jane gutcher office of general counsel ethics specialty team august 14, 2012

Conflict of Interestfor Institutional Review Boards

Jane Gutcher

Office of General Counsel

Ethics Specialty Team

August 14, 2012

Department of Veterans Affairs 2

Training Topics

Introductory slides

Applying rules to IRB members as Federal employees

Conflict of Interest Statutes Gifts from Outside Sources Outside Activities

Applying rules to VA researchers

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Why Follow the Rules?

Public service is a public trust

Employees must place loyalty to the Constitution, the laws and ethical principles above private gain

Maintain public’s confidence in the Federal Government, VA and VHA’s research program

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Why Get Ethics Advice

Take advantage of Safe Harbor - cannot be disciplined if disclose fully and rely on advice in good faith

Criminal prosecution almost certainly will be declined - if you disclose fully and rely on our advice

Ethics advice should always be in writing - to ensure above protections

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The Rules

Conflict of Interest Laws

18 U.S.C. §§ 201-209

Standards of Ethical Conduct for Employees of the Executive Branch

5 C.F.R. Part 2635

14 General Principles

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CRIMINAL STATUTES – 18 U.S. Code

Federal Government employees are prohibited from participating personally and substantially as part of official duties in a particular matter that will have a direct and predictable effect on their financial interest or the financial interest of their spouse, minor child, outside employer, or certain others

18 U. S.C. § 208

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CRIMINAL STATUTES

No bribery

No representing non-Government parties back to the Federal Government after leaving Government service in certain situations – don’t switch sides

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CRIMINAL STATUTES

No supplementation of Government salary by non-Government entity

No representing non-Government parties, with or without compensation, in matters in which Government is a party or has a substantial interest

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Standards of Ethical Conduct

Promulgated by the Office of Government Ethics (OGE) pursuant to two Executive Orders

Create Government-wide, mandatory standards for all employees of the Executive Branch.

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The 14 General Principles Apply to every employee of the

Executive Branch

Foundation principles

Two predominant concepts: Do not use your public office for private gain Do not give unauthorized preferential

treatment to any private organization or individual

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Applying Rules to IRB Members as Federal Employees

___________________________________________

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Hypothetical #1

A member of an IRB is approached by someone who offers to pay the member $10,000 if he ensures that a particular research study is approved by the IRB.

Should he take the money?

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Conflict of Interest

Not unless he wants to go to jail for bribery. The person paying the bribe is also subject to the law.

Hypothetical #2

What if a member of an IRB is offered a

$10,000 speaking engagement with Company

XYZ, with the unstated understanding, wink, wink,

that he will ensure that a particular study is

approved by the IRB?

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Not as straight forward – looks as if member is entering a legitimate

outside employment arrangement except … for the unstated requirement that the payment is

not really for the speaking engagement, but is in fact a payment to get the member to act in a certain way as part of his official duties.

DO NOT DO IT. Also a 208 criminal violation

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Hypothetical #3

An executive of Company XYZ offers to give the son of a member of the Central IRB a $10,000 scholarship to attend any college of the son’s choosing.

May the son accept the gift of thescholarship?

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Gifts

What is a Gift?

“Gift” is any item of monetary value, including any gratuity, favor, service, discount, entertainment, or hospitality

5 C.F.R. § 2635.203

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Gifts

What is not a Gift?Loans or discounts available to the general

public

Presentation item of little intrinsic value

Modest food or refreshments Coffee and donuts – not a meal

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Gifts From Outside Sources

RULE: You may not directly or indirectly solicit or accept a gift given:By a prohibited sourceBecause of your official position

Examples of “prohibited source” – VA contractor Veteran Veteran Service Org.

Patient Drug Co. Vendor

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EXCEPTIONS to gift prohibition

$20/$50 ruleUnsolicited gift from prohibited source with

value $20 per less per occasion (no cash)No more than $50 per year from one source

Gifts based on personal relationship Gifts based on spouse’s employment

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EXCEPTIONS to gift prohibition

DiscountsOffered to all Government employeesOffered to a group unrelated to GovernmentMileage points on official travel

Widely Attended Gathering

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Gifts From Outside Sources Unsolicited offer of free attendance at

conferenceAttend in official VA capacity; andAssigned to speak, present information, or

participate in panel; and Offer made by sponsor of event

Then acceptance of free attendance on day of presentation allowed- not a gift – 5 C.F.R. § 2635.204(g)(1)

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Gifts From Outside Sources Unsolicited offer of travel support from

non-Federal source for meetingAway from duty station in official capacityApproval in advance using VA Form 0893

Supervisor agrees meeting is in VA’s interest and related to employee’s official duties

Review by Government Ethics official

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Gifts From Outside Sources Non-Federal travel support cont.

