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Conflicts of Interest Act Virginia Code § 2.2-3100 et seq.

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Presentation on theme: "Conflicts of Interest Act Virginia Code § 2.2-3100 et seq."— Presentation transcript:

1 Conflicts of Interest Act Virginia Code § 2.2-3100 et seq.

2 The rules set out by the Conflicts of Interest Act really aren’t that difficult… …but the situations that come up involving COIA usually are.

3 Who does COIA apply to? Officers and employees of state and local government (“officer” and “employee” defined to include just about everyone). Officers and employees of state and local government (“officer” and “employee” defined to include just about everyone). Don’t have to be paid—unpaid elected officials count. Don’t have to be paid—unpaid elected officials count. Applies to both district employees and directors. Applies to both district employees and directors.

4 Three basic categories of actions that COIA is interested in: Actions Generally Prohibited (“don’t ever do this”) Actions Generally Prohibited (“don’t ever do this”) Contracts (“when can/can’t you have a business relationship with your agency”) Contracts (“when can/can’t you have a business relationship with your agency”) Transactions (“can you participate in a decision that your agency makes that could affect you?”) Transactions (“can you participate in a decision that your agency makes that could affect you?”)

5 Category 1: Generally Prohibited Actions Don’t accept money in return for carrying out the duties of your office from persons or businesses other than your agency (really means “don’t take a bribe”). Don’t accept money in return for carrying out the duties of your office from persons or businesses other than your agency (really means “don’t take a bribe”). Don’t accept money or anything of value in return for getting someone hired, appointed, or promoted within your agency. Don’t accept money or anything of value in return for getting someone hired, appointed, or promoted within your agency.

6 Category 1: Generally Prohibited Actions Don’t use any confidential information that you obtain as a part of your position to benefit yourself or anyone else economically. Don’t use any confidential information that you obtain as a part of your position to benefit yourself or anyone else economically. Don’t accept gifts or other things (loans, business opportunities, favors, etc.) that could tend to influence you in your position, that could be reasonably seen as affecting your impartiality, or that would make it appear that you are using your public office for personal gain. Don’t accept gifts or other things (loans, business opportunities, favors, etc.) that could tend to influence you in your position, that could be reasonably seen as affecting your impartiality, or that would make it appear that you are using your public office for personal gain. Others. Others.

7 Categories 2 and 3 Both rely on the presence of a “personal interest” had by you or a member of your immediate family (spouse or someone living in your household who is a dependant of yours or who you are a dependant of). Both rely on the presence of a “personal interest” had by you or a member of your immediate family (spouse or someone living in your household who is a dependant of yours or who you are a dependant of).

8 What is a “personal interest” Basically, if you have a “personal interest” in something, it means that you have a financial stake. Basically, if you have a “personal interest” in something, it means that you have a financial stake. If you own more than 3% of the equity in a business, you have a personal interest in that business. If you own more than 3% of the equity in a business, you have a personal interest in that business. Same if you derive more than $10,000 in annual income from a business. Same if you derive more than $10,000 in annual income from a business. If you own an interest in real or personal property that exceeds $10,000, you have a personal interest in that real or personal property. If you own an interest in real or personal property that exceeds $10,000, you have a personal interest in that real or personal property. Same if you derive more than $10,000 annually from real or personal property. Same if you derive more than $10,000 annually from real or personal property. Other circumstances defined in § 2.2-3101 (options to buy a business or property, personal liability assumed for a business, etc.). Other circumstances defined in § 2.2-3101 (options to buy a business or property, personal liability assumed for a business, etc.).

9 Category 2: Contracts You cannot have a “personal interest” in a contract with your agency other than any sort of employment agreement that may pertain to you. You cannot have a “personal interest” in a contract with your agency other than any sort of employment agreement that may pertain to you. In other words, you can’t be a party to a contract with your SWCD, nor can a business that you have a personal interest in be a party to a contract with your SWCD. In other words, you can’t be a party to a contract with your SWCD, nor can a business that you have a personal interest in be a party to a contract with your SWCD.

10 Category 2: Contracts You cannot have a “personal interest” in a contract with any other state governmental agency except: You cannot have a “personal interest” in a contract with any other state governmental agency except: Where the contract is the result of awarded as a result of competitive sealed bidding. Where the contract is the result of awarded as a result of competitive sealed bidding. Where the contract is awarded after a finding that competitive bidding is not in the agency’s best interest. Where the contract is awarded after a finding that competitive bidding is not in the agency’s best interest.

11 Category 2: Contracts There are exceptions to the “no contracts” rule: There are exceptions to the “no contracts” rule: Real estate transactions, so long as you don’t participate on behalf of the agency. Real estate transactions, so long as you don’t participate on behalf of the agency. Contracts for goods or services where the price doesn’t exceed $500. Contracts for goods or services where the price doesn’t exceed $500. Working for more than one government agency. Working for more than one government agency.

12 Category 2: Contracts Further exceptions to the “no contracts” rule: Further exceptions to the “no contracts” rule: Certain situations where your family members are also employees of the same agency. Certain situations where your family members are also employees of the same agency. Payments under a program where uniform rates are established for all participants. Payments under a program where uniform rates are established for all participants. Many other exceptions for specific circumstances contained in §§ 3106-3110. Many other exceptions for specific circumstances contained in §§ 3106-3110.

