Tag Archives: appearance of a conflict of interest

New South Wales Anticorruption Commission’s Excellent Guide to Conflict of Interest

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Conflict of interest is a critical element of any government ethics program.  It is also perhaps the most difficult to implement.  The challenge comes in determining when friendships, kinship ties, and other personal relationships affect, or appear to affect, a government employee’s duty to put the interest of the public above his personal interest.  Was the contract awarded because the bidder lived in the same neighborhood as the procurement official making the award or because the bidder offered the best value? Was the individual hired because the hiring manager came from the same tribe or because she was the most qualified? Even if there were no actual conflict in the two cases, is there an appearance of one?

Rules that produce sensible answers to such questions are not easy to write, and as I have suggested in earlier posts (here and here), much well-meaning advice on how to do so is either counterproductive or impossible to implement.  A recent publication by the New South Wales Independent Commission Against Corruption is thus a welcome addition to the literature. In 26 clear and crisply written pages, Managing Conflicts of Interest in the NSW Public Sector provides a road-map for writing and enforcing practical, workable conflict of interest rules.

It offers a short, easily understandable definition of conflict of interest followed by a commonsensical approach to applying it.  The touchstone for determining when there is a conflict or an appearance of a conflict” is not the disappointed bidder or applicant or the government’s political opposition.  It is instead a “fair-minded and informed observer,” otherwise known as “a reasonable person.”  How to apply the reasonable person standard and the other standards and rules that make for a sound conflict of interest regime is illustrated throughout with real-world examples.

Written for agencies of Australia’s most populous state, a much broader audience will find the guide a valuable resource.

The Trump Administration’s Ethical Conduct: An Appreciation

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Whatever else one might say about corruption and the Trump Administration, it has been a godsend for those who teach ethics and integrity courses.  Recent, real-world examples can spice up otherwise dry, abstract presentations while helping drive home key points, and Trump officials’ habit of skating at the edge of permissible conduct never fails to provide headline grabbing fodder for classroom discussion.  The most recent debt of gratitude ethics instructors owe the Trump Administration arises from the Environmental Protection Agency chief’s choice of a D.C. landlord.  In one fell swoop agency head Scott Pruitt’s actions illustrate the finer points of not one but two key ethical norms, the receipt of gifts and the duty to appear impartial.

The story begins with Pruitt’s decision after appointment as chief regulator of American environmental protection laws to not move to Washington, D.C. but instead to rent a place just for the nights spent in the nation’s capital.  He found the spare bedroom in a two-bedroom apartment located in a tony part of town whose owners agreed to rent the extra bedroom for $50 for each night Pruitt spent in Washington.

Real estate agents told the New York Times that Pruitt got quite a bargain: $50 a night was less than one would expect to pay on the open market.  Pruitt’s ethical travails begin here. Continue reading →

Guest Post: How District Attorneys Can Avoid Conflicts of Interest in Campaign Fundraising

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Jennifer Rodgers, Executive Director of the Columbia University Law School’s Center for the Advancement of Public Integrity (CAPI), and Izaak Bruce, CAPI Research Fellow, contribute the following guest post:

Last fall, New York County District Attorney Cyrus Vance received quite a bit of negative press for his handling of potential cases involving some high-profile potential defendants. In one case, Vance declined to bring sexual assault charges in 2015 against Harvey Weinstein despite a detailed victim account. In another case, back in 2012, Vance ultimately decided not to criminally charge members of the Trump family for making false and misleading statements to promote one of their real estate ventures, again despite what on the surface appeared to be credible evidence of wrongdoing. Of course, prosecutors have to make difficult judgment calls all the time about what cases to bring, often based on information that outsiders do not have access to and/or are not in a good position to judge. But what made these cases so troublesome to many was the suggestion or insinuation of improper influence. The New York County DA is an elected position, and in both the Weinstein case and the Trump case, the attorneys who successfully convinced Vance not to bring charges also made hefty donations to Vance’s reelection campaign.

