C onflict of I nterest - PowerPoint Presentation

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Conflict of Interestfor Institutional Review Boards

Jane Gutcher

Office of General Counsel

Ethics Specialty Team

August 14,

2012Slide2

Training TopicsIntroductory slidesApplying rules to IRB members as Federal employeesConflict of Interest StatutesGifts from Outside SourcesOutside ActivitiesApplying rules to VA researchers

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Department of Veterans Affairs

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Why Follow the Rules?Public service is a public trustEmployees must place loyalty to the Constitution, the laws and ethical principles above private gainMaintain public’s confidence in the Federal Government, VA and VHA’s research program

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Department of Veterans Affairs

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Why Get Ethics AdviceTake advantage of Safe Harbor - cannot be disciplined if disclose fully and rely on advice in good faith

Criminal prosecution almost certainly will be declined

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if you disclose fully and rely on our advice

Ethics advice should always be in writing

- to ensure above protections

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Department of Veterans Affairs

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The RulesConflict of Interest Laws 18 U.S.C. §§ 201-209Standards of Ethical Conduct for Employees of the Executive Branch 5 C.F.R. Part 263514 General Principles

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Department of Veterans Affairs

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Conflict of Interest LawsCRIMINAL STATUTES – 18 U.S. CodeFederal Government employees are prohibited from participating personally and substantially as part of official duties in a particular matter that will have a direct and predictable effect on their financial interest or the financial interest of their spouse, minor child, outside employer, or certain others

18 U. S.C. § 208

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Department of Veterans Affairs

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Conflict of Interest LawsCRIMINAL STATUTESNo bribery No representing non-Government parties back to the Federal Government after leaving Government service in certain situations – don’t switch sides

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Department of Veterans Affairs

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Conflict of Interest LawsCRIMINAL STATUTESNo supplementation of Government salary by non-Government entityNo representing non-Government parties, with or without compensation, in matters in which Government is a party or has a substantial interest

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Department of Veterans Affairs

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Standards of Ethical ConductPromulgated by the Office of Government Ethics (OGE) pursuant to two Executive OrdersCreate Government-wide, mandatory standards for all employees of the Executive Branch.

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Department of Veterans Affairs

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The 14 General PrinciplesApply to every employee of the Executive BranchFoundation principlesTwo predominant concepts:Do not use your public office for private gainDo not give unauthorized preferential treatment to any private organization or individual

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Department of Veterans Affairs

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Applying Rules to IRB Members as Federal Employees___________________________________________11

Department of Veterans Affairs

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Hypothetical #1A member of an IRB is approached by someone who offers to pay the member $10,000 if he ensures that a particular research study is approved by the IRB.Should he take the money?12

Department of Veterans Affairs

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Conflict of InterestNot unless he wants to go to jail for bribery. The person paying the bribe is also subject to the law. Hypothetical #2What if a member of an IRB is offered a$10,000 speaking engagement with CompanyXYZ, with the unstated understanding, wink, wink,

that he will ensure that a particular study is

approved by the IRB?

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Department of Veterans Affairs

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Conflict of InterestNot as straight forward – looks as if member is entering a legitimate outside employment arrangement except … for the unstated requirement that the payment is not really for the speaking engagement, but is in fact a payment to get the member to act in a certain way as part of his official duties. DO NOT DO IT.

Also a 208 criminal violation

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Department of Veterans Affairs

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Hypothetical #3An executive of Company XYZ offers to give the son of a member of the Central IRB a $10,000 scholarship to attend any college of the son’s choosing.May the son accept the gift of thescholarship?

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Department of Veterans Affairs

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GiftsWhat is a Gift?“Gift” is any item of monetary value, including any gratuity, favor, service, discount, entertainment, or hospitality 5 C.F.R. § 2635.203

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Department of Veterans Affairs

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GiftsWhat is not a Gift?Loans or discounts available to the general publicPresentation item of little intrinsic value

Modest food or refreshments

Coffee and donuts – not a meal

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Department of Veterans Affairs

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Gifts From Outside SourcesRULE: You may not directly or indirectly solicit or accept a gift given:By a prohibited sourceBecause of your official position

Examples of “prohibited source” –

VA contractor Veteran Veteran Service Org.

