2003-01-24 / Opinion

City, state miss mark on conflicts of interest


When the Long Branch City Council changed its ethics ordinance, it cleared up some ambiguous language in the statute. Unfortu-nately, while the statute is unquestionably clearer, it remains largely meaningless.

The revision used as the state’s standard for a conflict of interest is the standard soon to be in use for the city.

The creation of that standard isn’t the first time our state government’s solution to a problem doesn’t work.

As it stands, the state’s way of defining a conflict clearly goes about creating that definition from exactly the wrong direction. The type of conflict the city is addressing is based on the size of the interest, 10 percent, that an individual holds in a company.

In reality, it does not matter how large an interest an official might have in a company; what matters is how important that interest might be to that official.

A very good example to illustrate this exists right here in the city.

According to Securities Exchange Commission filings, City Attorney James Aaron owns roughly 5 percent of Monmouth Community Bank (which, it is only fair to note, that Aaron disputes).

Under the state and city ethics laws, Aaron is not going to be in conflict regarding his holdings in the bank.

While his share of the bank is less than what the state considers enough to cause a conflict of interest, it does not represent an insignificant investment. The value of the shares that the SEC says Aaron controls was more than more than $750,000 last week.

It seems completely reasonable that anybody with that amount of money invested in a business would be very interested in making sure that business fared well, regardless of how much of the company his holdings represented.

Rather than define a conflict of interest based on the company, it makes much more sense to define the conflict based on the interest of the individual.

Choosing such a standard should not be very difficult. The floor could be set at some reasonable value for an interest, such as $50,000 or $100,000.

A new ethics standard should also take into consideration the benefit an official would receive from a matter on which he is voting or advising. If an official’s interest in a business would result in a substantial benefit from the matter under consideration, it also seems reasonable to consider that a conflict of interest. As with defining what might be a substantial benefit, that does not seem very difficult.

Any contract that would put more than $10,000 into the official’s pocket seems worthy of consideration as a conflict, but that number really would be up to the officials to determine. They might prefer a lower or higher one.

The Long Branch city council, and any other government or agency, could go a long way to ensuring its members are acting ethically by creating a meaningful definition of a conflict.


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