1. Fleming Bell Eileen Youens Ethics for NC Local Government Officials

2. Objectives 1.Define ethics and ethical behavior. 2.Distinguish between legal and ethical standards. 3.Explain the effects of role conflicts and interest conflicts on ethical decision making. 4.Apply a process when making ethical decisions. 5.Describe how to develop a successful code of ethics. 6.Follow the laws governing conflicts in contracting. 7.Determine when you cannot vote and when you must vote on issues before your governing board.

3. Defining Ethics 1.What is fundamentally appropriate behavior? 2.Doing what is “good,” instead of what is “bad” 3.Characteristics of an ethical person

4. Making Ethical Decisions The public trust can only be preserved if public officials take their calling seriously and make informed decisions that reflect the core ethical principles that they and their fellow citizens share. Public officials should also consider who or what is affected by the decision, and how they are affected. Michael Josephson, Josephson Institute of Ethics

5. Citizen and Public Officials’ Expectations Hold each other accountable for ethical principles such as honesty, fairness, and caring. Citizens want public officials to make decisions based on what is good for their communities, not on what is good for the elected officials’ own individual interests. Recognize that public officials are the "especially responsible citizens." They have been given a special trust.

6. Objectives 1.Define ethics and ethical behavior. 2.Distinguish between legal and ethical standards. 3.Explain the effects of role conflicts and interest conflicts on ethical decision making. 4.Apply a process when making ethical decisions. 5.Describe how to develop a successful code of ethics. 6.Follow the laws governing conflicts in contracting. 7.Determine when you cannot vote and when you must vote on issues before your governing board.

7. Legal vs. Ethical Standards If people act legally are they also acting ethically? How does what’s legal differ from what’s ethical?

8. Objectives 1.Define ethics and ethical behavior. 2.Distinguish between legal and ethical standards. 3.Explain the effects of role conflicts and interest conflicts on ethical decision making. 4.Apply a process when making ethical decisions. 5.Describe how to develop a successful code of ethics. 6.Follow the laws governing conflicts in contracting. 7.Determine when you cannot vote and when you must vote on issues before your governing board.

9. What people think they ought to do depends largely on how they see their roles, and (most importantly) the conflicts between their roles. Dorothy Emmet, Rules, Roles, and Relations (New York: St. Martin's Press, 1966)

10. Conflicts of interest are fundamentally about legal and other conflicts between public and private roles.

11. Case problems

12. Objectives 1.Define ethics and ethical behavior. 2.Distinguish between legal and ethical standards. 3.Explain the effects of role conflicts and interest conflicts on ethical decision making. 4.Apply a process when making ethical decisions. 5.Describe how to develop a successful code of ethics. 6.Follow the laws governing conflicts in contracting. 7.Determine when you cannot vote and when you must vote on issues before your governing board.

13. Making Ethical Decisions 2 methods: Top down – apply ethical principles to the situation Bottom out – look at the situation, and ask who is affected, and how? Remember that the two methods can work together.

14. Objectives 1.Define ethics and ethical behavior. 2.Distinguish between legal and ethical standards. 3.Explain the effects of role conflicts and interest conflicts on ethical decision making. 4.Apply a process when making ethical decisions. 5.Describe how to develop a successful code of ethics. 6.Follow the laws governing conflicts in contracting. 7.Determine when you cannot vote and when you must vote on issues before your governing board.

15. Why have Ethics Codes, Regulations, or Statutes? Setting a minimum standard of conduct for public officials helps to provide certainty and accountability. Ethics codes help to provide identity for groups of public officials.

16. Defining Codes and Regulations 1.Aspirational: Public officials should do these things 2.Prohibitive: Public officials must not do these things 3.Hybrid: Both aspirational and prohibitive 4.G.S. 160A-83 provides very general guidelines for what ethics codes for local elected boards must contain

17. Required Content (G.S. 160A-83): 1.Obey all applicable laws about official actions taken as board member. 2.Uphold integrity and independence of office. 3.Avoid impropriety in exercise of official duties. 4.Faithfully perform duties. 5.Act openly and publicly.

18. Consequences of Violation No sanctions specified in statute, however: Remember citizen and media opinion Disobeying this law is itself unethical Public could rightly assume that someone who doesn’t comply with this law will be willing to break others Legislature may be watching for compliance by local governments

19. Issues to Consider in Drafting Ethics Codes 1.How detailed should they be? 2.What subjects should they cover? 3.Should they be positive or negative in tone? 4.Who prepares the code? Who is covered by the code?

20. Objectives 1.Define ethics and ethical behavior. 2.Distinguish between legal and ethical standards. 3.Explain the effects of role conflicts and interest conflicts on ethical decision making. 4.Apply a process when making ethical decisions. 5.Describe how to develop a successful code of ethics. 6.Follow the laws governing conflicts in contracting. 7.Determine when you cannot vote and when you must vote on issues before your governing board.

