Conflict of interest
Typically, this relates to situations in which the personal interest of an individual or organization might adversely affect a duty owed to make decisions for the benefit of a third party.
"[2] Primary interest refers to the principal goals of the profession or activity, such as the protection of clients, the health of patients, the integrity of research, and the duties of public officers.
Secondary interest includes personal benefit and is not limited to only financial gain but also such motives as the desire for professional advancement, or the wish to do favours for family and friends.
Conflict of interest rules in the public sphere mainly focus on financial relationships since they are relatively more objective, fungible, and quantifiable, and usually involve the political, legal, and medical fields.
Obtaining a benefit for a client will often mean disadvantaging another person or entity, and indirect consequences may follow to all who may be dependents or owners of the attorney's opponents.
[23] Relying on the entity as client framework in Model Rule 1.13,[24] the California committee opined that there was no conflict as long as the parent and subsidiary did not have a "sufficient unity of interests.
[26] The law in most jurisdictions is that parent corporations and their subsidiaries are treated as distinct entities, except in limited circumstances noted by the California ethics committee where they have a unity of interests.
[47] However, as one commentator has pointed out, the reasoning underlying this line of cases has been sparse, and few courts have attempted to justify this result through an analysis of the ethics rules.
"[52] The substantial relationship test reconstructs whether confidential information was likely to be imparted by the former client to the lawyer by analyzing "the similarities between the two factual situations, the legal questions posed, and the nature and extent of the attorney's involvement with the cases.
Found conflict can lead to denial or disgorgement of legal fees, or in some cases (such as the failure to make mandatory disclosure), criminal proceedings.
In 1998, a Milbank, Tweed, Hadley & McCloy partner was found guilty of failing to disclose a conflict of interest, disbarred, and sentenced to 15 months of imprisonment.
Law firms often employ software in conjunction with their case management and accounting systems in order to meet their duties to monitor their conflict of interest exposure and to assist in obtaining waivers.
[70] The medical-industrial complex describes the interaction between physician's conflict of interest with for-profit healthcare, continuing medical education, and patient's ethical considerations.
[71] In contrast to this viewpoint, an article and associated editorial in the New England Journal of Medicine in May 2015[72] emphasized the importance of pharmaceutical industry-physician interactions for the development of novel treatments, and argued that moral outrage over industry malfeasance had unjustifiably led many to overemphasize the problems created by financial conflicts of interest.
The article noted that major healthcare organizations such as the National Center for Advancing Translational Sciences of the National Institutes of Health, the President's Council of Advisors on Science and Technology, the World Economic Forum, the Gates Foundation, the Wellcome Trust, and the Food and Drug Administration had encouraged greater interactions between physicians and industry in order to bring greater benefits to patients.
For example, accepting bribes can be classified as corruption, the use of government or corporate property or assets for personal use is fraud, and unauthorized distribution of confidential information is a security breach.
[citation needed] Baker[75] summarized 176 studies of the potential impact of Bisphenol A on human health as follows:[76] Lessig[77] noted that this does not mean that the funding source influenced the results.
Conflict of interest rules are intended to prevent officials from making decisions in circumstances that could reasonably be perceived as violating this duty of office.
[88] When such large sums become virtually essential to a politician's future, it generates a substantive conflict of interest contributing to a fairly well-documented distortion of the nation's priorities and policies.
[citation needed] Conflicts of interest among elected officials are part of the story behind the increase in the percentage of US corporate domestic profits captured by the finance industry depicted in the accompanying figure.
However, if most consumers had refused to accept financial products they did not understand, e.g., negative amortization loans, the finance industry would not have been as profitable as it has been, and the Late-2000s recession might have been avoided or postponed.
(Note, however, that Stiglitz has been accused of a conflict of interests and violation of Columbia University transparency policies for failing to disclose his status as a paid consultant to the government of Argentina at the same time he was writing articles in defense of Argentina's planned default of over $1billion in bond debt during the 1998–2002 Argentine great depression, and for failing to disclose his paid consultancy to the government of Greece at the same time he was downplaying the risk of Greece defaulting on their debt during the Greek government-debt crisis of 2009.
[92][93][94] To be conservative, suppose we[tone] attribute only the increase from 23.5% of 1986 through 1999 to the recent 32.6% average to governmental actions subject to conflicts of interest created by the $1.7 billion in campaign contributions.
The signatories include George Akerlof, a Nobel laureate, and Christina Romer, who headed Barack Obama's Council of Economic Advisers.
[95] This call for a code of ethics was supported by the public attention the documentary Inside Job (winner of an Academy Award) drew to the consulting relationships of several influential economists.
[96] This documentary focused on conflicts that may arise when economists publish results or provide public recommendations on topics that affect industries or companies with which they have financial links.
Media action expressing this conflict of interest is illustrated in the reaction of Rupert Murdoch, Chairman of News Corporation (the owner of Fox Broadcasting, to changes in data collection methodology adopted by Nielsen in 2004 to more accurately measure viewing habits.
[citation needed] Election years are a major boon to commercial broadcasters, because virtually all political advertising is purchased with minimal advance planning, paying, therefore, the highest rates.
[108] A free market has a mechanism for controlling abuses of power by media corporations: If their censorship becomes too egregious, they lose audience, which in turn reduces their advertising rates.
[citation needed] Commonly, politicians and high-ranking government officials are required to disclose financial information—assets such as stock, debts such as loans, and/or corporate positions held, typically annually.
