Negative Conflicts of Interest

Conflicts of interest are not always positive, any more than relationships are always positive. And conflicts are based on relationships.

We tend to think of an official using his position to help a family member or business associate. But sometimes officials use their position to harm someone with whom they have a negative relationship, anyone from a former in-law (the bum who dumped my sister) or current in-law (that woman who's driving my brother crazy) to a former business partner or a major business competitor.

These negative situations do not crop up in the news very often. That is why it is worth noting a situation that occurred with respect to Colorado's Public School Capital Construction Assistance Fund. According to an article today in the Daily Caller, an auditors report recommended better conflicts of interest rules for the Fund's board.

As an example of a problematic conflict situation, it gave the handling an application for a grant from a school district that had previously rejected bids from two Assistance Fund Board members’ construction companies. Minutes show that both members spoke negatively about the school district's project. The auditors were surprised they were allowed to participate in the matter.

There was not a question that the members were trying to benefit anyway by participating or that they had any interest in the school district or in the particular grant. There was also no question that the school district was trying to influence the members in any way. But there is certainly a question of bias based on personal rather than public reasons. It would certainly appear to the public that the members might put their personal feelings – their interest in getting back at the school district for rejecting their bids – ahead of the public interest.

And yet few if any ethics codes would prohibit participation in such a conflict situation. The language of "benefit," the language of "interest," the language of "influence" — none of them applies to this situation, although the language of "benefit" might apply if it included "harm" along with benefit (but even then, it would have to include harm to an entity that rejected a relationship (think ex-spouse), rather than just entities with whom the official actually has a relationship (think spouse)).

Only the language of "bias" or "impartiality" might apply, but this is used in gift provisions, not in conflict provisions. Here is "bias" language from the Denver ethics code, which includes both "bias" and "prejudice." But note that this applies only to members of the city's ethics board.

Any member or employee of the board of ethics shall disqualify himself or herself from participating in any matter before the board in which his or her impartiality might reasonably be questioned, including, but not limited to, instances where he or she has a personal bias or prejudice concerning a party

So what we have here is a situation where auditors felt there was a serious conflict of interest requiring withdrawal, but where ethics codes do not require withdrawal. This is a situation where only training and advice can do the trick. Officials need to be trained to seek advice whenever they have any relationship to a party in a matter, whether the relationship is positive (a contract with the party, a spouse) or negative (the party's rejection of a contract bid, an ex-spouse). Officials need to be taught that any relationship requires either withdrawal or a request for advice. And ethics advisers need to recognize that, in such a situation, they should go beyond the language of an ethics code and tell the official that to deal responsibly with such a conflict situation, the official should withdraw from participation. If an ethics adviser is limited to the law, many such situations will fall between the cracks and undermine trust in an agency.

Robert Wechsler
Director of Research-Retired, City Ethics

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