Government Officials Who Wear Two Hats: Conflicts of Interest?

The readers of this blog are familiar with the idea that no one can serve two masters.  

What happens when a local elected official has been chosen to serve on a regional transit board?  Should the official act advocate the interests of the locality in the same way that a Senator advocates her state's interests in Congress?  Or does the official instead have fiduciary obligations to the the regional authority, requiring him to set aside the interests of the locality in favor of the regional authority?

A prominent law firm, Cadwalader, took the latter position when it investigated DC Councilmember Jim Graham, who served on the regional Metro board. 

Graham allegedly offered to support a local businessman's bid for the DC lottery contract if the businessman withdrew from a Metro development project.  

While it is not at all clear that Graham was motivated by a concern for the District's interests, Cadwalader concluded that Graham “pitted the interests of the Council of the District of Columbia against the interests of Metro, and thereby unnecessarily created a conflict of interest, or, at the least, the appearance of a conflict of interest.”

Graham no longer serves on the Metro board, but DC's new Board of Ethics and Government Accountability is considering whether to investigate Graham.

My oped on this issue will run in Sunday's Washington Post.

Comments

[Richard Painter]

Excellent op-ed.

If the District of Columbia, Maryland and Virginia each send a designated number of people to sit on the Metro board, the system is set up for them to represent the entities that sent them there. To say otherwise is this like telling a Senator from Ohio that he can't put the interests of Ohio before the interests of the Country as a whole. It doesn't work that way in Congress and I don't see how regional government is that much different.

The personal interest side of this incident is more ambiguous and depending on the facts could be more problematic.

[Trotsky]

While the political accountability of the regional board might derive from its constituent municipalities (unless it is a de minimis constituent, as the DC Circuit said a few days ago with reference to standing to sue the airport authority), the primary fiduciary responsibility would seem to be to the regional authority and whatever government issues it a corporate charter. (If any. No idea what the SOP is for that.) Totally nonderivative of the political accountability to the municipalities - it has to be, because the municipalities are the ones that contribute the assets, and as fiduciary obligations derive from assets held, the municipalities have the cause of action to enforce the obligation. And the c/a is limited to and derives solely from enforcing the purposes of the charter. The political purposes of the constituents are precisely irrelevant. (Not legal advice -- don't rely.)