Just say no to nepotism

Institutions that lack protections against the conflict of interest
that can arise from doing business with relatives are inviting trouble

It often begins with the best of intentions. A high-ranking
academic official sees a need on campus that a relative is perfectly
suited to meet. Even better, the relative agrees to do the job at a
reduced rate. At first blush, it seems like the perfect solution. But
is it?

Nepotistic practices, which result in contracts being granted on
the basis of family connections with key university officials, or
individuals getting university jobs supervised by a relative, pose
inherent conflicts for postsecondary institutions. Schools that have no
protections against the potential conflicts of interest that can arise
from these practices are courting trouble, according to a consensus of
college and university officials.

Many public institutions, however, are bound by the protections
imposed by their state legal systems. Sheila Trice Bell, executive
director of the National Association of College and University
Attorneys (NACUA) in Washington, D.C., says most states have laws that
prohibit conflicts-of-interest at all public institutions, including
colleges and universities.

Nonetheless, little uniformity exists in public statutes on conflict-of-interest rules among the states.

“It really depends on the state. Most of them have some sort of
standard with regards to conflict of interest for public employees and
institutions,” Bell says.

Less restricted by state laws than public institutions, private
colleges and universities are more obliged to police themselves on
conflict-of-interest matters. Institutions ultimately have to ensure
that their policies are aboveboard and evenhanded for their employees
and for the organization as a whole.

“The bottom line is fairness,” Bell says.

Michael A. Baskin, general counsel at Clark-Atlanta University in
Atlanta, Georgia, says it’s essential for a private college or private
university to have clear cut policies that prevent nepotism. In the
absence of such policies, a school runs the risk of inviting abuse to
its contracting activities and within its employee ranks.

“First and foremost, even if there’s nothing wrong occurring, the
perception of impropriety and the potential for impropriety is there,”
Baskin says of the employee risks incurred when an individual
supervises someone related to him or her in an academic environment.

“For other employees, that relationship could be demoralizing. It poses too many problems,” he added.

Baskin says that two or more relatives can work for the university,
but Clark-Atlanta employees are prohibited from serving in capacities
where they either directly supervise a close relative, or they fall
under the supervision of a close relative.

On the contracting side, Clark-Atlanta officials require full
disclosure by firms doing business with the school. The university must
be notified of all company principals who have relatives working at the
school. Regulations prohibit firms from competing for and doing
business with Clark-Atlanta if any school official with direct or
indirect decision-making authority over the contract is related to an
employee in the firm.

“It’s a two-pronged policy. There must be full disclosure by the
firm, and university officials related to firm employees must not be in
the direct or indirect line of decision-making process,” Baskin says.

C. Barton Landess, general counsel at Davidson College in Davidson,
North Carolina, says anti-nepotism policies help an institution “make
sure it uses merit instead of relationships” as the basis for its
management and contracting decisions. He says Davidson College guards
against nepotism through conflict-of-interest policies.

The risk for institutions that award contracts to firms due to
family relationships between school officials and firm employees could
prove costly for the institution, according to Landess.

“A school that contracts with a firm because of family ties may
lose out on the best price, the better service, or the better product,”
Landess says.

NACUA’s Bell, who has served as general counsel to a number of
institutions, including Fisk University, says nepotism is an important
legal matter for university attorneys but not an “overriding one.”

“I will tell you that general counsels deal with a wide range of
topics that are all important,” she says, adding that guarding against
nepotism “is an issue that’s important to the integrity of an
institution.”

COPYRIGHT 1998 Cox, Matthews & Associates



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