Conflict of interest: “A situation in which someone who has to make a decision in an official capacity stands to profit personally from the decision. For example, a judge who rules on a case involving a corporation in which he or she owns stock has a conflict of interest.” – Merriam Webster Dictionary
Carol Pitts remembers it all so well. She was a member of the South Dakota Legislature in 2001 and cast a vote to approve the general appropriations bill, which funds state government.
Because of that vote, she faced a dilemma: Give up her job with the South Dakota State University Extension Office, or resign her District 7 legislative seat.
Instead, she kept both jobs and sued for her paycheck from SDSU, but lost by a 3-2 vote of the state Supreme Court.
The court said Pitts had no clear legal right to payment because her employment with SDSU and her position as a member of the House of Representatives created a conflict of interest as defined by the state Constitution:
“No member of the Legislature . . . be interested, directly or indirectly, in any contract with the state or any county thereof . . .”
Since 2013, scandals involving the EB-5 and Gear Up programs have spawned a renewed interest in conflict of interest violations in our state. A new law was passed by the 2016 Legislature to help prosecute conflict of interest cases, though some say the law isn’t strong enough.
However, disagreements will occur, just as they did when two state Supreme Court justices dissented in the Pitts case, arguing that interpretations can be too restrictive.
Did anyone think that Rep. Pitts was lining her own pockets by voting for the general appropriations bill that funded colleges and universities? She was not voting for her specific salary.
Similarly, what about high school teachers serving in the state Legislature? On average, the state pays for about half of the K-12 general funds across the state, and those lawmakers vote on the appropriations bill at the end of each session. Moreover, teachers participate in the state retirement system. Yet no legal action has been taken against them for a conflict of interest because the Constitution cites only state and county entities, not school districts.
For her part, Pitts today says indirect contracts receive too much emphasis.
As to her challenge of the system: “I’d do it again,” she says, without hesitation.
July 20, 2016