# Conflict Of Interest policy (draft proposal)

1. Any Juno Council Department member should disclose immediately or as soon as it becomes relevant, if he has any Conflict Of Interest (COI), defined as:

1. On-chain compensation from any non-Juno entity surpassing compensation from the Departments, on a monthly basis, excluding staking rewards.
2. Ownership or governance rights of an entity that is entering an agreement with, or receiving any funding, delegation or token from, the Department or its SubDAOs.

2. Any proposal made by the member to his Department (or any of its SubDAOs) regarding such entities must note the proposer COI in its on-chain text.
3. The member with COI must vote ABSTAIN (or abstain from voting) on Department (or any of its sub-DAOs) proposals regarding such entities.

## Methodology

Conflicts of interest (COI) as defined above should be disclosed by the member with an on-chain text proposal to his department, titled "COI Disclosure & Acknowledgement" and listing the legal (or brand) name of said entities for last month or for an indefinite period: in the latter case, the COI is valid until the member is removed or posts a new COI.

In case a proposal by another Department member creates a new COI, the subject member must disclose it before the veto lock expires.

Compensations in different denominations are compared at their most liquid DEX pair rate over the month (daily average) or, when not available, as defined by the Council.

## Monitoring & Punishment

To allow "transparency agents" to report undisclosed COI, each Department must provide a publicly-accessible & free-to-submit form, and set its URL as value of a `COI_Reporting` storage item on its DAO. The submissions to such forms should be visible for at least a month, only to Council members to avoid public defamation. To report COI directly to the general public, anyone may submit a Juno Governance Proposal (with a deposit in JUNO).

To incentivise reporters of undisclosed COI, the Department must freeze its monthly compensation of the subject member until relevant submissions are verified, and redirect it to the reporter with a proposal that, if passed, confirms the veridicity of the report.

When failing to disclose his COI (1, 2) or to abstain from votes subject to COI (3), the member should be removed from the Council, Department and its SubDAOs.

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*The following section is not part of the policy*

## Rationale

The community is always sovereign through Juno Governance. The Council was created to serve the community interests. If elected members and users want to engage directly, higher standards should be followed to avoid conflict between their special interest & the community.

## Examples

1. **DAO-JUNO token swap**
The swap was approved by the community with [Juno Gov Prop#285](https://www.mintscan.io/juno/proposals/285). The funds were sent to the Juno Growth Fund (JGF), which used them to create a vesting payment to DA0DA0 with [Prop#A15](https://daodao.zone/dao/juno1xz54y0ktew0dcm00f9vjw0p7x29pa4j5p9rwq6zerkytugzg27qs4shxnt/proposals/A15). Since JGF isn't a SubDAO of a Council Department, this agreement wouldn't be subject to COI. **What if JGF was a SubDAO of a Council Department?**
- If Rarma, the proposer, had COI with DA0DA0, he should have disclosed it in propA15 and abstained. The vote would have reached the quorum and passed anyway.
- If at least 50% of members of JGF had COI with DA0DA0, the vote shouldn't have passed, and the vesting payment shouldn't have started. Otherwise, this could lead the Council or Community (with a Juno Gov Prop) to use the COI policy as a valid argument to stop the vesting and remove the members with COI that activated it.
- Anyone could report undisclosed COI between DA0DA0 and JGF members during the 12 months of vesting. If such report is confirmed by the Council:
- the vesting should be canceled (signaling a COI) and the member(s) removed
- the JUNO equivalent vested last month & going to members with COI should be sent to the "transparency reporter"
- the remaining vesting could restart with a new proposal following COI policy

2. **DEX RFP**
A Request For Proposal (RFP) about a comunity-owned DEX on Juno was [published](https://x.com/JunoNetwork/status/1761029221378371784).
> Ops department wants to preselect the team with the best proposal (based on price-performance ratio) and then wants to seek approval from the community to get funding for this grant.

If the Operations Department will pay the selected team directly, their members could be subject to this COI policy. If they have ownership or governance rights of the receiving entity, they should disclose it as in [Methodology](#Methodology) & abstain from relevant spend proposals.

3. **Delegation program**
The Operations Department might delegate [~6M JUNO](https://hackmd.io/@G2q75faESMyRkexdnhUCpA/B1NPVxxRh#Existing-Treasuries-amp-SubDAOs) through its [Delegations SubDAO](https://daodao.zone/dao/juno1mjsgk02jyn72jm2x7fgw72uu9wj7xy0v6pnuj2jd3aq7rgeqg5qq4dnhes/subdaos). According to this policy (1.2), an Ops. Dep. member would be subject to COI if he has ownership or governance rights in a Validator receiving a delegation from the SubDAO.
The COI member should abstain from voting on such proposals. If a majority is unable to form (because of COI on ≥50% of members), such proposals could be voted on the Council or Juno Governance (by the community at large), leaving the Delegation SubDAO only the duty of providing the rationale and information to suggest such delegations.

## Relevant reads

[A comparative analysis of financial disclosure obligations on members of parliaments:](https://www.europarl.europa.eu/RegData/etudes/STUD/2023/747911/EPRS_STU(2023)747911_EN.pdf)
> 1. all EU Member States currently impose financial disclosure obligations on the members of their national parliaments
> 2. all Member States require them to disclose that information shortly after taking up their duties and to update it either at regular intervals or when the situation has changed
> 3. 19 out of 27 Member States ensure the declaration(s) provided by members of parliament are made public through unrestricted access via the internet. A few have opted for a different solution, providing access to declarations only on request, or restricting access to relevant parts of the declarations to competent national authorities.