A Judicial Decision Involving the Language of "Interest" and Non-Financial Benefits

As I keep saying, conflicts are about "benefits" and
"relationships" rather than about "interests," and this should be
reflected in the language of ethics codes. The clash of these two
kinds of language is the subject of a recent Virginia Supreme Court
decision, <a href="http://scholar.google.com/scholar_case?case=13432344661886986355&hl=en&…; target="”_blank”"><i>Newberry
Station Homeowners Assoc. et al</i> v. <i>Board of Supervisors of Fairfax
County</i></a> (April 18, 2013).<br>
<br>
The matter also involves non-financial benefits and the distinction between an official sitting on a body as a government representative or as a private individual.<br>
<br>

A sloppily written state conflict provision that applies solely to
boards of supervisors dealing with land use matters, Code §15.2-852(A), requires disclosure "of any business or financial
relationship," which is defined in great detail (see early in the
decision) to include direct and indirect relationships, including
relationships with members of a supervisor's household,
relationships through a partnership or corporation, and even
relationships based on a gift or donation of over $100. It is a
thorough description of relationships, at least to the extent they
are financial rather than personal (if a supervisor's brother were to seek
a permit, no disclosure would have to be made under this provision).<br>
<br>
But when it comes to withdrawal from participation, the language
suddenly changes in the second paragraph of the provision. "If at
the time of the hearing in any such case such [supervisor] has a
business or financial interest with" an applicant or other person
involved in a land use matter, only then must the supervisor
withdraw from participation.<br>
<br>
The plaintiff insists that there is no difference between
"relationship" and "interest" in this provision. The board of
supervisors insists that these are two distinct terms, and that
"interest" is defined in the second paragraph by the following
language: "involving the relationship of employee-employer,
agent-principal, or attorney-client."<br>
<br>
The first thing one may think is, why would "interest" be defined in
terms of "relationships," in order to distinguish "interests" from
"relationships"? But it so happens that "interest" is often defined
in ethics codes in terms of "benefits" and "relationships." That's
one reason why "interest" is such a confusing term. It is not used
because it is the best or clearest term. It is used because of the
term "conflict of interest," and because lawyers feel comfortable
with it. Unfortunately, other people are not comfortable with it,
and it confuses them (see the discussion of this problem in my book
<i>Local Government Ethics Programs</i>; <a href="http://www.cityethics.org/files/lgep1-0%20-%20Robert%20Wechsler.htm">cl…
here</a> and search for "terminology").<br>
<br>
I won't bother going through the court's reasoning, but it did
conclude that "relationship" and "interest" as used in this
provision are synonymous.<br>
<br>
<b>The Relationship in This Case</b><br>
The next part of the decision seeks to determine whether two of the
supervisors had a relationship that required them to withdraw from
participation in the matter.<br>
<br>
It's worth noting that the relationship here involved the
supervisors being board members of the Washington Metropolitan Area
Transit Authority (WMATA), a position that also became the center of
a controversy within the District of Columbia's new ethics program
(see <a href="http://www.cityethics.org/content/dc-ethics-boards-opinion-needs-rewrit…; target="”_blank”">my
blog post</a>). In this case, the court determined that the board
position, since it is a government entity and brings no financial
"benefit" to its board members, is not one of the positions that
gives rise to a "business or financial relationship."<br>
<br>
<b>Non-Financial Benefits and Government Representation</b><br>
I realize that the Virginia provision is limited to financial
conflicts, but I consider this limitation to be wrong. When it comes
to wearing multiple hats, it doesn't matter whether or not the
hat-wearer benefits financially. As it turns out, if the state provision had included
non-financial benefits, the result would have been the same, because there is another distinction that would except these two
supervisors from withdrawal. The distinction is that they sit on
WMATA solely as representatives of their county, not in their
personal capacity.<br>
<br>
I would argue that an official who as an individual, rather than as
a government representative, sits on the board of a government body
involved in a matter before the official should withdraw from the
matter. For example, a member of the board of a state university
should withdraw from a matter where, say, the university seeks a
permit from the official's agency or body. This is true even if the
official would receive no financial benefit. The official would be
wearing two hats, and would therefore be reasonably seen by the public as not
clearly acting in the public interest. That is enough to create a
conflict requiring withdrawal.<br>
<br>
Thanks to <a href="http://lawoftheland.wordpress.com/2013/10/28/va-supreme-court-finds-rec…; target="”_blank”">Patty
Salkin's Law of the Land Blog</a> for bringing this court decision
to my attention.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
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