According to a July 2 unpublished opinion by Judge Flanagan of the Washoe County (NV) district court, Carrigan v. Commission on Ethics of the State of Nevada (attached; see below), a city council member has a first amendment free speech right to vote where there is not "an actual, existing conflict of interest." (p. 13)

Due process also comes into play in the opinion:  "In the absence of an actual, existing conflict of interest, this Court finds it at odds with the aims of due process to deprive the citizens of the Fourth Ward of their representative voice on issues pertaining to the Project, effectively silencing their vote at the ballot box..." (p. 13)

The opinion's conclusion only mentions the first amendment, not due process, but the court does call the state ethics commission's unanimous opinion "based on an improper purpose" and "arbitrary and capricious" due to its violation of the council member's first amendment rights.

I think it is important to consider the court's arguments in this case, particularly the extent to which conflict of interest laws deprive constituents of their voices. It's also important to understand the limits of the opinion, both in terms of the odd Nevada conflict language and the facts of the case.

A government official's relationships -- to family, employer, business -- are very important to determining whether conflicts exist. Both the type and the directness of each relationship are also important.

Here again are the basic facts of the situation in Cincinnati that I will be using to touch on a variety of issues (see the previous blog post for a list of the issues). A council member works for a development company owned by his father and his uncle, but has no ownership interest in the firm. The firm owns or has development rights to nine properties within three blocks of a proposed streetcar line, which has come before the council on a few occasions, and will have to be finally approved by the council. The firm has also proposed a $100 million development project, which would involve tax increment financing (TIF) money and a tax abatement from the city. The development would, it appears, be built near the proposed streetcar route.

According to an article in yesterday's Chicago Daily Observer, Cook County commissioner Tony Peraica has proposed a series of improvements to the ethics code. Here's a summary of the proposed amendments, taken from the commissioner's website (there's also a video on the topic):

Do Chinese walls (that is, mechanisms that separate someone from information or involvement in a matter) work in conflict situations in government? And what considerations determine whether they work or not?

One consideration is whether, even with the Chinese wall, there is still an appearance of a conflict. Another consideration is whether the individual will still have access to the information or still be involved in the matter despite the Chinese wall; that is, whether the Chinese wall is really a Chinese screen.

There are two important Chinese walls in the news the last couple of days. One involves congressional representatives in the position of choosing defense-related earmarks and their access to information about which recipients of those earmarks made campaign contributions to them, at what amounts and at what times. The other involves what was apparently a sweetheart deal between Florida and the United States Sugar Company, where the governor's chief of staff's law firm represented U.S. Sugar in the negotiations.

This month, in Portland, CT, home of the stone used to build New York City's brownstones, the new ethics commission found that it was a violation of the town's ethics code for the board of selectmen (the town's management board) to hire attorneys who had given campaign contributions to the board of selectmen majority's party town committee, according to the EC's minutes. The contributions of the particular attorneys were $20-250.

Cronyism is a tough problem to deal with. First, it's hard to define and, therefore, to enforce. Second, it's not clear that government ethics is the right place to deal with cronyism. Third, it's questionable whether most instances of cronyism create an appearance of impropriety so much as create an opportunity for personal and political attack.

Especially in small towns, bankers often have business relationships with many people and, therefore, do not make the best board and commission members on account of the many conflicts they have or, more frequently, the appearance of impropriety.

According to an article this week in the Asbury Park Press, in Long Branch, NJ (pop. 40,000) there is a dispute concerning the reappointment of a sewerage authority commission member, not a position that usually creates problems for bankers. But it turns out the situation reads like a question on a government ethics exam.