The Conflict-of-Interest Craze
Kinsley, Michael
The Conflict-ofInterest Craze by Michael Kinsley The Westinghouse Corporation, which builds nuclear plants (or at least tries to), got the urge recently to sue a few uranium producers....
...Indeed, they are supposed to have no opinions at all...
...David Gartner, President Carter’s nominee for a seat on the Commodity Futures Trading Commission, turned out to have received $72,000 worth of stock in a food commodities firm from a major Democratic contributor who is also involved in commodities...
...He visited a project in the Bronx with me and got turned on by it...
...Maybe Milliken was right when he said, “Chip and I really hit it off...
...Suppose a PR man for the nuclear industry writes an article arguing vehemently for nuclear power...
...One example is the unsavory habit, in places like The New York Review of Books, of friends reviewing one another’s books...
...Milliken could be seen as paying back the Carters for their aid by hiring their unemployed son...
...Where’s the Conflict...
...Presumably President Carter chose him for this policy-level job precisely because of his environmental sympathies...
...In this case, obviously the oil companies were not actually afraid of divided loyalties...
...Brill reported Justice Lewis Powell, the soul of propriety, had to nudge Burger away to avoid more indiscretions...
...any such feelings are by their nature illegitimate...
...All three of those situations can (and have) been construed as constituting a conflict of interest at some time or another-even though they are ordinary and common in everyday life...
...From here the legal conflict rules take off into speculation...
...It relieves people of any personal obligation to truth and justice...
...My fellow Washington Monthly contributing editor, Tom Bethell, fell victim to this particular fallacy in an article in the October Harper’s...
...We’re not accepting those types of gifts anymore...
...I’ll bet even Justice Powell has a casual opinion about the Farber case, based on what he reads in the papers...
...In this category people who are supposed not to have opinions are accused of a conflict if they reveal opinions that would otherwise not be known...
...No doubt this attitude will get me in trouble some day...
...He won’t know whether he still owns that peanut warehouse, and therefore his policies as president will not be biased in fzvor of peanuts or agriculture...
...Brill found himself chatting with Burger at last summer’s American Bar Association convention, and Burger began teasing him about the Myron Farber case...
...But put the same facts in another light and they come out a bit differently...
...Newspaper journalists, unlike writers for opinion magazines, are not supposed to present their opinions on the subjects they write about...
...We should not automatically impute criminality or immorality and those who have disclosed the facts have a right to be indignant when we do...
...For an organization of journalists to officially declare support for a presidential candidate, it was argued, would create a conflict of interest with their duty to report objectively on the presidential campaign...
...Human beings cannor be single-minded advocates nor can they be completely objective...
...So it was a scoop when Steven Brill, the law columnist for Esquire, gleefully zapped Chief Justice Warren Burger in that magazine’s September 12 issue...
...The Conflict-ofInterest Craze by Michael Kinsley The Westinghouse Corporation, which builds nuclear plants (or at least tries to), got the urge recently to sue a few uranium producers...
...It is nonsense to suggest that someone in this position should be “objective” and that evidence of a past commitment to a particular set of beliefs represents a “conflict of interest...
...First Westinghouse hired the huge Chicago law firm of Kirkland & Ellis...
...The Lewiston Morning Tribune of Lewiston, Idaho, assigned a reporter to write a feature on the newspaper’s own conflicts of interest...
...The feature quotes the paper’s managing editor talking proudly about its elevated conflict-ofinterest standards of recent years...
...The media are full of charges of “conflict of interest” that never explain what is wrong about the situations they describe...
...The exaggerated concern over conflicts of interest ignores the complexity of a society where law firms can have hundreds of lawyers spread across the country dealing with thousands of clients...
...There is no attempt to hide the strength of his feelings in the article...
...It is an insult to President Carter to suppose that his basic sympathies-and his ability to rise above them when he feels the national interest should take precedence-will be very much affected by where his own money is invested...
...Westinghouse has been caught in a squeeze by the enormous increase in the price of uranium, and it suspects these American companies of conspiring with foreign governments in violation of the antitrust laws...
...The purpose of conflictofinterest rules is to ensure that this good faith exists...
...This phony conflict, actually a confluence of interest, arises in government as well as in journalism...
...A conflict of interest is not created when they make their opinions known...
...But surely these arguments were a triumph of form over substance...
...He’d still be unsympathetic to defending the Ex-Im Bank against a suit by environmentalists...
