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What is a Conflict of Interest?

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  • Written By: Michael Pollick
  • Edited By: Niki Foster
  • Last Modified Date: 09 July 2014
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The term conflict of interest is often used in connection with an elected public official or judge. This is because people in positions of power are more likely to face such charges at some point in their careers. Many of the decisions they make must not be tainted by the possibility of favoritism or personal gain. It is not unusual for public officials to divest themselves of anything that could even be construed as creating a conflict, including stocks, pensions, board memberships and former clients.

In order to understand what a conflict of interest means, it may help to examine what is meant by "interest." Almost everyone has personal or professional interests, whether it be a hobby, an investment in a business, or a desire to help friends and family members succeed in their own interests. Sometimes people base their decisions on whether or not they will ultimately benefit one or more of these interests. Most individuals would not be faced with a conflict in such situations because their hobbies rarely interfere or intersect with their professional responsibilities.

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But people placed in positions of judgement or power must take extra steps to insure that their private interests do not compete with their professional duties. A conflict of interest may arise, for example, if a city councilman awards a lucrative contract to a company owned by his brother. It would not be illegal to award such a contract to the best qualified company, even if that company were indeed owned by a relative, but the councilman himself could not be part of the decision making process. There would be an obvious conflict because the councilman's own family would benefit financially from his position of power.

Definitions of this term are often spelled out in contracts or employee manuals. Enforcement of these agreements, however, is not always easy. Elected officials and judges usually fill out extensive disclosure forms that would reveal a potential conflict of interest, but private sector executives may not be so forthcoming. Often, such conflicts may not be revealed until a decision has already been made or a contract has been approved. Revealing some personal interests may be more of an ethical responsibility than a legal obligation.

Because there are some legal gray areas surrounding conflict of interest, it often falls on the official or executive to recognize potential problems before they interfere with his or her duties. When Dick Cheney was elected Vice President in 2000, for example, he first had to resign from his own company, Halliburton. If he had kept his financial interest in that company, any future government contracts might have appeared to be biased. Because Halliburton did receive lucrative government contracts for war reparations, Mr. Cheney could still be accused of having a conflict, but he can demonstrate he has nothing to gain financially from the awarding of those contracts.

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Discuss this Article

anon947897
Post 41

Is it conflict of interest when a lawyer continuously texts and calls the client, no matter what day of the week or what time of the day, even though it's not always to talk about the case the lawyer is working on, but just to chat about anything? This takes the client's time away from the client's family and allows the client to believe they have a friendship and creates a dependence on the part of the client.

anon357682
Post 38

Would it be a conflict of interest for a company that sells guns, to put in a really low bid for a government contract, to put on courses in a province for students (young and old) to get their (PAL) Possession and Acquisition License, and get the contract, knowing they could put 98 percent of the courses close to there store, and make a lot of money from sales of their guns, when the students pass the course?

anon332499
Post 36

What if an attorney provides legal training to the hearing board and at the same time presents grievance cases before the board for action by by board?

gyped
Post 35

Is there a chance I can file for a summary judgement against the other side's lawyer, because he's a public official, title of supervisor of a district, and he's also practicing law for these people who committed fraud against me? Isn't that a conflict of interest on his part? I am a citizen with no lawyer and he keeps getting my case delayed and now is threatening me with paying his legal fees with this motion for summary judgment, and I'm thinking I can also make a motion for summary judgment myself.

anon316174
Post 33

My husband is working in an engineering manufacturing company as a supply chain manager. I have a plan to start my own engineering business and supply engineering parts to Canada from China. I just want to know what are the conflicts of interest between my husband's company and my business?

Should I sell products to my husband's company? Can I contact those vendors in China that are already working with my husband's company?

My husband and I both are professional engineers in Canada.

anon291305
Post 32

If a person has written statements against someone, can the other person retain the same lawyer?

xlattyx
Post 31

Is conflict of interest illegal if you have already paid the lawyer to help you get your child back in your arms, and he goes behind your back and begins to help another person take your child away from you, when you already have paid him a whole lot of money?

anon283987
Post 29

I work for a company that has a president (the CEO's daughter) and she is also is the HR person/manager. We are a small company with only 175 employees. But, I don't see how this could not be considered a conflict of interest.

anon283335
Post 28

Would it be a conflict of interest if I worked as a tennis coach in a company and was teaching tennis lessons in my off-time outside of the company?

anon255347
Post 27

I was asked to appear as a friend(witness) to a magistrate on a matter in which was in regards to a piece of property.

