Should clear "conflict of interest" be illegal?

A conflict of interest is not always bad, however in the last decade there have been too many examples of conflicts of interest that have led to illegal and/or highly unethical behavior.

First, you have the obvious which is the Enron and Worldcom scandals.  These companies hired accountants to "cook the books" and then hired auditors from the same company to make sure the books were accurate.  It should be obvious that if you hire someone to check their own mistakes, they will see none if you pay them enough to look the other way.  Self-policing rarely works, and this is why federal laws since have said you cannot have the same company audit your books as actually wrote them (did the accounting).


Here is a list of some of the other conflicts of interest that have arisen over the past decade:


-Haliburton getting no-bid contracts at outrageous costs to go into Iraq (a company Cheney was involved in)
-Barney Frank was in charge of oversight and regulation of Fannie and Freddie and his Domestic partner worked for Fannie
-Blackwater was tried for its crimes by the Bureau of Diplomatic Security, the same bureau of the State Department that hired them.
-Big Pharm, Big Oil, the big banks, and all other big businesses that have benefitted at one point or another from crony capitalism
-(this is what got me thinking about conflict of interest) The Commissioner of the FCC rushed the approval of Comcast buying out NBC Universal and then days later takes a job as Senior Vice President of Governmental Affairs.


Barney Frank was the chairman of the House Financial Committee.  He had the power to regulate Fannie and Freddie.  There was a hearing to decide if oversight on Fannie and Freddie was needed.  Barney Frank blocked oversight, believing it wasn't needed.  His domestic partner, Jim Ready, was a high-ranking executive at Fannie.  Thats a clear conflict of interest and may have been one of the factors leading to the economic collapse (another would be Bush pushing Fannie and Freddie to take subprime loans).  

Senior VP Gov't Affairs

What does a Senior VP of Governmental Affairs do?  I assume at a big company, its to keep the government out of their business.  So, someone rushes through legislation that could have just created a monopoly (Comcast+NBC Universal+GE could very well have monopoly power) and then leaves the regulators to join that company?  Sounds like conflict of interest.


While conflict of interest is not illegal and it would be hard to make illegal, it is clearly unethical and happens too much in the United States.  One of the main criticisms of Capitalism is that capitalism "lets" this stuff happen.  It really doesn't.  Corrupt Crony Capitalism (fun alliteration) does, but not true Capitalism (not usually at least).  

David Kappos, hired to Patent Office

The last 8 years have been about cronyism and unfortunately, it hasn't fully stopped.  We hired people from IBM and Microsoft into the Commerce Department.  One of them explicitly expressed support for a bill of patent reform that would help his company.  And what does the administration do?  Hire him to the Commerce Department and put him in charge of the patent and trademark office.  Obama said he was making an effort (an executive order banned hirings that would have conflict of interest potential) but made possible conflict of interest hires anyways.  Its not a criticism of him in particular, every president does it and somewhere in the cracks, bills get passed because of a conflict of interest