Friday, March 18, 2016

Conflict of Interest

The press has recently been full of allegations of conflict of interest.  Most of the allegations misunderstand the concept.  Having decided opinions about matters is not a conflict of interest.  Having an incentive to make a decision on the basis of something irrelevant to its merits is a conflict of interest.

An example may clarify. 

Let’s suppose I grew up in an alcoholic household and saw the terrible things that alcohol can do to a family. As a result, I become a strong campaigner against alcohol abuse.  I protest the opening of liquor stores and argue that alcohol should be illegal.  My public profile becomes so significant that I go into politics and am elected to the legislature.  Once there I rapidly rise and become the Minister in charge of deciding if retail liquor sales should be expanded.  The fact I have strong views about retail liquor sales and indeed have campaigned against them is not a conflict of interest – in fact, that may well be the very reason I was elected to the legislature. 

On the other hand, let’s suppose I am the Minister in charge of deciding if a liquor store should be opened somewhere and I own the land where the liquor store is to be built, if allowed to open.  The I have a very real conflict of interest.  I will get more money if I support the opening of the liquor store – and that factor (my personal gain) has nothing whatsoever to do with the merits of the question.  Similarly, if I am the Minister and I know my son or daughter will get a job running the liquor store if I approve it, then I have a conflict of interest.  My child having a job is a benefit to me but it has nothing whatsoever to do with the merits of whether a liquor store should be opened.

Conflicts of interest are not the same as predispositions.  Sometimes a predisposition is a bad thing; we do not want judges, say, who are predisposed to believe that alcoholics are never to be believed.  But the fact that a predisposition can be a bad thing does not make the predisposition a conflict of interest.  A judge who believes strongly that justice rather than rehabilitation is the proper goal of sentencing a criminal offender has a predisposition and not a conflict of interest – indeed, provided the judge uses measured language and expresses that predisposition in a cogent and rational fashion there is nothing wrong with the judge having such predisposition. 

What’s more, conflicts of interest are everywhere and are often unavoidable.  Suppose you come to see me as a lawyer to ask if you should, for example, sue someone.  I have an inherent conflict of interest in that if I suggest suing you will likely give me a great deal more money than if I suggest suing is a bad idea.  If you ask a salesclerk whether a pair of pants “makes my ass look big” the clerk has an incentive to say “no” regardless to get the sale.  In both cases, the professional lawyer and the good salesclerk set aside their personal interests and tell the unvarnished truth – but the conflict is there.

The bottom line is having expressed opinions about an issue does not amount to a conflict of interest, but, having a financial or personal incentive to make a decision one way or another does amount to a conflict of interest.


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