e.g. by a particular design of an experiment; a limited scope of
work for an outside company; resigning managerial positions at a start-up (etc.)) then
university review of the activities will proceed much more quickly and approval will be
granted more readily.
(See University of Texas Sample Management Plan for Potential Conflict of Interest
http://www.utexas.edu/research/coi
University of Texas Examples of Non-allowable Activities or Those Requiring Management
Plans (Not Inclusive)
http://www.utexas.edu/research/coi
University of Texas Examples of Allowable Activities
http://www.utexas.edu/research/coi).
 Gift Guidance
Many State ethics codes (New Jersey included have strict regulations about when a gift can be
accepted by a state employee and set a specific value limit on such gifts. There are a
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bewildering number of items considered as gifts. For instance, the Code defines them as
“anything of value.” This breadth of definition may be confusing for faculty and other
employees. Faculty may also not understand in what circumstances the rules apply to them.
(See University of Texas Guidelines on Giving and Accepting Benefits
http://www.utsystem.edu/ogc/ethics).
 Guidance on Entrepreneurial Activities
Bayh-Dole and the growing interest of universities and their faculty in engaging in
entrepreneurial activities have considerable ethical implications. While universities want to
encourage technological and economic development they also want to be sure that their
intellectual property interests and their academic mission and research are protected. The best
way to both support such activities and protect the university is to have extensive guidance
available to faculty and other relevant employees that outline the issues and clarify the
policies and regulations that govern them. It is generally easier to structure a business, a
contract or a research project to comply with university policies at an early stage than to try to
make something already extensively constructed or negotiated conform later in the process.
(See University of California Guidelines for University-Industry Relations University of
California Office of President May 1989
University of California Guidance for Faculty and Other Academic Employees on Issues
Related to Intellectual Property (Office of the President University of California 3/3/2003)
(available at http://www,ucop.edu/ott/consult.html).
 Complete Information
One aspect of guidance that seemed especially useful was to have one place where people
could access all the relevant ethics laws, policies and guidelines. Because certain activities
(e.g. faculty member founding a company to develop and commercialize his own IP)
implicate federal and state law and regulations as well as a variety of internal university
policies and procedures, it is helpful to have a place where all the relevant authority can be
found. This way interested parties can analyze all the issues together, rather than learning in a
piecemeal way of yet another applicable rule.
(See University of California Business and Finance Bulletin G-39, Conflict of Interest Policy
and Compendium of Specialized University Policies, Guidelines and Regulations Related to
Conflict of Interest (Senior VP G-39, June 18, 2002)
University of Texas Office of General Counsel Ethics Standards at
http://www.utsystem.edu.ogc/ethics.htm
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 Websites and FAQs
It is important not only that the guidance provided is complete and accurate, but that it also is
understandable. Some universities have done a wonderful job of preparing websites that link
users to all other likely relevant sources (related law, policy, guidance (etc.)). In addition they
prepare Frequently Asked Questions to explain the sometimes convoluted and extensive rules
and provide answers about how to practically apply them.
Distributing codes to faculty and making them sign receipts, posting all relevant laws and
regulations, drafting policies regarding all the various activities in which universities engage
to comply with ethics laws is all more or less useless if the information is not transmitted in
some way that is understandable. It may seem an obvious point but the websites that give
guidance on ethics issues should be easily searchable (e.g. any reasonably likely search term
should allow a user to access them).
(See University of California at Los Angeles FAQ for UCLA Faculty Entrepreneurs at
http://www.research.ucla.edu/OIPA/faculty
UCLA Guide to Faculty Consulting Activities and Consulting Agreements Interim Guide: 615-06 at http://www.ucla.edu/evc/policies/0606/faculty-consulting.pdf).
Rutgers is at an early stage of the roll out of new policies and procedures relating to
the Code. We have good models from other state universities about how to communicate the
new obligations within a university community. We have a pretty good idea of those parts of
the rollout we particularly want to adapt for the University community – in such as plain
language guide, training and web site. We are reviewing our existing policies and are
adapting them to make them more compliant either through amendment or strengthening
enforcement, or both. Possibly, we will need or will decide to draft and implement new
policies relating to ethical issues. At this point we cannot predict how difficult the new
policies and guidelines will be to explain, implement, monitor and enforce.
VIII
Conclusion
State ethics reform can have a considerable impact on state universities. Rarely does
such reform have the interests and concerns of academic faculty in mind. Usually there need
to be some modifications of the proposed reforms to make allowance for the normal activities
of a university. These modifications can occur at the legislative or regulatory level. They can
include Ethics Commission interpretations of Attorney General opinions. For the most part,
though actually achieving these modifications can be difficult, it is not the intent of the ethics
reform to impede legitimate research and other educational activities. So universities are
likely to find cooperation in addressing their concerns from state ethics commissions and
legislators.
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Nonetheless the degree of regulation ethics reform imposes and with which,
ultimately, the university must comply can present a considerable administrative challenge to
implement. Luckily, some states with big university systems have already undertaken this
task. There is ample material on the websites of these state universities to provide models for
policies, guidelines, templates, educational materials and anything else useful to
implementing ethics policies and regulations. Additionally, these state systems have argued
for and have often obtained certain exemptions, mitigations or friendly interpretations of
statutory language that makes compliance with ethics laws more compatible with academic
practices and traditions. In the end, however, ethics compliance is a serious and time
consuming matter. Externally it requires the cooperation of the higher education community
in the State to clearly articulate its concerns and interests. Internally it requires careful work
by university counsels and the strong support and leadership of the university administration
to ensure compliance.
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