Three Conflict Case Studies

Here are three interesting conflict of interest case studies from Tuesday's news.

Conflicts That Make You Act Differently, and Imaginative Resolutions
According to an article in the Los Angeles Daily Breeze, a former Los Angeles airport attorney, who reviewed the paperwork submitted by four companies bidding on concessions at the airport, is married to an attorney who works for a law firm that represents one of the four companies (the law firm even owns a small stake in the company). It is not clear whether the husband ever represents the company or whether he has represented the company in this matter.

An airport commissioner is quoted as saying, "The conflict strikes me as a remote conflict and I hope we can find a resolution that is more imaginative than restarting a process that's more than four months old."

Although this relationship may not be covered by an ethics code, the conflict it raises is not that remote. Look at it from the airport attorney's point of view. She is charged with reviewing bids for the airport. One of the bids comes from a company represented by her husband's firm. She finds something wrong with the bid. Does she say something and embarrass her husband's firm, possibly causing them to lose the client, or does she keep it under her hat?

Let's say she finds a minor error in another company's bid. Does she suggest the bid be resubmitted or does she let it go? If she suggests resubmittal, it might look like she's making life hard for the client company's competitors. On the other hand, she might feel she needs to appear extra fair and let an error go that she would normally consider serious enough to require resubmittal.

A conflict that might make a city attorney act differently than she normally would is not a remote conflict. It is a conflict that should be disclosed and handled responsibly.

From the public's point of view, there is a serious appearance of impropriety when an attorney, whose work will likely not be reviewed, seems to be biased toward a company represented by her husband's law firm.

The second part of the quote raises a second important issue:  how to resolve this conflict without resubmitting bids. The commissioner was smart to suggest finding an imaginative way to deal with this problem. But it is hard, since the work has already been done, and the most responsible resolution would have been for the airport attorney to have withdrawn from the matter.

One way to resolve the matter would be to ask each of the other bidders if they have any problems with the airport attorney's work. If they were okay with it, then the bid could proceed. It might be helpful to them if there was a public discussion with the airport attorney about what she did, choices she faced, and decisions she made. The bidders could ask questions themselves, and the attorney's work product could be made available to them. There's nothing better at this stage in the game than to fully disclose everything that went on and answer all questions the parties might have.

Conflicting Institutional Loyalties
According to an article in the Waterloo Region (ON) Record, a Waterloo Region council member who works for the University of Waterloo withdrew from participation when the council dealt with approval of a rail transit route that would pass through a university-owned business park. Now transit stations have been proposed on or near three university campuses, and the council member does not want to withdraw from participation.

His argument is that because the university is a public entity, any increase in its land values will accrue to taxpayers. He also said that he earlier withdrew “out of an abundance of caution” to counter perceptions that he might favor the university in supporting a route through its campus. Now that the route has been decided, it's just a matter of determining exactly where the stops will be.

These are good arguments. But is there still a perception that he is favoring his employer? Even though it is a public entity, it is an institution that seeks to both become more competitive and to grow. Having transit stops at its various campuses will ensure that more students will apply and that it will be more likely that the government will allow it to grow to fill the growing demand. Public or private, institutions have their own interests, their own goals. And people realize this.

Clearly Prioritizing One's Interests
Here's another, more interesting case involving institutional loyalties. According to an article in the Beaufort (SC) Gazette, a county council member also chairs the board of the Lowcountry Economic Network, an economic development organization. He is the council representative on the network board.

The network can no longer afford a particular property it owns, and it is trying to sell it to the county. The question is whether the council member has a conflict that should cause to him to withdraw from participation on the matter when it comes before the council.

The council member stresses that he is not paid by the network, nor does he have any financial interest in the network. But that is beside the point, at least for those, like me, who do not believe that conflicts are purely financial.

The council member has not participated in any public discussions of this matter at network board meetings, to eliminate any appearance of impropriety. In other words, he sees that there is a conflict, and has taken the position that he is a council member first and should preserve his freedom to act there.

That is a good way of handling this conflict. By doing this, he is recognizing that he has or is seen as having interests that conflict, and that he has a clear priority ranking of these interests. As an elected official, he has an obligation to represent his constituents on the council. As a network board member, he has an obligation to represent the council's interests. He is making it clear that, despite the appearance of a conflict, he is a council member first and foremost.

An opponent of the council's purchase of this property says that the council member's view of the project might be shaped by his role on the network board. That is true, and that would be the principal argument in favor of withdrawal when the council considers the matter. But loyalty to a board on which one has been placed because one is a council member is not the same as, for example, loyalty to a charity whose board one sits on. Any loyalty to a board on which a council member is placed is to be expected when the decision is made to make such a placement.

In this case, the council member has consistently made his loyalties clear, and the other council members, on both sides of the issue, feel that he has dealt responsibly with the conflict.

Another council member makes an interesting point regarding the conflicts of council members placed on community boards: "It would be difficult then for any councilman to participate in any outside organization. The [council] chairman could use that as a weapon, basically, to negate somebody's vote. If the chairman didn't like my position on Rural and Critical Lands, he could put me on the Rural and Critical Lands Board and preclude me from voting."

Robert Wechsler
Director of Research-Retired, City Ethics

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