Elected Officials Doing Business Together
Should council members do business with each other or with the
mayor? Another way to put this question is, does their doing business together give rise to a
conflict of interest?<br>
<br>
The situation that gave rise to these questions came out recently in
Hoboken, NJ. According to <a href="http://www.hudsonreporter.com/view/full_stories_home/19577104/article--…--?instance=up_to_the_minute_lead_story_left_column" target="”_blank”">an
article in the Hudson <i>Reporter</i></a>, the then council president
represented the mayor and her husband in a civil lawsuit, which was
settled in late June. It is not clear whether the council president
was fully paid for his services.<br>
<br>
There is no doubt that acting as someone's lawyer creates a special
relationship. And providing free legal services is a substantial
gift. But are these the sort of relationships and gifts that government ethics programs are supposed to prevent?<br>
<br>
<b>The Law: Prejudicing Judgment</b><br>
The relevant New Jersey law (N.J.S.A. 40A:9-22.5) reads, "No local
government officer or employee shall undertake any employment or
service, whether compensated or not, which might reasonably be
expected to prejudice his independence of judgment in the exercise
of his official duties."<br>
<br>
According to this language (which is typical, but wrongheaded), it
would appear that the council president, but not the mayor, violated
the state ethics code. The fact that the mayor would not be in
violation, even though, as the more senior official, he is even more responsible for creating the
situation, shows that this provision was not intended to deal with
this situation. The employment contemplated by the provision was not
that between officials, but that between an official and someone
seeking a benefit from the local government.<br>
<br>
<b>Special Relationships</b><br>
Yes, the mayor may be seen as trying to prejudice the council
president's independence of judgment by giving him a legal job, or
if the council president provided free legal services, he could be
seen as trying to prejudice the mayor's independence of judgment.
But politicians are always trying to persuade each other, form bonds
and factions, compromise, support, and attack. Conflict laws are
intended to prevent the creation of special relationships between
officials and those seeking benefits. Special relationships between
officials at the same level (as opposed to supervisors and
employees) are common and acceptable.<br>
<br>
Well, they're acceptable except when individuals, usually from
another party or faction, try to use poor conflict of interest
language like New Jersey's to make it look like the officials are in violation of the
law. Then people wonder if such relationships are indeed acceptable. <a href="http://hudsonreporter.com/pages/full_story/push?article-Not+quite+the+H…; target="”_blank”">Another
Hudson <i>Reporter</i> article</a> wonders aloud if this controversy
might create enough of a crack to make the difference in the upcoming
mayoral election, referring to the situation as "an accidental
violation." In fact, it's not a violation at all. The politically advantageous raising of this issue turns out to have prejudiced the independent judgment of the reporter.<br>
<br>
<b>The Real Problem with Doing Business Together</b><br>
Personally, I think it's best that council members and mayors not
ask each other to represent them or provide other services or
products to each other. It's best that they relate as
representatives, and not as business partners, clients, or
customers. One problem not mentioned in the articles and blog posts
I read is that business relations between officials could be used to
launder campaign funds, bribes, or kickbacks. If no money is
supposed to pass between officials, any money that does creates a
paper trail that makes it harder to criminally conspire.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
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