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A Court Decision That Focuses on the Reasons Behind Conflict of Interest Rules
Saturday, January 9th, 2010
Robert Wechsler
Two months ago, I
pointed
out Patricia Salkin's new summary
of
2009
reported cases dealing with ethical aspects of local government land use matters.
I'm finally getting around to analyzing one of them that provides a
fascinating perspective on why conflicts of interest are important. The
decision shows that, when you look at the reasons behind conflict rules,
you take a far more broad-minded, less technical approach to possible
conflict situations. It makes it clear that ethics training should
focus less on rules than on the reasons behind them.
A New Jersey decision, Randolph v. City of Brigantine Planning Board, went beyond the interpretation given to most conflicts laws, concluding, “it is not simply the existence of a conflict that may be cause to overturn an action of a public official, but also the appearance of a conflict.” Here's the conflict language (it's from the state municipal land use statute, but the court said it applies equally to the conflict language in the state's local government ethics law and common-law conflicts relating to quasi-judicial proceedings):
The court favorably quotes a 1956 decision, as follows:
There is also the issue of family, since the conflict here involves an official's domestic partner (the court notes that, although the chair and the engineering company principal are not married, the perception is the same, thus effectively including domestic partners in the definition of "spouse"). With respect to family involvement, the court discusses a 2004 case:
Finally, the court details the appearance of impropriety in this case. Primarily it involves the appearance of bias toward the engineer's advice, because his advice would likely be based partially on the domestic partner's advice (as the board's former engineer and the current engineer's boss), and also because the chair would want the engineer to look good so that his firm's annual contract would be renewed by the board.
It's noteworthy that the judge does not focus on the fact that the failure to renew the contract would mean a financial detriment to the chair's household. Unlike so many people who deal with conflict matters, this judge is less interested in money than in the appearance of bias.
It's interesting that, in this very matter, the chair voted against the engineer's advice to require a variance. The court says it is not important whether bias is actually shown. The issue is whether it might be perceived. It is the situation rather than the specific facts that the court focuses on, because conflicts are not determined by how an official acts. One of the most common mistakes in government ethics is believing that how an official votes on a matter is relevant.
The court makes one last observation, and responds to it. This observation is important, given the opposition of many muncipal officials, and their associations, on these very grounds:
Robert Wechsler
Director of Research-Retired, City Ethics
---
A New Jersey decision, Randolph v. City of Brigantine Planning Board, went beyond the interpretation given to most conflicts laws, concluding, “it is not simply the existence of a conflict that may be cause to overturn an action of a public official, but also the appearance of a conflict.” Here's the conflict language (it's from the state municipal land use statute, but the court said it applies equally to the conflict language in the state's local government ethics law and common-law conflicts relating to quasi-judicial proceedings):
-
[n]o member of the planning board shall be permitted to act on any
matter in which he has, either directly or indirectly, any personal or
financial interest.
The court favorably quotes a 1956 decision, as follows:
-
Under
the common law, "[i]t is fundamental
that the public is entitled to have its representatives perform their
duties
free from any personal or pecuniary interests that may affect their
judgment." In
determining whether a conflict exists, "[t]he potential for
psychological
influences cannot be ignored." ... "[I]t is the mere
existence of the interest, not its actual effect, which requires the
official
action to be invalidated."
-
Officials
must
be free of even the potential for entangling interests that will erode
public trust in government actions. Thus, it is the potential for
conflict,
rather than proof of an actual conflict or of actual dishonesty, that
commands
a public official to disqualify himself from acting on a matter of
public
interest.
-
Would
an impartial and concerned citizen,
intelligent and apprised of all the facts in the situation, feel that
there was
the potential for non-objectivity on the part of the officeholder
making a
decision? If the answer is affirmative the appearance of conflict
exists.
-
[Courts]
must also be mindful that to abrogate a municipal action at the
suggestion that
some remote and nebulous interest is present, would be to unjustifiably
deprive
a municipality in many important instances of the services of its duly
elected
or appointed officials.
-
No
local government officer or employee shall
act in his official capacity in any matter where he, a member of his
immediate
family, or a business organization in which he has an interest, has a
direct or
indirect financial or personal involvement that might reasonably be
expected to
impair his objectivity or independence of judgment.
There is also the issue of family, since the conflict here involves an official's domestic partner (the court notes that, although the chair and the engineering company principal are not married, the perception is the same, thus effectively including domestic partners in the definition of "spouse"). With respect to family involvement, the court discusses a 2004 case:
-
In
finding that "when a family member's
vote results in another family member obtaining a position in a
government
agency . . . a conflict is usually present," we focused on the public's
perception that the committeewoman had "a personal interest in the
reappointment of her husband to a prestigious and potentially very
influential
position."
Finally, the court details the appearance of impropriety in this case. Primarily it involves the appearance of bias toward the engineer's advice, because his advice would likely be based partially on the domestic partner's advice (as the board's former engineer and the current engineer's boss), and also because the chair would want the engineer to look good so that his firm's annual contract would be renewed by the board.
It's noteworthy that the judge does not focus on the fact that the failure to renew the contract would mean a financial detriment to the chair's household. Unlike so many people who deal with conflict matters, this judge is less interested in money than in the appearance of bias.
It's interesting that, in this very matter, the chair voted against the engineer's advice to require a variance. The court says it is not important whether bias is actually shown. The issue is whether it might be perceived. It is the situation rather than the specific facts that the court focuses on, because conflicts are not determined by how an official acts. One of the most common mistakes in government ethics is believing that how an official votes on a matter is relevant.
The court makes one last observation, and responds to it. This observation is important, given the opposition of many muncipal officials, and their associations, on these very grounds:
-
We
recognize that our opinion could "reduce the number of qualified
persons .
. . willing to serve on local boards" in small municipalities. Gunthner
v.
Planning
Bd.
of Bay Head, 335 N.J. Super. 452, 457, 762 A.2d 710 (Law
Div.
2000) (quoting Assembly Local Government Committee Statement,
Assembly No.
826, Sept. 29, 1994). Yet, in reconciling the competing public
interests at
stake, the need for unfettered objectivity by planning board members
outweighs
the potential difficulties small municipalities may experience in
attracting
people to serve on local boards.
Robert Wechsler
Director of Research-Retired, City Ethics
---
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