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Time and the Drafting of Conflict of Interest Provisions
Thursday, February 11th, 2010
Robert Wechsler
Time is a very important element of conflicts of interest. Some
conflicts simply exist, but others either occur suddenly or suddenly
become relevant.
For example, an official can have a piece of property for twenty years and then suddenly the owner of a neighboring piece of property asks the local government to help turn it into something that would significantly raise the value of the official's property. That's an easy to problem to deal with.
More difficult is the case in Allen Park, MI (a suburb of Detroit, pop. 30,000), according to two articles in the News Herald, one last week, the other this week.
In October 2009, the city's Downtown Development Authority (DDA) board voted to give a $2 million unsecured loan to an institute, to be spent apparently on building and design. One of the DDA board members heads a company that does building and design work, and it was reported in the first article that he had been hired to do work for the institute and that, therefore, he had a conflict of interest and should not have participated in the October discussion and vote on the loan.
The board member says he has no contract to work for the institute, but that he has the right to do work for it, because he was not told, when he voted, that voting would disqualify him from doing work for the institute.
The way the city's ethics code is written, there would not be a conflict.
The City Ethics Model Code conflict of interest provision takes a different approach, focusing not on interests, which do not always exist at the time of a vote, but rather on benefits:
Since the ethics code does not deal with this matter, the council member is right to say that he should have been told that, by voting on the loan, he was giving up the right to do work on the institute's building. On the other hand, he should realize now that it would not look good for him to accept such a job. Instead, he feels that he has a right to accept such a job, since he didn't know when he voted that he'd be giving up the right.
There are situations that cannot be foreseen, but when someone who does development work accepts a position on a development authority board, he should realize that he might have to forgo doing work on projects the authority is involved with. Although the law does not say this explicitly, and although there should be good ethics training for all new board members, a thoughtful individual will recognize that it would look bad for him to work on development projects his board has had a role in. In short, a board member's obligations should be balanced against and, usually, take precedence over his right to do a particular job.
The timing here creates a problem, since the contract would come several months after the vote, but it shouldn't change the way the situation is responsibly handled. It's best to write conflict provisions so that timing is less of an issue, that is, where there is not a single moment that matters, in this case, when a matter comes to a vote. For this and other reasons, vote- and interest-oriented conflict provisions do not provide as much guidance as benefit-oriented conflict provisions.
Robert Wechsler
Director of Research-Retired, City Ethics
---
For example, an official can have a piece of property for twenty years and then suddenly the owner of a neighboring piece of property asks the local government to help turn it into something that would significantly raise the value of the official's property. That's an easy to problem to deal with.
More difficult is the case in Allen Park, MI (a suburb of Detroit, pop. 30,000), according to two articles in the News Herald, one last week, the other this week.
In October 2009, the city's Downtown Development Authority (DDA) board voted to give a $2 million unsecured loan to an institute, to be spent apparently on building and design. One of the DDA board members heads a company that does building and design work, and it was reported in the first article that he had been hired to do work for the institute and that, therefore, he had a conflict of interest and should not have participated in the October discussion and vote on the loan.
The board member says he has no contract to work for the institute, but that he has the right to do work for it, because he was not told, when he voted, that voting would disqualify him from doing work for the institute.
The way the city's ethics code is written, there would not be a conflict.
-
Section 2-358. Conflict of Interest Prohibited. An Officer or employee
shall abstain from acting, formally or informally, on a matter in which
the Officer or employee has an interest when the interest is adverse to
or could appear to be adverse to the Officer’s or Employee’s duty to
the public interest or would create a conflict of interest as defined
in this Article.
The City Ethics Model Code conflict of interest provision takes a different approach, focusing not on interests, which do not always exist at the time of a vote, but rather on benefits:
-
An official or employee
may not use his or her official position or office, or take or fail to
take any action, or influence others to take or fail to take any
action, in a manner which he or she knows, or has reason to believe,
may result in a personal or financial benefit, not shared with a
substantial segment of the city's population ...
Since the ethics code does not deal with this matter, the council member is right to say that he should have been told that, by voting on the loan, he was giving up the right to do work on the institute's building. On the other hand, he should realize now that it would not look good for him to accept such a job. Instead, he feels that he has a right to accept such a job, since he didn't know when he voted that he'd be giving up the right.
There are situations that cannot be foreseen, but when someone who does development work accepts a position on a development authority board, he should realize that he might have to forgo doing work on projects the authority is involved with. Although the law does not say this explicitly, and although there should be good ethics training for all new board members, a thoughtful individual will recognize that it would look bad for him to work on development projects his board has had a role in. In short, a board member's obligations should be balanced against and, usually, take precedence over his right to do a particular job.
The timing here creates a problem, since the contract would come several months after the vote, but it shouldn't change the way the situation is responsibly handled. It's best to write conflict provisions so that timing is less of an issue, that is, where there is not a single moment that matters, in this case, when a matter comes to a vote. For this and other reasons, vote- and interest-oriented conflict provisions do not provide as much guidance as benefit-oriented conflict provisions.
Robert Wechsler
Director of Research-Retired, City Ethics
---
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