When we arrived at the magistrate the claimant had already met with the magistrate, and was caught shaking the magistrate's hand, as it appeared that the claimant knew the magistrate quite well.

Would this be a cause for alarm to the general public, who might deal with either the claimant himself, or if in the future they were to appear before that particular magistrate?

The reason I ask is it seems that if a person knows a magistrate pretty well, it would be easy for them to give them a call and say, look I have so and so, I need to be taken care of. Can you help me? And then the magistrate lets them know when he will be available.

If there is such a doubt about whether one could get a fair trial based on such a situation, is there any way for a defendant to have a change of venue, or have another magistrate reside over the dispute? And if so, do you think it would really help make it truly neutral based on law?

I'm thinking the magistrate could simply call up their friend magistrate and tell them the details, and the same outcome would result, am I correct?

One would think, the only way for any court not to be biased would be to prevent any judge or magistrate from knowing one another. Am I correct?

anon219827
Post 26

We was given a mortgage by a bank who carried out the valuation for mortgage purposes(in Cyprus). The developer who arranged this mortgage had previously been a member of staff at this same bank. All matters in arranging the mortgage etc were managed by a member of staff at the bank who was and remains to this day to be a personal friend of the developer.

We now have serious problems as we have realistic reasons to believe the value of the property was inflated. Could this be deemed 'Conflict of Interest'?

anon200913
Post 25

@anon181104: I would certainly agree that your supervisor was not exactly playing fair with you five years ago. If your company did not have an existing "no outside work" policy, then what you did or didn't do on your personal time should have remained strictly *your* business. But unfortunately there are a lot of companies who do this sort of industrial espionage, especially if they're concerned that an employee with sensitive or protected information is secretly working with a rival company.

I'm not sure if you have much in the way of legal recourse now, since I can't see where an actual crime or employment violation has occurred. You weren't terminated for "conflict of interest" at the end of the supervisor's year-long inquiry, so obviously you did nothing wrong. As long as your supervisor didn't break any privacy laws or use illegal tactics, however, he or she isn't technically guilty, either. You are still employed by that same company, so you haven't been professionally "damaged", just disappointed with the extent of office politics. You'd have a much better legal claim if you *had* been terminated unfairly five years ago, or if the supervisor continues to maintain a hostile work environment to this day.

anon200909
Post 24

I'm not a legal professional, but I believe there has to be some sort of tangible gain in order to be considered a conflict of interest. In anon183883's situation, the city government would probably *want* a professional in the cemetery industry as its public cemetery supervisor. That person would speak the language and know the people to contract with and so on. Being an elected or appointed official and a professional in certain fields (like a lawyer, contractor or certified public accountant) would not necessarily be a conflict of interest. One occupation may enhance the other.

However, the question of conflict of interest might come up if that official benefits personally from his or her public office. If that cemetery supervisor gets the majority of the memorial masonry business because he hires himself to do it for the city, then other memorial masons may have a legitimate claim. If there is plenty of work to go around, then there really isn't much damage being caused by the man's secondary employment by the city. If his company is getting almost all of the local business, however, then you can file a complaint with the city and demonstrate financial losses.

anon183883
Post 23

I am a memorial Mason, and my local authority cemetery supervisor has set up in business as a memorial mason while still full time employed by the council. is this a conflict of interest?

anon181104
Post 22

I recently found out that five years ago, I was under surveillance for at least a year for conflict of interest at my job. I was shocked to learn this! I don't work another job. My supervisor did this behind my back to try to make a name for herself. (At my job, people who turn other employees are rewarded w/promotions). I took a lot of time off during the surveillance (I had difficult pregnancies), but charged my extensive banked sick time. Do I have any legal recourse? I still work there. Do I have any legal recourse at this time?

Marty58
Post 21

Would there be a conflict of interest for the following example: My company currently provides me with a vehicle which they hire. The car is old and always in need of minor repairs. I have tried to exchange it but to no success. If I were to buy a vehicle myself then hire it back to the company at the same cost they currently pay, is this a conflict of interest?

anon135018
Post 19

I am a government employee and engaged in a farm supply business with my name. Is there a conflict of interest?

anon134954
Post 18

I work for a ceo who owns a business that is in direct competition with the one he is president of. We are constantly bidding against each other for jobs. Isn't this a conflict of interest?

artmod
Post 17

Would a CPA who audits non profits being on board of another nonprofit be conflict?