...But we should have the right to question them about the appearance and they should not feel indignant when questioned...
...This is a lawyer’s procedural view of how things ought to work...
...In all but those cases of “confluence of interest” where disclosure is superfluous, it is good to get all the facts out in the open...
...It is also naive...
...It is not considered a conflict of interest, for example, to defend a client you believe to be guilty or put on the witness stand someone you believe to be lying...
...2. The f o r m - o ver- su bst an ce conflict...
...1. The confluence of interest...
...In service of that strong feeling, he does two things: he joins a lobbying organization, and he writes an article expressing his viewpoint...
...Lawyers have done to their conflict-ofinterest rules exactly what they’ve done to the antitrust laws...
...The article does not say whether the paper’s coverage of the circus has become more objective and balanced since the free tickets disappeared...
...These rules have evolved from their original purpose into one more tactic for litigators...
...It’s ridiculous to suppose that these intelligent men can turn their judgmental capacities on and off like a spigot...
...Jack Anderson probably could make it seem so...
...He was fulminating about environmentalists, and their efforts to impose U.S...
...It’s no tragedy when reporters have to buy their own tickets to the circus, but sometimes penny-ante conflict-ofinterest rules can be harmful...
...Unlike the case of the Zionist official writing a pro-Israeli article, knowing about the connection is not superfluous information here, and it ought not to be hidden...
...Well, this can be seen as a triumph for journalistic integrity, or it can be seen as an insult to the reporters of the Lewiston Morning Tribune...
...Most of life may well be sinful, but surely not because it involves so many “conflicts of i n t e r e s t . ” What e x a c t l y is objectionable about a conflict of interest...
...The subject was the ethical rules against fee splitting-one lawyer giving part of his fee to another lawyer...
...But a man’s lifelong attitudes do not change so easily...
...If it is out in the open it is difficult to see how the situation can be called a conflict...
...By the standards of the legal profession, for example, I am clearly violating my fiduciary duty to The New Republic by writing this article for The Washington Monthly...
...He calls this a “conflict of interest,” though an “ideological, not financial” one...
...It’s interesting to compare lawyers’ incolerance for personal or emotional complexities, which they call conflicts of interest, with what I would call the intellectual conflicts of interests that are allowedoften even required-in the service of legal advocacy...
...The truth is that these rules usually work to avoid only the appearance of conflict...
...Passing out freebies can make for real conflicts, but in the penny-ante situation, the amounts involved are too laughably petty to cause a problem...
...Perhaps they have made a tactical retreat rather than confront an exasperated judge with the truth: there is probably no law firm in the country big enough to handle an antitrust suit against oil companies that could not be disqualified by the conflict of interest rules these companies were using to thwart Westinghouse...
...it cannot be otherwise...
...But if his real objection is that the man making the Justice Department’s decisions about environmental lawsuits is an environmentalist, that is another thing entirely, a question of who he is rather than what he does...
...The specter of “conflict of interest” arises whenever an individual or an institution is involved with more than one goal or person or institution at the same time...
...We elect a peanut farmer as president, then he makes a great show of putting his peanut warehouse in a “blind trust...
...Vigorous advocacy on both sides is supposed to guarantee the truth...
...But they are supposed to be, in some vaguer way, “non-biased...
...You have no expertise in personal injury law, but you want a chunk of that fee...
...Disclose the facts, sure...
...their objections were intended to make trouble...
...In other words, if you are willing to “assume responsibility,” you should be able to get a chunk of the client’s fee even if you’ve done virtually no work on his behalf, other than steer him to another lawyer...
...They rarely do...
...Spokesmen for the other side accuse the author of a “conflict of interest” and denounce the magazine for failing to reveal the connection when it published the article...
...An actual conflict of interest in the law would be one lawyer representing both sides in a trial...
...Another effect is to create discord and conflict, by looking for situations where it might occur and forcing the parties to hire separate lawyers “just in case...
...Here is a fine legal mind at work: in a single stroke he has managed to gut a rule of all its meaning, without in any way reducing its length or complexity...
...Every time a new client, or a new piece of business from an old client, comes in, they run it through the computer, checking it against all the other work they’re doing or ever have done for everybody else...
...Some Conflicts are Real Of course real conflicts of interest do exist, as in the case where a public servant or a journalist receives a large sum of money or other significant favor from someone to whom they can be useful in their jobs...
...Indeed, refusing to publish reviews of books written by friends of the author is going too far in service of “objectivity...
