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Explaining the Business Aspects of a Conflict Situation
Thursday, April 19th, 2012
Robert Wechsler
Here's an interesting conflict situation out of Forsyth County,
Georgia. According to an
article in the Forsyth News, a county commissioner owns a
company that buys county water and sells it to county residents who
used to have wells. The company owns the infrastructure that
supplies water to four subdivisions in the county. It is one of
several companies that do this. The companies are charged the flat commercial water
rate, rather than residential rates that increase with use.
The question is, should the county commissioner participate in negotiations involving water contracts between the county and a city within the county, since the city would apparently be a water reseller, as well?
According to a resident who has asked the county commissioner not to participate, the negotiations "affect the cost of what he’s going to have to pay for water in his business in order to resell it. What he charges his customers or his profit level is ultimately determined by the contracts.”
The county commissioner feels he has no conflict and should not withdraw from the negotiations. “My company is simply a water customer,” he said. “My company gets no special treatment in these purchases.” He also said that, were he to withdraw, his district would not be represented, and that he can make "a fair and impartial decision.”
The commissioner's company is not simply a water customer like any other. It is a reseller of water. It is also a residential provider that pays a commercial rate. Any matter that affected the commercial water rate might benefit his company, and it would certainly be seen by the public as an attempt to benefit his company. The issue is not special treatment, just because other companies would benefit in exactly the same way.
Nor is the issue whether the commissioner's district would be represented. An elected official who acts to benefit his company, or is seen as acting to benefit his company, is not representing his district; he is representing his personal interest. That is what a conflict is, and why it requires withdrawal.
As for the commissioner's ability to make a fair and impartial decision, there is no way for the public to know this. In fact, we cannot say that we truly know how fair and impartial we ourselves can be when we have a conflict. We have numerous blind spots that prevent us from seeing our motives and actions clearly (see my blog posts on blind spots).
What really matters here is whether the negotiations involving county sales of water to a city do affect the cost of water to companies such as the commissioner's, and whether changes in the price of water might affect the companies' profits. The commissioner should treat this conflict situation purely as a business issue. Instead of talking about special treatment, his district's right to representation, and his personal ability to be fair and impartial, he should explain in detail to the public how his business works and why price negotiations would or would not affect his business.
He has apparently tackled this matter wrong, but there is no reason he can't do it now. It might even turn out that he can participate without it appearing that he is trying to use his position to benefit himself.
Robert Wechsler
Director of Research-Retired, City Ethics
203-859-1959
The question is, should the county commissioner participate in negotiations involving water contracts between the county and a city within the county, since the city would apparently be a water reseller, as well?
According to a resident who has asked the county commissioner not to participate, the negotiations "affect the cost of what he’s going to have to pay for water in his business in order to resell it. What he charges his customers or his profit level is ultimately determined by the contracts.”
The county commissioner feels he has no conflict and should not withdraw from the negotiations. “My company is simply a water customer,” he said. “My company gets no special treatment in these purchases.” He also said that, were he to withdraw, his district would not be represented, and that he can make "a fair and impartial decision.”
The commissioner's company is not simply a water customer like any other. It is a reseller of water. It is also a residential provider that pays a commercial rate. Any matter that affected the commercial water rate might benefit his company, and it would certainly be seen by the public as an attempt to benefit his company. The issue is not special treatment, just because other companies would benefit in exactly the same way.
Nor is the issue whether the commissioner's district would be represented. An elected official who acts to benefit his company, or is seen as acting to benefit his company, is not representing his district; he is representing his personal interest. That is what a conflict is, and why it requires withdrawal.
As for the commissioner's ability to make a fair and impartial decision, there is no way for the public to know this. In fact, we cannot say that we truly know how fair and impartial we ourselves can be when we have a conflict. We have numerous blind spots that prevent us from seeing our motives and actions clearly (see my blog posts on blind spots).
What really matters here is whether the negotiations involving county sales of water to a city do affect the cost of water to companies such as the commissioner's, and whether changes in the price of water might affect the companies' profits. The commissioner should treat this conflict situation purely as a business issue. Instead of talking about special treatment, his district's right to representation, and his personal ability to be fair and impartial, he should explain in detail to the public how his business works and why price negotiations would or would not affect his business.
He has apparently tackled this matter wrong, but there is no reason he can't do it now. It might even turn out that he can participate without it appearing that he is trying to use his position to benefit himself.
Robert Wechsler
Director of Research-Retired, City Ethics
203-859-1959
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