Travel support includes travel, lodging, meals, and attendance fees

“Meeting” or similar function does NOT include a meeting required to carry out an agency’s statutory function such as investigations, inspections, audits, site visits, negotiations or litigation

Not appropriate to accept gift from non-Federal source to attend IRB meetings (e.g. Central IRB)

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Offer of scholarship to son of IRB member could be an “indirect” gift to the member

If given by a prohibited source or given to the son because of the member’s official position, it would be a prohibited gift

Seek ethics advice – ethics official will: Look at facts of particular gift See if any exceptions apply

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Hypothetical #4

IRB member has outside job as a consultant to small biotech company. A second IRB member has a salaried appointment at the University-affiliate. A VA PI, who is also employed at the University-affiliate, is PI for a VA CRADA with that same biotech company. The study comes to the IRB.

Can either of the members participate in thereview of the study?

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Outside Activities

RULE: An employee shall not engage in outside employment or any other outside activity that conflicts with official duties

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Outside Activities An activity conflicts with an employee’s

official duties when: It is prohibited by statute

It would require the employee’s disqualification from matters so central to the performance of his official duties that the employee’s ability to perform the duties of his position would be materially impaired

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CRIMINAL STATUTES – 18 U.S. Code

Federal employees are prohibited from participating personally and substantially in a particular matter as part of official duties that will have a direct and predictable effect on their financial interest or the financial interest of their spouse, minor child, outside employer, or certain others

18 U.S.C. § 208AUG12


Impartiality RULE: Federal employee may not

participate in particular matter in which any “person” with whom he has a “covered relationship” is a party, or represents a party, where a reasonable person with knowledge of all the relevant facts would question the employee’s impartiality Violates the ethics rules which prohibit favoritism in

performance of official duties

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Impartiality

Which “persons” are in covered relationship with employee?

Personal (members of household, spouse, relatives, friends)

Business (anyone with whom employee has or seeks a business, contractual, or other financial relationship)

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Impartiality Covered relationship, cont.

Organizations in which employee is an active participant

Employers, including: spouse’s former any non-Federal prospective

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Hypo # 4 - SolutionSo, IRB member who is a consultant at the biotech company is prohibited from participating in the review of the study funded by the biotech company.

Why?

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Possible violation of 18 U.S.C. § 208

Central IRB member has personal financial interest in study if his participation in study review is determined to affect the ability or willingness of the biotech company to pay his consulting fees

Fact-driven determination

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Violation of impartiality regulation

The biotech consultant/IRB member has a covered relationship with the biotech company

Prohibited from participating in review of

the study if a person with whom the member has a covered relationship is a party to the matter

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Hypo #4 Solution – cont’d

IRB member who is an employee at the University may participate in the review provided:

He has no personal financial interest in the study

University has no financial interest in the study that would be imputed to him Potential for university to have ownership of any IP resulting

from the study because PI is DAP is too attenuated

No covered relationship exists just because IRB member works at same university as PI

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Say another IRB member’s spouse works for a large medical device company that is funding a different study at VA, which comes before the IRB.

May this IRB member participate in the

study review?

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Conflict of InterestNo. IRB member may not participate.

Possible violation of 18 U.S.C. § 208Spouse’s relevant financial interests in

company imputed to member Stock ownership Bonus dependent on company performance Other relevant financial interests Salary is not relevant to participation in study

review unless the study affects the ability or willingness of company to pay spouse’s salary

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Possible violation of 208 cont.

Financial interest of spouse’s employer is not imputed to the member (unless spouse has “ownership” interest in company)

Determination of financial interest fact-driven

If spouse has relevant financial interest in study, then member prohibited from participating in study review due to imputed financial interest

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Violation of impartiality regulation IRB member has covered relationship

with spouse’s employer Even if no imputed financial interest in the

company through his wifeProhibited from participating in the study

review where wife’s employer is a party to the CRADA

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Applying Rules to VA Researchers

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Hypothetical #5

Dr. Rich Stocker, VA researcher and clinician, has an idea for a new use of a drug manufactured by BigDrugCo. He wants BigDrugCo to fund a VA study under a Clinical Trial CRADA.

Dr. Stocker holds $14,000 worth of BigDrugCo shares and his 12-year-old daughter holds $10,000 – any problems?

