Professional Confidentiality and the Disclosure of Conflicts

John Hazlehurst's observation on the Colorado Springs ethics commission's dismissal of a complaint against the mayor is valuable enough to deserve a separate blog post, rather than a mere update to my original post on this topic.

An important issue involved the mayor's insistence that, as an investment adviser, he could not disclose the names of his clients. This means that, effectively, he could not fulfill his city's conflict of interest requirements; his professional confidentiality obligation overrode the law.

Hazlehurst takes a strong position on this:  "The Mayor can either serve his employer, or the people of this city.  He can’t just walk a tightrope, and pretend to serve both.  If his employment is of such a nature that he can’t reveal possibly conflictual actions, he should resign either from UBS or from elected office."

Lawyer, doctor, clergy, psychotherapist, they all have confidentiality requirements as strict or, more likely, stricter than an investment adviser. Would Hazlehurst's position apply to them?

And since conflicts do not necessarily end the moment someone either leaves a job or drops a client, would doing either of these solve the problem? If a lawyer feels unable to disclose his or her recent representation of someone appearing before his commission, can that lawyer serve on that commission?

One thing that officials often ignore when they say they cannot disclose a relationship is that confidentiality requirements are one-way streets. That is, the client controls the confidentiality, not the professional. If the official finds himself in a position where he is supposed to disclose a conflict, he can ask the client if he may reveal the relationship.

And since the client is presumably seeking something from the local government, the client has an obligation to reveal the relationship, as well, although this obligation is rarely stated in ethics codes (see the City Ethics Model Code's applicant disclosure provision).

If the applicant refuses to disclose the conflict or allow the official to disclose it, what is the official to do? Quitting the non-government job or dropping the client won't solve the problem.

Recusal is the usual way of dealing with a conflict, but when an official recuses himself or herself, an explanation is often required, or when it is not required, people often demand one. However, the official could say that he or she is not permitted by professional rules of ethics to disclose the relationship behind his or her recusal. As long as the official fully withdraws, that might be considered sufficient under the circumstances.

The inability to disclose a conflicting relationship, and the client's refusal to disclose it, puts an even greater burden on an official. That is, since the conflict cannot be disclosed and, therefore, discussed publicly, the official should withdraw from matters where there would be any appearance of impropriety if the relationship were disclosed. And if the client chooses to seek contracts or zoning changes or whatever without disclosure of a possible conflict, the official should drop the client, or resign.

Where someone has more than a couple of clients where the relationship is likely to create a conflict, and those clients do not want the relationship disclosed (such a request can be made in advance of a conflict actually occurring), the official should, as Hazlehurst suggests, resign from the local government, or not run for office or take a government position in the first place.

This is an important area of conflict of interest decision-making for which ethics codes do not generally provide guidance. It should be included in ethics training, and emphasized where training is given to candidates and new officials.

Robert Wechsler
Director of Research-Retired, City Ethics

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