HomeMy WebLinkAboutR01-Redevelopment Agency
CCITY OF SAN BEtNARDINO 0- MEMORANDUIO
To
OUbject
Glenda Saul, Executive Director
Redevelopment Agency
Commission/Council Meeting of Oct. 23
From
Allen R. Briggs
Sr. Asst. City Attorney
October 17, 1986
Date
Approved
Date
Attached please find several copies of a brochure provided by the
Fair Political Practices Commission for distribution to Council/Commission
members prior to the October 23, 1986 (10 am) meeting on conflicts of
interest. Please distribute them with the agenda for that meeting.
~4i~
Sr. Asst. City Attorney
cc: Mayor
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California 0 0
Fair Political
Practices Commission
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October 7, 1986
Allen R. Briqqs
Senior Assistant City Attorney
City of San Bernardino
300 North "D" street
San Bernardino, CA 92418
Re: Presentation on Conflicts
to city Council
Dear Mr. Briqqs:
In our recent conversation, you indicated that the City
Council would like to have some written materials to review
before my presentation to the Council on October 23.
Accordinqly, I have included copies of a draft of the
Commission's recently revised conflicts of interest pamphlet.
While the pamphlet is not yet in final form, I believe it will
serve as an excellent basis for discussion.
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I look forward to seeinq you on October 23 at 10:00 a.m.
~SincerelY ,
!).~S', -
ohn G. McLean
Counsel
Leqal Division
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428 J Street, Suite 800 . P.O. Box 807 . Sacramento CA 95804.0807 . (916)322-5660
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DRAFT GUIDEPAH
10/2/86
DRAFT
A GtJJ:DE TO THE
POLITICAL REFORK ACT OP 1974
CALZFORHU' S CONFLICT OP IRTEREsT LAW
POR PUBLIC OPFICIAIB
CALZPORHU FAm POLITICAL PRACTICES COMl[[SSION
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What is the Political Reform Act?
The Political Reform Act was enacted by the people of the
State of California by an initiative, known as Proposition 9,
in 1974. One of the Act's main purposes is to prevent
financial conflicts of interest on the part of public officials.
* * *
Bow does the Political Reform Act prevent conflicts of interest?
1. By Disclosure: The Political Reform Act requires every
public official to disclose all economic interests, such as
investments, interests in real estate (real property), or
sources of income, which the official may possibly affect by
the exercise of his or her official duties. Disclosure is made
on a form called a "statement of economic interests."
2. By Disqualification: If a public official has a
conflict of interest, the Political Reform Act may require the
official to disqualify himself or herself from makinq or
participatinq in a qovernmental decision, or usinq his or her
official position to influence or attempt to influence a
qovernmental decision.
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Who mISt file statements of econOJlic interests under the
Political Refora Act?
The Governor, members of the Legislature, elected state and
local officials, judges and commissioners of courts of the
jUdicial branch of government, and all high ranking state and
local officials must file statements of economic interests.
Other officials or employees of state and local government
agencies must also file statements of economic interests if
they are "designated" by the agencies for which they work.
Each agency must designate all its officials or employees who
make or participate in governmental decisions which could cause
conflicts of interest. Unpaid members of boards or commissions
and consultants to state or local government agencies also may
be required to file statements of economic interests. Each
<:) government ~gency has a list of all agency officials and
employees who have to file statements of economic interests.
Anyone may inspect this list.
. . .
Are statements of economic interests available to the public?
Statements of economic interests are public records. Any
member of the public must be permitted to inspect and copy any
statement during normal business hours. No more than 10 cents
a page may be charged for copies. No one can be required to
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identify himself or herself or sign anythinq in order to be
e:> permitted to inspect or copy statements. No other conditions
can be imposed on inspection and copyinq.
statements of economic interests must be kept on file by
the official's or employees's aqency and made available upon
request. statements of certain officials, includinq elected
state officials, members of the Leqislature, judqes, court
commissioners, most hiqh rankinq state officials, and many
elected local officials and planninq commissioners, are also
,
available at the offices of the Fair Political Practices
Commission.
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Who aay be disqualified under the Political ReforJa Act?
The disqualification requirements of the Political Reform
Act apply to all elected state or local qovernment officials,
to all appointed state or local qovernment officials, and to
all qovernment aqency employees, except judqes and court
commissioners. Unpaid members of boards or commissions and
consultants to state or local qovernment aqencies may also have
to disqualify themselves under the Act.
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What is a conflict of interest?
A public official or employee has a conflict of interest
when all of the following occur:
1. The official makes, participates in, or uses his or her
official position to influence a governmental decision,
2.
