Explaining the Business Aspects of a Conflict Situation
Here's an interesting conflict situation out of Forsyth County,
Georgia. According to <a href="http://www.forsythnews.com/section/5/article/12553/" target="”_blank”">an
article in the Forsyth <i>News</i></a>, 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.<br>
<br>
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?<br>
<br>
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.”<br>
<br>
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.”<br>
<br>
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.<br>
<br>
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.<br>
<br>
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 <a href="http://www.cityethics.org/search/node/%22blind%20spots%22" target="”_blank”">my
blog posts on blind spots</a>).<br>
<br>
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.<br>
<br>
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.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
203-859-1959