An Interesting Three-Headed Potential Conflict
Here's an interesting potential conflict. Chicago's <a href="http://civicfed.org/" target="”_blank”">Civic Federation</a>, a "non-partisan
government research organization working to maximize the
quality and cost-effectiveness of government services in the Chicago
region and State of Illinois," is asked by the city council to evaluate the
city's 2016 Olympics bid, to make sure that Mayor Daley's Olympic
committee has a reasonable financial plan, according to <a href="http://www.chicagotribune.com/news/local/chi-olympic-plan-report-27-aug…; target="”_blank”">an
article in the Chicago Tribune</a>.<br>
<br>
Most of the work on the Civic Federation's report was done
by <a href="http://www.lek.com/" target="”_blank”">L.E.K. Consulting</a>. The <a href="http://civicfed.org/civic-federation/publications/lek-consulting-summar…; target="”_blank”">report's
conclusion</a> was "that the operating budget provides adequate
protection for
taxpayers, but the development of the Olympic Village exposes the City
of Chicago to continuing real estate risks that must be managed." In
other words, the report essentially approved of Chicago's Olympic bid.<br>
<br>
According to the Tribune article, L.E.K. Consulting is "bidding on a
city contract at O'Hare International Airport that will be decided by
the Daley administration." The Civic Federation's president is quoted
as saying that he does not believe this constitutes a conflict of
interest.<br>
<br>
The <a href="http://thewritingonthewal.blogspot.com/2009/08/olympic-bid-reviewer-is-…; target="”_blank”">Writing
on the Wall blog</a> disagrees. The contract L.E.K. is bidding on is a
$33 million concession contract in the airport's International
Terminal, and there is no doubt that its concessions revenue will
increase substantially if the Olympics come to Chicago.<br>
<br>
The Writing on the Wall blog asks three reasonable questions, recognizing the three heads of L.E.K.'s potential conflict:<br>
<ul>Would
a company that is bidding for city business while evaluating the
Mayor’s #1 priority reasonably feel that a negative evaluation would
impact its bid?<br>
<br>
Would
a company that is seeking to run the International terminal at O’Hare
believe that harming the Olympic bid also harms their own business
interests?<br>
<br>
Would a company that wants to
bring international visitors to Chicago
be predisposed to thinking the Olympics is a good idea, regardless of
whether there is an overt conflict of interest?</ul><br>
Unlike many one-sided blogs, the Writing on the Wall blog also asks two
questions questioning the possible conflict:<br>
<ul>1. Is L.E.K.
large enough and decentralized
enough that some of its employees can critique the bid while others
work on projects that would gain from the bid?</span><br>
<br>
2. Was L.E.K’s role in the
study large enough that their potential conflict of interest would
color the Civic Federation’s analysis?<br>
</ul>
It bothers me that the Civic Federation and L.E.K., although
mentioning L.E.K.'s contract bid in the report, dismiss the potential
conflict so easily, and that the council, Mayor Daley, and the press appear to have no concerns. By dismissing the conflict without considering the
above questions, the Civic Federation also dismisses the possibility that the information
and analysis it depended on could have been colored by the conflict.<br>
<br>
The consulting company should not have been selected to write the report, but once this had been done, its work product should be questioned, as difficult as that might be under the circumstances.
Its potential conflict was not handled responsibly at the start, nor is it being handled responsibly now.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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