Patient Drug Co. Vendor

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Department of Veterans Affairs

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Gifts From Outside SourcesEXCEPTIONS to gift prohibition$20/$50 ruleUnsolicited gift from prohibited source with value $20 per less per occasion (no cash)No more than $50 per year from one source

Gifts based on personal relationship

Gifts based on spouse’s employment

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Department of Veterans Affairs

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Gifts From Outside SourcesEXCEPTIONS to gift prohibitionDiscountsOffered to all Government employeesOffered to a group unrelated to Government

Mileage points on official travel

Widely Attended Gathering

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Department of Veterans Affairs

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Gifts From Outside SourcesUnsolicited offer of free attendance at conferenceAttend in official VA capacity; andAssigned to speak, present information, or participate in panel; and

Offer made by sponsor of event

Then acceptance of free attendance on day of presentation allowed- not a gift –

5 C.F.R. § 2635.204(g)(1)

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Department of Veterans Affairs

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Gifts From Outside SourcesUnsolicited offer of travel support from non-Federal source for meetingAway from duty station in official capacityApproval in advance using VA Form 0893Supervisor agrees meeting is in VA’s interest and related to employee’s official duties

Review by Government Ethics official

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Department of Veterans Affairs

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Gifts From Outside SourcesNon-Federal travel support cont.Travel support includes travel, lodging, meals, and attendance fees

“Meeting” or similar function does NOT include a meeting required to carry out an agency’s statutory function such as investigations, inspections, audits, site visits, negotiations or litigation

Not appropriate to accept gift from non-Federal source to attend IRB meetings (e.g. Central IRB)

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Department of Veterans Affairs

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Gifts From Outside SourcesOffer of scholarship to son of IRB member could be an “indirect” gift to the member If given by a prohibited source or given to the son because of the member’s official position, it would be a prohibited giftSeek ethics advice – ethics official will: Look at facts of particular gift

See if any exceptions apply

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Department of Veterans Affairs

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Hypothetical #4IRB member has outside job as a consultant to small biotech company. A second IRB member has a salaried appointment at the University-affiliate. A VA PI, who is also employed at the University-affiliate, is PI for a VA CRADA with that same biotech company. The study comes to the IRB.Can either of the members participate in thereview of the study?

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Department of Veterans Affairs

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Outside ActivitiesRULE: An employee shall not engage in outside employment or any other outside activity that conflicts with official duties26

Department of Veterans Affairs

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Outside ActivitiesAn activity conflicts with an employee’s official duties when:It is prohibited by statuteIt would require the employee’s disqualification from matters so central to the performance of his official duties that the employee’s ability to perform the duties of his position would be materially impaired

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Department of Veterans Affairs

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Conflict of Interest LawsCRIMINAL STATUTES – 18 U.S. CodeFederal employees are prohibited from participating personally and substantially in a particular matter as part of official duties that will have a direct and predictable effect

on their financial interest or the financial interest of their spouse, minor child, outside employer, or certain others

18 U.S.C. § 208

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Department of Veterans Affairs

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ImpartialityRULE: Federal employee may not participate in particular matter in which any “person” with whom he has a “covered relationship” is a party, or represents a party, where a reasonable person with knowledge of all the relevant facts would question the employee’s impartialityViolates the ethics rules which prohibit favoritism in performance of official duties

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Department of Veterans Affairs

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ImpartialityWhich “persons” are in covered relationship with employee?Personal (members of household, spouse, relatives, friends)Business (anyone with whom employee has or seeks a business, contractual, or other financial relationship)

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Department of Veterans Affairs

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ImpartialityCovered relationship, cont.Organizations in which employee is an active participantEmployers, including:

spouse’s

former

any non-Federal

prospective

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Department of Veterans Affairs

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Conflict of Interest Hypo # 4 - SolutionSo, IRB member who is a consultant at the biotech company is prohibited from participating in the review of the study funded by the biotech company.

