Another Non-Financial Conflict Poorly Handled

One of the worst times to create a conflict of interest is in the
midst of labor negotiations. This is what has happened recently in
San Francisco, where Bay Area Rapid Transit (BART) is negotiating
contracts with its three unions. There was a short strike in July,
and now there are negotiations with an August 4 deadline.<br>
<br>
The conflict involves the company for which BART's labor negotiator works,
which is itself a large transportation company, specializing in bus
transportation. The company, which has worked for BART in the past,
was given a no-bid contract ("awarded under General Manager's
authority" according to a March 29 amendment to the agreement, which
is attached). This means that the contract did not go through the
usual competitive bidding and, therefore, the company would likely
not have had to disclose possible conflicts or received training
relative to the creation of conflicts.<br>
<br>
According to <a href="http://sanfrancisco.cbslocal.com/2013/07/26/bart-chief-negotiator-accus…; target="”_blank”">an
article on Friday on the KPIX website</a>, when the union striked
in July, the company for which the negotiator works brokered a deal
that provided BART with buses, what is referred to in the trade as
"paratransit vehicles." The union says that this gave the company "a
direct financial interest in a prolonged strike." BART insists there
is not a conflict because the company received only $500 for its
brokerage work.<br>
<br>

BART admits
there was a conflict, but takes the position that it is a <i>de
minimis</i> conflict. Financially, BART is perfectly
correct. By insisting that the negotiator's company has a direct
financial interest in a prolonged strike, the unions effectively
agree with BART that the conflict is primarily a financial one. If
it is, then it is indeed <i>de
minimis</i>.<br>
<br>
But the important conflict here is not financial. The company is
being paid $400,000 to negotiate with the unions. There is no reason
to believe that it is going to threaten future negotiating jobs by
doing a lousy job that prolongs a strike, so that it can make a few
bucks brokering buses.<br>
<br>
The important conflict is that a company acting as a labor negotiator, supposedly in good faith, played a role in keeping
BART functioning during a strike, something that the company and
BART should have known would unnecessarily incense the unions and cause them to see the company as acting in bad faith. Not
only did the company wear two hats, but it wore the blackest hat it
could find. BART should never have asked it to wear the hat, and the
company should have refused to wear it.<br>
<br>
Now the unions are asking for a new negotiator. They don't expect
a negotiator to be neutral. But it is reasonable to expect that a
negotiator will be a negotiator, and nothing more.<br>
<br>
Here is yet another example of a situation where the narrow belief
that a conflict of interest has to be financial in nature contributed to the irresponsible handling of a conflict situation
as well as to a poor discussion of what occurred. What will it
take to get people to recognize that the "interest" in "conflict of
interest" does not mean "financial interest"?<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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