...The author is identified as a professor of history, but he does not reveal that he is also on the board of the American-Israeli Public Affairs Committee, the Zionist lobby...
...You can refer your friend to a personal injury lawyer, but once you’ve done that, “it is often difficult to perform services justifying an adequate fee...
...Almost as clearly, it would be a conflict for one lawyer to represent both sides negotiating a contract...
...The best we can hope for from judges is that their opinions do not become rigid and immune from new facts that might cause them to change...
...But the author of the article offers a hypothetical problem: “A friend of the family is seriously injured in an automobile accident...
...At last report Westinghouse had found itself a New York law firm to handle the suit, and the oil company defendants had not objected...
...Politicians, of course, are not supposed to be “objective...
...The first draft of the new rules was very tough, but the process of shaving corners and splitting hairs has proceeded far enough by now to assure the coming round of two-year defectors from the Carter administration plenty of lucrative offers...
...Neither client, it was reasoned, could count on the firm’s total loyalty...
...This seems a reasonable suspicion, since most of these uranium producers are also oil companies with some experience in this sort of hanky-panky...
...A total ban on book reviews by friends would be a good example of a conflictofinterest rule working to the detriment of the very people-the readers-it is intended to protect...
...Suppose this writer isn’t really an advocate of nuclear power, but is only doing it for the money...
...Well, so what...
...How can I possibly serve two competing liberal magazines at the same time...
...When the facts were disclosed Milliken and Carter parted ways (thereby reinforcing the suspicion that they themselves believed they were in a conflict-of-interest situation), but the “facts” themselves did not constitute the conflict of interest...
...In journalism and politics, as well as law, “conflict of interest” has evolved into a monstrous no-no, a subject of obsessive concern and elaborate rules, but one that benefits from little common-sense thinking...
...There was no evidence the $14 affected Angelotti’s job performance, which was superior...
...The author proposes solving the problem “by substituting the word ‘or’ for ‘and’ or interpreting the Code so that the provisions of the Rule are read in the alternative...
...disciplinary rules permit fee-splitting between lawyers only “in proportion to t h e services performed and responsibility assumed by each...
...People who are informed and intelligent will develop opinions...
...The main effect of the legal profession’s elaborate conflict-ofinterest rules is to create new business for lawyers...
...It’s hard to see how a lawyer’s zeal in representing a client would be diminished by a conflicting loyalty he wouldn’t even know about without the help of a computer...
...different locations) to represent both would be a “conflict of interest...
...A person feels strongly about a public interest...
...But when they’ve done that, we should do them the courtesy of treating an appearance of a conflict as an appearance...
...There is a pointsomewhere between circus tickets and a suitcase full of hundred-dollar billswhere the assumption that there’s no quid pro quo disappears...
...But if the facts checked out, and the opinions were clearly presented and well reasoned, I would not refuse an article only because of some outside connection of the author’s, even one that involved money...
...A passionately pro-Israeli article, let us say, appears in a national magazine...
...quite the opposite-the purpose is to express those feelings as vividly and persuasively as possible...
...Originally intended to protect those who need legal services, they also can have the perverse effect of denying services to those who need them...
...The suit bubbled along, with Westinghouse spending $2.5 million in legal fees, when a judge ordered the company to drop Kirkland & Ellis and start again with someone else...
...If it is the former, I refer him to the next category, “form over substance conflicts”: what difference would it make if Moorman, though a passionate environmentalist, had never joined the Sierra Club...
...Bethell says this is because the assistant attorney general for the Lands and Natural Resources division, James Moorman, used to work for the Sierra Club...
...So Westinghouse turned to another huge midwestern law firm: Jones, Day, Reavis & Pogue of Cleveland (220 lawyers in 3 offices across the country...
...The purpose of elaborating, studying, and refining complex antitrust rules is not to imbue in lawyers and their clients the spirit of free competition...
...He denies ihai this is a conflict of interesi...
...He used to advance that cause at the Sierra Club, now he does it at the Justice Department...
...Rather, the finely honed definitions and subtle distinctions are intended to help lawyers tell their clients exactly how anti-competitive they can be without stepping over the line...
...The D.C...
...This is the one that brought Westinghouse so much grief...
...The friend might bring a valuable perspective a stranger couldn’t offer...
...The same is true of conflict-of-interest rules...
...He makes no attempt to hide his sympathies...
...Judges have been much more reluctant than journalists to abandon their own myth of objectivity...
