Conflicts of interest and constitutional rights

Can a conflict of interest be protected by a constitutional right?  The answer is Yes.  Campaign finance – at least in the US – is a prominent (some would say glaring) example of this.

But what about in the more common context of employment?  Again speaking specifically of the US, the issue is most likely go come up in cases of government employment, given that most constitutional provisions apply to government – but not private – action.  But that doesn’t mean that public sector challenges to COI standards are irrelevant to the private sector C&E context – because, even where not binding,  some constitutional norms (such as free speech and due process) help shape the expectations of individuals in dealing with institutions of all kinds. Indeed, public sector COI cases  – because they are more publicly available than private sector ones – can form a useful body of precedent for private sector C&E officers, as discussed in this earlier post.

The most recent case of note from this neck of the woods  is a decision handed down two weeks ago (Carrigan v Nevada Commission on Ethics) by the Supreme Court of Nevada (downloadable at http://supreme.nvcourts.gov/)  in which Michael Carrigan, a councilman from Sparks City, made several constitutional-rights based claims with respect to that state’s Ethics in Government Law.  The state’s “Ethics Commission censured … [him] for voting to approve the Lazy 8 hotel/casino project despite a disqualifying conflict of interest. The conflict of interest grew out of [his] relationship with Carlos Vasquez, Carrigan’s longtime friend and campaign manager. For the six months leading up to the Lazy 8 vote, Vasquez was managing Carrigan’s reelection campaign free of charge—the third such campaign Vasquez had managed for Carrigan— and placing Carrigan’s campaign ads at cost. At the same time, Vasquez was receiving a $10,000-a-month retainer from the Lazy 8’s principals,…. Vasquez openly lobbied the Sparks City Council to approve the Lazy 8 project and testified before the body as a paid consultant. Several citizens complained to the Commission that Carrigan should not have voted on the Lazy 8 project because of a conflict of interest. An evidentiary hearing followed, at which both Carrigan and Vasquez testified. After deliberation, the Commission issued a written opinion, which included findings of fact and conclusions of law. The Commission’s findings of fact included findings that Vasquez ‘has been a close personal friend, confidant and political advisor’ to Carrigan ‘throughout the years’; that Carrigan ‘confides in Mr. Vasquez on matters where he would not confide in his own sibling’; and that ‘[t]he sum total of their commitment and relationship equates to a ‘substantially similar’ relationship to those enumerated under [the law], including a close personal friendship, akin to a. . . family member, and a ‘substantial and continuing business relationship.” The Commission found that under these circumstances, “a reasonable person would undoubtedly have such strong loyalties to this close friend, confidant and campaign manager as to materially affect the reasonable person’s independence of judgment” on the Lazy 8 hotel/casino project,” and further “found that Carrigan violated [the law] by not abstaining from voting on the Lazy 8 matter” (although “it imposed no civil penalty or fine because it deemed his violation not willful”).

Carrigan appealed from this decision on a number of constitutional grounds.  First, he claimed held that his “vote on the Lazy 8 hotel/casino project constituted protected speech under the First Amendment.”  While the state supreme court initially agreed with him on this, the US Supreme Court reversed, holding: “’[T]he act of voting,’ by an elected official on a local land-use matter symbolizes nothing,” and therefore cannot be seen as speech at all.

Second, he argued that the recusal provision at issue was unconstitutionally vague, particularly the law’s “enumeration of types of relationships that are disqualifying (household, family, employment, or business)” which included “’any other commitment or relationship that is substantially similar’ to those listed.’” The court disagreed, stating that this catch-all language “does not sweep in entirely new types of relationships. Rather, it closes potential loopholes in the Ethics Law by giving the Commission the flexibility to address relationships that technically fall outside the four categories enumerated [above] yet implicate the same concerns and are substantially similar to them, such as a relationship with a domestic partner or fiancée.” Indeed, as the court noted, when the law was enacted the legislature heard specific testimony that  if “’the same person ran your campaign time, after time, after time, and you had a substantial and continuing relationship, yes, you probably ought to disclose and abstain in cases involving that particular person.”

Finally, Carrigan argued that the ethics law “unconstitutionally burdens the First Amendment freedom-of-association rights shared by Nevada’s elected officials and their supporters.” Here, the Court noted the statute protects (albeit in somewhat convoluted language) what might be called classic association rights but not situations involving benefits or detriments to individuals greater than those “accruing to any other member of the general business, profession, occupation or group,” an exception that plainly was not apposite in this case (and presumably would not be operative with any true COI).