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CONFLICTS OF INTEREST
The Political Reform Act
Government Code Section 1090
Common Law Conflicts
Campaign Contributions and Loans
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CONFLICTS OF INTEREST
The Political Reform Act
Government Code Section 1090
Common Law Conflicts
The concept of conflicts of interest is relatively simple, and derives from the idea
that no person can serve two masters. Application of this concept is quite difficult,
however, for several reasons:
1. Determination of whether or not a conflict of interest exists is intensely factual
in nature. Whether or not an official has a disqualifying conflict of interest depends just
as much —if not more —on the precise facts of the situation as it does on the law.
2. There is no single law of conflicts of interest in California. Instead, potential
conflicts arise under a number of different laws. These include (but are not limited to):
*The Political Reform Act of 1974, dealing with conflicts that arise from
financial interests.
*Government Code section 1090, dealing with conflicts that arise from
contracts.
*Health & Safety Code section 33130, which prohibits redevelopment
agency officials from acquiring any interest within a project area.
*Health & Safety Code section 34281, which prohibits any housing
authority commissioner or employee from having any interest in a housing
project or in a contract for providing services or materials to a project.
*California Constitution Article XII, section 7, which prohibits a public
official from accepting any free or discounted pass from any transportation
company.
*Common law prohibitions of an official acting in any instance in which he
or she cannot act with "disinterested zeal ".
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3. A local government official may have a conflict under one law, but not under
another. As a consequence, it is necessary to examine each factual situation under a
variety of legal tests.
4. Local officials often are taken unaware by the potential for a conflict of interest
which seems to arise at the last moment.
PRACTICE TIP: Be aware of items that will come before you for decision
in the future, so that conflict of interest issues can be spotted early, rather
than trying to make conflict determinations during public meetings.
Political Reform Act: Conflicts of Interest
The Political Reform Act of 1974, ( "the PRA") was adopted by initiative as a response to
the "Watergate" scandals of the preceding few years. It is codified at Government Code
section 81000 et seq. and is considered the primary law in California regarding conflicts.
The PRA regulates disqualification of government officials due to conflicts of interest. In
addition, it also regulates reporting and disclosure of economic interests; gift and
honoraria limits; and, to a limited extent, campaign contributions. The PRA establishes
the Fair Political Practices Commission ( "the FPPC ") as the State agency charged with
its enforcement. The FPPC regulations implementing the PRA are found at 2 CCR
§18110 et seq.
A. General PRA Rule Regarding Conflicts of Interest
No public official at any level of government shall make, participate in making or
in any way attempt to use their official position to influence a governmental
decision in which the official knows, or has reason to know, he or she has a
financial interest. (Govt. Code sec. 87100.)
The purpose of the PRA is to ensure officials perform their duties in an impartial
manner, free from bias caused by their own financial interests or the interests of
persons who have supported them.
B. When is there a Conflict of Interest under the PRA?
An official has a conflict of interest under the PRA when it is reasonably
foreseeable that the decision will have a material financial effect on an economic
interest of the official, or a member of his or her immediate family.
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C. Components of a PRA Conflict of Interest:
FPPC regulations establish an 8 step process for determining whether or not a
conflict of interest exists in any given case. (see, 2 CCR §18700 et seq.) A
public official seeking to determine whether or not he or she has a conflict of
interest should ask himself or herself each of the following questions.
a. Step One: Determine if the individual involved is a "pub
official" with the meaning of the PRA.
The disclosure and disqualification provisions of the PRA apply to
"public officials ". The PRA defines that term to include every
natural person who is a member, officer, employee or consultant of
a public agency. (Govt. C. §82048; 2 CCR §18701(a).)
A "consultant" is a "public official" within the meaning of the PRA if
under contract he or she provides information, advice,
recommendations or counsel and: (a) serves in a staff capacity
with the public agency and in that capacity performs the same or
substantially the same functions or duties as would an individual
holding the same position as an employee; or (b) the individual
makes a governmental decision on behalf of the agency. (2 CCR
§19701(a)(2).)
PRACTICE TIP: Your agency's consultant agreements should
contain a determination as to whether or not a particular consultant
will be deemed to be a public official for purposes of the PRA. If a
consultant is deemed to be a public official he or she may not only
be subject to the PRA disqualification provisions, but may also be
subject to the economic interest disclosure provisions requiring the
filing of FPPC form 700.