...This happens to cover a great deal of modern life...
...Is it a conflict of interest for a mother to have more than one child...
...We need to realize that complex relationships are inevitable and don’t necessarily involve a conflict of interest...
...Knowing that a passionate Zionist (or antiZionist) is also a member of a Zionist (or anti-Zionist) organization adds nothing to a reader’s ability to evaluate this person’s arguments...
...If the circus sent someone down to the newsroom passing out thousanddollar bills and asking for pictures on the front page, that would be conflict of interest...
...4. The penny-ante conflict...
...But Jones, Day had done work in the past for at least six of the 29 companies Westinghouse wants to sue, so the defendants’ lawyers got the judge to nix that one too...
...Well, where is the conflict...
...It’s often said the purpose of these rules is to avoid even the appearance of conflict...
...A. recent issue of District Lawyer, the official journal of the D.C...
...Most large law firms have to use computers to tell them when they have a conflict of interest...
...Form-over-substance conflicts of interest abound in both the legal and political worlds...
...Or the reverse: an anti-Israeli article by an officer of the American Friends of the PLO...
...A negative review by a friend might carry more weight than one by a more “objective” reviewer...
...The assumption underlying conflictofinterest rules is that if those whose assigned role is to advocate are sufficiently pure in their devotion to their cause, and if those whose assigned role is to be “objective” are sufficiently pure of any devotion at all, the interplay of these forces will guarantee truth and justice...
...Maybe Chip Carter genuinely believed in what Milliken was doing-setting up teaching programs in ghettos-and wanted to do whatever he could to help...
...The complexity of human motives crops up all the timein stories charging “conflict of interest” even though the stories invariably emphasize the conflict and ignore the complexity...
...Do you suppose that failing to reveal their preference between Nixon and McGovern in 1972 meant that journalists had no preference...
...In the first instance people who are supposed to have opinions are accused of a conflict when they fail to reveal some fact that merely confirms opinions they are already known to have...
...As an editor, I naturally would be suspicious of any article that came to me in which some institutional connection had been concealed...
...But what we need is a renewed understanding of the fundamental conflicts these nitpicking rules obscure...
...Or on another level, the complexity of human motivation, where judges are also parents and newspaper readers, and journalists are people with opinions and biases, and business competitors are close friends...
...The notion that the human heart can sincerely maintain dual loyalties is foreign to the lawyer...
...The Triumph of Lawyerthink Our obsession with conflicts of interest is another example of the triumph of lawyerthink...
...perceive that the case has the potential for a substantial fee...
...That is hisjob...
...And there is surely no conflict of interest...
...In fact, Angelotti was done in by other bureaucrats who resented his apparently successful efforts to reorganize and modernize his department...
...The fact that his previous-or even concurrentbehavior comports with his openly expressed opinions is reassuring, not objectionable...
...It is a situation that seemed to reek of conflict...
...An environmental group has sued the Ex-Im Bank, and the Justice Department, it seems, has been unenthusiastic in coming to the Bank’s defense...
...The purpose of the rules is to prevent kickbacks from one lawyer to another for steering business his way...
...The real cost of our conflict-ofinterest obsession is that it distracts us from an important and difficult taskconstantly probing the good faith of those in positions of trust, and of ourselves...
...The firm’s Washington office, it turned out, did work for the American Petroleum Institute, a lobbying group, to which some of the defendants belong...
...Rest assured that in the Westinghouse case, all 29 defendants have their own law firms-large ones-duplicating one another’s work...
...But why...
...Or even two parties on the same side of a contract-joint buyers of a business, say-may have to get separate lawyers in case their interests diverge...
...There is also room for legitimate concern about potential conflicts of interest, though not those that require a computer to be uncovered...
...Bethell doesn’t make clear whether Moorman’s defect is having worked for the Sierra Club, or whether it is his being an environmentalist...
...Nitpicking Rules Social, business, and political relationships in our complex society can work only if people can count on the good faith of those they deal with and rely upon...
...In the first case there is no real conflict...
...That is a conflict of interest, both because of the source and amount, and because of the stake it would have given Gartner in his own decisions...
...In most stories charging conflict of interest, what has actually been uncovered is merely the appearance of a conflict, not necessarily a scandalous fact, although it is usually reported as such...
...If anything, revealing the opinion alleviates the danger the conflict of interest poses, by allowing the newspaper reader to take this opinion (otherwise unknown) into account...
...The trouble and expense usually occur to the clients...
