Conflict of interest laws vs democracy

One of the West’s great cultural and political achievements is the idea of an ‘office’, the idea that certain roles should be performed in the interests of persons other than the person who fills that role at a particular time. While tribal cultures see little or nothing wrong with their leaders handing out ‘public’ privileges to their friends, relatives and cronies, in the West this is now seen as a ‘conflict of interest’, if not corrupt.

But in many cases the line between personal and public interest in a matter is far from clear. The Age this morning reports on legislation before the Victorian Parliament that in my view redefines legitimate political interests in the outcome of issues as personal interests. In the future, local councillors may be prevented from voting on the very motions before council they may have been elected to support or oppose.

For example, they will be held to have become an ‘interested party’ if they have lodged an appeal in relation to a council decision, or have made an objection or submission. Say the Council wants to cut down the trees in your street, or redirect its traffic, or let someone build a house that overshadows your garden. You go through the normal processes to protect your interests, by making an objection. This fails.

So you run for election on one of these issues, win a mandate to act on them, and then because of your earlier steps to protect your interests you cannot vote on the matter. Not only are you deprived of your right to vote, but the democratic will of the people who supported you is also frustrated.

A lot will depend on how proposed section 77A(5) is interpreted. It says that there is no conflict of interest where the interest is held in common with other residents, ratepayers or voters, and does not exceed the interest of other residents, ratepayers or voters. This may – at the cost of considerable doubt and complexity – permit some votes on council. But why shouldn’t the person most affected by a council proposal have a say? The election was the process for deciding whether their interests had broader legitimacy or not. We don’t need statutes second-guessing the voters.

Lack of clarity in the law means that it will end up having wider anti-democratic effects than legislators intend, because people err on the side of caution. According to The Age, these proposed amendments are already having the predictable chilling effect on political participation:

Alison Clarke, who is running for the Greens in Yarra, decided against speaking on a rezoning matter at a council meeting last night, fearing that that would constitute a submission. But a Government spokesman said “submission” referred only to written submissions, though the bill does not state that.

In another disenfranchising provision even more draconian than political party donations laws, gifts (which include campaign donations) of more than $200 in the past five years with persons with a direct interest in a matter also disqualify a councillor from voting. So what this means is that if you may have material interests at stake you should not support a candidate financially, for fear that he or she will be disqualified from voting on something affecting you at a later time (this could be on a project yet to be even thought of).

In an even more extreme way than the political donations and expenditure laws, this assumes that people involved in politics have the kind of sophisticated record keeping needed to keep track of donations and link them to matters that arise years later. In practice, it is another measure that entrenches the major parties that have the capacity to maintain databases. It’s all way beyond the reach of the independents who have, historically, often successfully run in local council elections.

Democratic politics is about interests as well as principles, and this is even more true of local councils than the other levels of government. Most of their decisions relate to property or matters that affect residents directly. The point of local government is for those closest to these issues to resolve them democratically, so more than at other levels of government personal and public interests are likely to overlap.

This is not to say that there is no requirement for conflict of interest provisions where there are direct and significant financial interests at stake. But to say that having taken a stance on an issue in the past should disqualify that person from voting as a councillor is absurd – akin to Labor MPs not being allowed to vote on bills repealing WorkChoices because they had all opposed it. And to say that you cannot vote on a development application because it was submitted by someone who years ago gave your campaign $200, with no evidence that there is any connection between the two events, is also nonsensical.

It looks like the Greens will, to their credit, seek to amend this anti-democratic bill. I can only hope that the Liberals will do the same. Alas, after the political expenditure laws fiasco I can no longer be confident in their democratic judgment.

Update 23/10: The Age reports this morning that the Liberals supported the bill through the lower house, but will reconsider their support in the upper house.

Update 27/10: Classical liberals united on this.