If the person undertaking the conflict analysis is not a "public
official" as defined in the PRA, he or she does not have a conflict of
interest.
b. Step Two: Determine if the public official is making or
attempting to influence a governmental decision.
A public official may not make, participate in making, or attempt to
influence a governmental decision. (Govt. Code sec. 87100.)
Hence, the prohibition is much broader than simply abstaining from
the final vote regarding a matter. A public official is prohibited from
advising or making recommendations regarding the decision, or
participating in the debate leading up to the ultimate decision. (see,
2 CCR §§ 18702.1, 18702.2)
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C.
However, a public official may appear in the same manner as any
other member of the public before an agency solely to represent
himself or herself on a matter related to his or her personal
interests, and may communicate with the general public or the
press regarding a matter. (2 CCR §18702.4(b).)
PRACTICE TIP: Because "participation" is broader than merely the
final vote on a matter, it is important for public officials to not
become involved in the preliminary stages of a decision on which
their board or commission may ultimately have the final vote.
If the public official is not "making a decision" as defined in the
PRA, then he or she does not have a conflict of interest.
Step Three: Identify the public official's economic interests.
The PRA forbids conflicts of interest that relate to what it terms
"economic interests ". In order to determine whether a public official
making a decision has a conflict of interest, the official must
determine if he or she has one or more of the following 6 types of
economic interests:
Business Investments: A public official has an economic interest
in a business entity, operated for profit, in which he or she has a
direct or indirect investment of $2,000 or more.
Business Management Positions: A public official has an
economic interest in any business entity, operated for profit, in
which he or she holds a position as a director, officer, partner,
trustee or any position of management.
Real Property: A public official has an interest in real property
when the official, spouse or dependent children have a direct or
indirect equity, option or leasehold interest of $2,000 or more in a
parcel of property located in, or within two miles of, the
geographical jurisdiction of the official's agency.
Sources of Income: A public official has an economic interest in
any person or entity from whom he /she has received income
aggregating $500 within 12 months prior to the time when the
relevant governmental decision is made. Income includes income
which has been promised to the public official but not yet received
by him or her, if he or she has a legally enforceable right to the
promised income.
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PRACTICE TIP: The PRA does not include income received from
government entities as "income ". As a consequence, a public
official usually has no conflict of interest under the PRA even when
the decision affects his or her government employer, unless
another economic interest is also involved.
Sources of Gifts: A public official has an economic interest in any
donor of, or any intermediary or agent for a donor of, a gift or gifts
aggregating $420 or more in value provided to, received by, or
promised to the public official within 12 months prior to the time
when the decision is made.
PRACTICE TIP: The gift limitation amount is adjusted by the FPPC
every two years.
Personal Financial Effects: A public official has an economic
interest in his or her personal expenses, income, assets, or
liabilities, and those of his or her immediate family.
With respect to both economic interests in real property and
business entities, a public official may have such an economic
interest by virtue of an indirect investment. Any investment or
interest owned by a spouse or dependent child, or held by a
business entity or trust in which the public official, the official's
spouse or dependent children own 10% or more, is deemed to be
held by the official him or herself. (Govt. Code sec. 87103.)
PRACTICE TIP: The most important thing you can do as a public
official to comply with the PRA is to learn to recognize the
economic interests from which a conflict of interest might arise.
PRACTICE TIP: As a public official, it is critical that you are aware
of any economic interests held by your spouse or dependent
children, since they may result in a conflict of interest in the same
fashion as interests held directly by you.
d. Step Four. Determine if each of the affected economic
interests are directly or indirectly involved in the governmental
decision.
For each type of economic interest potentially affected by a
government decision, the FFPC regulations provide a different
standard to determine whether the interest is directly involved.
Generally speaking, any economic interest that is not directly
involved will be considered to be indirectly involved. (see, 2 CCR §
18704 et seq.)
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Business entities; management position; sources of income or
gifts: If the economic interest is a business entity, a management
position in a business entity, a source of income, or a source of
gifts, if, (i) the economic interest initiated the proceeding or the
need for the decision; (ii) the economic interest is the subject of the
proceeding or the decision; or (iii) the proceeding or decision
involves a permit, entitlement, or contract with the economic
interest, then the economic interest is directly involved.
Real Property: If the economic interest is real property, if, (i) the
decision affect's the zoning, annexation, sale, lease, inclusion or
exclusion from a governmental district or subdivision of the
property, (ii) the decision involves issuance, denial, modification or
revocation of a license, permit, or other land use entitlement for the
property, (iii) the decision affects taxes or fees imposed on the
property, (iv) the decision is whether to adopt a redevelopment plan
or designate a plan area, form a project committee or certify an EIR
for a plan that would include the property, or (v) if the property is
within 500 feet of the subject of the decision, then the economic
interest is directly involved.
