HQ AMC ETHICS ADVISORY 98-07 -- Appearances of a Conflict of Interest

Article excerpt

To: HQAMC-All-Personnel
Subject: ETHICS ADVISORY 98-07 -- Appearances of a Conflict of Interest

Last week, I sent an ETHICS ADVISORY on conflicts of interests explaining what it means to have a conflict (i.e., a financial interest or stake in the outcome of an official matter) and how such a financial interest might arise (e.g., owning stock in a contractor, being an officer or director of a private association, or having a spouse employed by a contractor.)

Now, what's an " appearance of a conflict of interest ?" An "appearance" is where we don't actually have a financial interest either directly or through one of the relationships where the interest is imputed to us by law; but notwithstanding, it still looks bad for us to participate in the official matter because of some other relationship. This "appearance" rule is in the Standards of Ethical Conduct for Employees of the Executive Branch (Section 2, Chapter 2, DoD Joint Ethics Regulation, DoD 5500.7-R).

There is an inappropriate "appearance" where a reasonable person with knowledge of the relevant facts would question an employee's impartiality if the employee participates in a particular official Army matter. This can come about in a number of different ways. Some examples follow:

   We should not participate in official matters that affect the financial
   interests of a member of our household where it is going to look bad to
   this "reasonable person." This does not mean your spouse or minor children
   because their financial interests are already imputed to you by law and
   will create an actual conflict for you. Here, I am referring to your
   parents, in-laws or unmarried significant other who might be a member of
   your household. A couple of examples: there probably would be no perception
   of bias if you are drafting a statement of work for which General Electric
   is a potential bidder and your sister, who lives with you, owns 100 shares
   of GE stock; however, there probably would be a perception problem for you
   to sit on a source selection evaluation board for a major contract where
   Boeing is a competitor and your significant other, who lives with you, is
   an employee for the competing division of Boeing.

   We should not participate in official matters where someone with whom we
   have a "covered relationship" is a party or represents a party to the
   matter where it is going to look bad to this "reasonable person." What's a
   "covered relationship?" It includes the following:

   Anyone with whom you are engaged in a non-routine financial or other
   business transaction. …