Why?

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Department of Veterans Affairs

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Conflict of InterestPossible violation of 18 U.S.C. § 208Central IRB member has personal financial interest in study if his participation in study review is determined to affect the ability or willingness of the biotech company to pay his consulting fees

Fact-driven determination

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Conflict of InterestViolation of impartiality regulationThe biotech consultant/IRB member has a covered relationship with the biotech company Prohibited from participating in review of the study if a person with whom the member has a covered relationship is a party to the matter

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Department of Veterans Affairs

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Conflict of Interest Hypo #4 Solution – cont’dIRB member who is an employee at the University may participate in the review provided:

He has no personal financial interest in the study

University has no financial interest in the study that would be imputed to him

Potential for university to have ownership of any IP resulting from the study because PI is DAP is too attenuated

No covered relationship exists just because IRB member works at same university as PI

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Department of Veterans Affairs

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Conflict of InterestSay another IRB member’s spouse works for a large medical device company that is funding a different study at VA, which comes before the IRB.May this IRB member participate in thestudy review?

Department of Veterans Affairs

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Conflict of InterestNo. IRB member may not participate.Possible violation of 18 U.S.C. § 208Spouse’s relevant financial interests in company imputed to member

Stock ownership

Bonus dependent on company performance

Other relevant financial interests

Salary is not relevant to participation in study review unless the study affects the ability or willingness of company to pay spouse’s salary

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Department of Veterans Affairs

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Conflict of InterestPossible violation of 208 cont.Financial interest of spouse’s employer is not imputed to the member (unless spouse has “ownership” interest in company)

Determination of financial interest fact-driven

If spouse has relevant financial interest in study, then member prohibited from participating in study review due to imputed financial interest

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Conflict of InterestViolation of impartiality regulationIRB member has covered relationship with spouse’s employer Even if no imputed financial interest in the company through his wifeProhibited from participating in the study review where wife’s employer is a party to the CRADA

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Applying Rules to VA Researchers___________________________________________40

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Hypothetical #5Dr. Rich Stocker, VA researcher and clinician, has an idea for a new use of a drug manufactured by BigDrugCo. He wants BigDrugCo to fund a VA study under a Clinical Trial CRADA.Dr. Stocker holds $14,000 worth of BigDrugCo shares and his 12-year-old daughter holds $10,000 – any problems?41

Department of Veterans Affairs

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Conflict of InterestResearcher is prohibited from participating in a matter that affects his own financial interest unless there is a regulatory exemption.$15,000 de minimis exemption for publicly-traded stockMust aggregate all affected stock held by employee, spouse, minor children$14,000 and $10,000 takes him over allowed amount

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Department of Veterans Affairs

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Conflict of InterestDr. Stocker may –recuse himself, sell the stock or seek a waiver of the criminal conflict If stock not publicly-tradedno de minimis exemption ownership of any amount would cause a financial conflict

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Department of Veterans Affairs

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Conflict of InterestDo the laws and rules of conflict of interest apply to researchers (and IRB members!) at VA under a Without Compensation (WOC) appointment?44Department of Veterans Affairs

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Conflict of InterestYes. A researcher/IRB member under a WOC (or IPA) appointment is considered a VA employee subject to all of the laws and rules of Government Ethics.May a VA researcher conduct VA research on a licensed invention owned and patented by the VA researcher?45

Department of Veterans Affairs

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Conflict of InterestMaybe – prior to royalty flow unclear if financial interest – attenuated, but prudence dictates - time to get a waiver of the criminal conflict of interest lawOnce royalty flowing – employee researcher may not participate (conduct research) in a particular matter (licensed invention) that will have a direct and predictable effect on his own financial interest Must get

a 208 waiver

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Department of Veterans Affairs

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Conflict of InterestWhat if a VA researcher starts his own company to license an invention owned by VA?Can he continue to research the invention at VA?47

Department of Veterans Affairs

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Conflict of InterestNo.The VA researcher may not continue to research the invention at VA without a waiver of the criminal conflict (“208 waiver”)Likelihood of one in this circumstance is very small

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Department of Veterans Affairs

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Conflict of InterestCan VA researcher consult for a company that is licensing his invention (under a license with the university affiliate) if he holds no ownership interest in the company and is NOT researching the invention at VA?

