| Advisory opinion request regarding the propriety of the CEO of the LSU Foundation also holding the position of LSU Vice-President for Institutional Advancement. |
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The LSU Foundation (Foundation) CEO position became vacant on December 31, 2016 and a search for a successor CEO is proceeding. The new CEO will be hired and compensated (including salary, performance bonus and other benefits) by the Foundation's Board of Directors. It is anticipated that the Foundation CEO also will serve in the role of LSU Vice-President for Institutional Advancement (LSU VP), without salary or benefits.
According to the additional information provided, the duties of the LSU VP will include providing leadership and coordination for all major fundraising activity associated with all LSU affiliated foundations and other LSU campuses; serving as the primary communicator to other University officers, deans, leaders at other LSU campuses and entities, and other constituents regarding issues related to advancement on behalf of the University President; and overseeing the University's Office of Institutional Advancement. However, according to the organizational chart provided, it does not appear that the LSU VP will directly supervise any employees.
Additionally, LSU's Vice-President for Finance and Administration/CFO (LSU CFO) is serving as interim Foundation CEO. His LSU employment duties and compensation will be continued without change, but the Foundation will reimburse LSU for a portion of his salary attributable to time spent on Foundation matters and away from his regular LSU duties.
A search committee made up of the ranking members of the Foundation's Board of Directors, including LSU President F. King Alexander, an ex-officio board member, and the interim CEO, will interview candidates for the position. The Foundation's Board of Directors will make the final decision regarding its new CEO, while Mr. Alexander will technically be responsible for filling the LSU VP position. In his capacity as Foundation CEO, he will report directly to the Foundation's Board of Directors and will undergo annual performance evaluations without the involvement of the LSU President. As LSU VP, he will report directly to the LSU President and be subject to the performance evaluation process required of similar positions.
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It is the position of the Foundation/LSU that:
The Foundation deems its support of the costs of the dual position, even to the extent the LSU VP performs duties on behalf of LSU that are unrelated to the Foundation, to be part of its support of LSU. This dual role formally establishes a central leader to coordinate and align statewide fundraising efforts for the LSU campuses, which is particularly important as LSU and the Foundation prepare to launch their next capital campaign. The dual role also reflects the significance of philanthropy to LSU's success, and is the model which most of the best performing university foundations nationwide have adopted.
The Foundation/LSU recognize that the person hired to fill the Foundation CEO/LSU VP position will be a public employee because of his employment with LSU. The Foundation/LSU assert that the LSU VP would, in his role as Foundation CEO, necessarily participate in transactions in which the Foundation has an interest (for example, common duties include execution of gift agreements wherein private donations are received by the Foundation for the benefit of LSU). However, the Foundation's interest is the fulfillment of its purpose as provided in its charter - the support of LSU, the entity ultimately at interest in the Foundation's transactions.
The request provides that La. R.S.17:3390(A) recognizes the connectivity of LSU and Foundation interests and the value of mutual support. Additionally, La. R.S. 17:3390(B) permits a minority of the Foundation's Board of Directors to be LSU employees, and allows LSU to provide personnel and other support to the Foundation, provided the Foundation reimburses LSU directly or through its in-kind services (LSU receives financial support from the Foundation far in excess of any support given.) Furthermore, the request provides that La. R.S. 17:3390 aligns with the purposes of La. R.S.42:1123(9)(b), as both are grounded in a recognition of benefits flowing to a university from its employees performing services for a private employer. Nevertheless, the benefit is greatly enhanced in the narrow circumstances of La. R.S. 17:3390 inasmuch as the private employer/Foundation exists only to support LSU. LSU submits that the purposes of La. R.S. 17:3390 cannot be fulfilled without recognition of the exceptional unity of interests of LSU and the Foundation.
Finally, the request provides that, to the extent the Foundation CEO's compensation could be deemed to be received for the performance of his LSU VP duties, and to the extent the Foundation reimburses LSU for a portion of the interim CEO/VP's compensation, such payments are permitted by La. R.S.42:1111(A)(1)(b).
