Dr. Jeffery Chalmers Guest Posts: As Liberty University Moves Forward, Where Were, and Are, the Conflict of Interest Guidelines?

The Wartburg Watch (blog)
September 18, 2020

https://bit.ly/3j5hhVO

“Many years ago, there used to be something called ‘conflict of interest.’ No longer, I’m afraid. Today, we all bathe in the same river.”

1. 911 call from Falwell house reveals ex-Liberty president was drinking, fell down, lost ‘a lot of blood’ after resigning
   Read this carefully. Becki Falwell claimed she was at a church meeting until 11 PM and needed to break down a door to get into this house and help her drunk and bleeding husband. There is no question that we are dealing with a very sick family and this didn’t happen yesterday. I’m suspicious that university leaders were aware of these problems. If they weren’t, they should never have been in their positions.
2. The Falwells, the pool attendant and the double life that brought them all down
   The Washington Post printed a damning article on the sexual proclivities and questionable business dealings of the Falwells.
3. After Jerry Falwell Jr.’s departure, Liberty University faces questions about faith, power, accountability

Today, we are discussing how to do accountability in educational institutions so the post on accountability is timely. The following are some quotes from that final link.

The board of trustees should examine its own failures, said Warren Smith, president of MinistryWatch, a watchdog group, and a Liberty parent. “They have not performed their fiduciary duties. ”Still, he said, Liberty’s strengths — its financial health, its large donor and alumni bases, its breadth of majors and opportunities — give it the opportunity to become an even better school.“There’s a lot going on at Liberty that’s great; I wouldn’t send my own daughter there if I didn’t think so,” he said.

….“This is a once-in-a-generation opportunity in higher education. It’s a school with the budget to hire the best.”For years, members wrote in a statement, Liberty’s board allowed Falwell to harm Liberty’s reputation, permitting him and his family to run the school like a personal business and sitting by “while Falwell’s words and deeds disgraced the name of the Lord again and again.”

Coincidentally (or is it providentially?) Dr. Jeffrey Chalmers, a long time reader and thoughtful commenter at TWW, approached us about an idea he had to write about universities and ethics. Jeffrey has commented frequently about his frustration at the goings-on at Liberty University as well as other Christian educational institutions. He is a professor at a secular university in the area of science and engineering.

He raises the following question frequently. Why do some secular universities and scientific research institutes seem to have a higher standard of ethics than Christian schools like Liberty University? Why can he easily find the conflict of interest statements at major secular institutions while being unable to find them at Liberty University? Is this the reason LU is facing the mess they now deservedly have in today’s news media?

Todd and I are most thankful for Jeffrey’s thoughtful commentary.

COI=Conflict of Interest in the following post.

I picked the above image because the TWW usually has an image to start a post, and most of us have seen this statue somewhere.  Years ago I was at an old county courthouse, and the blindfolded lady justice was very prominent.   As I was preparing this post, I looked into “Lady Justice”, and realized she was a Roman “god” and was known in Rome before the time of Christ.  However, the blindfold did not appear until the 16 th century, apparently.

So, the writer of the NT would have been aware of not only lady justice but the concept of a “balance” of measuring both sides of a “question/issue”

So, I ask again, “What does the concept of above reproach mean in the NT”?  The phrase is used a number of times in the NT, including 1 Timothy 3:2, Titus 1, and Colossians 3.  It is used not just to describe “overseers” but all Christians (Colossians 1:22).  Thayer’s Greek Lexicon defines approve reproach to mean “to blame, to revile… equivalent to shame”.  It seems to me that “above reproach” is quite clear.

As a reader and blogger on TWW for a number of years now, reoccurring themes are not just the bad behavior of individuals, and in many cases, of “Christian” organizations, but also the common comment that “such and such” would not be allowed, or more realistically, there are policies regarding such behavior/practice in our “secular” organizations.

Since I have spent my professional life in a Big State U, I am well aware of “ethical policies” of which I am bound to follow.  It is my opinion, that these “ethical policies” are the “balance” that Lady Justice is holding. At my institution, when there is a “question” with respect to a person upholding/respecting one of these “ethical polices”, an investigation is conducted, usually by a “committee” which then is charged with deciding if the policy was violated.  Obviously, when issues of criminal actions are involved, the local authorities, and I have seen in some cases, the FBI is involved.