21. Conflicts in Contracting: 3 Statutes 1.Conflicts of interestG.S. 14-234 2.Misuse of secret information G.S. 14-234.1 3.Gifts and favors G.S. 133-32

22. Conflicts in Contracting 1.Conflicts of interestG.S. 14-234 2.Misuse of secret information G.S. 14-234.1 3.Gifts and favors G.S. 133-32

23. Making or administering a contract + Direct benefit to you or your spouse = Class 1 misdemeanor* & void contract* * Unless an exception applies Conflicts of Interest—G.S. 14-234

24. Making or administering a contract + Direct benefit to you or your spouse = Class 1 misdemeanor* & void contract* * Unless an exception applies Bottom line: As a board member, you are always involved in “making or administering” contracts entered into by your local government—even if you don’t vote. Conflicts of Interest—G.S. 14-234

25. Making or administering a contract + Direct benefit to you or your spouse = Class 1 misdemeanor* & void contract* * Unless an exception applies Bottom line: There’s a direct benefit if you or your spouse: 1.own 10% or more of company 2.receive income or commission from the contract 3.acquire property under the contract

26. Conflicts of Interest—G.S. 14-234 Exceptions: Contracts with banks, savings and loans, public utilities “Friendly” condemnation Employment of the spouse of a public officer Public assistance programs “Small” jurisdictions

27. Conflicts of Interest—G.S. 14-234 Making or administering a contract + Direct benefit to you or your spouse = Class 1 misdemeanor* & void contract* * Unless an exception applies If an exception applies, the board member with the conflict may not vote, participate in any way, or attempt to influence others who are voting.

28. Is there a contract between the local unit and the officer or employee (or spouse)? Does the officer or employee (or spouse) derive a direct benefit from the contract? Is the officer or employee involved in making or administering the contract? Does an exception apply? No conflict under G.S. 14-234. Officer may not vote on or participate in contract. Yes No conflict under G.S. 14-234. Did the officer or employee try to influence (or receive a reward for influencing) the award of the contract? No Conflict! Contract void. Misdemeanor to violator. Yes No No conflict under G.S. 14-234. No Yes No Conflicts of Interest—G.S. 14-234

29. Is there a contract between the local unit and the officer or employee (or spouse)? Does the officer or employee (or spouse) derive a direct benefit from the contract? Is the officer or employee involved in making or administering the contract? Does an exception apply? No conflict under G.S. 14-234. Officer may not vote on or participate in contract. Yes No conflict under G.S. 14-234. Did the officer or employee try to influence (or receive a reward for influencing) the award of the contract? No Conflict! Contract void. Misdemeanor to violator. Yes No No conflict under G.S. 14-234. No Yes No Conflicts of Interest—G.S. 14-234

30. Conflicts in Contracting 1.Conflicts of interestG.S. 14-234 2.Misuse of secret informationG.S. 14-234.1 3.Gifts and favors G.S. 133-32

31. Use non-public information gained in official position + Pecuniary benefit to you = Class 1 misdemeanor Misuse of Secret Info—G.S. 14-234.1

32. Conflicts in Contracting 1.Conflicts of interestG.S. 14-234 2.Misuse of secret informationG.S. 14-234.1 3.Gifts and favorsG.S. 133-32

33. Gifts and Favors—G.S. 14-234.1 past current potentialfuture contractor orvendor Public officer or employee who: prepares plans orspecifications for publiccontracts, or awards or administers publiccontracts, or inspects or supervisesconstruction. = Class 1 misdemeanor, unless an exception applies.

34. Gifts and Favors—G.S. 14-234.1 Exceptions: Honoraria Gifts of nominal value Meals at banquets Gifts to professional organizations Gifts from friends or family (must be reported)

35. Objectives 1.Define ethics and ethical behavior. 2.Distinguish between legal and ethical standards. 3.Explain the effects of role conflicts and interest conflicts on ethical decision making. 4.Apply a process when making ethical decisions. 5.Describe how to develop a successful code of ethics. 6.Follow the laws governing conflicts in contracting. 7.Determine when you cannot vote and when you must vote on issues before your governing board.

36. Statutes that Govern Conflicts in Voting CountiesMunicipalities Excused from voting G.S. 153A-44G.S. 160A-75 Zoning votesG.S. 153A-340(g)G.S. 160A-381(d) Board of adjustment G.S. 153A-345(e1)G.S. 160A-388(e1)

37. Conflicts in Voting Board members must vote unless the vote involves: the member’s own financial interest (must be direct, substantial, and readily identifiable)*, or the member’s official conduct*, or a contract giving a direct benefit to member or member’s spouse, but covered by an exception to G.S. 14-234 * Board c ompensation does not involve the board’s financial interest or official conduct.

38. Conflicts in Voting Board members must vote unless the vote involves: a zoning map or text amendment reasonably likely to have direct, substantial, and readily identifiable financial impact on the member; or a quasi-judicial matter in which board is acting as board of adjustment, and member’s participation would violate an affected person’s constitutional rights to an impartial decision maker.

39. Conflicts in Voting Q: When does a governing board “act as a board of adjustment”? A board of adjustment: hears appeals of interpretations of the zoning ordinance grants variances to the zoning ordinance grants conditional-use permits for certain land uses and types of development A: When doing any of these activities—all of which are considered quasi-judicial matters).

40. Conflicts in Voting Board members must vote unless the vote involves: a zoning map or text amendment reasonably likely to have direct, substantial, and readily identifiable financial impact on the member; or a quasi-judicial matter in which board is acting as board of adjustment, and member’s participation would violate an affected person’s constitutional rights to an impartial decision maker.

41. What type of conflict would violate someone’s constitutional rights? a member having a fixed opinion before hearing the matter undisclosed communications between the board member and an affected person a close familial, business, or other associational relationship with an affected person a member having a financial interest in the outcome of the matter Conflicts in Voting

42. Case problems

43. Remember NC’s Motto Esse quam videri (To be, rather than to seem)

44. Questions? Fleming Bell Phone: 919.966.4210 E-mail: bell@sog.unc.edu Eileen Youens Phone: 919.962.0942 E-mail: eyouens@sog.unc.edu