Conflicts of Interest: Can we trust UW trustees?
Essay by Jeffrey Alan Lockwood
– November 12, 2013
University of Wyoming professor
Here’s a moral aptitude quiz. Tom Green, a city council member, owns a grocery store in town. The council must decide which businesses will be included in a publicly-funded economic development program. When the list of enterprises is put to a vote by the entire council, “retail stores” is the business sector identified for assistance — and Green’s Groceries is approved as the case-study for a systematic analysis to increase profitability. Did Mr. Green have a conflict of interest in using his public office to advance his private enterprise? If you said “yes,” you may be unsuited for a position on the University of Wyoming’s board of trustees.
Conflict of interest is a cottage industry in Wyoming. The general excuse is that in a state with so few people, our leaders will inevitably have personal, business, and political connections entangled with their public responsibilities. More realistically, the tight network among Wyoming’s power elite assures that when politicians are elected — or appoint their pals — the desires of the few are likely to conflict with the interests of the many. Wyoming may be a small town with very long streets, but the road to the country club is not open to the public.
The UW trustees constitute a perfect storm for conflicts of interest. The governor appoints these individuals to oversee the state’s largest public institution with a budget exceeding half a billion dollars. Quite appropriately, the trustees include leaders in various financial enterprises that are represented by the university’s School of Energy Resources and colleges of agriculture, arts and sciences, business, engineering, health sciences, and law. As such, the trustees have the potential to augment their wealth as individuals or to garner benefits for their business sectors at public expense. In itself, this is not a problem. In fact, it’s a good thing. If the trustees were not in a position to benefit from the research, teaching, and outreach by the university, then UW would not be doing its job. To the extent that the institution is of direct economic value to the state, the trustees (who all live in Wyoming) have a corresponding potential for conflict of interest.
Presumably in response to this risk, the university adopted a conflict of interest policy. Although the document is lengthy, the central concept is explicit:
“Trustees should not use the authority, title, or prestige of their office to solicit or otherwise obtain private financial, social or political benefit that in any manner is inconsistent with the public interest …[a conflict or apparent conflict arises] whenever a member of the Board, because of his or her outside business, professional or personal interest is in a position to affect, or gain from, the outcome of any transaction with the university.”
The policy is straightforward — and consistently violated. Trustees do not keep up-to-date disclosures on file, and 10 of the 12 claim to have no potential conflicts of interest. Either the governor is appointing people who are irrelevant to Wyoming business or the trustees have a peculiar understanding of “conflict of interest.” Given the backgrounds of most of the trustees, the latter is evidently the case. The only two trustees who list conflicts of interest are Jeffrey Marsh and Warren Lauer. When asked about how he understands the policy, Marsh replied: “I would assume you read the directive the same as I did when I completed the last questionnaire.” But it seems that his fellow trustees had some other interpretation, given that they surely have business interests similar to Marsh’s but assure the public that nothing in their portfolios could possibly “affect or gain from” programs at the University of Wyoming.
So let’s look a bit further into what is (or isn’t) going on with the people who ultimately call the shots.
Too Little, Too Late
The conflict of interest policy requires that:
” … each Trustee shall annually sign and submit to the secretary of the University a statement disclosing all material financial interests, known to the Trustee, of the Trustee or a family member, in any outside entity with which the Trustee knows the University has or is considering a transaction or other business relationships, or affirming that the Trustee knows of no such interests.”
So how’s that working? When the university’s Office of General Counsel finally provided the disclosures after much evasion, the reason for their foot-dragging became evident. The three newest trustees, appointed in March and having attended several meetings, suddenly remembered to file their disclosures two weeks after the documents were requested in mid-July. One of the other trustees (Larry Gubbles) also conveniently remembered to provide an update at this time. The other trustees were 10 to 23 months out of compliance which appears to be a long-standing tradition, according to former trustee Ann Rochelle.