Personal Financial Effect: If the decision will have any effect on
the public official's personal assets or liabilities, then the economic
interest is directly involved.
e. Step Five: For each economic interest, determine the correct
"materialitv standard ":
"Materiality" is a measure of whether or not the potential conflict is
of sufficient concern to warrant disqualification. Materiality depends
upon both the type of economic interest affected, and whether that
economic interest is directly or indirectly affected. (see, 2 CCR
§18705 et seq.)
For any "directly involved" economic interest, any foreseeable
economic impact will be deemed to be material, no matter how
small.
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For any "indirectly involved" economic interest, the rules vary by the
type of economic interest involved:
Indirectly Involved Business Entities:
Given the following sizes of business entities, an effect of at least
the following amounts on gross annual revenue, expenses or the
value of assets or liabilities would be material:
SIZE OF
EFFECT ON
EFFECT ON
EFFECT ON
BUSINESS
GROSS ANNUAL
ANNUAL
VALUE OF
REVENUE
EXPENSES
ASSETS OR
(increase or
(increase or
LIABILITIES
decrease)
decrease)
(increase or
decrease
Listed on Fortune
$10,000,000
$2,500,000
$10,000,000
500
Listed on NYSE or
$500,000
$200,000
$500,000
$2,500,000 pretax
earnings
Listed on NASDAQ
$300,000
$100,000
$300,000
or AMEX or
$750,000 pretax
earnings
Other
$20,000
$5,000
$20,000
Indirectly Involved Real Property — not including leasehold
interests:
The decision is material if it is reasonably foreseeable that, for
example, the decision would (i) affect the development potential or
income producing potential of the property; (ii) affect the use of the
property; or (iii) affect the character of the neighborhood, including
effects on traffic, view, privacy, intensity of use, noise or air
pollution. (2 CCR § 18705.2(b).)
Indirectly Involved Real Property — leasehold interests:
The decision is material if it would (i) change the allowable uses of
the leasehold interest, (ii) change the actual use of the leasehold
interest, (iii) change the lessee's use or enjoyment of the lease, (iv)
change the amount of rent by 5% (either increase or decrease)
during the 12 months following the decision, or (v) change the
termination date of the lease.
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Indirectly Involved For Profit Business Entity Sources of
Income or Gifts:
If the source of gifts or income is a for profit business entity, the
same materiality rules apply as for investments in business entities.
Indirectly Involved Non - profit Sources of Income or Gifts:
If the economic interest is a non - profit source of income or gifts that
is indirectly involved, then materiality depends on the size of the
non - profit, and whether the decision in question would affect the
non - profits gross annual receipts, gross annual expenses or the
value of its assets or liabilities.
SIZE OF NON-
EFFECT ON
EFFECT ON
EFFECT ON
PROFIT
GROSS ANNUAL
ANNUAL
VALUE OF
MEASURED IN
RECEIPTS
EXPENSES
ASSETS OR
ANNUAL GROSS
(increase or
(increase or
LIABILITIES
RECEIPTS
decrease)
decrease)
(increase or
decrease
More than
$1,000,000
$250,000
$1,000,000
$400,000,000
$100,000,001 --
$400,000
$100,000
$400,000
$400,000,000
$10,000,001 --
$200,000
$50,000
$200,000
$100,000,000
$1,000,001 --
$100,000
$25,000
$100,000
$10,000,000
$100,001 --
$50,000
$12,500
$50,000
$1,000,000
$100,000 or less
$10,000
$2,500
$10,000
Indirectly Involved Individual (non- entity) Sources of Gifts or
Income:
If the source of income or gifts is an individual that is indirectly
involved, the decision is material as to that source of income if (i)
the decision affects that individual's income, investments, assets or
liabilities by $1,000 or more, or (ii) if the individual's real property
would be affected as described in the "indirectly involved"
standards for real property. (2 CCR §§ 18705.2.)
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Step Six: Determine if it is reasonably foreseeable that the
decision could materially affect the official's economic
interest.
The FPPC regulations require that is be "reasonably foreseeable"
that a decision will have a material financial impact on an economic
interest in order that a conflict of interest will exist. Reasonably
foreseeable does not require certainty, but does require that an
impact be more than merely speculative. "An effect is considered
reasonably foreseeable if there is a substantial likelihood it will
occur." (2 CCR §18706; In re Thorner (1975) 1 FPPC Op. 198,
emphasis added.)