To keep this post focused, I would like to address the concept of “Conflict of Interest, COI” at Universities. This specific post is further motivated by the recent revelations at Liberty University, and the actions of Mr. Jerry Falwell, Jr.  I might add, however, that published allegations of COI by Mr. Falwell Jr are not new, and have been in the press for years.

Therefore, I am posting links to public, published, COI policies for a number of Big Name Universities. Further, I have picked both public, and private institutions, in the “liberal” state of California, as well as the “conservative” state of Texas, just to demonstrate the uniform concern for COI. These institutions listed are big research Universities with very large research grants and contracts from federal agencies, such as the National Institutes of Health, NIH, and the National Science Foundation, NSF. Consequently, there are multiple types of COI policies, the most strict of which are those that involve human subjects. (I might add that there are allegations that Dr. Fauci, the head of the National Institute of Infectious Diseases, is heavily “conflicted” with respect to COVID-19.  I know for a fact that NIH employees are under VERY strict COI rules). Finally, to provide “apples to apples” comparison, I have included the COI policy for Calvin College.

Here are some of the links and text taken directly out of the online documents to demonstrate how explicit they are. I also might add, that not all COI rules are draconian. There are cases that COI is allowed, as long as an independent oversight committee “judges” the actions of the “conflicted party”.

The National Institutes of Health

Conflict of interest in scientific research (NIH): https://grants.nih.gov/grants/policy/coi/index.htm

NIH requires recipient institutions and investigators (except Phase I SBIR/STTR applicants and recipients) to comply with the requirements of 42 CFR 50, Subpart F, “Responsibility of Applicants for Promoting Objectivity in Research for which PHS Funding is Sought” (FCOI Regulation), as implemented in the 2011 Final Rule for grants and cooperative agreements.

The requirements promote objectivity in research by establishing standards that provide a reasonable expectation that the design, conduct, or reporting of research funded under PHS grants or cooperative agreements will be free from bias resulting from any conflicting financial interest of an investigator. An “investigator” is someone:

• defined as the PD/PI and any other person, regardless of title or position
• who is responsible for the design, conduct, or reporting of research funded by PHS, or proposed for such funding
• which may include, for example, collaborators or consultants.

Each Institution shall maintain an up-to-date, written, enforced policy on financial conflicts of interest that complies with the regulation and make the policy available via a publicly accessible Web site.

These FCOI requirements do not apply to Federal employees or Federal agencies. Federal agencies have their own set of rules governing financial conflicts of interest for employees.

When submitting a grant application, the signature of the Authorized Organization Representative (AOR) certifies the applicant institution’s compliance with the requirements of 42 CFR 50, Subpart F, including that:

1. There is in effect at the Institution an up-to-date, written and enforced administrative process to identify and manage Financial Conflicts of Interest (FCOI) with respect to all research projects for which NIH funding is sought or received;
2. The Institution shall promote and enforce Investigator compliance with the regulation’s requirements including those pertaining to disclosure of Significant Financial Interests;
3. The Institution shall identify and manage FCOIs and provide initial and ongoing FCOI reports to the NIH consistent with this subpart;
4. When requested, the Institution will promptly make information available to the NIH/HHS relating to any Investigator disclosure of financial interests and the Institution’s review of, and response to, such disclosure, whether or not the disclosure resulted in the Institution’s determination of an FCOI;
5. The Institution shall fully comply with the requirements of the regulation.

When the Institution determines that an FCOI exists (see #3 above), the Institution must report to the NIH awarding Institute or Center through the submission of an initial (Original) and annual FCOI report using the eRA Commons FCOI Module (learn how to submit a report through eRA Commons).

For full FCOI requirements, see the NIH Grants Policy Statement and the Final Rule.

The University of California, Berkeley: https://compliance.berkeley.edu/conflict-of-interest

Disqualification Rule under the California Political Reform Act

Under the California Political Reform Act, ALL employees (staff and faculty) must disqualify themselves from any University decision involving entities that may affect their personal financial interests. The following are deemed to be economic interests from which conflicts of interest can arise:

• Any business in which the employee or immediate family member is a director, officer, partner, trustee, employee, or holds any position of management;
• Any business in which an employee or immediate family member has an investment worth $2,000 or more;
• Any real property in which an employee or immediate family member has an interest worth $2,000 or more;
• Any source of income worth $500 or more, received or promised 12 months or less before the decision;
• Personal finances of the employee or immediate family member if these personal expenses, income, assets or liabilities are likely to go up or down by $250 or more in a 12-month period as a result of the University decision; or,
• The employee or immediate family member received or has been promised $500 or more in gifts 12 months or less before the decision is made from any person or organization that may benefit by the University decision.
• Immediate family members include spouse, registered domestic partners, and dependent children.

