Director Conflicts: the Effect of Disclosure-part Ii
| Publication year | 1988 |
| Pages | 639 |
| Citation | Vol. 17 No. 4 Pg. 639 |
1988, April, Pg. 639. Director Conflicts: The Effect of Disclosure-Part II
In Part I of this article, published in the March 1988 issue at page 461, the Colorado statutes governing conflicts of interest with respect to board members of Title 32 special districts were reviewed, and the definition of a "conflict of interest" was discussed in detail. It was determined that the "interest" in question is a personal, pecuniary interest that is immediate, definite and capable of demonstration and which is (or may be) in conflict with the public interest. It was also revealed that, at common law, a public servant with such an interest would be disqualified from acting on issues involving that interest and, in addition, any transaction of the public body involving a conflict of interest of even one board member would be considered void.
Colorado has attempted to address by statute conflicts of interest of special district board members, and has prescribed the disclosure of such conflicts prior to a board member's participation in an action in which one is involved. However, once it is determined that an "interest" exists on the part of a board member, and that this interest does in fact "conflict," the question revolves around the effect of those disclosure statutes. Nationwide, in the absence of curative statutes, the effect of disclosure of a public servant's interest in any of the situations discussed last month has varied, depending on the kind of alleged conflict and the jurisdiction. However, as discussed in this Part II, the effect is dramatic where statutes prescribe disclosure procedures. Indeed, such disclosures actually "cure" any conflict. Accordingly, open disclosure of even the hint of a personal pecuniary interest is advisable in any action.
Colorado's civil and criminal disclosure statutes follow a trend toward a more lenient treatment of conflicts of interest when they are disclosed. The drafters of the criminal disclosure statutes obviously contemplated technical conflicts of interest and, thus, provided for curative measures. If the criminal and civil statutes are considered to be in pari materia (that is, a cohesive statement of state policy), then it can be argued that disclosure in compliance with the criminal section should cure civil conflicts, at least in cases where the public purpose and substantive validity of the particular transaction is unquestioned.
This theory is not new. In the lower court's ruling in Brown v. Kirk,(fn1) the court considered the effect of a civil statute prohibiting the ownership by a housing authority commissioner of property included in the housing project, absent disclosure of such ownership to the housing authority. Like the criminal and civil statutes in Colorado, the Illinois statute contained no indication of the effect of ownership or, for that matter, disclosure. The court attempted to fill that void:
An incumbent commissioner may not acquire an interest but the sentence does not speak to a pre-existing interest of a commissioner. The second sentence requires that such an interest be disclosed in writing to the authority and entered upon its minutes. There is no language of eligibility or disqualification. Considering the provision as a whole, a fair and reasonable...
To continue reading
Request your trial