Vance and his supporters insist that there was no impropriety, let alone a quid pro quo, and rightly point out that DAs raise substantial campaign contributions from many attorneys. But the reports were nonetheless deeply troubling, not least because these incidents evince a more general problem. In a couple of cases, DAs have been convicted for accepting campaign contributions as bribes in exchange for favorable defendant outcomes; much more common, however, is the appearance of impropriety caused by campaign donations from individuals involved in cases before the district attorney’s office; these are problematic even if no underlying crime is proved. And of course there is always the possibility of unconscious bias when a DA makes decisions about criminal cases that involve a campaign donor, even if the DA believes his or her decision making is unaffected. Yet despite these obvious problems, there are very few legal limits on donations by individuals to district attorneys, either in New York or elsewhere. In New York, for example, campaign contributors can give a DA candidate up to the maximum amount (almost $50,000 in New York County) with no regard for whether those contributions might lead to a conflict of interest or an unconscious bias on the part of the district attorney. And there is virtually no guidance for DAs on how to handle these potential or apparent conflict-of interest issues.

To help address this problem, my organization, the Center for the Advancement of Public Integrity (CAPI) at Columbia Law School, recently released a report on DA fundraising practices. DA Vance, to his credit, specifically requested this review, which included an examination of his own campaign fundraising practices. In conducting its review, CAPI considered the donation acceptance policies of DA Vance’s campaign, and analyzed contributions to his campaigns over his three election cycles, paying particular attention to contributions from attorneys. CAPI conducted research into applicable laws, regulations, and guidance for DAs, and lawyers generally, in this area, and interviewed numerous stakeholders on the topic, including DAs, election regulators, good governance groups, and legal ethics experts, to learn from their experiences and solicit their views. After conducting this review, the report offered seven recommendations for DAs to follow to avoid actual and potential conflicts of interest and biases. While these recommendations are geared to DAs in New York, they are instructive for elected prosecutors all over the United States: Continue reading →

Governor Brown’s Missed Opportunity to Promote Political Transparency and Fight Trumpian Corruption

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Last month, Republicans announced their plan for a comprehensive overhaul of the United States federal tax code, the first in decades. In characteristic fashion, President Trump promised, “I don’t benefit. I don’t benefit.” To clarify his point, he added, “I think very, very strongly, there’s very little benefit for people of wealth.” Lest those statements left any doubt, Trump later claimed, “I’m doing the right thing and it’s not good for me, believe me.” Notwithstanding the President’s promises, a New York Times analysis found that Trump could save over a billion dollars if his plan were to be passed into law. Seemingly responding to this reality, Trump later amended his sales pitch by claiming that “everybody benefits” from tax reform.

Tax reform fits squarely into the third category of conflicts tracked by this blog: government regulatory and policy decisions that benefit Trump and his family businesses. Americans deserve to know how the President would personally stand to gain if his proposal became law. Yet the extent of Trump’s conflict of interest remains unknown, and unknowable, because of his widely-criticized refusal to release his tax returns.

Unfortunately, California Governor Jerry Brown squandered an opportunity to force Trump to shed some light on his personal finances when he vetoed the Presidential Tax Transparency and Accountability Act, which had passed both houses of the state legislature with overwhelming support. The Act would have required all aspiring Presidential candidates to provide their tax returns to the California Secretary of State (who would then publish them online) before the candidate’s name could appear on the California primary election ballot. In his veto message, Governor Brown explained that while he “recognize[d] the political attractiveness—even the merits—of getting President Trump’s tax returns,” he worried about the “political perils of individual states seeking to regulate presidential elections in this manner.” Brown identified two specific concerns about the bill: its constitutionality and the potential “slippery slope” it might create.

Brown’s arguments ring hollow. They seem particularly unjustified in a time in which state action is one of the few viable bulwarks against Trump’s corruption. Fortunately, other states, including Massachusetts and New York, are considering similar proposals. Those states can do better than California. Here’s why they should: Continue reading →

Targeting Trump Businesses as a Response to Conflicts of Interest

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Many people, myself included, believe Donald Trump’s failure to place his assets in a blind trust is more than just problematic. The full extent to which President Trump may be abusing public power for private gain—that is, engaging in corruption—is unknowable, so long as his business empire remains opaque and his tax returns stay buried. Even where Trump’s business interests are out in the open, a “shadow of corruption” hangs over the actions he takes as an ostensible public servant.

