Part 9 Subpart 9-2 Conflicts of Interest Involving the President or a Trustee

Sec. 9-201. Compliance with the Constitution and Laws.

It is the policy of the University that all Trustees and the President of the University comply with the law pertaining to conflict of interest.

Statutory References:

MCL 15.301 et seq. (1968 PA 318, as amended)

MCL 15.341 et seq. (1973 PA 196, as amended)

Sec. 9-202. Law Pertaining to Conflict of Interest.

The Trustees and the President of the University are subject to the provisions of Section 10, Article IV, of the 1963 Michigan Constitution, and Act 318 of the Michigan Public Acts of 1968, as amended (MCL 15.301 et seq.).

Sec. 9-203. Prohibition of Substantial Conflict of Interest.

  1. A Trustee or the President of the University shall not be interested directly or indirectly in any contract with the University, the State, or any political subdivision of the State, which shall cause a substantial conflict of interest.
  2. "Interest", as used in this subpart, means a pecuniary interest.
  3. If there is a conflict of interest on the part of a Trustee or the President of the University in respect to a contract with the University, the State, or any political subdivision of the State, and if the personal interest of the Trustee or the President is of such substance as to induce action on his or her part in promoting the contract for his or her personal benefit, then the conflict of interest shall be deemed substantial and is therefore prohibited.
  4. Notwithstanding subsection (3) above, a substantial conflict of interest of a Trustee or the President of the University shall be deemed notto exist in the following cases:
    1. A contract between the University, the State, or any political subdivision of the State and any of the following:
      1. A corporation in which a Trustee or the President of the University is a stockholder owning one percent (1%) or less of the total outstanding stock of any class where such stock is not listed on a stock exchange, or is a stockholder owning stock with a total market value of Twenty-five Thousand Dollars ($25,000) or less where such stock is listed on a stock exchange;
      2. A corporation in which a trust (where a Trustee or the President of the University is a beneficiary under the trust) owns one percent (1%) or less of the total outstanding stock of any class where such stock is not listed on a stock exchange, or owns stock with a total market value of Twenty-five Thousand Dollars ($25,000) or less where such stock is listed on a stock exchange;
      3. A professional limited liability company organized pursuant to Act 23 of the Michigan Public Acts of 1993, as amended (MCL 450.5101 et seq.), if the Trustee or the President of the University is an employee but not a member of the company.
    2. A contract awarded to the lowest qualified bidder, upon receipt of sealed bids pursuant to a published notice for bids, provided the notice does not bar, except as authorized by law, any qualified person, firm, corporation, or trust from bidding. This subsection (b) does not apply to amendments or renegotiations of a contract or to additional payments under a contract which were not authorized by the contract at the time of award.
    3. A contract for public utility services where the rates for the services are regulated by the state or federal government.

Sec. 9-204. Interpretation of this Subpart.

This subpart shall be interpreted and applied in a manner that (a) results in compliance with the law pertaining to conflict of interest, and (b) best serves the interests of the University. In some cases, it may be determined that after full and complete disclosure to those concerned, the University's best interests are served by authorizing the contract despite the existence of a conflict of interest, but only if the personal interest of the Trustee or the President of the University is not of such substance as to induce action on his or her part in promoting the contract for his or her personal benefit.

Sec. 9-205. Reporting of Conflict of Interest.

If a Trustee or the President of the University believes that he or she may have a conflict of interest (whether or not he or she believes the conflict of interest to be "substantial" and thus prohibited by applicable law and this subpart), he or she shall promptly and full disclose the conflict to the Chairperson of the Board of Trustees (or if the Chairperson of the Board of Trustees is the reporting individual, then to the Vice Chairperson of the Board of Trustees), and shall refrain from participating in any way as to the matter until the conflict issue has been resolved. The Chairperson (or Vice Chairperson) of the Board of Trustees shall consult with legal counsel regarding all conflict of interest matters reported under this subpart, and shall inform the Board of Trustees as to the resolution of such matters as have been reported to him or her.

Cross Reference:

Subpart 10-3. Conflicts of interest involving other officers and employees of the University.

Constitutional Reference:

Mich Const 1963, art iv, § 10

Statutory Reference:

MCL 15.301 et seq. (1968 PA 318, as amended)

Prior Board Action:

November 15, 1991.

May 10, 2002.

Entire Subpart 9-2 included in October 19, 2001 Codification, Phase I.

Entire Subpart 9-2 included in October 22, 2004 Codification, Phase II.