Employees whose financial interests require them to disqualify themselves may not participate in any way in the decision, and may not influence any other person with respect to the decision.

Stanford University: https://adminguide.stanford.edu/chapter-1/subchapter-5

1. Definitions
   a. Significant Financial Interest, Current or pending ownership interest in an entity amounting to at least one-half percent (0.5%) of the company’s equity or at least $10,000 in ownership interest (except when the ownership is managed by a third party such as a mutual fund).
   b.Immediate Family MemberSpouse, dependent child as determined by the Internal Revenue Service, domestic partner.
   c.Cognizant University OfficerPresident, Provost, Vice Presidents, Vice Provosts, Deans, Directors of SLAC, Hoover Institute and Athletics, and the University Librarian.

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2.  Policy: The following actions on the part of staff members are prohibited:

1. Personal Gain
   Transmitting to outsiders or otherwise using for personal gain University-funded or supported property, work products, results, materials, property records or information developed with University funding or other support.
2. Confidential or Privileged Information
   Using for personal gain or other unauthorized purposes, confidential or privileged information acquired in connection with the individual’s University-supported activities. Confidential or privileged information is non-public information pertaining to the operation of any part of the University including, but not limited to, documents so designated, medical, personnel, or security records of individuals; anticipated material requirements or price actions; knowledge of possible new sites for University-supported operations; knowledge of forthcoming programs or of selections of contractors or subcontractors in advance of official announcements; and knowledge of investment decisions. Questions about confidential information may be referred to the University Privacy Officer at privacyofficer@stanford.edu.
3. Approvals
   Participation in negotiating or giving final approval to financial or other business transactions between the University and other organizations in which the individual or an immediate family member has a Significant Financial Interest or with which the individual or an Immediate Family Member has an employment or consulting arrangement.

All staff should also note that originating or approving financial or other business transactions between the University and other organizations with which the staff member has any financial or family ties (even those not rising to the level of Significant Financial Interest or constituting an Immediate Family Member) may create the appearance of a conflict of interest. It is required that all such situations be disclosed in writing to the cognizant University officer and this disclosure should be documented and retained for the duration of the business relationship.

1. Gratuities and Special Favors Acceptance of gratuities, unsolicited gifts exceeding $50 in value, solicited gifts in any amount or special favors from private or public organizations or individuals with which the University does or may conduct business or extending gratuities or special favors to employees of any sponsoring government or other agency or entity.
2. University Resources Use of University resources including, but not limited to, facilities, departmental parking permits, personnel or equipment, except in a purely incidental way, for any purposes other than the performance of the individual’s University employment. Note: Acceptable use of University vehicles is covered in Guide Memo 8.4.2: Vehicle Use.
3.Business Relations Acceptance of or continuing in employment, an official relationship, or a consulting arrangement with another concern which has or seeks to have a business relationship with the University.
4.Commitment For staff members exempt from governmental regulations regarding compensation for overtime work: Acceptance of employment, consulting, public service, or pro bono work which can result in conflicts or the appearance of conflicts with a staff member’s primary commitment of time and energy to the University.

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3. Procedures for Exceptions
Because it may be in the interest of the University to grant exceptions to the rules in Section 2, the following procedure has been established:

1. Disclosure
   Whenever a staff member anticipates a situation where he/she may be potentially in violation of the policies in Section 2, that staff member must immediately make full disclosure in writing of the details of the situation, through his/her supervisor, to the cognizant University officer and request an exception. Exceptions must be approved in writing in advance. If a staff member finds that he/she has engaged in conduct that violates the policies in Section 2, such situation must be reported immediately to the cognizant University officer.
2. Responsibility of University Officers
   Any requests for exception shall be reviewed and all facts thoroughly examined for apparent conflicts. Exceptions may be granted at the sole discretion of the University. If the cognizant University officer determines that the University would best be served by the granting of the requested exception, he/she may do so in writing with justification for the granting and delineating any conditions placed on the approval. Except in rare instances, University officers may not delegate this responsibility and any delegation must be in writing. If the designee grants an exception, the designee must provide the University officer with a memorandum detailing the circumstances of the exception.

Copies of the approval must be retained throughout the period of employment.