Some of the people who share these concerns are exploring ways in which they might engage in consumer activism as a response to Trump’s conflicts of interest. Consider two organizations that are leading broad boycotts against the Trump Administration. Don’t Pay Trump is a web browser extension that allows one to, in their words, “keep your money out of Trump’s tiny hands.” It alerts the consumer when he or she is making an online purchase from a business that sells Trump products. A second initiative, #grabyourwallet, is a more established and exceedingly low-tech enterprise which also calls for “flexing consumer power.” #grabyourwallet maintains what looks like an excel spreadsheet that displays companies ripe for a Trump boycott. It provides the necessary tools to the activist consumer: name and number of the company, reason it should be boycotted, suggested sample of what to say, and updates on successes. #grabyourwallet received credit for the recent Nordstroms decision to drop Ivanka Trump’s produces from its stores, which earned Nordstroms a Presidential tweeted complaint on February 8th.

Both of these organizations attempt to decrease the profitability of Trump businesses, albeit for different reasons. Don’t Pay Trump seeks to weaponize consumer power to affect administration policy, while #grabyourwallet is explicitly motivated by the Trump family’s conflicts. It is difficult to say how effective the anti-Trump boycotts might be, given the absence of direct analogies to the current situation. Nonetheless, we might be able to draw some lessons from past corporate boycott efforts:

Continue reading →

Appearances Can Be Revealing: The Trump Administration’s Corruption Perceptions Problem

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In the wake of President Trump’s Executive Order “Protecting the Nation from Foreign Terrorist Entry into the United States” (also known as the “Muslim Ban”), numerous media outlets published articles highlighting the fact that Trump’s order excluded several predominantly Muslim countries where the Trump organization conducts business (see here, here and here). The implication was that this exclusion was intentional, and demonstrates the extent to which Trump’s business ventures create conflicts of interest that influence his policy decisions. Although this explanation is plausible, another likely explanation is that the list of countries targeted by the ban tracked the visa waiver program restrictions Congress passed in 2015 and the Obama administration expanded in 2016 (see here).

Were the limitations on the ban driven by corruption or policy priorities? We don’t know—and that’s the problem. Even if Trump’s executive order had no connection with his business, Trump’s extensive conflicts of interest and unwillingness to divest from foreign holdings casts a shadow of corruption over any decision made by the administration. The fact that every decision Trump makes could be tainted with the appearance of self-interest, regardless of whether his administration actually is doing what it believes is in the public’s interest, is incredibly damaging, delegitimizing, and destabilizing. This is why we have ethics rules for government officials that seek to prevent not only corruption, but also the appearance of corruption. Trump’s failure to clear his presidency of any potential conflicts of interest has a few particularly pernicious effects:

Continue reading →

The Purity Potlatch and Conflict of Interest Revisited

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A potlatch is a competition once found among tribes in the American Northwest.  Contestants took turns destroying things of value to them to demonstrate their wealth and status in the community, and overtime the combat escalated until eventually the only way to win was to reduce oneself to material ruin.  In a 1964 essay Stanford Law School Dean Bayless Manning, a member of the President’s Advisory Panel on Ethics and Conflicts of Interest in Government, compared the then current race in Washington, D.C., to condemn conflicts of interest to a potlatch – with similar unfortunate consequences.  Given the conflict of interest mania now gripping Washington, D.C., the time seems right to resurrect Dean Manning’s largely forgotten classic on the perils of ethics overstretch.  “The Purity Potlatch: An Essay on Conflicts of Interest, American Government, and Moral Escalation” appeared in volume 24 of the Federal Bar Journal. Available nowhere online, excerpts follow. The emphasis are as in the original:

“Something dramatic has happened of late to the subject of conflicts of interest.  This formerly obscure topic has become front page news and Big Politics. . . .

“The significant feature of these nation-rocking exposes is that, so far as is known from the record, none of the men involved actually did anything demonstrably injurious to the public treasury or the public interest.  None figured in an alleged Teapot Dome or anything resembling it.  The charge was only that the combination of their economics circumstances and their offices did not look just right.  The worst allegation that could be made against them was that they held an economic interest or received gifts that might, upon a certain set of assumptions about the conduct of their office and about human nature generally, tempt them in the future to act contrarily to the public interest in certain limited situations. Continue reading →

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

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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. Continue reading →