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Department of Veterans Affairs

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Conflict of InterestYes. The VA researcher may consult for the licensee under these facts – may not use government time, facilities or equipmentHowever, he may NOT conduct additional research on his invention at VA if he is a consultant for the outside company50

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Conflict of InterestMust maintain a clear delineation between VA job and consulting job – cannot be paid by another to do his Government job (209 violation)Researcher should legal seek advice – each factual situation is different51

Department of Veterans Affairs

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Conflict of InterestMay a VA employee who is a consultant for, or in a speaker’s bureau for, a company conduct VA research that benefits that company?52Department of Veterans Affairs

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Conflict of InterestNo.VA researcher is prohibited from participating in matter that could affect his financial interest. Here, financial interest is the ability or willingness of the company to continue to hire him as a consultant or speaker by conducting the research.

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Department of Veterans Affairs

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Conflict of InterestEven without a criminal prohibition, the researcher has a covered relationship with the company Absent an authorization, he would be prohibited from participating in research study where the company is a party if a reasonable person with knowledge of the facts would question his impartiality54

Department of Veterans Affairs

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Conflict of InterestMay the VA researcher who is also a university-affiliate employee request that part of his VA research be contracted to:himself at the university?his spouse at the university?another university employee?55

Department of Veterans Affairs

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Conflict of InterestAbsent a 208 waiver, the researcher is prohibited by the conflict of interest law from participating in a matter that affects his own financial interest or the financial interest of certain others such as his outside employer, the universityVA researcher may request contracting officer procure certain service not available within VARequest must not be for a specific entity or researcherNeeds a 208 waiver to put specifics into grant proposals

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Department of Veterans Affairs

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Conflict of InterestFederal employees are prohibited from receiving any salary or contribution to or supplementation of salary from any source other than the United States as compensation for services as a Government employee 18 U.S.C. § 20957

Department of Veterans Affairs

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Conflict of InterestVA researchers may work for both the university and VA, but NOT at the same moment in timeNeed strict accounting of timeNeed to use VA computer systems and email when on VA timeNeed to segregate VA research from non-VA researchData issues – authority to give VA data to others

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Department of Veterans Affairs

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Advice and GuidanceWhen in doubt, seek advice before taking any action!Contact the Designated Agency Ethics Official (DAEO), Alternate DAEO, or Deputy Ethics Officials in the Office of General Counsel orRegional Counsel and their Staff ethics officials

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Department of Veterans Affairs

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Contact InformationVA Ethics OfficialsWalter A Hall, Assistant General Counsel and Designated Agency Ethics OfficialRenée L. Szybala, Associate General Counsel and Alternate DAEOVACO Deputy Ethics Officials:Jane Gutcher, Jonathan Gurland, Chris Britt

Office of General Counsel (023)

810 Vermont Avenue, NW

Washington, DC 20420

(202) 461-7694 or (202) 461-1600 or at GovernmentEthics@va.gov

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Department of Veterans Affairs

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Contact InformationOther VA Ethics Officials:OGCNorthEastEthics@va.gov for ME, NH, VT, MA, RI, CT, NY, NJ, DE, PA, OH, WV, MI, WI OGCSouthEastEthics@va.gov for VA, NC, SC, GA, FL, MS, AL, LA, southern TX, Puerto Rico 

OGCMidwestEthics@va.gov

for DC, MD, IN, KY, TN, AR, MO, IL, IA, MN, ND, SD, NE, KA,

OGCWestEthics@va.gov

for northern TX, OK, NM, AZ, CO, UT, WY, MT, ID, NV, CA, OR, WA, HI, AK, Guam, Philippines

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