The president of the board of trustees, David Bostrom (who was 22 months beyond his own deadline), explained, “The three new trustees apparently were not advised of the need to file the conflict of interest statements. … We have put in place a process to be certain that all trustees file annually and that new trustees are notified immediately upon their appointment.” That the entire board was delinquent in July and that evidently no trustee has filed an updated disclosure since that time (the new process notwithstanding) suggests how seriously the trustees take their obligations.
A Sheep in Wolf’s Clothing
The conflict of interest regulations further state that, “Trustees shall adhere to the highest ethical standards” — a principle that ought to resonate with UW’s new president, Robert Sternberg, whose tag line is “ethical leadership” as in: “… UW can strive to educate the future ethical leaders [by] admitting students to the university for ethical leadership qualities.” However, his concern doesn’t extend to the institution’s upper echelon: “I must say that I know nothing of the trustees’ conflict of interest policy. … This is not within my sphere of responsibility.” So whose responsibility is it?
The trustees have decided that their approach will solely depend on self-reporting. Each individual files a disclosure, but then nobody reads these documents. Everyone assumes that everyone else is aboveboard, although Ms. Rochelle was dubious on several occasions, including during the infamous Bill Ayers affair during which the university attempted to prevent a 1970s radical from speaking on campus. Pressure to censor Ayers came from major donors who Rochelle suspects had financial ties to some of the trustees. So, the policy might look like a principled wolf, but it’s more like a sheep with a wolf’s pelt that’s been pulled over its eyes.
Rick Miller, the university’s General Counsel, explains: “Board members individually or as a group do not inquire of their fellow members as to the contents of the disclosure documents. That’s simply not the process.” Nor is part of the process actually recusing oneself. Excluding Ms. Rochelle’s own recusals (once in consideration of her niece being a volleyball player during a discussion of the coach’s violations of NCAA regulations and once because she had a legal client who was considering actions against the University), she can recall only one instance in which a fellow trustee declared a conflict of interest.
Don’t look for the disclosures on the university’s website. Without an insistent effort to extract this information from the bowels of Old Main, nobody can see if the trustees are voting on matters that would serve their financial interests. It’s not much of a disclosure if 12 people promise to strip and then go into their closets, where 10 refuse to take off their clothes, while the two naked ones keep the door closed.
A Toothless, Neutered Sheep
Given the loopholes built into the conflict of interest policy, it’s difficult to figure out why the trustees wouldn’t simply file legitimate disclosures in a timely manner. One provision was called the “blind mouse” exemption by an attorney who reviewed the guidelines:
“In the ordinary course of fulfilling their responsibilities, Trustees will not be aware of all the transactions and business dealings of the University. Consequently, this conflict of interest policy applies only to transactions and business dealings of which the Trustee is actually aware.”
In other words, there is a perverse incentive for trustees to do their best not to know what their companies and the university are doing.
So, what if a trustee is caught violating the policy? The wolf’s skin also conveniently covers the sheep’s ass: “No transaction or action undertaken by the University shall be void or voidable, or may be challenged as such by an outside party, by reason of having been undertaken in violation of this policy or the principles set forth herein.” So if your business gets the short end of the stick because a trustee funneled university resources into his or her enterprise, tough luck. My attorney doubted that this provision could be enforced but the subtext is clear — the policy is meant to deny any consequences for violations. The blindfolded sheep is also toothless.
And if the policy isn’t weak enough, the trustees are committed to neutering the sheep. Let’s say that a trustee makes a living by cattle ranching or owns an environmental consulting firm. Should he or she divulge this venture? Well, could the trustee conceivably benefit from a UW program in the College of Agriculture or the Ruckelshaus Institute of Environment and Natural Resources? Not according to Mr. Bostrom. He contends that: “Just because a trustee is in a business area that UW is doing research and/or development in does not mean that a conflict or potential conflict exists. The facts and circumstances of each individual situation must be reviewed to see if there is even the possibility that the conflict or potential conflict exists.”
Of course the details need to be considered, but if the trustee has claimed no potential conflicts of interest, then there’s nothing to review. No disclosure, no problem.