Seems they would unfairly get information they can use.

anon118212
Post 16

please tell me why - a congressman having the ability to vote for his own salary is not a conflict of interest. If it is how, can this practice be stopped?

anon107640
Post 15

I work for the government managing a frame shop, graphics business, which caters to military, DoD employees and those affiliated with the base.

After 14 years, I opened an art gallery and woodworking shop, which offers framing too, but only to the local community.

I do not promote my business on base and we only frame museum quality projects, unlike the base frame shop- which caters to inexpensive, military projects. Is this a conflict of interest? My boss is pushing the issue.

pware
Post 14

Would it be a conflict of interest if I do event planning for a non profit company and I start my own business that does not deal with non profit but social events instead for extra money.

anon101908
Post 13

what about if you and your wife worked at the same place and you left that job and now you're doing a three-way phone call with a judge for unemployment and they have your wife appealing against you?

anon84519
Post 12

Just wondering if there is a conflict of interest between a bank manager acting as executive controller for a 78 year old customer. Is there not any bank policy regarding acting for a dying customer to benefit from being in his will?

How far should a bank manager go acting as his executive controller? Does it include handling his personal problems to illegally evict and break the law trying to remove a tenant in one of his properties?

Is this a proper way for a Bank of Nova Scotia manager here in Vancouver, Canada to act? Does he not fear losing his job acting this way, or I guess his benefit is huge in the will of his long time drinking lonely buddy.

At least this is what I believe is his reasoning, and he doesn't care much for his job, and thinks it is okay to lie to police and others to further gain. Wow -- how true it is the formula for corruption. Lies + greed and or jealousy = corruption.

This is the number one world problem that is causing so much global economic destruction as we see now is happening world wide. Man's self-destruction is greed + lies in the world problem of corruption has already caused some many wars.

When will it stop and humanity finally realize to save mankind is to stop corruption and poverty and live only in a truthful world in peace and harmony?

anon68366
Post 11

thanks a lot for these various cases about the conflict of interest. It will inspire me since I have been recently appointed chairperson of the Conflict of Interest Review Committee where solutions are to be addressed.

Concerned people are all the paid personnel including volunteers. Help me get related material to help me carry on my responsibilities. I wish to hear more of various cases, not only executives but also subordinates, as it relates to personal advantages or favor or esteem, influence on people, etc.

anon67395
Post 10

I am a member-at-large on the board of trustees of a non-profit organization. I want to do some writing of literature for this organization and be compensated. Is this a conflict of interest? Or some other legal problem?

anon54547
Post 9

I am a bookkeeper for local government. I recently began my own bookkeeping business. Is it a conflict of interest to work as a bookkeeper for contracted members of this local entity?

anon40882
Post 8

I am a technical writer with a company. Would it be a conflict of interest if I conducted trainings (related to my profession) to employees of other companies?

tubing
Post 7

Would it be conflict of interest if my employer will find out that I'm selling on ebay (the products my employer is selling) through a sole proprietorship company called company (A), but the product is bought from my employer? The company (A) is owned by my myself and my son. My son is placing the orders for products, cutting the checks etc. I think my boss just found out that this is happening. There's nothing in the employee manual to prohibit that. I'm trying to find out if it is illegal to sell products bought from my employer on ebay and if this activity has anything to do with conflict of interest and what can possibly happen? Please help!

Soccermom71
Post 6

I worked for a Heathcare Insurance company for 1 1/2 years and I started a Medical billing home base company about 3 months before I resigned. I had a provider that bills this insurance company call me to do his billing would this be a conflict of interest.

Again I no longer work for this company.

thanks for you help....

anon10122
Post 5

I have been working as a sole proprietor providing services to a company (A) who helps other companies implement a particular type of software applications. The applications are developed by various sw development companies and the company I'm contracting with chooses the best solution for their client. Another company (B) that does basically the same thing has approached me to contract on a longer-term project for them but they want to bring me on as a W2. Will it be a conflict of interest if I take the W2 position but continue to support projects for Company A?

anon4902
Post 4

The nature of the businesses are in direct conflict with each other, therefore, there is direct conflict of interest since the two are in competition with each other, and the possibilities of the president/dean of a college being able to manage both at the same time, compromises his loyalty to at least one.

paapostolic
Post 2

Would there be a conflict of interest if the president\dean of a college were to start their own college and be the president\dean of that college? We are terminting them from the postion due to the conflict of interest but there seems to be a bit of a fight going on please help.

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