Wednesday, April 20, 2011
A Structural Conflict of Interest in Feinberg's BP-Claims Disbursement Office
Tuesday, April 19, 2011
Business Ethics in the Business World: A Glimpse from Goldman Sachs
Goldman Sachs’ ethics code reads in part, “[We] expect our people to maintain high ethical standards in everything they do. . . . From time to time, the firm may waive certain provisions of this Code.”[1] The explicit conditionality is notable and significant. I contend that among other reasons, a negative impact on the bank’s financial position and/or profits is apt to trigger such a waiver not only at Goldman Sachs, but from the business standpoint more generally.
The full essay is in Cases of Unethical Business, available at Amazon.com.
1. William D. Cohan, Money and Power: How Goldman Sachs Came toRule the World (NY: Doubleday, 2011).
Conflicts of Interest for Public Officials: How Broad?
Michael Carrigan, a member of the
City Council in Sparks, Nevada, “says he was trying to make sure his vote on a
proposed casino, one that his campaign manager helped develop, did not pose an
ethics problem.”[1]
Carrigan backed the Lazy 8 casino project proposed by Red Hawk Land Co.
Carrigan’s friend and campaign manager, Carlos Vasquez, worked as a consultant
on the project. The question is whether the elected official’s relationship to
his campaign manager who was a consultant on a project to be voted on constitutes
a conflict of interest sufficient for the official to have not voted. The Sparks city attorney told
Carrigan that he could vote on the project as long as he publicly disclosed his
relationship with the project consultant. The attorney was obviously thinking
in terms of transparency. Carrigan made the recommended disclosure. The Nevada
Ethics Commission, however, claimed after the vote that Carrigan had a conflict
of interest and should have abstained even with the transparency. In its reprimand, the commission
cited ethics law that says public officials must not vote when their judgment
could be affected by a commitment or relationship to someone in their
household, a relative, business partner, or a person “substantially similar” to
those specified. The commission classifies the campaign manager in the
“substantially similar” category because Carrigan’s loyalties to his campaign
manager would have affected his judgment. Caren Jenkins, executive director of
the Nevada Ethics Commission, explains, “Here was a friend, a buddy, a close
confidant. If Mr. Carrigan ever thought it was in his best interest to vote
against the project, would he have?”[2] Carrigan sued the commission for
its reprimand, claiming it violated his free speech rights. The Nevada Supreme
Court sided with Carrigan, who pointed to the fact that he was not in business
with his campaign manager. The Nevada Supreme Court said the catch-all category
the commission cited failed to “limit the statute’s potential reach (or) guide
public officers as to what relationships require recusal.”[3]
The state court said the law “thus chilled speech.” In its appeal to the U.S. Supreme
Court, the lawyer representing the commission argues, “State and local
legislators have no personal ‘free speech’ right to cast votes on particular
matters, much less ones in which they have a personal interest.”[4]
The Reporters Committee for Freedom of the Press similarly claims that rules
such as Nevada’s are important to ensure politicians don’t vote based on
personal interests.
2. Ibid.
3. Ibid.
4. Ibid.