On Conflict of Interest

Issues of conflict of interests have been always addressed in organizations where an employee is agreeing to act always in the best interest of the organization.  So what is conflict of interest? What does it really mean? I looked in Wikipedia to find the meaning.  According to Wikipedia A conflict of interest is a situation in which someone in a position of trust, such as a lawyer, an insurance adjuster, a politician, an executive or director of a corporation or a medical research scientist or physician, has competing professional or personal interests. Such competing interests can make it difficult to fulfill his or her duties impartially. A conflict of interest exists even if no unethical or improper act results from it. A conflict of interest can create an appearance of impropriety, irregularity or even illegality that can undermine confidence in the person, profession, or the system. The most common forms of conflicts of interest are also listed in Wikipedia:

  • Self-dealing, in which public and private interests collide, for example issues involving privately held business interests,
  • Outside employment, in which the interests of one job contradict another,
  • Family interests, in which a spouse, child, or other close relative is employed (or applies for employment) or where goods or services are purchased from such a relative or a firm controlled by a relative.
  • Gifts from friends who also do business with the person receiving the gifts. (Such gifts may include non-tangible things of value such as transportation and lodging.)
  • Pump and dump, A stock broker (from boiler room down the street to big brokers uptown) which owns a security artificially inflates the price by “upgrading” it or spreading rumors, sells the security and adds short position, then “downgrade” the security or spread negative rumors to push the price down.

Lately what has happened in the World Bank or what is known as the case of Paul Wolfowitz the president of the World Bank is a case of conflict of interest that was resolved by his resignation from the prestigious organization because his behavior was deemed to be in breach of work ethics and a very strong manifestation of Nepotism and Favoritism which are a manifestation of a conflict of interest. According to Steven R. Weisman in the New York Times :“The decision came four days after a special investigative committee of the bank concluded that he had violated his contract by breaking ethical and governing rules in arranging the generous pay and promotion package for Shaha Ali Riza, his companion, in 2005.” In an organization like the World Bank mechanisms to handle such situations are available and they did not spare the bank president. That was the World Bank, so what place does conflict of interest occupy in our culture? How do we deal with it? Unfortunately this important issue is almost inexistent and the cultural system is built around favoritism. No reprimand has happened or has been reported because of cases of conflict of interest. Despite the public opinion and the  negative impact it has on the person involved.To start we look at Nepotism and Favoritism in the work and professional arena, we will find that network and connections replace merit, and subjective decisions replace objective ones. Second as highlighted in a previous article mixing of business with political power in an attempt to gain immunity and non accountability is another case of serious conflict of interest. Where public and private interests are mixed with a clear dominance of private interest.  Thirdly as it appeared strongly on the political arena with several Ministers who are related to businesses and as ministers regulate the same business field bringing another mix of private and public interests. The following cases have been reported on several news papers as Rose El Youssef, Al Ahram, Al Fagr and others. The first case is that of Ahmed El Maghraby and Mohamed Mansour during the acquisition of EAB by Calyon Bank Egypt, in which their company Al Mansour & Almaghraby was an active share holder (not a silent investor).   The second case also is bringing the name of Ahmed El Maghraby who is a share holder of Accor the global hotel chain. This chain attempted to buy a piece of land in Tahrir square right in the center of Cairo at only EGP 10,000 per m2 where the same Minister sold the desert to an investor at EGP 4000 per m2. Fortunately the deal did not go through and the land was not sold to Accor. The third case reported the name of Zohair Garrana the Minister of Tourism who is alleged and suspected to grant his company 180,000 m2 in a national protectorate area in Hurghada. The fourth case was attributed again to Mohamed Mansour the Minister of Transport who previously presented a project to the former Minister of Transport Essam Sharaf to acquire the exclusive rights for fluvial transportation the project was rejected at that time. The project suddenly emerged through another company in which Yassin Mansour the brother of the Minister is a share holder.  The fifth case is associated with Hatem El Gabaly the Minister of Health and the Major share holder of Dar El Foad hospital who has been accused in Al Fagr of dismantling Sheikh Zayed Hospital, a public hospital, in favor of his own.  Five cases involving four ministers in a period of a year requires a clear law regulating this issue. However, although these cases were brought on national newspapers, no reply or reaction was done. On the other side one has to highlight another positive case, the only positive case of avoiding conflict of interest is Rashid Mohamed Rashid. Rashid gave up his business to the family when he was appointed Minister of Industry, he did not grant this business any privilege or benefit


4 Responses to “On Conflict of Interest”

  1. 1 ]Dr. Ayman Makkawy May 29, 2007 at 11:57 am

    Dear Rafik
    First of all , I have to express my admiration for the fine selection of the subjects of your thoughts , as all of it are hot issues and very logical to think about and I admit the professionality of your analysis and presentation.
    Again u talk about something that reached the degree of being a culture in our miserable community , and the 5 cases u enumerated can be multiplied by a thousand at least if we count parliment members , local puplic assemblies and many public officials in the different governmental offices .
    It is like a cancer with no cure, as long as we deal with it on the public level as a common event and a natural thing to happen !!

  2. 2 rafiknakhla May 29, 2007 at 1:54 pm

    Dear Ayman
    we have reached an age where it would be wrong not tothink about our country specially if we want to create a bright future for our children.
    What is needed for Egypt is a strong civil movement that is capable of defining a vision for the country and driving the change in culture we need.
    Almost every bad behavior has proliferated as cancer in the society although the facade is still clear but the interior is rotten and filthy

  3. 3 midhat gazale (ghazala) June 5, 2007 at 6:26 am

    Dear Rafik,
    Grat Blog! Bravo Aleik !

    One comment : On the advice you give regarding succeeding at work, you might add two items which are really hurting the Egyptians:

    1. Always Return phone calls
    2. Promptly Answer your mail (or email)

    Continue the good work



  4. 4 rafiknakhla June 7, 2007 at 9:53 pm

    Dear Dr. Midhat
    Thank you for your encouraging comments, the two items you mentioined are a sign of disrespect however they are not related to the issue of conflict of interest.
    keep on visiting my blog

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