When Platonic Friendships Create Conflicts of Interest

Even in this Netflix and chill world, some friendships create personal conflicts of interest (“COIs”).  Take for example, the 2011 U.S. Supreme Court case  of Nevada Commission on Ethics v. Carrigan, heard during a time when Obama was in office and Justice Scalia sat the bench (ah, the good ol’ days).    The case, which decided whether state legislators have a personal, First Amendment right to vote on any given matter (they don’t), is an example of a situation where a platonic long-time friendship created a conflict of interest that warranted disclosure and recusal.

From the facts of the case, it appears that a Nevada elected city councilmen, mindful of an upcoming vote to approve the application of a hotel/casino project, approached the city’s attorney with concerns that his long-time friend was a consultant for the company seeking approval of the application.  The city’s attorney seemingly advised the councilmen that disclosing his long-time friendship with the consultant before voting would satisfying the councilmen’s obligations under Nevada’s Ethics in Government Law.   Accordingly, the councilmen disclosed his friendship and then voted in favor of the application that benefited his friend’s employer.

Predictably, the Nevada Commission on Ethics received complaints that the councilmen had a disabling conflict that required him to abstain from voting on the application because his long-time friend (who was also the councilmen’s campaign manager) was a paid consultant of the company seeking the application’s approval.

The Commission launched an investigation and concluded that the councilmen had a disqualifying conflict of interest under Nevada’s Ethics in Government Law’s catchall provision because the councilmen’s relationship with his long-time friend/campaign manager was substantially similar to other prohibited relationships listed in the statute.  Prohibited relationships in the statute included: (1) members of the elected official’s household; (2) relatives related by blood, adoption or marriage; (3) employers of the elected official; (4) employers of members of the elected official’s household; and (5) anyone with a substantial and continuing business relationship with the elected official.  The catchall provision essentially said that if a relationship was substantially similar to any of the relationships listed above, that relationship would also be construed as conflicting.

The Commission censured the city councilmen for failing to abstain from voting, but did not impose a civil penalty because his violation was not willful.  Remember, the councilmen sought advice from the city’s attorney before voting; he just got bad advice.

Ethics & Chill Takeaways

  1. The catchalls will get you.  Many states, public agencies, and corporations have catchall provisions to capture relationships like long-time friendships.
  2. Trust your gut and seek ethics opinions.  The councilmen was smart enough to consult the city’s attorney before voting. The city’s attorney just gave him bad advice on Nevada’s Ethics in Government Law.   Not all attorneys are experts in the field of ethics.  In addition to legal advice, consider seeking an opinion from a state ethics commission, a public agency’s ethics officer, or, in the case of private industry, the company’s ethics officer.
  3. Think Critically.  Ask Yourself Why Is the Policy/Rule In Place.  The city attorney advised the councilmen to disclose the close friendship before voting, but did not tell him to abstain from voting.  The councilmen should have questioned how merely disclosing the conflict would alleviate the statute’s concern over the potential for the councilmen’s objectivity to be impaired by his close friendship.  The only way to mitigate the conflict was to abstain from voting.  It’s important to ask what the ethics statute or policy is seeking to prevent or protect and then question whether your actions are consistent with the intended purpose of the statute/policy.

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