The regulations list certain factors that should be considered when
determining "reasonable foreseeability." (2 CCR § 18706.) This
non - exclusive list includes: (1) the extent to which the official or
source of income engages or plans to engage in business in the
jurisdiction; (2) the market share held by the official or source of
income; (3) the extent to which the official or source of income has
competition for business in the jurisdiction; (4) the scope of the
governmental decision; and (5) the extent to which the occurrence
of the material financial effect is contingent upon intervening
events. (2 CCR § 18706.)
g. Step Seven: Determine if the effect of the decision on the
official's interest is distinguishable from its effect on the
public generally.
Even if a decision maker has a conflict of interest, he or she may
participate in a governmental decision if the decision impacts the
decision maker in the same way that it impacts the public generally.
In order for this exception to apply, the decision must affect a
"significant segment" of the public in "substantially the same
manner" as it will affect the decision maker's interests. The
regulations clarify this exemption by providing a four step roadmap
to determine if the "public generally" exception applies. If the
exception applies, there in no conflict. (2 CCR §18707, et seq.)
Significant segments of the public include:
*If the economic interest affected is a business entity, and the
decision affects 25% of all or 2,000 businesses within the
jurisdiction in the same manner, and the business that are not all in
the same industry, trade or profession.
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*If the economic interest affected is real property, and the decision
affects 10% or 5,000 property owners or homeowners within the
jurisdiction in the same manner.
*If the economic interest affected is a source of income or gifts, or
the personal expenses, assets or income of the public official or his
or her family, and the decision affects 10% or 5,000 individuals
within the jurisdiction in the same manner.
A special public generally rule applies within small jurisdictions if
the economic effect is on the public official's domicile. The effect of
a governmental decision on residential property that is the domicile
of the public official is considered to be not distinguishable from its
effect on the public generally if all of the following conditions are
met: (1) the jurisdiction has a population of 30,000 or less and a
geographic area of 10 square miles or less; (2) the official is
required to live in the jurisdiction; (3) the official, if elected, was
elected in an at -large election; (4) the official's property is more
than 300 feet from the boundaries of the subject property; (5) the
official's property is located on a lot not more than' /4 acre in size or
not larger than 125% of the median size of residential lots; and (6)
there are at least 20 other properties under separate ownership
within 500 feet of the boundaries of the subject property. (2 CCR
§18707.10.)
h. Step Eight: "The Rule of Necessity ": Determine whether or
not the public official's participation is legally required.
The PRA permits a public official to participate in a governmental
decision, despite a reasonably foreseeable, material financial effect
on an economic interest, if the public official is legally required to
participate. The fact that the official's vote is needed to break a tie
does not make participation "necessary." (Govt. Code sec. 87101; 2
CCR §18708; see Kunec v. Brea Redevelopment Agency (1997) 55
Cal.App.4th 511.)
*May not be used if other members who do not have a conflict are
absent from meeting or when lack of quorum caused by a vacancy.
*May not be used to break a tie.
• MUST disclose financial interest and why no alternate source
exists.
*Re- qualify, by random selection, only the minimum number
needed to act.
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D. Disqualification if Conflict Exists
If, after following the process outlined above, a conflict is found to exist, the
public official is disqualified from participating in making the decision. An official
who is disqualified from an item on the agenda for a closed session may not
attend the closed session or obtain the materials distributed for the closed
session.
If a conflict exists and the disqualified member is not required to participate by
the rule of necessity, then the member must:
•Publicly identifying the financial interest that gives rise to the conflict in
detail sufficient for a layperson to understand the conflict.
•Recuse himself or herself from attempting to influence, participating in,
discussing or voting on the matter.
•Leave the room where the discussion or consideration of the matter is
occurring, unless the matter is listed on the consent calendar of the public
agency.
Notwithstanding the conflict, however, an official may appear in the same manner
as a member of the general public before his or her agency solely to represent
himself in a matter related to his or her own personal interests. This includes
where decisions would affect real property or a business entity that is solely
owned by the official or the official's immediate family. (2 CCR §18702.4.) In
such cases, the official must still identify the conflict and leave the dais, but he or
she may address the agency from the same position as the public and may listen
to the public discussion of the item.