1. Annual Reports
University officers who receive and grant exceptions to the policies in this Guide Memo shall, at the end of each academic year, provide a detailed summary report to the Provost. 2. Other Reports
In addition to Section 3.c, cognizant University officers may establish, within their areas of responsibility, mandatory periodic conformance and compliance reporting procedures for all staff.
3.Consequences
Failure to adhere to any aspect of the policy and procedures shall subject the involved employee(s) to disciplinary action, up to and including termination of employment.

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University of Texas, Austin:  https://www.utsystem.edu/sites/policy-library/policies/uts-180-conflicts-interest-conflicts-commitment-and-outside-activities#:~:text=of%20Commitment%20Prohibited-,U.%20T.,employees’%20duties%20to%20their%20institution.

UTS 180 Conflicts of Interest, Conflicts of Commitment, and Outside Activities

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Sec. 1 Purpose

This policy is intended to provide best practices, ensure compliance with the law, and protect the credibility and reputation of the U. T. System Administration, of each U. T. institution, and their employees, by providing a framework to address conflicts of interest, conflicts of commitment, and outside activities.

Sec. 2 Principles

Appropriate oversight of outside activities in order to successfully manage potential conflicts of interest and conflicts of commitment is critical to the success of U. T. System Administration and each U. T. Institution.

Sec. 3 Applicability

This policy applies to all employees of The University of Texas System Administration, and to all those employed by a University of Texas institution.

Sec. 4 Primary Responsibility

The primary responsibility of employees of the U. T. System Administration and each of the U. T. institutions is the accomplishment of the duties and responsibilities assigned to one’s position of appointment.

Sec. 5 Value in Certain Outside Activities

Regents’ Rule 30104 permits U. T. employees to engage in outside work or activities, subject to State laws, U. T. System Administration and U. T. institution rules or policies.  Institutions may encourage certain specified outside activities that clearly contribute to the mission of the institution and/or provide important elements of faculty or staff development related to their institution responsibilities.

Sec. 6 Unmanaged Conflicts of Interest and Conflicts of Commitment Prohibited

1. T. employees may not have a direct or indirect interest, including financial and other interests, or engage in a business transaction or professional activity, or incur any obligation of any nature that is in substantial conflict with the proper discharge of the employees’ duties to their institution.

Activities on behalf of outside entities or individuals must not interfere with a U. T. employee’s fulfillment of his/her duties and responsibilities to U. T. Such conflicts of commitment may arise regardless of the location of these activities, the type of outside entity, or the level of compensation.

Sec. 7 Policy on Outside Activities Required

System Administration and each Institution shall adopt a policy governing an officer’s or employee’s outside activities, including compensated employment and board service, that clearly delineates the nature and extent of permissible outside activities and that includes processes for electronically disclosing the outside activities and for obtaining and electronically documenting institutional approval to perform the activities.

Sec. 8 Procurement and Contract Management Conflicts of Interest

Given the elevated risks present in procurement and contract management, U. T. System Administration and each U. T. institution shall adopt policies and/or procedures that specifically protect their institutions from unmanaged conflicts of interest in the procurement and contract management context.

Sec. 9 Outside Activities of the Chancellor and Institution Presidents

The Chancellor and presidents are required by state law to file Personal Financial Statements with the Texas Ethics Commission.  The Chancellor shall file a duplicate copy of the Personal Financial Statement with the Board Office at the time that it is filed with the Ethics Commission.  Presidents shall file a duplicate copy of their Personal Financial Statement with the Office of the Chancellor at the time that it is filed with the Ethics Commission.  If an institution president seeks an extension of the time to file a Personal Financial Statement with the Ethics Commission, the president must also notify the Chancellor’s Office of the extension.

Sec. 10 Additional Process Requirements

In addition to the approval and disclosure requirements outlined above, policies must include the following minimum features:

1. a) A process to prevent, identify, manage, and resolve conflicts of interest and commitment;
2. b) A process to electronically document the approval and disclosure process for outside activities;
3. c) a process for appealing a decision that includes at least one level of higher review and access to standard grievance procedures in appropriate cases;
4. d) a process for approval, prospectively or promptly retrospectively, of activities that by their nature cannot be specifically approved before the work must begin, such as consulting on an emergency or other urgent need;
5. e) a process for approving and disclosing activities the details of which must remain confidential (e.g., third party proprietary information, classified government work, and other information made confidential by law); and
6. f) a process for rescinding approvals.

Sec. 11 Accounting for Outside Board Service

Institution policies regarding approval and disclosure of outside board service should balance the need to protect U.T. institutions from even the appearance of conflicts of interest with the rights of employees to engage in outside board service activities which are entirely unrelated to U.T. business without undue burden.

