Dealing Responsibly with Contract Conflicts

Two important issues arise from a story about a competitive bid for a concrete contract for an arena in Louisville which, according to an article in yesterday's Louisville Courier-Journal, was won by a company solely owned by a member of the state task force that chose the site, the chair of the board that manages the arena, a close friend of the coach of the arena's primary tenant, and a nonvoting member of the arena authority, whose executive director reports directly to the board that this individual chairs.

Disclosure Is Not Always Sufficient
Because there are many ways to skew even competitive bidding of a contract, especially via input into writing the specifications, it is not enough for an official to simply disclose possible conflicts when that official is in a position to have input into any aspect of the contract. Disclosure is important, but when it looks to the public as if the official might influence the bid directly or indirectly, disclosure is not enough.

There are two ways to deal with this situation responsibly. One is to fully withdraw from participation in the matter. This means having no communication at all with anyone involved in writing specifications or making any determinations of matters that will affect the contract, such as building design and location. This is possible for, say, a council member who would not normally deal with such people. But it is impossible for someone with all of this individual's contacts and responsibilities. He would have to resign from the managing board and the arena authority.

The other way to deal with this situation responsibly would be not to bid. Many jurisdictions prevent officials from bidding for any contract with the government. With a law such as that, this individual would not have become an official at all, which would have meant there would be no conflicts in the first place.

Form of Disclosure
The individual says that he disclosed his conflicts, and a couple others agreed that he did, but he did not put it in writing, as required. The article says that an ethics expert recommended that the state have a standard disclosure form, but this advice was rejected. It sounds like good advice to me. A disclosure form easily accessible online allows officials and contractors to easily disclose conflicts, to know exactly what the procedure is for filing the disclosure, and to know what else is required under certain circumstances. The guidance is clear, and there is no excuse for failing to disclose. The office to which the disclosure is made can quickly decide whether the disclosing party or other parties must do more than disclose.

Here are links to some local government disclosure forms:
Atlanta
San Antonio
Massachusetts
Texas

Robert Wechsler
Director of Research-Retired, City Ethics

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