I do not disagree that a federation president judging skaters from their own federation can be perceived as a conflict of interest.
Here's the conundrum and why there's no easy solution:
The ISU has minimum activity requirements to maintain international/ISU appointments. These activity requirements can be met by judging sectional-level, national-level or international-level competitions. A federation president who is an international/ISU official has three choices:
1) Resign the international appointment, which takes decades to earn and requires the passing of a rigorous exam following an exhausting multiday course, which has very limited available slots (i.e., you give it up, you aren't getting it back)
2) Judge their own country's Nationals or Sectionals
3) Judge an international every 24 months
The ISU, in its infinite wisdom and unerring tendency to enact rule changes without considering the consequences, mandates that an official must judge the short and free skate of the same event in order to count towards activity. This means that any competition that draws the judges for short and long (i.e., several judges judge only one portion of the event) may not count for activity.
IMHO, a federation president judging their own National Championships (or the qualifier for Nationals) is a horrendous conflict of interest. U.S. Figure Skating used to have a rule that the president wasn't allowed to judge during their four years in office. I believe that rule was deleted and the U.S. Figure Skating president may occasionally judge a test session or low-level local competition, but they do not judge Nationals or Sectionals. (There's a tradition that the U.S. Figure Skating president travels to all three Sectional competitions during their four days of competition so he/she is present at Sectionals but not officiating; the executive director travels some years and not others.)
Assuming that no one will give up their international appointment to volunteer as a federation president for four years (they won't), there are two remaining choices: never elect anyone with an international appointment to be federation president, which eliminates many of the most qualified candidates in many associations (especially the small ones), as well as most of the candidates who have the knowledge and experience with international figure skating to guide an association's success internationally and to represent the association's interests* in ISU matters; or find the federation president an international competition to judge every 24 months that represents the lowest possible conflict of interest.
(*"Interests" sounds insidious, but things like the U.S. wanting to get rid of anonymous judging is an "interest" of U.S. Figure Skating. Maintaining Skate America's position as one of the Grand Prix competitions is an "interest" of U.S. Figure Skating, etc. This is a business - a weird, nonprofit business, but a business nonetheless - and connections matter, just as they do in the business world.)
Earlier this year, someone on FSU commented that Sam Auxier had judged U.S. Classic and noted that it was a "major international." That surprised me because, while it's not Podunk Open, the "Salt Lake City Senior B" (what we call it) is not a major international competition. I suppose that the creation of the Challenger Series and the prize money at the end of the Series has made the results of the SLC Senior B more important, but it's about as low-level of a competition as you can get that is 1) guaranteed to fulfill all requirements to count as activity for international appointments (including number of entries, entries from enough different countries, and officials from enough different countries, among other requirements) 2) the federation can guarantee that the federation president will be invited 3) the federation president typically has to be there anyway, so there's some savings in hotel/airfare.
Also, who is the "No. 2 official" in the U.S. is variable: the first vice-presidency rotates from section to section on a set schedule. The current first vice president is not an international official; the second vice president, who was first vice president last year or the year before, is an ISU referee and judge.