Conflict of Interest in the PMO: Just What is the Worry?

Before we can determine whether new PMO chief of staff Nigel Wright's corporate past entails an ethical problem, we will have to decide exactly what "conflict of interest" means.

By now just about everyone knows that Stephen Harper has appointed Nigel Wright – until recently, a top executive at Onex Corp. – as his new chief of staff. Likewise, just about everyone knows that the appointment of a corporate insider who has taken only a two-year leave of absence from his corporate duties has raised questions about conflict of interest.

Opposition MPs have suggested that the ethical concerns around Wright’s appointment are insurmountable. The new chief of staff has acknowledged the sensitivity of his position and gone to some lengths to manage the conflicts in question, for example by constructing an elaborate “ethical wall” to insulate himself from certain kinds of information and and decision-making processes. So for both sides, “conflict of interest” is the buzzword of the day.

During the weeks since Wright’s appointment was announced, the term has been invoked, bandied about, and practically beaten to death by the nation’s editorialists – but mostly without any serious consideration of what it actually means.

To be fair, this is not that unusual: conflict of interest is a term that many are familiar with, but that few of us can explain in any detail. To understand how the term might apply to Wright’s appointment, we must first understand what exactly it means.

Not surprisingly, Wright and others have looked to the Conflict of Interest Act to understand just what it is that Wright ought to be avoiding or managing. That act defines conflict of interest as follows:

“For the purposes of this Act, a public office holder is in a conflict of interest when he or she exercises an official power, duty, or function that provides an opportunity to further his or her private interests or those of his or her relatives or friends or to improperly further another person’s private interests.”

So as far as the act is concerned, the key risk is that the individual in question will use his or her position to derive some sort of benefit. And this is surely part of what critics are worried about. Liberal MP Wayne Easter, for example, has said he is worried about whether there is “going to be special favour given” to the companies Wright is associated with. In other words, the worry is that Wright will use his position in ways that benefit Onex or one of the many firms it owns.

But it is worth noting that this understanding of conflict of interest and the definition given in the Conflict of Interest Act differ significantly from the way the notion is typically defined by people who have studied it and who have tried to formulate a clear picture of just why it is such an ethical problem. And as appropriate as the act’s definition may be from a government lawyer’s point of view, it is far less clear that it captures what Canadians really ought to be worried about in the case at hand.

So how would an expert define the term? Not surprisingly, there is some disagreement.

Some scholarly definitions cast the matter as a question of judgment. Under such definitions, conflict of interest is said to occur if there is good reason to think that the judgment of the individual in question will be impaired. In other words, will she be able to exercise judgment impartially, or will her judgment be clouded by other factors that ought to, for ethical reasons, be excluded?

Other definitions frame the issue as one about the interests of those being served: a conflict is said to occur if there is reason to doubt the individual’s ability to faithfully serve the interests of those they are sworn to serve.

Whatever their differences, both definitions focus on service. We worry about conflict of interest when the incentives present in a given situation give us reason to doubt the quality of an individual’s service as a trusted advisor or decision-maker. This analysis suggests that, whatever the Conflict of Interest Act may say, the real question in the case of Wright is whether the judgment that he exercises in his capacity as the chief of staff can reasonably be expected to be skewed (consciously or subconsciously) by the interests of his former, corporate, employers.

But there’s a sense in which those who are sincerely worried by Wright’s appointment are not at heart worried about Wright himself. I’ve seen no one offer any critique of Wright’s character, or suggest that Wright is more likely than the rest of us to allow outside interests to bias his judgment or advice. And in general, we need to remember that the term “conflict of interest” describes a situation that an individual finds him or herself in. Pointing out a conflict of interest needs to be carefully distinguished from accusing someone of being corrupt.

No, worries about conflict of interest are in fact very seldom limited to worries about the decision-making or advice of a single individual. The reason modern institutions of all kinds – from government ministries to corporate boards to professional licensing bodies – take conflict of interest so seriously is that conflicts of interest threaten our trust not just in particular decision-makers, but in the posts and institutions they inhabit.

That’s not to say that there can be no reason for concern at the micro level. If it turns out that Wright does in fact use his new position to advance the interests of Onex, the company to which he will return two years from now, that will be a bad thing. And that’s what the Conflict of Interest Act seemingly seeks to prevent. But surely what matters somewhat more – what ought to matter more – to Canadian taxpayers and voters is the quality of the advice that Wright will provide to the prime minister. And what matters even more than that is whether the appointment of Wright to this position damages public faith in the judgment exercised by those in the Prime Minister’s Office, or whether, instead, it provides the opportunity to demonstrate to a skeptical public that institutions such as the Office of the Conflict of Interest and Ethics Commissioner are in fact capable of managing, rather than simply banning, conflicts of interest.