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La. R.S. 42:1102(2)(a) defines "agency" to mean a department, office, division, agency, commission, board, committee, or other organizational unit of a governmental entity.For purposes of this Chapter, "agency of the public servant" and "his agency" when used in reference to the agency of a public servant shall mean: (i) for public servants in the twenty principal departments of the executive branch of state government, the office in which such public servant carries out his primary responsibilities; except that in the case of the secretary, deputy secretary, or undersecretary of any such department and officials carrying out the responsibilities of such department officers it shall mean the department in which he serves; and except that in the case of public servants who are members or employees of a board or commission or who provide staff assistance to a board or commission, it shall mean the board or commission.
La. R.S. 42:1102(3) defines "agency head" to mean the chief executive or administrative officer of an agency or any member of a board or commission who exercises supervision over the agency.
La. R.S. 42:1102(21) defines "substantial economic interest" to mean an economic interest which is of greater benefit to the public servant or other person than to a general class or group of persons.
La. R.S. 42:1102(23) defines "transaction involving the governmental entity" to mean any proceeding, application, submission, request for a ruling or other determination, contract, claim, case, or other such particular matter which the public servant or former public servant of the governmental entity in question knows or should know: (a) is, or will be, the subject of action by the governmental entity; (b) is one to which the governmental entity is or will be a party; or, (c) is one in which the governmental entity has a direct interest. A transaction involving the agency of a governmental entity shall have the same meaning with respect to the agency.
La. R.S. 42:1111A(1)(a) prohibits a public servant from receiving anything of economic value, other than compensation and benefits from the governmental entity to which he is duly entitled, for the performance of the duties and responsibilities of his office or position.
La. R.S. 42:1111A(1)(b) provides that any supplementary compensation or benefits provided to an employee of a public higher education institution, board, or system from funds or property accruing to the benefit of the institution, board, or system as approved by the appropriate policy or management board, through an alumni organization recognized by the management board of a college or university within the state or through a foundation organized by the alumni or other supportive individuals of a college or university within the state the charter of which specifically provides that the purpose of the foundation is to aid said college or university in a philanthropic manner shall be deemed for purposes of this Subsection as compensation and benefits from the government to which he is duly entitled.
La. R.S. 42:1112B(3) prohibits a public servant from participating in a transaction involving the governmental entity in which, to his actual knowledge, any of person of which he is an officer, director, trustee, partner, or employee has a substantial economic interest.
La. R.S. 42:1115A prohibits a public servant from soliciting or accepting, directly or indirectly, any thing of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if such public servant knows or reasonably should know that such person: (1) has or is seeking to obtain contractual or other business or financial relationships with the public servant's agency, or (2) is seeking, for compensation, to influence the passage or defeat of legislation by the public servant's agency.
La. R.S. 42:1115B prohibits a public employee from soliciting or accepting, directly or indirectly, anything of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if such public employee knows or reasonably should know that such person: (1) conducts operations or activities which are regulated by the public employee's agency, or (2) has substantial economic interests which may be substantially affected by the performance or nonperformance of the public employee's official duty.
La. R.S. 17:3390A provides that the legislature finds that private support enhances the programs, facilities, and research and educational opportunities offered by public institutions of higher education in Louisiana. Therefore, each higher education management board and institution is hereby encouraged to promote the activities of alumni associations, foundations, and other private, nonprofit organizations that raise private funds for the support of public institutions of higher education. Further, it is recognized that private, nonprofit organizations under the direction and control of private individuals who support institutions of higher education are effective in obtaining private support for those institutions.
La. R.S. 17:3390B provides that a nonprofit corporation, whose principal purpose is to support one or more programs, facilities, or research or educational opportunities offered by public institutions of higher education, including but not limited to any nonprofit corporation whose primary purpose is to finance the design, construction, renovation, or equipping of facilities to be leased to such public institutions of higher learning, shall be a private entity that shall not be deemed to be a public or quasi public corporation or an administrative unit, public servant, employee, or agent of any institution of higher education for any purpose whatsoever if it meets all of the following criteria: (1) the majority of the voting members of the corporation's board of directors are not members or employees of a higher education management board; (2) the corporation is under the management and control of a board of directors elected by the members or shareholders of the corporation; and (3) the corporation reimburses, either directly or through in-kind services, the cost of housing, personnel, which personnel shall remain public servants for all purposes, and other support furnished to the corporation by any institution of higher education, if any such support is furnished.
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Adopt the proposed advisory opinion.
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| Assigned Attorney: |
Haley Williams |
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