why are we talking about this?

Ethical Dilemmas in Economic Development

46th Annual Basic Economic Development Course

Norma HoustonJuly 30, 2018

What We’ll Be Discussing . . .

Basic Principles

Ethical Standards

Legal Standards

Case Problem Scenarios

Why Are We Talking About This?

Norma Houston UNC School of Government

www.sog.unc.edu

Why Are We REALLY Talking About This?

Whose interests do you serve?

Have You Ever Felt Like This?

Perception Is As Important As Reality


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If people act legallyare they also acting ethically?

If you can do it, does that mean you should do it?

Ethics vs. Law

You Have A Choice

You have a choice about how to act; you should evaluate legal and ethical factors in deciding

how to act

Deciding How to Act: Two Questions

Is it legal? Is it ethical?Your

Decision Here


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ETHICAL STANDARDS

Ethics vs. Law

Who decides when a public official has acted unethically?

Citizens

Ethics vs. Law


The press


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Ethics vs. Law


The public official

Ethics vs. Law


Other public officials

Ethics is NOT . . .

• How you feel that day

• The same as religion or spiritual belief

• Simply following the letter of the law

• Doing something because technology will enable it to be done

• Doing what everybody else does

• Doing something simply because you can get away with it

Modified from: Ed Burghard, October 29, 2012, strengtheningbrandamerica.com


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Why Do People Act Unethically?

• Pressure to perform

• Peer pressure

• Not understanding consequences

• Unchartered territory –not knowing what to do

• Personal loyalties

• Lack of long-term perspective – thinking in the moment

• High personal cost for doing the right thing

• Poor judgment

• Not understanding expected conduct

• Improper/inadequate training

• Small violations not punished lead to bigger violations

Source: IEDC Ethics Training materials

IEDC Code of Ethics

1. Bring respect to profession

2. Uphold position of trust

3. Remain free from influence

4. Represent community interests

5. Inform stakeholders

6. Maintain confidentiality

7. Follow local protocols

8. Develop professionally

9. Assure equal opportunity

10. Follow IEDC code

IEDC Ethics “Check-List”

1. Recognize and clarify the predicament

2. Gather all relevant facts

3. List all of your options

4. Analyze each option to determine if it is legal, represents the right thing to do, and generates a result that is beneficial to all parties

5. Draw your own conclusions and make a decision

6. Ask yourself how you’d feel if your decision was made public by the media (“front page” test)

7. Take action


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CASE PROBLEMS DISCUSSION

ETHICAL ISSUES

LEGAL STANDARDS

Sources of Legal Standards

Federal Law

State Law

Local Code of Ethics

Remember the“Most Restrictive

Rule”


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Common Ethics Provisions

• Prohibition against financial conflicts of interest• Individual• Family• Business associates• Others (nonprofits)

• Gift Ban

• Misuse of confidential information

• Economic interest disclosure

• No “revolving door”

• Conflicts disclosure and recusal

• Outside compensation for rendering official services

• Enforcement

• Sanctions

What is a conflict of interest?


1. Self-benefiting in contracting


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2. Gifts & Favors



3. Insider Trading

2. Gifts & Favors


Conflicts of Interest in Contracting


Direct contracting

Attempting to influence

contracting


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If you’re involved at any point in the contracting process, you’re involved in “making or administering” the contract

Making or administering

a contract

Self-Benefiting in Public ContractingG.S. 14-234(a)(1)

There’s a direct benefit if you or your spouse:

1. Own more than 10% of the company,

2. Receive income or commission from the contract, or

3. Acquire property under the contract

Direct benefit to you or

your spouse


a contract



*Unless an exception applies:1. banks and utilities2. friendly condemnation3. spouse employment4. public assistance programs 5. small jurisdictions


your spouse


a contract

Class 1 misdemeanor* &

void contract*


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Doesn’t have to be a contract you make or

administer!

No exceptions!


your spouse

Attempt to influence

Someone involved in making or

administering

Class 1 misdemeanor

Attempting to Influence ContractingG.S. 14-234(a)(2)

Gifts & Favors

2. Gifts & Favors

Gifts from contractors

Gifts for influencing contracts

What is a Gift?

“Something voluntarily given by one person to another without compensation.”

-Webster’s Dictionary


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Gifts and Favors from Contractors G.S. 133-32

Prohibited Giver:Contractor or vendor who is:1. Past (within 1 year)2. Current3. Potential future

= Class 1 misdemeanor, unless an exception applies


Prohibited Recipient:Public officer or employer who:1. Prepares plans or

specifications for public contracts, or

2. Awards or administers public contracts, or

3. Inspects or supervises construction

= Class 1 misdemeanor, unless an exception applies

Honoraria

Honoraria BanquetsSouvenirsProfessional Organizations Family / Friends


Exceptions:


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Souvenirs / advertising items of nominal value



Exceptions:

Meals at banquets



Exceptions:

Gifts to professional organizations



Exceptions:


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Non-business customary gifts from friends or family (must be reported to agency head)



Exceptions:

Gifts for Influencing ContractsG.S. 14-234(a)(3)

Doesn’t have to be a contract you or your spouse benefit from!

No exceptions!

Solicit or receive a gift

or favor

Attempt to influence

Someone involved in making or

administering

Class 1 misdemeanor

Gift Ban Rule of Thumb

When In Doubt, Do Without!


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Misuse of Confidential Information

3. Insider Trading

Misuse of Confidential Information G.S. 14-234.1

Use non-public information

gained in official position

Class 1 misdemeanor

Pecuniary benefit to you or

someone else

CASE PROBLEMS DISCUSSION

LEGAL ISSUES


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Thanks for Being an Ethical Public Servant!

Norma [email protected]

919.843.8930


www.sog.unc.edu

mailto:[email protected]

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