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Wednesday, July 7, 2010

Conflicts of interest may include social non-profit interests

Attorney: Johnson’s funding request a conflict of interest
Darlington County [South Carolina] Councilwoman Wilhelmina Johnson’s effort to get $35,000 in public funding from Darlington County Council to help bail the Darlington County Cultural Realism Complex (CRC) Inc., of which she is executive director, out of foreclosure proceedings constitutes a conflict of interest as defined by the State Ethics Reform Act, County Attorney Jim Cox said.

Cox said it was improper for Johnson to even bring up the subject to council or to participate in any discussions about it because of her connection to CRC.

Johnson first made the request for the funding to council during a meeting on June 7 but got no response from any other members. When she tried to bring the issue up again during council’s June 21 meeting to have it placed on the agenda for the next meeting, Chairman Billy Baldwin ruled her request and comments out of order.

The Ethics Reform Act prohibits public officials from using their office to obtain an economic interest for themselves, immediate family members or any business or organization with which they are associated. It also prohibits public officials from using their office to influence decisions affecting themselves, immediate family members, or any business or organization with which they are associated.

Cox said under the statute, Johnson’s interest in CRC does not have to be only financial. Being closely tied to an organization can constitute an interest that rises to the level of conflict of interest, he said.
“Mrs. Johnson is the primary moving force behind it (CRC). She is the founder. In essence, Mrs. Johnson is CRC,” he said.

“We don’t even know what the rules are,” Councilman Alex “Buz” Shaw of Hartsville said. “We’ve been told it’s a conflict of interest, and we don’t even pay any attention to it.”

Johnson was having none of it. She read a prepared statement in which she denied any conflict of interest and said anyone accusing her of a conflict of interest had better be prepared to prove it. “When you confront me again, have your stuff ready,” she said.

Johnson founded CRC in 1973 as a nonprofit organization aimed at bridging the gap for young people between school and home with various services. She said that at the time of its formation, African Americans had little to celebrate. CRC, she said, changed that.

And Johnson again chastised council for not providing more funding for the organization in the past. She said CRC is meeting a need that the county does not meet. “Shame on Darlington County, South Carolina and the country as a whole,” Johnson said. “Hypocrisy in a democracy cannot be tolerated.”

Johnson said the $35,000 she wants from the county is “nothing compared to the need,” and said she is seeking as much as $1 million from a variety of sources, including the county, state and federal governments as well as other sources.

Johnson also tried unsuccessfully to resurrect the issue of council’s long-standing policy of not funding requests from organizations or agencies that are not a part of county government.

She said nonprofits like CRC are bearing the burden of providing services to the community and the county should be helping by providing funding.

COMMENTARY: The ABA Model Code and Guam procurement code provisions dealing with conflicts of interest seem to require some form of "financial interest" nexus. I'm not sure if that is definitionally the same thing as the "economic interest" this article mentions.

From my perspective, I would think that the conflicts of interest provisions should apply, if they do not, to cases like this where a procurement decision maker tries to steer procurement decisions to non-profit interests, however laudable, in which the decision maker has any affiliation, sponsorship or other interest, financial or noble. Otherwise, intangible benefits related to campaigning and political patronage could easily divert public funds on the basis of favoritism rather than government need.

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