67 



: GENERAL INVESTIGATION OF 

 CONFLICT OF INTEREST AND THE NORTH PACIFIC COUNCIL 



On June 30, 1992, Frank DeGeorge, the Commerce Department's Inspector 

 General, forwarded a memorandum to John Knauss. the Under Secretary for Oceans 

 and Atmosphere, regarding alleged conflicts of interest by members and staff of the 

 North Pacific Fisheries Management Council. The Inspector General found that while 

 the actions of certain Council members amounted to a conflict of interest, their actions 

 were permissible and legal because of the exemptions included in section 302 (k) of the 

 Magnuson Act (see above discussion of permissible conflicts). 



The Inspector General's investigation involved the inshore-offshore allocation 

 issue and claims that certain Council members voted in a way that advanced their 

 personal financial interests. The critical action involved a CouncU vote to define 

 "inshore fadlities" to include all vessels of less than 125 feet. Three council members 

 may have financially benefited from this decision since they had interests in vessels less 

 than 125 feet. However, the Inspector General found there was no violation of law. 

 since the members disclosed their interests and this was not a "particular matter of 

 individual concern" nor a matter that had a "direct and predictable effect on their 

 financial interests". 



A copy of the Inspector Generals memo is attached. 



PgSSIBLE SOLUTIONS 



Numerous fisheries interests have offered a broad range of options to address this 

 matter, ranging from greater financial disclosure to stricter rules dictating when a 

 member must abstain from Council activities due to his or her financial interests. 

 Although a few have suggested revamping the Council system to prevent the 

 appointment of members with financial interests, most observers feel this would be a 

 drastic and unjustified change in the system that allows those with the greatest 

 knowledge and experience to act to manage and conserve the resource. 