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Conflict of Interest Researcher is prohibited from

participating in a matter that affects his own financial interest unless there is a regulatory exemption.$15,000 de minimis exemption for

publicly-traded stockMust aggregate all affected stock held by

employee, spouse, minor children$14,000 and $10,000 takes him over

allowed amountAUG12



Dr. Stocker may – recuse himself, sell the stock or seek a waiver of the criminal conflict

If stock not publicly-tradedno de minimis exemption ownership of any amount would cause a

financial conflictAUG12



Do the laws and rules of conflict of interest apply to researchers (and IRB members!) at VA under a Without Compensation (WOC) appointment?

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Yes. A researcher/IRB member under a WOC (or IPA) appointment is considered a VA employee subject to all of the laws and rules of Government Ethics.

May a VA researcher conduct VA research on a licensed invention owned and patented by the VA researcher?

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Maybe – prior to royalty flow unclear if financial interest –

attenuated, but prudence dictates - time to get a waiver of the

criminal conflict of interest law Once royalty flowing –

employee researcher may not participate (conduct research) in a particular matter (licensed invention) that will have a direct and predictable effect on his own financial interest

Must get a 208 waiverAUG12



What if a VA researcher starts his own company to license an invention owned by VA?

Can he continue to research the invention at VA?

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No.The VA researcher may not continue

to research the invention at VA without a waiver of the criminal conflict (“208 waiver”)

Likelihood of one in this circumstance is very small

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Can VA researcher consult for a company that is licensing his invention (under a license with the university affiliate) if he holds no ownership interest in the company and is NOT researching the invention at VA?

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Yes. The VA researcher may consult for the licensee under these facts – may not use government time, facilities or equipment

However, he may NOT conduct additional research on his invention at VA if he is a consultant for the outside company

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Must maintain a clear delineation between VA job and consulting job – cannot be paid by another to do his Government job (209 violation)

Researcher should legal seek advice – each factual situation is different

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May a VA employee who is a consultant for, or in a speaker’s bureau for, a company conduct VA research that benefits that company?

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No. VA researcher is prohibited from

participating in matter that could affect his financial interest.

Here, financial interest is the ability or willingness of the company to continue to hire him as a consultant or speaker by conducting the research.

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Even without a criminal prohibition, the researcher has a covered relationship with the company Absent an authorization, he would be

prohibited from participating in research study where the company is a party if a reasonable person with knowledge of the facts would question his impartiality

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May the VA researcher who is also a university-affiliate employee request that part of his VA research be contracted to:himself at the university?his spouse at the university?another university employee?

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Conflict of Interest Absent a 208 waiver, the researcher is

prohibited by the conflict of interest law from participating in a matter that affects his own financial interest or the financial interest of certain others such as his outside employer, the university VA researcher may request contracting officer procure

certain service not available within VA Request must not be for a specific entity or researcher Needs a 208 waiver to put specifics into grant

proposals

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Federal employees are prohibited from receiving any salary or contribution to or supplementation of salary from any source other than the United States as compensation for services as a Government employee

18 U.S.C. § 209

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VA researchers may work for both the university and VA, but NOT at the same moment in time Need strict accounting of time Need to use VA computer systems and email

when on VA time Need to segregate VA research from non-VA

research Data issues – authority to give VA data to

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Advice and Guidance

When in doubt, seek advice before taking any action!

Contact the Designated Agency Ethics Official (DAEO), Alternate DAEO, or Deputy Ethics Officials in the Office of General Counsel

or

Regional Counsel and their Staff ethics officials

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Contact Information

VA Ethics Officials Walter A Hall, Assistant General Counsel and

Designated Agency Ethics Official Renée L. Szybala, Associate General Counsel and

Alternate DAEO VACO Deputy Ethics Officials:

Jane Gutcher, Jonathan Gurland, Chris Britt

Office of General Counsel (023)

810 Vermont Avenue, NW

Washington, DC 20420

(202) 461-7694 or (202) 461-1600 or at [email protected]

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mailto:[email protected]


Contact Information

Other VA Ethics Officials: [email protected] for ME, NH, VT, MA, RI, CT,

NY, NJ, DE, PA, OH, WV, MI, WI

[email protected] for VA, NC, SC, GA, FL, MS, AL, LA, southern TX, Puerto Rico

[email protected] for DC, MD, IN, KY, TN, AR,

MO, IL, IA, MN, ND, SD, NE, KA,

[email protected] for northern TX, OK, NM, AZ, CO, UT, WY, MT, ID, NV, CA, OR, WA, HI, AK, Guam, Philippines

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jane gutcher office of general counsel ethics specialty team august 14, 2012

Documents

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nongovernment entity

criminal statutes

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advice ethics advice

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