Issues & Analyses: Government For The Greater Good. What You Need To Know About Conflicts-Of-Interest

A Conflict-of-Interest Primer

Is it a conflict of interest to vote on issues that affect your employer’s finances and future? Your former business partner’s? Your best friend’s?

“The fox shouldn’t guard the chicken coop” is a good principle but it can get complicated when the fox doesn’t look like a fox or doesn’t recognize its foxiness, or when the chickens make assumptions that all is well. It can also get complicated when someone is wrongly called out as a fox or the converse, when someone is too polite to call it as they see it.

In municipalities, it often comes down to a fox wearing sheep’s clothing: a conflict of interest.

Conflict of interest is easy to spot if there is a clear financial relationship with benefits to be gained between an official and an individual, legal entity, or group of entities. But often, it isn’t clear at all. 

Fortunately, there are conflict of interest laws to protect officials and municipalities from inappropriate considerations and behaviors, or an impression of an inappropriate relationship that potentially is a conflict of interest. As Town Attorney Lauren Goldberg lays out below, there are straightforward actions that can be taken by public officials when they are certain or uncertain about whether there’s a potential conflict of interest, or the appearance of one. They can go on record with a full disclosure, they can recuse themselves from discussing and voting on an issue, they can abstain from voting on an issue, they can go to the  state Ethics Commission for an opinion in advance of the potential conflict of interest. Apparently, some towns even have ethics commissions to adjudicate whether a relationship poses a conflict of interest, gives the impression of posing a conflict of interest, or certainly does not.

Here’s what you need to know, whether you’re an official or an aware resident, according to town attorney Lauren Goldberg of K-P Law. Below is Goldberg’s introduction to Massachusetts conflict-of-interest laws, excerpted and lightly edited for clarity. It was presented to new and returning town councilors on December 13, 2021 before the formal opening of the Town Council meeting.

All councilors-elect attended, along with Councilors Lynn Griesemer (President, District 2) and Pat DeAngelis (District 2), Dorothy Pam (District 3), Cathy Schoen (District 1), Andrew Steinberg (at large), and Shalini Bahl-Milne (District 5). (When a quorum of current councilors was reached, the formal council meeting began.)

The Amherst Media recording of the meeting can be found here

Lauren Goldberg: “The most important thing for the conflict of interest law is: You cannot participate in anything you have a financial interest in, or that an immediate family member, or your employer, or an organization that you’re on the board of or you’re a trustee of, has a financial interest in. 

“You can’t just sit at the table during a discussion in which you have a financial interest, and it could be large or small, positive or negative. You need to get up from the table and go sit in the audience if you’re worried that you might have a conflict.

“The basic rule is that if it doesn’t feel right, that’s a very useful red flag. Pay attention to it. You cannot undo a violation of the conflict of interest law, so you want to be very careful to make sure that you do not have a conflict.

“…if you don’t think you have a potential conflict of interest and other people think you do — it’s usually a red flag. And you might want to think a little bit more about why people would be concerned about it.”

Lauren Goldberg, Amherst Town Attorney

“And if you have something that might look like a conflict or that feels wrong — your best friend’s husband or your childhood best friend’s mother or your wife’s work friend — any of those things might suggest to someone that you might act, or fail to act, not because of the best interests of the town but because of this other relationship. There’s a disclosure form to use or you can make the disclosure and file it with the clerk or you can make the disclosure on the record at the meeting — [even if] there isn’t a prohibited interest, a violation of the law, but it doesn’t look great. You’ll know best who those people are [who might seem like a conflict of interest] in a small town, where a lot of people are in business with one another, or they’re not necessarily going to have a financial interest in the matter before [the council or board], but they might be your business partner in another enterprise. So it’s not prohibited for you to participate, but you have to make a disclosure saying, ‘I have this relationship but I’m still going to make decisions based on what’s best for the town.'”

Andy Steinberg: I think in Amherst it’s worth touching base on the question of people who are employees, or spouses of employees, or children of employees of the University of Massachusetts and Amherst College and Hampshire College on matters that pertain to those institutions.

“Essentially, you need to try and analyze whether in the matter before the council, is there any financial interest for you, your employer, your immediate family member, your board or trust? All of those things create a conflict of interest that is prohibited, that is an offense.

“I would suggest that you self-reflect and say, ‘Do I have any issues there? Is there any financial interest that’s reasonably foreseeable?’ You can always ask ahead of time whether there’s a conflict. (But if you call the Ethics Commission for an opinion, which you can do, you have to tell them everything because they can’t give you the right advice unless they know everything, all of the circumstances.) (And also you never want to call them after the fact because essentially it’s reporting yourself to the ethics commission.)

“Short answer is, if your employer has a financial interest in a particular matter that’s pending before you, or an immediate family member, you cannot participate.”

Shalini Bahl-Milne: If we’ve worked with somebody in the past but currently there is no financial interest, can we vote on an issue regarding that person?

“The answer to that is, likely yes, and the reason I’m saying ‘likely’ is that you’ve reported that there is no financial interest currently. It’s kind of a personal decision, whether to participate [and] whether to file the disclosure form and announce at the beginning of the meeting, ‘We used to be business partners. It was a long time ago and we have no financial relationship right now.’ You could say that on the record and decide to participate. Or you could say, ‘Hey, look, this is my best friend and most important business partner, and even though I don’t have a financial interest now, and we haven’t had any financial dealings for awhile, I don’t want to put myself in a position of having to vote for or against this person, or that project, and so I’m going to recuse myself.’ And recusal is getting up from the table and sitting down as a member of the public where you have the same rights as a member of the public but no more. Or you could sit at the table and abstain. Abstaining means you participated but you’re not going to vote. 

“Probably in the scenario I just described, you’d prefer to recuse yourself if you feel like voting against that person, or if talking about that person’s project negatively would reflect negatively on your relationship, or if you would not be focussed solely on the best interests of the town. 

“You, as an individual, own that potential conflict of interest. No one can force you not to participate. But even if you don’t think you have a potential conflict of interest and other people think you do — it’s usually a red flag. And you might want to think a little bit more about why people would be concerned about it. Again, ask first, don’t act first.”