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Tuesday, May 23, 2017

The Constitution’s Chapter Six: Conflicts of Interest


The Kenya Constitution places great emphasis on integrity and avoiding conflicts of interest. We tend not to discuss these concepts much, despite concerns about corruption among politicians and other public servants.

Conflicts of Interest: US style

Some aspects of the imminent Trump presidency in the US have illuminated the risks and possible implications of conflicts of interest, especially of the president. Most recently he has said he will close his (controversial) foundation “to avoid even the appearance of any conflict with my role as President”.

Donald Trump is a very wealthy man. He is also heavily indebted. A New York Times investigation unearthed debts by Trump corporations of $650 million (about 65 billion Kenya shillings). The Atlantic Monthly (in the US) says that Deutsche Bank (based in Germany) has lent $300 million to Trump or his companies since 2012 .

The Guardian (UK) suggested (purely hypothetically):

Trump could sign a weapons deal in exchange for a write-down on the hundreds of millions of dollars his companies owe to foreign banks. Trump could turn a blind eye on a Russian incursion in Estonia after his long-desired tower project in Moscow suddenly gets the green light…. Trump’s administration could drop a protest about human rights abuses in the Philippines after his Manila real estate project gets a valuable easement or some such boost. A Trump-appointed director of the general services administration [which deals with contracts with government] could decide for some reason to shrink the rent the Trump organization must pay the federal government to run its hotel in the Old Post Office Pavilion in Washington DC.

The US Constitution says that “no Person holding any Office of Profit or Trust under [the US], shall, without the Consent of the Congress, accept of any present, Emolument, … of any kind whatever, from any King, Prince, or foreign State.” Lawyers in the US are divided over whether this applies to the President.

Conflicts of interest: Kenyan style

The guiding principles of our Constitution (in Chapter Six) on leadership and integrity include “selfless service based solely on the public interest, demonstrated by. ..the declaration of any personal interest that may conflict with public duties”. And state officers must always behave “in a manner that avoids any conflict between personal interests and public or official duties.”

We in Kenya can have no doubt that our Constitution binds our President. There is a strong emphasis on “rule of law” and everyone is equal before the law. And the President is most clearly a “State officer” bound by Chapter Six to have no conflicts of interest. A gross violation of a provision of the Constitution” is a ground for a President to be impeached and removed from office. Allowing a major decision of state policy to be influenced by considerations of personal benefit would surely be a ground for removal.

I do wonder a bit when I see Brookside Dairy butter served on a Kenya Airways flight. That may be simply a result of near-monopoly, but does it seem right to have a President whose family has a near monopoly of a field of business? Certainly that family connection underlay feelings that there was something not quite right about an agreement said to have been made between the Presidents of Uganda and Kenya about sugar moving in one direction and milk in the other.

But it is not the President alone whose possible conflicts of interest are important. Conflicts of interest can arise for any public employee or officer at any level. Of course, taking of a bribe by a public officer to do or not to do his or her job is a conflict of interest. Every favouring of a fellow tribesperson over someone else who is at least as well qualified is giving in to conflict of interest against the Constitution. Every dropping a hint to anyone that pending government policy will make land in a particular place a specially valuable investment, or using that information oneself to speculate in affected land, is a form of insider dealing and reflects a conflict of interest.

Dealing with conflicts of interest

How to guard against this? It is common for leaders in many countries to deposit their property with trustees who will not reveal how they deal with it. In theory, the owners will not know how their decisions as office holder will affect their personal position. This may be required by law, or by codes of ethics, or a way of avoiding what would otherwise be an obligation to dispose of assets. But the blindfold is not always tight. Tony Blair’s wife instructed his blind trustees to buy some flats with the trust money. Donald Trump says his children will operate his blind trust. Hardly blind, as commentators have observed.

Kenyans prefer to hold much of their wealth in the form of land. How useful is a “blind trust” if the property is land and hotels at home or in in various other countries, or even your shares in your family company that no-one is likely to part with, even if it is a public company (the case with Lord Sainsbury of the famous UK supermarket chain who was for a while a Minister)?

Kenya has the Public Officers Ethics Act (2003) and the Leadership and Integrity Act (2012). Both say that state or public officers must not, for example, “hold shares or have any other interest in a corporation, partnership of other body, directly or through another person, if holding those shares or having that interest would result in the public officer’s personal interests conflicting with his official duties.” They must not award contracts to themselves or immediate family members or businesses with which they are associated. The second Act says they must disclose any offers of future employment that might create conflict of interest.

The newer Act says that members of Parliament and county assemblies must declare interests in matters being debated, and any transactions or communications they have with other State or public officers. The register of those declarations must be open to the public.

All prospective holders of state or public office must complete a form about their ethics, behaviour and assets. Most questions are unlikely to elicit a truthful answer; for example like “Have you ever abused a public office?”

Perhaps more interestingly, the Act says that every government department or agency must have a register of interests of conflicts of interest on the part of state or public officers. “Registrable interests” include directorships, employment, consultancies, shares, land, and pending court cases. It is unfortunate that the Act seems to say that these have to be registered only if there is a conflict of interest. One can imagine officers, through wishful thinking, stupidity or wilful blindness, deciding there was no conflict and not declaring.

It is the “responsibility” of the officer to file the information but it does not seem to be an offence not to do so.

Under Regulations, anyone may apply to inspect this Register. They must specify what information they want (which may be difficult before they see the register) and why they want the information. This provision is unconstitutional because every citizen has the right to information held by a public body—and does not have to say why they want it. The recent Access to Information Act should be used for this purpose by anyone who wants information from the register. But the question must be asked: will anyone find anything useful in that register (if it exists)?

We have various other devices, such as the provisions on public procurement, designed to prevent conflicts of interest. But weaknesses of drafting and lack of will, and corruption of so many of our institutions tend to defeat the constitutional intentions.

This is one of an occasional Katiba Corner series on Chapter Six.

The author is one of the Directors of the Katiba Institute


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