It is foreseeable that the decision will affect the
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official's economic interest,
3. The effect of the decision on the official's economic
interest will be material,
4. The effect of the decision on the
interest w~ll be distinguishable from its
generally.
official's economic
effect on the public ~
Each of these four components of a conflict of interest is
discussed below.
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1. The official aakes, participat_ in, or uses his or her
o official position to influence a governmental decision.
A. Governmental decision:
A governmental decision is any decision made by a
government body or by a government official or employee in his
or her official capacity. Governmental decisions include:
decisions on ordinances, regulations and reSOlutions; decisions
on contract awards, purchases and leases; decisions on hiring,
firing and personnel actions; decisions on land use, zoning,
redevelopment plans, permits and variances; and decisions on
any other matter which may come before a state or local
government agency. Governmental decisions do not include
e:> purely private decisions made by a public official in his or
her person~l capacity.
B. KaJdng a govermaental decision:
A public official makes a governmental decision when he or
she votes as a member of 'a board, commission or council on any
governmental decision, regardless of the outcome of the vote.
Whether the official votes for or against the action, or for or
against his or her economic interest, the official makes a
governmental decision when he or she votes on the decision.
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Heads of departments, directors of aqencies, and employees
of state or local qovernment aqencies make qovernmental
decisions when they take or authorize any official action on
behalf of their aqencies. A determination that an aqency will
not take a particular action is also a qovernmental decision.
c. Participating- in a g-overnmental decision:
A public official participates in a qovernmental decision
when he or she advises or makes recommendations to a
decision-maker, whether or not the decision-maker ultimately
follows the official's advice. However, a consultant who is
under contract to prepare a report or analysis independent of
the control or direction of an aqency, and who has no authority
'0 with respect to the aqency's decision, does not participate in
a qovernmental decision by making- a recommendation or qivinq
advice.
rl A public official who neg-otiates on behalf of his or her ~~
aqency with any other ag-ency or with any person outside his or~
her ag-ency concerninq a qovernmental decision participates in
"
that decision.
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An employee whose actions are solely ministerial,
<<:> secretarial, clerical or manual does not make or participate in
governmental decisions.
D. Using one's o:f:ficial position to in:fluence a governm.ental
decision:
A public o:fficial in:fluences or attempts to in:fluence a
governmental decision when the o:fficial appears before any
governmental agency in his or her o:fficial capacity and urges
that a particular governmental decision be made. Contacts with
any individual within a government agency for the purpose of
urging a partiCUlar decision or result are also considered
influencing or attempting to in:fluence a governmental decision.
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A-publi~ o:fficial can sometimes in:fluence a governmental
decision when acting in a private, as well as in an official
capacity. For example, an o:fficial appearing as the
representative o:f a third party before the Official's own
agency is influencing or attempting to influence a governmental
decision. So is an official who, as the representative of a
third party, appears before an agency subject to the appointive
or budgetary control of the Official's agency.
The following actions by an official are not considered
influencing or attempting to in:fluence a governmental decision:
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i. Appearing before any agency as a member of the
general public to represent only himself or herself on a matter
affecting real property or a business entity wholly owned by
the official, his or her spouse or dependent children.
ii. Appearing as a private citizen before an agency that
is independent of the appointive or budgetary control of the
official's own agency. The official must not act or purport to
act as the representative of his or her own agency, or use his
or her agency's official stationery in any communications.
iii. Communicating with the general public or the press.
2. :I:t i. for_eeable that the decision will affect the
official's econoaic inter_to
A. An official's economic interest:
An official's economic interest is affected whenever a
governmental decision affects:
~ i. The official's personal financial status, or that of
his or her spouse or dependent children. This does not apply,
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however, to decisions which affect the official's government
salary. It also does not apply to decisions which affect the
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qovernment salary of an official's spouse unless the decision
is to hire, fire, promote, demote or discipline the spouse, or
to set a salary for the spouse that is different from salaries
paid to other employees in the same job classification or
position.
@ ii. A business entity located in or doinq business in the
official's jurisdiction, in which the official, or his or her
spouse or dependent child has an investment of $1,000 or more.
Investments in a business entity include: ownership of stock,
bonds, or commercial paper: a qeneral or limited partnership
interest: or any other form of ownership interest in a business
entity. Investments do not include: bank accounts: interests
in mutual funds, money market funds, or insurance policies: or
qovernment bonds or securities. Business entities include:
corporations: partnerships: joint ventures: sole
proprietorships: and any other type
a profit. ~ nonprofit orqanization
of enterprise operated for~1
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is not a business entity.] ~
iii. Real estate (real property) located in the official'S(j)
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jurisdiction, in which the official, or his or her spouse or
dependent child has an interest of $1,000 or more. Interests
in real property include: ownership (equity): deeds of trust
(mortqaqes): leaseholds: options to buy: and joint tenancies.
