Wednesday, August 28

New Reporting Rules at Stalingrad, er, PSU

A student friend of mine e-mailed me and said that posters with the following messages are plastered on the buildings all over campus.  I suggest we take PSU up on its offer of reporting conflicts of interest.  BTW, the BOT policy on COI is not mentioned on the flyer.

Conflict of Interest - Starts at Page 33 (also posted below)
Call: Penn State Ethics and Compliance Hotline at 800-560-1637 

As we welcome new and returning students to campus for the fall semester, all members of the Penn State community are asked to be mindful of their individual responsibility to help keep the University a safe and ethical institution. Members of the University community are urged to speak up if they see or suspect illegal or unethical conduct.
The following resources are available for faculty, staff, students and others to report any suspected illegal or unethical conduct, and to seek assistance:

Reporting a crime: Contact the campus police or security office. In an emergency, dial 911.
Assistance for victims of sexual violence, sexual abuse or sexual harassment:
If a child is a victim of any kind of abuse, including sexual abuse: Contact the Pennsylvania Child Welfare Services "ChildLine" at 800-932-0313.
Reporting ethical violations (including fraud, theft, conflict of interest and violations of University policy, including research compliance, discrimination and athletics-compliance issues):
Reporting a bias or discrimination incident:
There also are other ways to report acts of intolerance. For students at University Park, call the Lion Support Help Line at 814-863-2020, while students at campuses other than University Park may contact their campus Student Affairs office.
In addition, employees should be aware of Penn State's Conflict of Interest policy:
The following University offices also are available:
  • The Employee Relations Division of the Office of Human Resources at 814-865-1412.
  • Office of University Ethics and Compliance at 814-865-8353
  • The Office of Internal Audit at 814-865-9596.
  • College and administrative unit Human Resources Representatives listing at online.
If it is not clear where to turn for assistance, any of these offices will guide the individual to someone who can help.
Training is available on many of the above topics. Please contact the Office of Human Resources' Center for Workplace Learning and Performance at 814-865-8216.
The University does not condone wrongful conduct by any member of the Penn State community no matter what position he or she may hold. Members of the University community are urged to speak up if they see or suspect illegal or unethical conduct, and to be assured that the University will protect them from retaliation.

- selected passages-

Note: Most legitimate organizatons have conflict of interest policies that prohibit ANY transactions or dealings that could be perceived as a conflict of interest.  The PSU BOT's policy allows board members to conduct business with PSU up to certain dollar or shareholder levels.  Not so ironically, this is one of the few policies recommended by the Freeh Report that is LAGGING in implementation.


(d) Related Entity. A “related entity” means a corporation, partnership, 
association or other entity where the Trustee or family member serves as an officer, director, 
partner or employee; expects to receive $5,000 or more in compensation for services in a 
calendar year; holds any equity in a non-publicly traded entity; or holds an interest of 5% or 
more in a publicly traded entity. 

(e) Known. “Known” means that the Trustee has actual knowledge of the 
conflict of interest. 

Section 8.04 Recusal. If a matter in which a Trustee has a known conflict of 
interest comes before the Board for discussion or decision, the interested Trustee shall leave the Board meeting while the matter is discussed and voted upon. The Trustee’s interest and recusal shall be noted in the minutes, which shall be publicly available. 

Section 8.05 Contracts or Transactions with the University.. (a) A contract or transaction between the University and a Trustee, family member or an entity in which a Trustee or family member has a beneficial interest of ten percent (10%) or more and the
contract or transaction is valued at $10,000 or more must be approved by the Board of Trustees 
in accordance with this Section. The University official responsible for the matter must first 
conclude that it is in the best interests of the University to consider entering into such a contract 
or transaction. In circumstances where the Trustee, family member or related entity is 
purchasing goods or services from the University, as opposed to selling such goods or services, 
the matter is presumptively in the University’s interests if the price is fair and reasonable and the 
contract or transaction does not foreclose a similar transaction with another individual or entity. 

