Stockbrokers were supposed to serve the interests of their customers, but many continued to tout Enron stock even as the company was imploding. Auditors were supposed to attest to the honesty of company books, but Arthur Andersen in its consulting role made lucrative fees helping Enron management concoct dubious financial manipulations that Andersen auditors then blessed.

The chairman of the Securities and Exchange Commission, Harvey Pitt, comes directly from a lucrative career lobbying on behalf of accounting firms including Andersen to prevent tough regulation. How can he ethically serve both masters, not to mention the public interest? He can't.

The other corporate meltdown in the headlines is Global Crossing, a would-be telecommunications giant. Global Crossing spent lavishly to curry favor with politicians of both parties. It gave $100,000 in stock to Democratic Party chairman Terry McAuliffe, which McAuliffe quickly parlayed into an $18 million profit. Former President George H.W. Bush got an $80,000 fee for addressing a Global Crossing company event. None of this passes the smell test.

In 1999, Congress repealed the Glass-Steagall Act, a landmark New Deal reform that separated the underwriting of securities from the practice of commercial banking. In the 1920s, large banks had engaged in both businesses - a flagrant conflict of interest - in which banks like Morgan often sold their commercial customers risky stocks that the banks themselves had floated. The promotion of such stock schemes was blamed in part for the Great Crash.

After the Roaring Twenties, such practices were deemed unethical as well as risky. By the roaring '90s, however, conflicts of interest were again deemed normal, even clever.

The New York Times has just published an expose of hospital supply companies that take fees from manufacturers whose products they then recommend to hospitals. There's an old-fashioned word for this practice. It's called a kickback - profiting from a conflict of interest.

The Globe magazine recently profiled former Senator George Mitchell, who seems determined to cash in his reputation of integrity for whatever the market will bear.

It's bad enough that businesses and politicians (often in collusion) yield to temptation. What's more troubling is that conflicts of interest have become widespread not just in the grubby business and political world but in the professions.

Not so very long ago, a professional was distinguished from a businessman by higher ethical obligations to clients and to society. Doctors, for example, took seriously the Hippocratic Oath, which bound them to serve only the interests of patients. But in the HMO era, many doctors sign contracts that base their own earnings in part on how much money they save the HMO.

Doctors who take on sicker patients are penalized, as are doctors who spend adequate time with patients and doctors who make ''too many'' referrals to specialists, order too many tests, or prescribe costly drugs. HMOs cynically refer to this pressure as ''alignment of incentives'' - ways to bring about a financial alignment between the physician and the health insurance company.

But what happened to the alliance between doctor and patient? Why doesn't the American Medical Association, which is very adept at rising up against national health insurance, make an issue of these payment formulas? Why don't all physicians simply refuse to sign such contracts?

A number of universities have made research deals with biotech companies that limit the ability of their researchers to publish scholarly papers and restrict the access of research findings within the scientific community. In such arrangements, the university's commitment to the general advancement of knowledge takes a back seat to the prospect of profits.

There are two grave risks in this trend. One is that the rising tide of conflicts of interest will produce a flood of bad business decisions, ultimately swamping the broader economy. A more ominous risk is that the economy will avoid another great crash but that opportunism will continue crowding out other values.

And there are only two ways to put this genie back into its bottle. Either it will take another great crash and another sober morning-after. Or those of us who still have some values other than commercial ones will rise up, by example and agitation, and again make conflicts of interest a badge not of cleverness but of shame.

Robert Kuttner's is co-editor of The American Prospect. His column appears regularly in the Globe.

© Copyright 2002 Globe Newspaper Company

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