making local government more ethical

An Official's Relationship with a Bidder

Here's an interesting conflict situation from San Mateo County, CA. According to an article in yesterday's Almanac, prosecutors are investigating the selection by two school boards of a project architect for construction projects at the same time that the project architect was remodeling the house of a district official.

As someone from the state's Fair Political Practices Commission said, at first glance it does not appear that, especially with the purported disclosures by the district official, anything about such a situation is problematic.

But there are at least three problems here. One is that the district official and the project architect are good friends. That is, their relationship is not limited to home owner-contractor. Financial interests are not the only things that lead to conflicts. Conflicts are based on special relationships, only some of which are financial in nature. Family relationships are one kind of relationship that leads to conflicts without the official's direct financial benefit. Friendships, although more difficult to categorize for the sake of enforcement, similarly lead to conflicts. They also make it more likely that there will be misconduct, because the parties can rely on each other.

Two, it isn't clear that the official did make disclosures. He said that his concurrent work with the architect was "well known" to both school boards, but one board member says he didn't know. What an official considers to be "well known" may not be known at all, not known in its entirety (knowledge that work was being done, but not the extent or the friendship), or not fully understood. Questions about disclosure can easily be solved by requiring that disclosures be made in writing or be included in minutes.

Three, concurrent work being done on an official's home is not as remote a relationship as it may sound. The appearance, and sometimes the reality, of such a situation is that an official agrees to help a company get a contract in return for a discount on work done on his home. Since it is very difficult to know the fair market value of work done on a home, due to the range of bids (if there are any) and the often limited paperwork that accompanies such work, it is very hard to know if the official was given a discount, unless it was huge (and even when no money is paid at all, officials say that they had agreed, for example, on a two-year loan that had not yet come due). The fact that the same situation occurred twice makes it appear more likely that there was some sort of deal (whether or not, in fact, there was one).

If an official has a special relationship with a bidder, or is currently (or will soon, or was recently) doing business with a bidder, that official should withdraw from participation with respect to that bid. Even clear, written, full disclosure is not sufficient.

Robert Wechsler
Director of Research, City Ethics