Research at University of Wisconsin System institutions, disclosure requirements relating to contracts with and gifts from foreign sources, and providing a penalty. (FE)

Current law also prohibits any UW System employee from acting as an agent for another if it would create a conflict of interest with the terms of the employee's service in the UW System and also requires the Board of Regents to promulgate rules relating to conflicts of interest. These rules prohibit specified persons, including faculty and academic staff, from engaging in outside activities if doing so conflicts with his or her public responsibilities to the UW institution or to the UW System.

In addition, the rules require such a person to annually report to his or her institution the following: 1) associations with organizations related to his or her fields of academic interest or specialization; 2) private remunerative relationships with nongovernmental sponsors of university research for which the person is a principal investigator; and 3) remunerative outside activities in his or her field of academic interest or specialization. The rules also require each UW institution to develop policies and procedures relating to outside activities, including those relating to use of university facilities, absences from regular duties, and conflicts of interest.

Also under current law, with exceptions, it is a crime for a public employee to participate in a contract in both an official and private capacity if the employee has a private pecuniary interest and also an official function requiring the exercise of discretion. Among the exceptions, the provision does not apply to a contract between a research company and the UW System or a UW institution for the purchase of goods or services, including research, if the interest that a UW System employee has in the research company has been evaluated and addressed in a management plan for evaluating and managing potential conflicts of interest and this plan complies with the Board of Regents' policy for such management plans.

Federal law also requires each UW institution to annually submit to the federal Department of Education a publicly available disclosure report containing certain information if the institution receives a gift from or enters into a contract with a foreign source, the value of which is $250,000 or more, considered alone or in combination with all other gifts from or contracts with that foreign source within a calendar year. Federal law requires additional disclosures of gifts from or contracts with foreign sources that contain certain restrictions or conditions.

Under the bill, if a UW institution receives a gift from or enters into a contract with a foreign source, the value of which is $50,000 or more, considered alone or in combination with all other gifts from or contracts with that foreign source within a calendar year, the UW institution must submit to the legislature and to the state Department of Justice an annual disclosure report containing 1) the aggregate dollar amount of the gifts and contracts by country and 2) the purpose of each gift or contract. A “foreign source” includes a foreign government, a foreign legal entity or its subsidiary or affiliate, and an individual who is not a U.S. citizen or national. A “gift” includes a gift of money or property. A “contract” is defined as an agreement for the acquisition by purchase, lease, or barter of property or services by a foreign source, for the direct benefit or use of either of the parties. The Board of Regents may submit one report on behalf of multiple UW institutions.

The bill also requires each UW institution to separately disclose any restricted or conditional gift or contract from a foreign source. A “restricted or conditional gift or contract" is defined as any endowment, gift, grant, contract, award, present, or property that includes provisions regarding the employment, assignment, or termination of faculty; the establishment of departments, centers, programs, or new faculty positions; the selection or admission of students; or the award of grants, loans, scholarships, fellowships, or other forms of financial aid restricted to students of a specified country, religion, sex, ethnic origin, or political opinion. The disclosure must include the dollar amount, the date, a description of the conditions or restrictions, and the applicable country.

Under the bill, if a UW System employee fails to act in good faith and with reasonable diligence to facilitate a UW institution's reporting of foreign-source gifts and contracts with an aggregate value of at least $50,000 or of a restricted or conditional gift or contract, the employee may be fined not more than $5,000 for the first offense and not more than $10,000 for each subsequent offense.

In addition to institutional disclosures, the bill requires each UW System employee who participates in research conducted at or sponsored by a UW institution, and each third-party researcher, to disclose all research contracts with and gifts from any foreign source associated with the People's Republic of China, Russia, Cuba, Iran, North Korea, or Syria to the extent the contract or gift involves the employee or third-party researcher. The bill defines a “third-party researcher” as a principal investigator, project director, collaborator, consultant, or other person who participates in the design, conduct, or reporting of research conducted at or sponsored by a UW institution and who is not a UW System employee or student.

The disclosure must be made to the applicable UW institution and include the amount of the contract or gift; the date the contract was entered into or the gift received; the name and address of the foreign source; and a copy of any applicable agreement. Any person who willfully or with gross negligence violates these disclosure requirements may be fined an amount not exceeding 105 percent of the amount of the applicable contract or gift.

The bill also requires each UW institution to ensure that its employees and students who perform research supported by state or federal funds, and any other person who participates in such research at the institution, satisfy all disclosure requirements associated with the awarding of the research funding, including the reporting of financial conflicts of interest under federal rules governing the management and reporting of financial conflicts of interest in U.S. Public Health Service-funded research. Unless the UW institution already maintains such a policy or does not conduct research, each UW institution must create a policy of best practices for research projects, security, and collaboration that further American scientific standards of transparency, reciprocity, merit-based competition, and integrity. In developing this policy, the institution must consider best practice standards established by federal agencies and other entities that award research grants.

Because this bill creates a new crime or revises a penalty for an existing crime, the Joint Review Committee on Criminal Penalties may be requested to prepare a report.