Keeping up appearances

February 20, 2004

THE PERCEPTION of a conflict of interest can be as potent as the actual thing.

That's why Global Student Loan, a company in which University College President Gerald A. Heeger owns a stake, is no longer advertised to students on the college's Web site. It's why Mr. Heeger says he limits his participation in the company, which has lent money to some students enrolled in his college.

University System of Maryland Board of Regents believes it has got the potential for conflict reined in on this matter, as the law says it should.

However, all of these efforts to minimize potential conflict don't stop its shadow from lurking: It may be legal, but it doesn't look right, even if Mr. Heeger no longer has a controlling role.

Note that Mr. Heeger recently served as chairman of the regents' statewide Tuition Task Force, which reviewed tuition-setting and financial aid policies. Nobody has suggested direct conflict there, but the persistent shadow can't be denied.

Where the regents really went too far was attempting to give the situation the stamp of legitimacy by exempting Mr. Heeger from state conflict-of-interest laws. Originally created so that research faculty could profit from their discoveries and inventions, which could include technology and services, such exemptions help universities recruit talent. One can also see how they also might help biotechnology expand in the state.

Mr. Heeger helped develop software for Global Student Loan, which is involved in financial aid research to help international students, among others; the regents decided he qualified for the exemption under the law, Chancellor William E. Kirwan says.

In 2002, the state ethics board saw this interpretation as a stretch; so do we.

As corporate investment in university research grows, particularly in the sciences, there's a continuing national debate over potential conflict of interest on campus. And there's a need to balance that potential with the contributions these researchers can make to industry, the public good, and the economy: It's not all academic.

Many colleges deal with it by imposing restrictions on professors' or administrators' investment in the private sector -- by limiting them, say, to a 5 percent stake in a company, or to a $10,000 investment, according to the American Association of University Professors. The trend is toward clamping down on conflict, not easing up.

Maryland's ethics commission did its part by raising the red flag and questioning the regents' loose use of the research exemption. Too bad the regents didn't do theirs.

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