A month-to-month lease is not an interest in real property.
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iv. A person or Dusiness ent.ity located in or doinq
o Dusiness in the official's jurisdiction, from which the
official has received income of $250 or more, or the official's
spouse has received income of $500 or more, in the past 12
months. With certain exceptions, income includes: salaries I A
commissions; rents; payments for qoods or services (inC1Udinq~1
payments for purchase of real property or stock); loans
(includinq loans previously made Dut still outstandinq); and
all other types of payments. Income does not include:
qovernment,salaries; inheritances; dividends, interest or
premiums from puDlicly traded stock, mutual funds, Dank
accounts, credit unions or insurance policies; alimony or child
support; loans of $10,000 or less from Danks, credit unions, or
credit cards on terms qenerally available to the puDlic;
c:; mortqaqes on a principal residence; loans from family membersl
or mos~ pensions.
v. A person or Dusiness entity from whom the official
has received qifts of $250 or more in the past 12 months. This
includes qifts from sources inside and outside the official's
jurisdiction, except for-qifts from specified family members.
Gifts provided to the official's spouse or children, rather
than to the official, are qenerally not considered qifts to the
official.
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vi. A business entity in which the official is a ~{
director, officer, partner, trustee, employee or holds a
position of manaqement.
B. A for_eeable effect:
An effect on an official's economic interest is foreseeable
when there is a substantial likelihood that it will occur as a
result of a qovernmental decision. An effect does not have to ~
be certain to be foreseeable; however, if an effect is a mere
possibility, it is not foreseeable.
3. Tbe effect of the decision on the official's economic
interest will be _tarial.
It-is usually necessary to estimate the dollar value of the
effect of a decision on the official's economic interest to
determine whether the effect is material. Specific
circumstances under which an effect is material are set forth
in the Commission's regulations.
An effect of $250 or more on the official's own income,
assets, or out of pocket expenses is material. For purposes of
determininq whether there is a conflict of interest, it does
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not matter whether the financial effect increases or. decreases
the income, assets, or expenses.
Whether an effect on a business entity in which an official
has an investment, or which is a source of income to an
official, will be considered material depends on the financial
size of the business entity. For example, an effect of only
$10,000 on the qross revenues or assets of a small business is
material, while a $1 million effect on the gross revenues or
assets of a Fortune 500 company is material.
A similar slidinq scale applies to effects on real
property. As a qeneral rule, an effect of $10,000 or more on
the fair market value of real property is material. When the
effect is between $1,000 and $10,000, it may be material,
dependinq on the value of the real property.
Sometimes it is difficult to qive a dollar value to the
effect of a qovernmental decision. In such cases, the effect
may be material if the decision siqnificantly affects the use
or enjoyment of land or other interests, or if the official's
receipt of income from a private source is directly related to
the decision.
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In special situations, an effect is considered material
reqardless of its dollar value. These situations include the
followinq:
i. A person or business entity in which the official has
an economic interest "appears before" the official in
connection with the decision. A person or business entity
"appears before" an official if it is a named party to the
proceedinq or initiates the proceedinq by filinq an
application, claim, appeal or similar request.
ii. The decision would affect the zoninq, annexation,
sale, lease, actual or permitted use of, or taxes or fees
imposed on real property in which the official has an interest.
4. The effect of the decision on the official's economic
interest will be distinquishable froll its effect on the public
qenerally.
An official does not have a conflict of interest if the
effect of a qovernmental decision on the Official's economic
interest is no different from its effect on most other persons
or interests in the juriSdiction. For example, a decision to
impose a city sales tax, which will affect all residents of the
city, does not affect any individual city councilmember (no
matter how much he or she pays in sales taxes) in a different
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manner than it affects the public qenerally, and, as a result,
does not create a conflict of interest for any city
councilmember. By way of contrast, a decision concerninq a
zoninq variance for an official's business or home, which has a
different effect on the Official's economic interest than on
other members of the qeneral public, does constitute a conflict
of interest for the official.
. . .
What shou1d a public official who has a conflict of interest do?
When a public official determines that a qovernmental
decision will foreseeably have a material effect on his or her
c:> economic interest, the official has a conflict of interest and
must not vote on, make, participate in any way in, or attempt
to influence the decision. This is called disqualification.
When an official disqualifies himself or herself from a
qovernmental decision because of a conflict of interest, the
reason for the disqualification must be announced (in the case
of a member of a votinq body), or disclosed in writinq (in the
case of all other Officials).
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Is a governmental decision valid ir it was wade by an orricial
who had a conrlict or interest?
A governmental decision is not invalidated by the ract that
an orricial who made or participated in the decision had a
conflict of interest. However, a court can set aside a
governmental decision if the court determines that an ofricial
who made the decision had a conflict of interest, that without
that orficial's actions the decision would not have been made,
and that setting aside the decision will not cause injury to
innocent persons.
can a public ofricial ever IIlllte a decision in which he or she
has a conflict of interest?
There may be situations in which a public ofricial is
legally required to make or participate in a decision, even
though the official has a conflict or interest. This occurs
when no one other than the official has the legal authority to
make or participate in the decision. In such a case, the
Political Rerorm Act allows the official to make or participate
in the decision, so long as the existence and nature of the
official's rinancial interest is put on the public record, and
the official does not try to influence the decisions of others.
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An official is not leqally required to make or participate
in a decision because the official's vote is needed to break a
tie, or because the official is needed for a quorum as a result
of some other official's absence for a reason other than a
conflict of interest. However, if so many members of an aqency
are disqualified because of conflicts of interest that a quorum
cannot be convened, there is a procedure for allowinq some
officials who have a conflict of interest to vote.
What are the penalties for violation of the conflict of
interest provisions of the Political Reforll Act?
The Pair Political Practices Commission can brinq an
administrative action aqainst an official who has violated the
disclosure or disqualification requirements of the Political
Reform-Act,' and can impose administrative penalties of up to
$2,000 for each violation. An official who violates the Act
may be subject to a civil lawsuit, in which a court can impose
a fine. A willful violation of the Act is also a misdemeanor,
punishable by a fine of up to $10,000 or by imprisonment, and
may result in the official beinq ineliqible to run for public
office for four years.
These penalties apply to violations of the disclosure
requir..ents of the Act by any public official. However, they
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c:; do not apply to violations of the disqualification provisions
of the Act by the Governor, other constitutional officers or
members of the Legislature. They do apply to disqualification
violations by all other public officials.
* * *
Bow can a public official find out if he or she has a conflict
of interest?
When a public official suspects that he or she may have a
conflict of interest in an upcoming decision, the attorney for
the official's agency should be consulted. The official can
c::> also ask the Legal Division of the Fair Political Practices
Commission for advice. Requests for written advice are
generally answered within 21 working days, although written or
telephone advice may be given more quickly in urgent
situations. If the Commission advises an official in writing
that disqualification is not necessary, the official is
protected against legal or administrative action arising from
conflict of interest charges. If an official poses a question
which is unusually complex, significant or unique, the full
Commission may issue an opinion.
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.The Commission can only issue opinions or qive advice
reqardinq conflicts of interest to the official who may have
be disqualified, or to the official's authorized
representative. I I Advice about specific situations cannot be
qiven to members of the public, or to other persons who are
interested in whether or not an official should be disqualified
from the specific decision. However, qeneral guidance about
the requirements of the law will be provided to anyone who
requests it.
;
The Commission cannot issue an opinion or provide advice
about an official's past conduct. These questions are referred
to the Enforcement Division of the Fair Political Practices
Commission.
All Commission regulations and opinions are published by
the California Continuinq Education of the Bar. Virtually all
advice requests and advice letters are public records.
Opinions and significant advice letters are summarized in the
Commission's monthly Bulletin. Copies of opinions and advice
letters can be obtained from the Commission.
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What should you do ir you suspect that a public orricial has
violated the conrlict or interest provisions or the Political
Rerora Act?
Complaints concerninq violations or the conrlict or
interest provisions or the Political Rerorm Act should be made
to the local district attorney, the Enrorcement Division of the
Fair Political Practices Commission, or the Attorney General.
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Fair Political Practices COIIIIIission
The Fair Political Practices Commission administers and
enforces the Political Reform Act. It has a full-time chairman
and four part-time commissioners. The chairman and one other
member are appointed by the Governor, one member is appointed
by the Attorney General, one by the Secretary of state, and one
by the Controller. The Governor's two appointees must be from
different political parties. No more than three commissioners
may be from the same party. Commissioners serve for four years
and cannot be reappointed.
Fair Political Practices COIIIIIIi.ssion
428 J street, Suite 800
P.O. Box 807
Sacramento, California 95804
Legal Division 916/322-5901
Statements of Economic Interests 916/322-5662
Enforcement Division 916/322-6441
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