In other circumstances where the University is purchasing goods or services, the officer must 
first explore alternatives that do not involve an interest of the Trustee, family member or entity in
which the Trustee or family member owns a beneficial interest of ten percent (10%) or more. If, 
after exercising such due diligence, the official determines that it is in the best interests of the 
University to proceed, the matter must be submitted to the Board for approval. The written 
materials submitted to the Board shall include a description of the contracting process, including 
the use of open and public bidding if possible and practical, and the official’s analysis of why it 
is in the best interests of the University to proceed with the agreement or relationship. The 
interested Trustee shall leave the meeting during the discussion and voting. The Board shall 
determine by a majority vote of the disinterested Trustees whether the transaction or arrangement 
is in the University’s best interests, the price and value provided are fair and reasonable to the 
University and whether to approve the transaction or arrangement. Any such decision shall be 
recorded in the minutes, which shall be publicly available. 

(b) Contracts or transactions of less than $10,000 between the University and a Trustee, 
family member or an entity in which the Trustee or a family member has a beneficial interest of 
ten percent (10%) or more will be disclosed to the Board of Trustees annually in a written report
which shall be available to the public. The report shall include a certification by the appropriate 
officers of the University that such contracts or transactions were made in the normal course of 
business and were fair to the University. 

Section 8.06 Annual Statements. Each Trustee shall annually sign a 
statement that affirms that such Trustee (a) has received a copy of the Board’s conflict of interest
policy as expressed in this Article VIII, (b) has read and understands the policy, and (c) has 
agreed to comply with the policy. 

Section 8.07 Fiduciary Duty. Members of the Board of Trustees stand in a 
fiduciary relationship to the University which reposes special confidence in each member. 
Members of the Board of Trustees shall act in good faith, with due regard to the interests of the 
University, and shall comply with the fiduciary principles of conduct in addition to any other 
state or federal requirements. Trustees bring to their roles varied backgrounds and expertise, and 
they are selected in different ways, but they must keep the welfare of the entire University, not 
just a particular constituency, at all times paramount. 

Section 8.08 Misuse of Information. No member of the Board of Trustees 
shall for personal gain or benefit or for the gain or benefit of others use any information not 
available to the public at large and obtained as a result of service to the University. 

Section 8.09 Gifts and Favors. No member of the Board of Trustees shall 
solicit or accept for personal use or for the use of others any gift, loan, gratuity, reward, promise
of future employment or any other thing of monetary value based on any understanding that the 
vote, official action or judgment of the member would be influenced thereby.

Section 8.10 Pre-Existing Contract or Transaction. A contract or 
transaction that would be required to be disclosed under this Article but which was entered into 
before the interested Trustee assumed office, or which became subject to this Article as a result
of amendments to the Article, and which remains to be performed in whole or in part, shall be 
disclosed by the Trustee pursuant to Section 8.03 but is not subject to the voting and other 
requirements of this Article. 

Section 8.11 Family Members as Employees. A record of all spouses or 
dependent children of Trustees who are employed by the University or an affiliated entity and 
where compensation exceeds $10,000 per year shall be maintained in the Office of the Board of
Trustees and the names and positions but not the amount of compensation shall be posted on the 

Section 8.12 Employment of Trustees. No Trustee may be employed by the 
University in any capacity before the fifth (5th) anniversary of the date on which such person l
served as a Trustee, except as approved by action of the Board of Trustees. 

Section 8.13 Disclosure of Potential Conflict of Interest by Employees of 
the University. Employees of the University shall exercise the utmost good faith in all 
transactions touching upon their duties to the University and its property. In their dealings with 
and on behalf of the University, they shall be held to a strict rule of honest and fair dealings 
between themselves and the University. They shall not use their positions, or knowledge gained
therefrom, in such a way that a conflict of interest might arise between the interest of the 
University and that of the individual. Employees shall disclose to the administrative head of the 
college or other unit in which they are employed, or other appropriate superior officer, any 
potential conflict of interest which they are aware before a contract or transaction is 
consummated. This bylaw shall be published to the University community at least once 

Section 8.14 Consultation. Any Trustee or University official may consult 
with the Secretary of the Board or the University General Counsel concerning the interpretation
or application of any of the provisions of Article VIII

PSU Ethics HOTLINE 800-560-1637
Call to Report BOT Conflicts of Interest

1 comment:

  1. Pretty pedestrian stuff, but I hope that they have the staff to investigate reports by over zealous reporters and those with axes to grind. PSU may have opened Pandora's box. I would estimate that over 50% of reports made will be totally unfounded. We had a case here of a Branch Head being accused of child molestation by his ex wife. By the time the DA and JAG determined that the accusation was false and malicious, significant damage was done to the person's career. He ended up transferring to another base. His ex disappeared into the woods.