Advisory Opinion No. 1998-2

University Of Connecticut Health Center Faculty Member Receiving Research
Funding From A Business With Which He Is Associated

Dr. Pramod K. Srivastava recently joined the faculty of the University of Connecticut Health Center (UCHC). Among his duties, he serves as the chair of the Center for Immunotherapy of Cancer and Infectious Diseases. The Center’s laboratory is charged with developing innovative treatments of cancers and infectious diseases. A private biotechnology company, Antigenics LLC, would like to fund such research efforts at UCHC. As part of this contract, there may be options for licensing opportunities for inventions emanating from the research.

Antigenics, Inc. is a holding company which owns approximately 65% of the shares of Antigenics LLC. Dr. Srivastava owns less than 1% of the stock of Antigenics LLC and owns approximately 22% of the stock of Antigenics, Inc. Because of this ownership, Dr. Srivastava has asked whether, under the Code of Ethics for Public Officials, he may enter into a contract with Antigenics LLC to provide the research funding.

Pursuant to Conn. Gen. Stat. § 1-84(i), a state employee or a business with which he is associated may not enter into any contract with the state, valued at one hundred dollars or more, unless the contract has been awarded through an open and public process, including prior public offer and subsequent public disclosure of all proposals considered and the contract awarded. A "Business with which he is associated" includes a corporation in which the state employee holds five per cent or more of the total outstanding stock of any class. See Conn. Gen. Stat. § 1-79(b).

Based on Dr. Srivastava’s 22% ownership interest in Antigenics, Inc., it is a business with which he is associated. Furthermore, because Antigenics, Inc. is the majority stock owner and holding company of Antigenics, LLC, any benefits derived by Antigenics, LLC would create a resultant benefit to Antigenics, Inc. Therefore, for purposes of § 1-84(i), Antigenics, LLC will also be considered a business with which Dr. Srivastava is associated. As a result, the agreement between UCHC and Antigenics, LLC to provide research funding may only be allowed if it is first awarded through an open and public process. An advertisement placed in a biotechnology trade journal, which is widely disseminated in the industry, soliciting proposals to support the intended research will comply with the open and public process. Finally, in order to avoid any potential violation of § 1-84(c) which prohibits use of one’s position for personal financial gain or the financial gain of a business with which you are associated, neither Dr. Srivastava nor any subordinate should be involved in any part of the evaluation and selection process.

By order of the Commission,

Stanley Burdick
Chairperson