Conflicts of Interest in the News: 123011 Edition
This is not all the COI news that’s fit to print, but hopefully some items of interest that you might not otherwise see – with notes on why I think they’re noteworthy.
COIs and Government
NY State “Attorney General Eric Schneiderman has asked the state’s 932 towns to show his office their ethics codes in an effort to bolster self-policing by local government.” As explained in the article, “one practical aim is providing the attorney general’s office with referral information for calls from New Yorkers with concerns, which have recently included questions about officials with connections to wind power and hydrofracking interests.”
This seems like an important initiative, given the COI risks that can occur on local levels of government – risks exacerbated by often weak controls. Because, over the years, the NY AG’s office has been a leader in addressing many COI issues, I imagine that other states’ enforcement officials will be watching this effort as it unfolds. The story may also be of particular interest to private sector organizations that deal with local governments.
A story about conflicts that occur when individuals have more than one government role This not your typical public sector COI, which involves a conflict between a public duty and a private interest. (But it is not altogether unique, either: NY’s legendary “Power Broker” Robert Moses once held twelve public posts at the same time.) More generally, the story shows that an interest for COI purposes can itself be a duty – something we’ll return to next week when we look at COIs arising from outside board service.
COIs in Business
For Wall Street Deal Makers, Sometimes It Pays to Be Bad (may require registration). This is about COIs in the buy-out area – which can indeed be a COI minefield. The story is interesting for, among other reasons, showing the difficulties that shareholders can face in seeking redress for COIs in corporate governance settings. (Also, this is the first time in my more than thirty years as a lawyer that I’ve heard a court use the word “icky.” )
Drug company money on rise for 2 Minn. clinics. Among other things, the piece a) has an interesting discussion of conflict of interest management plans, which can be crucial for this one – very significant – type of COI; b) reveals a split in approaches between the two institutions at issue (the Mayo Clinic and the University of Minnesota) on whether to have a de minimis threshold for COI reviews. (Both COI management and de minimis COIs are topics we’ll explore in 2012.)
COIs and Criminal Law
Prosecutor’s Literary Contract Creates Conflict of Interest. Even though he cancelled the contract and returned the advance, the court held, “this is a bell that cannot be unrung.” Note that cases concerning COIs in the legal profession are rarely useful for analyzing those in business organizations, but this one may be an exception for at least some cases where a party tries fecklessly to “undo” a COI.