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Wednesday, May 25, 2016

Conflict of Interest: Case Study #3

My third and final case study in conflict of interest will be brief, since it is a relatively straightforward case of good old-fashioned nepotism. Quaint stuff, really…

Now, not every instance of what we commonly call “nepotism” is bad. For instance, if I need my driveway shoveled, and I “hire” my son to do it, there is no harm done — unless of course my son is shiftless, lazy, or not physically up to the task. But even then, the harm is to myself only. Similarly, if I am the proprietor of a family business, say a restaurant, I commit no breach of ethics in giving my daughter a job in the company. Indeed, there may be very good reasons for doing so; she may be part of my “succession plan” and will need to learn the ropes if she is to follow in my footsteps. If it turns out that she doesn’t have what it takes, lacks the “right stuff” or the “royal jelly”, again, that’s a risk I take, and one I’m entitled to take.

Perhaps it could be argued that I am “denying” a better qualified person a job. But that presumes I have a duty to provide jobs for people, which seems implausible. I almost want to say that my hiring my son is a decision about consumption rather than production: I may be perfectly aware that my son is a waste of oxygen, and that looked at from the perspective of production, my decision may seem inefficient. But in our consumption decisions, an inefficient choice is not the same thing as an unethical one. As with many other purchases that seem wasteful to observers, I derive some personal gratification from this “purchase” of a job for my son, and so I do it, efficiency be damned. And a case could be made that, at the end of the day, for all his uselessness, my son is at least a known quantity. In hiring outside the family I would of necessity be turning to strangers, with all the risks that entails. I may have to hire and fire a few duds before I find the right person for the job, and some of those duds may be far worse than my son. 

The matter is different where I am a representative of a public institution, corporation, or publicly-traded company. In that context, my decision is one concerning production. My choice is open to the judgment of others. Where I am spending money that belongs to others, money that has been entrusted to me as their agent, money that is to be spent on furthering their objectives, then to spend it on my own objectives — in effect, on consumption — may or may not be inefficient, but it is certainly unethical.

Put that way, it is akin to embezzlement. If I give my useless son a job in a public institution, corporation, or publicly-traded company, I bear none of the risk for the harm his uselessness may cause. Taxpayers or shareholders foot the bill, while I receive the direct or indirect benefits of the hire. I may as well be stealing from the till.

Therefore, we are concerned with nepotism only insofar as it is practiced within organizations not owned by the practicing “nepotist”. Furthermore, though its similarity to theft would in itself make nepotism morally wrong, we are mainly concerned with nepotism as it relates to conflict of interest. Wherein does the conflict of interest in nepotism lie? Well, from the foregoing, and from the previous two case studies, it should be fairly obvious: The nepotist’s (self)interest in furthering the interests of his relations conflicts — or is likely to conflict, or at the very least is likely to be perceived to conflict — with the interest of the organization. The organization’s interest herein consists of having the right person for the job, whether that person be an employee, a contractor, or a consultant.

(To these latter we might even conceivably add volunteer, at least insofar as the importance of the volunteer’s role is sufficiently greater than the mere value of her free labour. "Importance" here should be understood in terms of the potential value added by the volunteer's labour or the potential harm caused by a volunteer's incompetence. And as the use of free labour — interns, for example — in highly skilled positions becomes ever more common, having good volunteers in an organization approaches in importance the interest of having good employees, contractors, and consultants.)

With these fairly obvious remarks out of the way, here’s the case study. 

Case Study #3: 

A researcher at my university was the recipient of a multi-million dollar research grant. It was for a large-scale project, the type that necessarily requires a certain amount of administration. Receiving and spending millions of dollars of public funds requires that there be financial accounting and reporting.  A meeting of various interested parties was held before the project started, amongst whom was a certain accounting manager — let’s call her Angelica.

A few hours after the meeting, Angelica sent an e-mail message to the researcher. After the usual pleasantries, the message quickly came to the point: Angelica’s daughter — let’s call her Laura — needed a job for the summer, and wouldn’t it be nice if the researcher hired her on the project? There was, of course, no indication of what special skills Laura might bring to the project or in what capacity she might serve. Just an expectation that she be provided with a job for the summer.

The researcher immediately forwarded the correspondence to me, seeking my advice. I advised her to be evasive for the time being, while I pursued the matter with the powers that be. I was frankly incensed that Angelica was shaking down my researchers for jobs for her kids. What made it all the more galling to me was that Angelica was precisely in a position to know better. As the person in charge of research accounting at my institution, she would be intimately familiar with our policies around hiring research personnel, and with our policy on conflict of interest. Indeed, she was partly responsible for making sure researchers were compliant with them.

I made some inquiries and found out that this was not the first time Angelica had pulled this stunt. Indeed, Laura had been making the rounds all over the university as an employee in one capacity or another, thanks to her mother’s influence. I brought the matter to the attention of various higher-ups, but nothing was done about it. So I brought it to the attention of the office of the Vice President, and again nothing was done. All agreed that what Angelica was doing was wrong, but Angelica had been around for a long time, and nobody seemed inclined to rock the boat. Indeed, my impression was that there was some annoyance directed towards me for bringing up a problem that they would rather pretend didn’t exist.

In any case, I had pursued the matter as far as I was able to without doing harm to my own interests. The particular researcher in question did not hire Laura. That is because a few weeks later she was employed by a different researcher of mine, after having been likewise shaken down by Angelica.

(Incidentally, it was then that I had a first-hand opportunity to observe Laura at work. As I suspected from what I knew of her mother, Laura had little that I could discern in the way of skill or intelligence.)

I cannot resist noting that Angelica is of Italian heritage, a culture for which nepotism is the rule rather than the exception. (What we call “corruption” might in Italy be rather accurately referred to as “the economy”). If this sounds bigoted, I can only say in my defense that I am half Italian myself. I have had enough opportunity to observe the culture’s workings to feel justified in pointing out this predilection. It is also why I never have and never will vote for an Italian candidate for public office. They simply can’t help themselves. Indeed, if you try to explain the wrongness of nepotism to an Italian, he will only stare at you uncomprehendingly. For him, to not hire a relative is to be in grave dereliction of duty.

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