...What a dilemma...
...For the same law firm (with 256 lawyers in 2 Michael Kinsley is ihe managing ediior of The New Republic and a contributing ediior of The Washington Monthly...
...As a result of this published exchange, Brill writes (correctly), Burger may have to disqualify himself if the Farber case reaches the Supreme Court...
...The extremely suspicious attitude of lawyers toward conflicts of interest is merely a corollary of the basic rule that a lawyer owes the client a duty of unwavering advocacy...
...And, by focusing on appearances, they do it in a way that is often frivolous and wrong...
...It is most prevalent in the legal world, where it is believed that all efforts must be made to avoid the possibility that a conflict might arise, no matter what trouble and expense this might cause...
...You...
...Such payments would pose a “conflict of interest” between a lawyer’s own financial gain and the good of his clients...
...The magazine’s failure to reveal the official connection is also harmless...
...Do you think you have special privileges like this guy Farber does...
...3. The speculative conflict of interest...
...environmental standards on projects built outside the United States that are funded by the Export-Import Bank...
...Even if Burger hadn’t said a word, he still would have had an opinion...
...Maybe...
...It’s the motivation behind the facts that separates the real conflict from the make believe, and reporters who write about an appearance of conflict as if that alone constitutes wrongdoing miss the point...
...Nor should they be...
...The District of Columbia Bar Association is in the process of revising its rules about the “revolving door”-the practice, common to Washington lawyers, of moving back and forth between government agencies and law firms representing clients that deal with these agencies...
...In 1972 there was an enormous fuss when it appeared that the Newspaper Guild, the union for journalists, might endorse George McGovern for president...
...The legal profession has evolved an elaborate set of rules-varying slightly in d i f f e r e n t j u r i s d i c t i o n s - t o determine when a conflict of interest exists...
...the truth is nobody’s client, and nobody owes it a duty of advocacy...
...A few months ago, a man named Robert Angelotti was fired as administrator of the Agriculture Department’s Food Safety and Quality Service Division, allegedly for accepting $14 worth of meals from a friend who is a “food consultant” employed by the industry...
...Comparing this situation to the one described in the first category shows the confusion surrounding the concept of conflict of interest...
...Even if the parties have already negotiated the contract, they must hire separate lawyers in case one lawyer sees something disadvantageous to one side...
...Bar, contained an amusing example of how the hair-splitting works...
...In the past, he said, “When the circus came to town, some guy would always come in and pass out 50 tic-kets...
...Yours is not to judge, it is said, yours is to advocate...
...And while Westinghouse is a respectable enough company, well able to pay its legal bills, it had the hardest time trying to find a law firm to take its case...
...Conflict-of-interest rules attempt to avoid the need for those questions, to make the crucial judgments for us...
...By their logic, human beings should be singlemindedly in pursuit of only one goalin service of only one client-at one time...
...This leads to a lot of form-over-substance foolishness...
...Many of those situations seem to fall into a few broad categories, which I have listed here...
...The best we can hope for from reporters is that their opinions won’t prevent them from providing a fair and balanced presentation of the facts...
...If we did not want a president who was basically sympathetic to agriculture and who had some feel and understanding for the business of agriculture, we should not have elected this one...
...Burger allegedly asked Brill...
...In this case the conflict-between the inevitable human tendency to have opinions and the institutional need to pretend not to have them-exists whether or not the opinion is expressed...
...It is nearly impossible to fire a civil servant for sloth or incompetence, both of which are widespread, but the government’s penny-ante conflict-ofinterest rules permitted Angelotti’s enemies to bounce him expeditiously for his $14 indiscretion...
...Would it be any worse if the person were a paid employee of the lobbying organization, hired to promote the organization’s opinions in magazine articles...
...Maybe Milliken Was Right In June The Washington Monthly reported that Chip Carter, with no apparent qualifications other than being the Presidept’s son, took a $26,500-a-year job with the nownotorious Bill Milliken, who was receiving the Carter family’s active help in getting government grants...
...Everywhere the company turned, it faced a brick wall labeled “conflict of interest...
...Moorman believes in a cause...
...It is the people who try to hide any hint of a possible conflict who heighten suspicion about their motivations-if they have nothing to hide they should put their cards on the table...
...Here, a reasonable presumption arises that the benefactor wishes to exert influence and the beneficiary is willing to be exerted upon...
...This is a corollary of the myth of objectivity...
Vol. 10 • November 1978 • No. 8
