Conflict of Interest

Q. Our synagogue needs to hire a contractor. I am both a member of the building committee that will choose a contractor and also a partner in one of the companies under consideration. Is it ethical for me to promote my own company in committee discussions?

A. In your dual role as synagogue representative and partner in a contractor, you face a conflict of interest. Conflicts of interest are nearly unavoidable in every day life, but they need to managed in an ethical fashion.
The Torah states: “Don’t curse the deaf, and don’t place an obstacle before the blind. Fear your God; I am the Lord” (Leviticus 19:14). Our sages interpret both subjects figuratively: the deaf person is just an example of a person who is vulnerable (1), while the blind person means one who is blind to his own best interest.

Rashi’s commentary states:

Before one who is blind to the affair, don’t give advice unsuitable to him. Don’t tell him, Sell your field and buy a donkey, and you are scheming to take it from him.

The key word here is “scheming”. The problem is not the conflict of interest, but rather the hidden conflict of interest. The solution is to disclose the conflict of interest.

Another possibility that could occur to us is to simply suppress the conflict of interest and determine to judge objectively, without regard for your interest. But the sages of the Talmud did not have much faith in this ability.

The Torah warns against bribery in the following verse:

Don’t distort justice, and don’t show favoritism. And don’t take bribes, for bribes blind the eyes of the wise and distort the words of the righteous. (Deuteronomy 16:19)

On the words “for bribes blind,” Rashi’s commentary states: Once a person accepts a bribe, it is impossible that his judgment shouldn’t lean towards him to justify him.

The Talmud tells the story of Rebbe Yishmael the son of Rebbe Yosi, whose sharecropper brought him his share of the crop on Thursday instead of Friday, since he had a lawsuit and Thursday was the day the court sat. Rebbe Yishmael recused himself from the case. Even though the produce actually belonged to him, his natural feeling of delight at having it brought, and brought early, distorted his judgment. (2)

Exploiting your position to advance your business interests would certainly be an abuse of your position of trust. It would involve “placing an obstacle before the blind”. Making the decision while pretending to ignore your interest is not realistically possible.

The best solution would be to recuse yourself and let others make the decision; then you would be free to act solely as an interested party and make the best case for using your own firm. If that is not practical (for instance, you have unique expertise the committee needs), you must at the very least disclose your conflict of interest so that the synagogue membership can evaluate your recommendations in the proper context.

SOURCES: (1) Babylonian Talmud Sanhedrin 66a (2) Babylonian Talmud Ketubot 105b.