When does a political interest become a conflict of interest?

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JEREMY MAGGS: The Democratic Alliance (DA) has done an about-turn over its finance spokesperson Mark Burke, removing him from parliamentary finance oversight roles while the Reserve Bank investigates the fintech company Kastelo, which Burke founded and in which he remains a beneficiary.

Now, as I understand it, Burke says he left the business to pursue politics and has recused himself from Reserve Bank matters. Importantly, there has been no finding of wrongdoing against him.

Read:

Kastelo says Sarb jumped the gun on crypto freeze

But the DA says he is stepping aside to avoid even the perception of any conflict of interest. So where exactly is the ethical line?

I want to talk to Kris Dobie now from The Ethics Institute, and he specialises in this particular field. Kris, a very warm welcome to you, and maybe let’s start with a basic test, if we can. What actually constitutes a conflict of interest?

KRIS DOBIE: A conflict of interest we define as when someone’s personal interests or outside interests are in conflict with their professional responsibilities. So generally, there are a few tests that that you can do.

The first is: can you objectively apply your mind to what is in front of you? Are you acting in the best interest of the professional role that you are asked, and are you transparent in any conflict that comes up?

So, yeah, where to draw the line is really a tough question, and it really is a case-by-case basis. Whenever we develop conflict of interest policies for organisations, people want to harden fast line.

But unfortunately, that doesn’t exist. In this case, I can definitely see that there is a potential for a conflict of interest. If not an actual conflict, then at least a perceived conflict, which also breaks down trust.

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JEREMY MAGGS: And that, I think, is a key question. There doesn’t necessarily have to be actual wrongdoing, but I think you’re suggesting that the perception of a conflict could be enough.

KRIS DOBIE: Absolutely. I always use the example where, let’s say a minister’s son received a tender from the department that the minister is in. The minister was not involved in that process at all, but there’s no way that you’re going to convince the public that that’s not the case. So perception really is very important.

In this case, I was glad to see that he had already recused himself from matters relating to the South African Reserve Bank (Sarb). So one could potentially say that he doesn’t have discretionary decision making over any Reserve Bank matters already, so potentially he doesn’t need to step aside.

But I think things become so intertwined at the level of parliamentary oversight and parliament is also a legislature. So if matters come up in terms of legislation that could influence the matters that he deals with, there are also issues related to that.

So I think it’s definitely the right thing to do to step down. If he hadn’t stepped down or been removed, there would definitely be questions.

JEREMY MAGGS: But Kris, on a broader canvas, can you realistically oversee a financial system while having a financial interest in a company being investigated by one of the institutions that you oversee?

KRIS DOBIE: No. I think the broader question is almost whether people who are involved in such businesses should be on parliamentary committees that relate to that at all. But yeah, the line there becomes very thin.

And to an extent, one also wants people who have knowledge of financial systems, but who don’t have a conflict of interest, and that becomes very difficult sometimes.

Sometimes you have to actually deal or live with certain conflicts. Not in this case, but you have to live with certain conflicts in order to gain the type of expertise that you are requiring on a committee.

JEREMY MAGGS: Kris, the DA initially defended Burke on the basis that there had been no finding of wrongdoing and then a day later removed him from the finance committee and the broader finance cluster. What does that reversal tell you?

KRIS DOBIE: I think we tend to personally know people and think that everything is okay and, this guy is a good person type of thing. But the public perception is very different. It’s also a very political space.

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I read what other parties had said about this, and, and it’s difficult to draw the line between what is politics and what is actual, legitimate criticism.

But I think it would have been a mistake from the DA, from a governance perspective to let it slide, most definitely. I think once someone is under investigation, that is sufficient. Simple allegations can be weaponised.

People then start having to withdraw from public office or from their duties, and it can just be abused completely.

JEREMY MAGGS: Interestingly, the DA says the move is about avoiding the perception of a conflict. So I guess the cynic in me would say is that good ethical governance or simply crisis management after the fact?

KRIS DOBIE: Yeah. I don’t know whether new information came to light for them. But it seems to be that there was crisis management, and reputation management, rather than governance considerations that came in.

JEREMY MAGGS: Which does raise the point, surely, that the conflict maybe should have been identified and managed earlier before it became a public controversy?

KRIS DOBIE: That’s where I’m saying it was positive for me to see that he had already of his own accord noted that there is a potential conflict with Reserve Bank matters, and he had recused himself from any decisions or any deliberations related to Reserve Bank matters.

So one could say that that resolved the conflict, but it definitely doesn’t resolve the perception of a conflict.

JEREMY MAGGS: I’m going to leave it there. Kris Dobie, thank you very much indeed, you’re from The Ethics Institute. I appreciate the time and the insight.

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