Banning the Appearance of a Conflict of Interest: Another Misguided Ethics Rule

Last week I wrote about the problems arising from laws which make “conflicts of interest” illegal but which do not define “interest.”  As I explained, the harm that results from leaving “interest” undefined, or vaguely defined, is of several kinds:  Public employees have no way to know when they should avoid making or participating in a decision; authorities can easily slant enforcement of the law to serve their own ends; and the ease with which charges of conflict of interest can be leveled in the court of public opinion undermines public confidence by creating the impression that conflicts of interest are ubiquitous.

Making “the appearance of a conflict of interest” illegal can do as much, if not more, harm.

The ban on appearances of impropriety seems to have originated with U.S. President Lyndon Johnson’s 1965 order tightening ethical standards for employees of the federal government.  Among the measures he decreed to ensure citizens maintained “complete confidence in the integrity of [their] government” was the requirement that federal employees “avoid any action . . . which might . . . create the appearance of —

(1) using public office for private gain;

(2) giving preferential treatment to any organization or person;

(3) impeding government efficiency or economy;

(4) losing complete independence or impartiality of action;

(5) making a government decision outside official channels; or

(6) affecting adversely the confidence of the public in the integrity of the Government.”

Appearances bans have since been incorporated into the ethics law of most states in the United States and are starting to appear in the laws of other nations.  A 2005 Albanian law prohibits conflicts of interest that “affect or might affect the performance of official duties and responsibilities in an incorrect way, but, in fact, the effect has not occurred, is not occurring or cannot occur;” in New Zealand civil servants must avoid “situations where there could be a conflict, or appearance of a conflict, between personal interests and the interests of their employers,” and Canadian tax collectors are told that a conflict of interest arises “whenever your private interests, and/or outside activities . . . could be perceived to impair your ability to make decisions with integrity and honesty.”  The justification for banning appearances is the same as that Johnson advanced in his 1965 order — to maintain public confidence in government, a point the OECD stresses in its “Tool Kit” for managing conflict of interest.

But do rules outlawing the appearance of conflict of interest really bolster citizen confidence?  Proponents offer no evidence to support the claim.  No opinion poll data comparing attitudes before and after the adoption of such a rule nor any comparison of citizen confidence in government between countries with an appearance ban and without one.  The argument rests on logic instead.  If citizens think when making a decision an official has a conflict of interest, no matter whether she does or not, they will lose trust in government.

This is true as far it goes, but the logic breaks down when one asks the critical question:  In whose eyes is there an appearance of a conflict?  A political opponent?  An individual with a personal grudge against the office holder?  Someone ignorant of the facts surrounding the alleged appearance of a conflict? If it is enough to deem a public official “guilty” of an appearance violation if anyone in any of these categories levels a charge, we can expect the spread of appearance laws to produce a glut of charges.  Will a surfeit of charges really bolster citizens’ trust and confidence in government?  Or will it, as many argue has happened in the U.S. and fear is about to happen with the “ethicization” of Western Europe, drive it down as citizens begin to think they “are all crooks.”

Countries where “appearance bans” have not made an appearance would be well advised to keep it that way.  Spain is in the midst of a major revision of its ethics laws in response to recent scandals.  Current law contains nothing about appearance, and the January 14, 2015, report on the proposed bill has nothing either about the appearance of impropriety.  Nor do the press or the public seem to be demanding such a provision.

Countries stuck with an appearance provision in their law or ethics code can minimize the damage through interpretive rulings or commentary.  That is how the American Bar Association limits the mischief from the directive in its Model Code of Judicial Conduct that judges shall “avoid the appearance of impropriety.”  To prevent litigants unhappy with the judge hearing their case from getting a new one by claiming something in judge’s past creates an “appearance of impropriety,” the commentary states that “the test for appearance of impropriety is whether the conduct would create in reasonable minds a perception that the judge violated this Code. . . .”  The U.S. Office of Government Ethics has adopted a similar interpretation for the rule applicable to employees of the executive  in one of its advisory opinions.

Readers might wonder why I don’t recommend countries with appearance provisions in their laws just repeal them.  That, however, would require repeal of an iron law of politics: no matter how misguided, ineffective, or counter-productive a provisions in an ethics code or anticorruption statute is found to be, it can never, ever be amended or revised if someone, somewhere could characterize the change as “weakening” the law.  But the politics of ethics and anticorruption rules is a subject for another post.

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