Even if the trustees aren’t committed to President Sternberg’s other major principle — transparency — let’s be clear about a real trustee.
To Tell the Truth
The True Companies is an international conglomerate (primarily involving the exploration, drilling, production, transportation and purchasing of oil) worth more than $100 million. Dave True was named a trustee this March, and on July 24th 2013, he remembered — or was reminded — to file his disclosure in which he stated that he has no possible conflicts of interest. Keep in mind that the policy covers, “situation[s] which could … reasonably appear to compromise the integrity or effectiveness of the Board.” So Dave True, joint partner/owner of the True Companies, claims that, in his role as a trustee of a university with a School of Energy Resources and with plans for a multimillion dollar investment in energy research, he can’t conceive of how his business would benefit.
Taking this absurdity one further step, the Enhanced Oil Recovery Institute (EORI) within the School of Energy Resources has a mandate to provide assistance to individual Wyoming producers. Only if True believes that EORI is incapable of fulfilling its mandate could he deny a potential conflict of interest. But such a belief would require amnesia. According to Geoffrey Thyne, a former researcher with EORI, True Oil has directly and specifically benefitted financially from collaborating with institute scientists, who use public monies to generate solutions for private companies.
It would seem to be contrary to both the purpose of EORI and the goals of True Oil to preclude the potential for conflict of interest. To be clear, such a possibility is not inappropriate. In fact, it is evidence that UW is doing its job in terms of providing valuable service to industry. The problem is: Why would any trustee with an obvious potential for conflict of interest claim that no such possibility exists?
Dave True didn’t respond to my queries, so I’m left guessing why he and the others brush off the conflict of interest policy. Maybe they uniquely interpret the policy or simply don’t understand it (the latter being Ms. Rochelle’s best guess). Or given the concentration of power and wealth in Wyoming, perhaps they enjoy political immunity. Or they might just be unreflective participants in a subculture of presumed privilege. Whatever the explanation, the university appears nonplussed.
“There are times when the university needs to be a leader in the state,” suggests Ms. Rochelle. Perhaps one might even say an ethical leader to echo the leading principle of President Sternberg.
When I asked UW’s General Counsel if I correctly grasped the conflict of interest policy and its (non)implementation, Mr. Miller replied, “I think you understand the process, but are dissatisfied with it.” Fair enough. I’m not pleased with a weak policy that is disingenuously interpreted so that the trustees can exploit conflicts of interest without repercussions.
Even a blind, toothless, neutered sheep can say, “Bah!”— Jeffrey A. Lockwood is a professor of philosophy at the University of Wyoming. He is a renowned entomologist and accomplished writer/philosopher. He first arrived at the UW in the 1980s to conduct groundbreaking research on grasshoppers, insecticides and biological controls. In 2000, Lockwood turned his attention to the arts and humanities and became a professor of philosophy and creative writing. He is the author of Locust: the Devastating Rise and Mysterious Disappearance of the Insect that Shaped the American Frontier (Basic Books 2004), Grasshopper Dreaming: Reflections on Killing and Loving (Skinner House 2002), and other books. In February 2012, Lockwood was featured on WNYC’s RadioLab for the podcast episode “Killer Empathy.” Interested in more of Jeffrey Lockwood contributions? Read these WyoFile features: — “Concealed Weapons, Hidden Failures: What guns in schools would mean for Wyoming,” February 2013 — “Behind the Carbon Curtain; Art and freedom in Wyoming,” July 2012 — “Six-legged Creatures; Lessons from locusts and beetles,” November 2010 — “Insect Intellect; The literary turn of UW entomologist Jeffery Lockwood,” by Susan Gray Gose, June 2011 — Guest columns and essays are the signed perspective of the author, and do not necessarily reflect the views of WyoFile’s staff, board of directors or its supporters. WyoFile welcomes guest columns and op-ed pieces from all points of view. If you’d like to write a guest column for WyoFile, please contact Dustin Bleizeffer at [email protected]
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