The public agency may also be able to "segment" the decision under
consideration, so that the official may participate in portions, but not all, of the
decision. This may occur provided that: (1) the decision can be broken down into
separate decisions that are not "inextricably interrelated" to the decision in which
the official has a conflict; (2) the decision in which the official has a financial
interest is segmented from the other decisions; (3) the decision in which the
official has a financial interest is considered first and a final decision on that
segment is reached by the agency without any participation by the official; and
(4) participation by the official in the remaining segments does not result in a
reopening of, or otherwise financially affect, the segment from which the official
was disqualified. (2 CCR §18709.)
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E. Penalties for Violation of the Political Reform Act:
1. Administrative Fine: Up to $5,000 fine per violation imposed by FPPC.
2. Civil Remedy: If official derived economic benefit from decision, fine
could amount to 3 times the benefit received. A plaintiff who prevails in a civil
action may receive an award of attorneys' fees.
3. Criminal Sanctions: If the official knowingly or willingly violated the law:
misdemeanor conviction, fine of $10,000 or three times value of the amount
involved, and the official may not be a candidate for public office for four years.
F. How to Obtain Advice: If you think you may have a conflict contact your
agency's attorney who can provide general guidance. The FPPC will also provide free
advice. You can find general information and guidance from the FPPC website at
www.fppc.ca.gov.
1. You may request unofficial advice from the FPPC by calling 1- 866 -ASK-
FPPC (1- 866 - 275 - 3772).
2. FPPC Advice Letter: Only a public official or his or her authorized
representative can seek a written advice letter concerning his /her duties. Written
FPPC advice conveys immunity even if it is incorrect, if the advice is followed.
No third party advice will be given. No advice will be provided for past conduct.
PRACTICE TIP: If uncertain regarding the existence of a conflict, always
ask for advice first in order to obtain the immunity. Advice may take
several months, therefore ask early. WARNING: No FPPC advice or
immunity is available for Government Code section 1090 questions.
II. Government Code Section 1090
Government Code section 1090 predates the Political Reform Act and is completely
separate from it. The FPPC has no jurisdiction with respect to section 1090 violations.
A. Prohibition on Having Financial Interest in a Contract
Government Code section 1090 prohibits a public official from contractual self -
dealing, or from being in a position to be tempted to self -deal. An official may not
"make" a contract in his or her official capacity in which he or she a financial
interest. Nor may a public official be financially interested in a contract made by
the board of which he or she is a member.
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The prohibition of section 1090 is absolute. Section 1090 applies:
*Regardless of whether the contract is objectively fair and reasonable.
*Regardless of whether the contract is let to the lowest bidder.
*Regardless of whether the official abstains from participation.
B. Compare Political Reform Act
The PRA is broader. The PRA applies to a wide variety of "economic interests"
and to any action or decision that would have a material financial impact on those
interests. Section 1090 applies only to financial interests in the making of a
contract.
The PRA contains exemptions for governmental salary, which is not counted as
an economic interest. Section 1090 applies to all financial interests, including
governmental salaries.
The PRA permits a board to continue to act, once the member with a conflict of
interest has abstained from participation and recused him or herself. Subject to
limited exceptions, section 1090 is violated despite abstention by the official with
a conflict if the board of which he or she is a member makes a contract in which
that member has a financial interest. A board member is presumed to have made
any contract executed by the agency —even if he or she disqualified himself or
herself from all participation in the making of the contract.
C. Consequences of Section 1090 Violation
Contracts made in violation of Section 1090 are void and unenforceable, and no
claim for future payments under the illegal contract may be made, although the
public agency is entitled to retain any benefits it received.
The presence of a Section 1090 conflict can affect the entire governing body, not
just the person with the financial interest which creates the conflict. When
Section 1090 is applicable to one member of the governing body of a public
agency, the prohibition cannot be avoided by having the interested member
abstain —the entire governing body is precluded from entering into the contract.
If a violation is established, in addition to voiding the contract, Section 1090
provides for very serious consequences for an individual officer who acts in
violation of Section 1090. Government Code Section 1097 provides that willful
violations of Section 1090 are a felony, punishable by fine, imprisonment, and
permanent disqualification from holding any office in California.
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D. Participation in Making a Contract
Section 1090 prohibits a public official from making a contract in which the official
has a financial interest. This is construed very broadly, and includes any
preliminary discussions, negotiations, compromises, reasoning, planning,
drawing of plans and specifications and solicitation for bids.
A board member is presumed to have participated in a contract in which he or
she has a financial interest whether he or she actually participates or not.
