When people like legislators and members of Congress make official decisions that affect their personal investments--which in turn may benefit them financially--they are said to have a conflict-of-interest. But conflict-of-interest concerns are not limited only to elected officials.
Under Arizona law, nearly all employees of public institutions have an ongoing duty to ensure that they not have a conflict-of-interest in their employment.
The essential provisions of the law are in Arizona Revised Statutes Section 38-503, which requires that any public employee who has, or whose relative has, a "substantial interest in any contract, sale, purchase, or service" to the agency where the employee works "make known that interest" in the agency's official records and "refrain from voting upon or otherwise participating" in the transaction.
Employees and their Relatives
The statute also requires an employee who has (or whose relative has) a "substantial interest in any decision of a public agency" to disclose the interest in the agency's official records and not participate in that decision.
A relative whose business dealings might trigger the conflict-of-interest requirements is the employee's spouse, child, child's child, parent, grandparent, brother, or sister of the whole or half blood and their spouses, and the parent, brother, sister or child of a spouse.
Arizona's conflict-of-interest law applies to "all public officers and employees of incorporated cities or towns, political subdivisions and of the state and any of its departments, commissions, agencies, bodies or boards, but shall not apply to members of the legislature."
Substantial Interest
Employees and Governing Board members of the Maricopa Community Colleges are therefore subject to the law, and the Governing Board's conflict-of-interest policy mirrors the statute.
Key to determining if a conflict of interest exists is whether the interest in a business deal or decisions is what the law would call a "substantial interest."
The statute, however, does not define "substantial interest." Instead, it defines the phrase "remote interest," and holds that a substantial interest is a "pecuniary or proprietary interest" that is not a remote interest.
Under the law, a remote interest is limited to nearly a dozen varieties of business relationship that might involve a public employee.
Remote interests include those of a nonsalaried officer of a nonprofit corporation, a landlord or tenant of the contracting party, and an attorney of a contracting party--and the list goes on.
Typically, though, the situations that would create a substantial interest outnumber those that would create a remote interest. This means that if a public employee--or the employee's relative--has a financial stake in a separate business deal with the agency where the employee works, chances are good that financial stake represents a substantial interest under the conflict-of-interest law.
Public Disclosure
If a Maricopa employee (or the employee's relative) has a substantial interest in a transaction with, or decision by, the District (as well as any of its colleges or centers), the employee must do two things.
First, the employee must disclose the substantial interest on the Annual Acknowledgements and Disclosures eForm (which is housed in the Employee Learn Center portal).
This information is an official record of the Maricopa County Community College District that is available for public inspection.
Second, the employee must thereafter refrain from voting or participating in any manner in the contract, sale, purchase or decision in which the employee has the substantial interest.
For as long as that interest exists, the employee is under a continuing obligation to keep current the disclosure statement by completing the Annual Acknowledgements and Disclosures eForm every fiscal year.
Competitive Bidding
Neither state law nor Governing Board policy prohibits, however, an employee or employee's relative from doing business with the District. In fact, the employee or relative may supply equipment, material, supplies or service to the District and not violate its conflict-of-interest policy, provided:
- the interest is disclosed on the Annual Acknowledgements and Disclosures eForm or in the minutes of the Board;
- the contract is awarded after public competitive bidding; and
- the employee refrains from voting or participating in any manner in the contract, sale, purchase or decision.
No doubt the best measure of public concern over the potential of such a conflict is the criminal penalties the law imposes on officials and employees who violate Arizona's conflict-of-interest statutes.
Any public employee, then, would be well advised to exercise caution before engaging in business-related dealings with that person's employer.
In addition to the State laws discussed above, the Maricopa Governance Online Policy Manual also contains standards relating to conflict-of-interest.
Page Updated 02/21/18