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Arthur Schafer is a professor and the founding director of the Centre for Professional and Applied Ethics at the University of Manitoba.

Our Prime Minister denies a conflict-of-interest situation in the award of a multimillion dollar untendered contract to WE Charity. His Minister of Finance, Bill Morneau, offers a similar denial. Both concede, however, that they ought to have recused themselves from the decision-making process because, as they now acknowledge, there was the appearance of a conflict.

So, Mr. Trudeau and Mr. Morneau admit that things look bad; but both claim that this is mere appearance. Notwithstanding that Mr. Trudeau’s family were paid hundreds of thousands of dollars by WE, and notwithstanding that Mr. Morneau’ s daughter is employed by WE and his family were treated to expensive overseas travel, both the Prime Minister and his Minister of Finance insist that there was no real conflict of interest.

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That they deny what is patently obvious to most Canadians indicates that neither understands what it is to be in a conflict of interest.

Big names continue to donate to WE charities in the U.S., despite recent controversy

Prime Minister Trudeau and WE Charity: The controversy explained

Time to go back to basics.

What does it mean to be in a real, as opposed to a merely perceived, conflict of interest?

Imagine this scene in an Ottawa courtroom. Arthur, the plaintiff in a lawsuit, claims millions of dollars in damages from the defendants, Justin and Bill. As the trial opens it emerges that the presiding judge, Madam Justice Portia, has recently enjoyed a luxurious family vacation in Africa, paid for by Arthur. Moreover, Portia’s daughter is employed by Arthur, while Portia’s mother and brother have received hundreds of thousands of dollars for giving inspirational talks to Arthur’s clients.

The lawyer representing Justin and Bill rises to his feet demanding that, in light of her past financial relationships with Arthur, Portia must recuse herself. Madam Justice Portia indignantly rejects the demand to step aside, insisting that her judgment will be influenced neither by her personal ties to the plaintiff nor by the financial benefits she and her family have received. “I am an independently wealthy woman,” she insists. “I can’t be bought for a few hundred thousand dollars. I am, moreover, a person of great integrity whose judgment will not in any way be influenced by my relationship to the plaintiff.”

Neither Justin, nor Bill, nor any other reasonable person is going to be satisfied with this reassurance. Even if they accept Portia’s declaration that she is a person of integrity, they are going to worry that when she weighs the evidence her judgment will be biased by the benefits she and her family have received from Arthur – if not consciously, then perhaps subconsciously. She’s a wealthy person but she cannot help but be grateful to Arthur. Portia may well feel a need to reciprocate for the favours he’s done for her. Reciprocity is a deep human need we all experience (psychopaths excepted).

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Some important lessons can be learned from the above scenario. First, potential conflicts of interest arise when an official is required to exercise discretion and is obligated to do so without bias. Public officials, whether judges or cabinet ministers, are ethically required to be “disinterested” with respect to the decisions they make. That doesn’t mean that they don’t care about the issues. It means that they have no vested (or personal) interest that might bias their judgment.

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Conflict of interest does not require that bias actually occur, only that there is reason to fear that bias may be present. The risk of bias, not the exercise of bias, is what makes both our imaginary scenario and the WE Charity imbroglio real conflicts of interest.

Even if Portia ultimately rules against Arthur and in favour of Justin and Bill, this would not show that she is innocent of conflict of interest. Nor would it matter if, in her heart of hearts, she was unaffected by Arthur’s beneficence. It was ethically impermissible for Portia to hear the case because the benefits she had received from Arthur were a risk factor for bias. Cabinet ministers, like judges, are required by law, as well as ethics, to avoid such situations.

Thus, even if an independent inquiry establishes the truth of Prime Minister Trudeau’s claim that “WE Charity received no preferential treatment, not from me, not from anyone else,” it will still be the case that Mr. Trudeau and Mr. Morneau were guilty of conflict of interest. It’s time that cabinet members and those who advise them figured this out.

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