Different rules apply to members of the agency board and employees of the
agency. When an employee, as opposed to a member of a governing body, has
a financial interest in a contract, Section 1090 prohibits the agency from making
the contract only if the employee was actually involved in making the contract in
his or her official capacity.
E. Financial Interest in a Contract
The term "financial interest" is liberally interpreted to include both direct and
indirect interests. There is no minimum monetary amount; any financial interest
at all is sufficient to trigger the prohibition.
PRACTICE TIP: The definition of "financial interest" is not the same for
purposes of Government Code section 1090 and the PRA.
F. Exceptions to Section 1090
The very harsh effect of section 1090 is ameliorated by two statutory exceptions.
A financial interest may be statutorily excluded as a "remote interest" or a "non -
interest." In addition to these statutory exceptions, in some narrow and limited
cases, the court- created rule of necessity may apply.
Remote Interest Exception: Government Code section 1091 lists a number of
financial interests that the Legislature has determined to be "remote." Where
there is a remote interest, the official must disclose the interest to the entity and
have the interest noted in the official records of the entity. Finally, the official with
the remote interest must disqualify himself or herself, i.e., not participate in
making the contract. However, the remainder of the board may continue to
make the contract in this instance. Examples of remote financial interests
include:
*Non- salaried officer of a non - profit.
*Interest as an employee of a private party if; the party has 10 or
more other employees and the public official has been employed
for three or more years.
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*Interest of a parent in the earnings of a minor child.
•Receipt of a salary, per diem or expense payment from a directly
involved governmental agency department.
*The supplier of the same goods and services for 5 years prior to
taking office.
Noninterest Exception: Government Code section 1091.5 lists those financial
interests that the Legislature has determined should not be subject to Section
1090 at all. In these cases, the public official may fully participate, just as if he or
she had no financial interest. "Noninterests" include:
*Ownership of less than 3% of the stock in a corporation (provided
this does not exceed 5% of official's annual income)
*interest in a spouse's employment, if the spouse is employed in
the same position at least one year prior to the public official
assuming the public office.
•Receipt of salary, per diem, or reimbursement from a government
entity other than the department directly employing the officer or
employee.
Limited Rule of Necessity Exception: While not a statutory exception, the
courts have recognized a very limited rule of necessity applicable to Section
1090 which applies: (1) to permit a governmental agency to acquire an essential
supply or service despite a conflict of interest, or, (2) where a public officer must
participate in order to carry out the essential duties of his office despite a conflict
of interest.
III. Common law of Conflicts of Interest
Even prior to the adoption of either Section 1090 or the PRA, the courts imposed a duty
on public officials to act with "disinterested zeal" in discharging their duties. The rule
continues to apply, whether or not a statutory conflicts law also applies. (Clark v. City of
Hermosa Beach (1996) 48 Cal.App.4th 1152.) The common law is designed to deal with
both conflicts and with the appearance of impropriety.
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IV. Campaign Contributions and Loans
Campaign contributions generally are not covered by conflict of interest laws because of
their relationship to a citizen's first amendment rights of free political speech. However,
there is one provision in the Political Reform Act which addresses campaign
contributions in a conflict of interest context.
Government Code section 84308 sets up a special rule regarding receipt of
contributions for officials holding appointed (not directly elected) positions. The section
provides the following:
1) An official may not accept a campaign contribution over $250 while a proceeding
involving a license, permit, or other entitlement for use is pending, and for three months
after the decision is made;
2) Before a decision is made, an official must disclose on the record whether he or
she has received a campaign contribution exceeding $250 within the 12 months prior to
the decision. If the official has received such a contribution, the official must not
participate, in any way, in the decision;
3) A party to the proceeding before the agency must not make a campaign
contribution of over $250 while one of the above proceedings is pending and for three
months after the final decision is made. If the party has made such a contribution within
12 months of the decision, the party must disclose the contribution on the record of the
proceeding.
4) If an official has received a contribution that would require disqualification, the
official may return the contribution within 30 days and be permitted to participate in the
proceeding.
Special Restrictions on Personal Loans
Elected officials are prohibited from receiving personal loans of $250 or more from
persons who contract with or are employed by the official's agency or any agency over
which the official has direction and control. There are exemptions for specified
commercial loans made to officials in the ordinary course of business on the same
terms as other members of the public. (Government Code § 87460.)
An elected officer may not accept personal loans of $500 or more unless the contract is
in writing and complies with other specified requirements. (Government Code § 87461.)
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