Sec. 12 Noncompliance.

Noncompliance with this policy may subject one to discipline in accord with applicable procedures up to and including termination of employment.

Finally, here is the Calvin College COI policy.  I might note that Calvin College is a reformed, Christian College, primarily focused on undergrad education:  Again, I have included some highlighted verbiage.

 Calvin College:   https://calvin.edu/directory/policies/conflict-of-interest-and-disclosure-policy-for-employees

Policy Statement

3.1 Each employee must avoid incurring any kind of financial or personal obligation that might affect his or her judgment in dealing for the College with outside organizations or individuals. Each person must examine his or her own activities and those of his or her immediate family to ensure that no condition exists that creates a potentially embarrassing or conflict of interest situation with respect to transactions with the College. Employees covered by the policy (per Section 2.1) shall sign and complete the attached Conflict of Interest Statement, upon adoption of this policy or appointment as a covered employee of the college, if later.

3.2 Unless the provisions in paragraphs 3.3 through 3.5 are followed, an employee shall not solicit or be a party, directly or indirectly, to any contract between the College and:

(a) Himself or herself;

(b) Any firm, meaning co-partnership or other unincorporated association, of which he or she is a partner, member, or employee;

(c) Any organization of which he or she or member(s) of his or her immediate family is an officer, director, or employee;

(d) Any private corporation in which he or she is a stockholder owning more than one percent (1%) of the total outstanding stock of any class if the stock is not listed on a stock exchange, or stock with a present total value in excess of $25,000.00 if the stock is listed on a stock exchange or of which he or she is a director, officer, or employee; and

(e) Any trust of which he or she is a beneficiary or trustee.

3.3 In the event a potential contract or existing contract that does or could present a conflict situation, as described in paragraph 3.2, is presented to the college, the employee shall:

(a) Not participate in any way on behalf of the College in negotiation or amendment of the contract, or in the approval of the contract; and

(b) Promptly disclose in writing any financial, personal, or pecuniary interest in the contract to the President of the College, to his or her divisional Vice President or to any other college officer that has the power to approve the contract.

3.4 A contract referenced in paragraph 3.2 must be approved by a vote of not less than two-thirds (2/3) of the President’s Cabinet, or of the approving body, in open session without the vote of the employee making the disclosure.

3.5 The President’s Cabinet or other official body must disclose the following summary information in its official minutes as to contracts referenced in paragraph 3.2:

(a) The name of each party involved in the contract;

(b) The terms of the contract, including duration, financial consideration between parties, facilities or services of the entity included in the contract, and the nature and degree of assignment of employees of the College for fulfillment of the contract; and

(c) The nature of the employee’s financial, personal, or pecuniary interest.

3.63 An employee shall not engage in a business transaction in which the employee may profit from his or her official position or authority with the exception of royalties, commission, and income which are received under the situations described in the Handbook for Teaching Faculty Section 6.10 — Policy On Commissions, Royalties, And Patents.

3.7 An employee shall not engage in a business transaction in which the employee may benefit financially from confidential information that the member has obtained or may obtain by reason of such position or authority. An employee shall not participate on behalf of the College in the negotiation or execution of contracts, making of loans, granting of subsidies, fixing of rates, issuance of permits or certificates, or other regulation or supervision relating to a business entity (whether for profit or not-for-profit) in which the employee has a financial, personal, or pecuniary interest or is an officer, director, or employee.

Board of Trustees AF/IS Committee – reviewed with consent and referred to college governance for approval, May 18, 2006

Cabinet – Approved, July 19, 2006

Planning and Priorities Committee – Approved, October 19, 2006

Faculty Senate – Approved, November 6, 2006

Board of Trustees – Approved, May 18, 2007

Revised August 1, 2012 – Item 1.9 added

Cabinet – Approved, August 22, 2012

Summary 

In summary, it would seem that Mr. Jerry Falwell Jr., and his family, would have violated COI policies a number of times at these institutions, and many, many more that I have looked at which are not listing here.  For example, the “yacht party” would be suspicious given that the Liberty has invested VERY large sums of money in the “yacht” owner’s race cars. There are multiple, repeated reports that Mr. Jerry Falwell Jr’s family has had real estate transactions with Liberty University. Conveniently, the only COI public policy that I can find involves faculty conducting research.

Like a good TWW post, I would like to leave you with this question: