News Journal: Disclosure is everybody’s business

While I was reading an article in The New York Times about conflicts of interest in academia, I remembered a column I wrote a couple of years ago. I dug it out of my files, and quote its first three paragraphs here because they are still all too relevant:
“The corrupting influence of conflict of interest, both in and out of government, is a major threat to our democracy. When the people making the most important decisions in our society have a personal, financial stake in the outcome, or when the people providing supposedly objective information to the public are in effect paid for their point of view, democracy falls apart.
“The failure to recognize and address conflicts of interest, either through disclosure, recusal or otherwise, is especially a problem as our institutions and their interrelationships become more complex and opaque.
“Conflicts of interest are not necessarily illegal or even unethical. Indeed, the complexity of modern life makes some conflicts inevitable. Unless conflicts are recognized and addressed, however, their incidence will multiply, as will the damage they cause. In many cases we turn a blind eye to conflicts because we do not want to accuse anyone of improper behavior. Time and again, conflicts are soft-pedaled as “potential,” when they are all too real.”
The Times story was about professors who write academic papers without revealing that they have been, or in some cases still are, financially rewarded by companies in the industry they are writing about. One economics professor at the University of Houston, for example, has written a number of letters to regulatory agencies defending financial speculators and commodity index funds against charges that their activities drive up prices of oil and other commodities, adversely affecting consumers.
His letters cite academic studies he has done, but never mention that he has, according to the Times, “reaped financial benefits from speculators and some of the largest players in the commodities business.”
Asked about that source of income, the professor said, “that’s between me and the IRS.” He bristled at any suggestion that his academic work is in any way influenced by those financial ties.
The Nation magazine has also been looking into the academic-for-sale phenomenon. The article quoted Charles Ferguson, whose film “Inside Job” highlighted the role of sponsored professors in supporting the deregulatory policies that led to the financial meltdown in 2008, who said that “the business of economic consulting firms that work to ‘source’ academics for expert testimony and regulatory filings ‘has been going on for quite a while, and it’s now quite a large industry.’ “
To put that into plain English, there are now a number of well-paid consultants who do nothing but match up Wall Street firms with university economists who will give their regulatory positions academic backing.
Charles River Associates advertises its services to help clients with “sophisticated economic and statistical analyses … in ways that regulators can easily understand.” Charles River, says The Nation, “flips the scientific method, promising that its academic services will ‘make strong cases to support desired outcomes.’ “ Its roster of consultants included academics from the University of California, Berkeley; Harvard University; the University of North Carolina, Chapel Hill; and the University of Chicago. The company notes that many have worked on financial regulatory reform, including Dodd-Frank.”
Hey, it’s a free country. I’m not arguing that academics shouldn’t be allowed to write whatever they like. But if they write about an issue in which they have a financial interest they have a conflict of interest and they should disclose that.
Full disclosure: We see those two words more and more frequently in news articles and opinion pieces that appear in our more reputable media. Often they are in parenthesis after a sentence about a particular company, for instance (full disclosure: I used to work there). Or in a review of a film or play (full disclosure: the producer is my brother).
Why don’t regulatory agencies demand exactly that kind of transparency when Wall Street firms present academic studies that support their positions? And when a medical doctor cites research on a particular drug and the drug company involved has compensated her in some way, shouldn’t that be disclosed? Don’t we have a right to know that?
Ted Kaufman is a former U.S. senator from Delaware.