13 Category 3: Transactions What is a “transaction”? What is a “transaction”? “any matter considered…on which official action is taken or contemplated.” “any matter considered…on which official action is taken or contemplated.” Includes matters before committees, subcommittees, etc. Includes matters before committees, subcommittees, etc. You may not have a “personal interest” (again, think “financial stake”) in a transaction (matter) that comes before your agency. You may not have a “personal interest” (again, think “financial stake”) in a transaction (matter) that comes before your agency.

14 Category 3: Transactions What do you do if you discover that you have a “personal interest” in a transaction? What do you do if you discover that you have a “personal interest” in a transaction? Disqualify yourself: Disqualify yourself: Make a full, public disclosure on the record of your personal interest. Make a full, public disclosure on the record of your personal interest. Do not vote on the matter (if your absence causes less than a quorum to vote, then Act says that remaining members constitute a quorum). Do not vote on the matter (if your absence causes less than a quorum to vote, then Act says that remaining members constitute a quorum). Do not participate in any discussion of the matter. Do not participate in any discussion of the matter.

15 Category 3: Transactions Exceptions to the “no participation in transactions when you have a personal interest” rule: Exceptions to the “no participation in transactions when you have a personal interest” rule: If the action affects the public generally, even though your personal interests may be affected as a member of the public (overarching, policy-type decisions). If the action affects the public generally, even though your personal interests may be affected as a member of the public (overarching, policy-type decisions).

16 Category 3: Transactions Further exception: Further exception: You are a member of a business, profession, occupation, or other group of 3 or more who will all be affected, and you make a public declaration stating: You are a member of a business, profession, occupation, or other group of 3 or more who will all be affected, and you make a public declaration stating: The transaction involved. The transaction involved. The nature of your personal interest. The nature of your personal interest. That you are a member of a group affected. That you are a member of a group affected. That you can participate fairly, objectively, and in the public interest. That you can participate fairly, objectively, and in the public interest.

17 Category 3: Transactions Further exception: Further exception: You are a member of a firm that represents a party to the transaction, but you don’t personally represent the party, and you make a public declaration of: You are a member of a firm that represents a party to the transaction, but you don’t personally represent the party, and you make a public declaration of: The transaction involved. The transaction involved. The party involved that is a client of your firm. The party involved that is a client of your firm. That you you do not personally represent the party. That you you do not personally represent the party. That you can participate fairly, objectively, and in the public interest. That you can participate fairly, objectively, and in the public interest.

18 Penalties for COIA violations A knowing violation is a Class I misdemeanor. A knowing violation is a Class I misdemeanor. It also constitutes “malfeasance in office” and can cause your removal. It also constitutes “malfeasance in office” and can cause your removal. Can result in forfeiture of monetary gain, rescission of contracts, etc. Can result in forfeiture of monetary gain, rescission of contracts, etc.

19 What to do when you’re not sure: Office of the Attorney General charged with enforcement/oversight of the Act and has the ability to issue advisory opinions in response to questions. Office of the Attorney General charged with enforcement/oversight of the Act and has the ability to issue advisory opinions in response to questions. If you make a full disclosure of all facts to the OAG, and act in good faith reliance on a written opinion from that office, the Act specifies that you will not be prosecuted. If you make a full disclosure of all facts to the OAG, and act in good faith reliance on a written opinion from that office, the Act specifies that you will not be prosecuted.

20 Scenarios Note that these hypothetical scenarios are intended only to illustrate how COIA operates and are based on very limited, general information. They are NOT to be relied upon with regard to real-world situations that you may encounter. Note that these hypothetical scenarios are intended only to illustrate how COIA operates and are based on very limited, general information. They are NOT to be relied upon with regard to real-world situations that you may encounter. COIA is very fact-specific and each situation needs to be considered individually—DO NOT use these as guidance to analyze particular situations that you/others are unsure about. Rather, seek individualized advice from the proper sources (see the previous and final slides of this presentation). COIA is very fact-specific and each situation needs to be considered individually—DO NOT use these as guidance to analyze particular situations that you/others are unsure about. Rather, seek individualized advice from the proper sources (see the previous and final slides of this presentation).

21 Scenario #1 Debbie Director serves on her local SWCD board and also owns a 400 acre cattle operation. Debbie wants to participate in the BMP cost share program in order to fence her cattle out of the streams on her property. Can Debbie get cost share funds from the SWCD that she serves as a board member for?

22 Scenario #1 Answer: Yes, Debbie can receive cost share funds from her SWCD. Answer: Yes, Debbie can receive cost share funds from her SWCD. Isn’t this a prohibited contract? No. While there is indeed a contractual relationship here, it is not prohibited, as the BMP program is an example of a program where uniform rates are established. See section 2.2-3110(A)(8) of COIA. Isn’t this a prohibited contract? No. While there is indeed a contractual relationship here, it is not prohibited, as the BMP program is an example of a program where uniform rates are established. See section 2.2-3110(A)(8) of COIA. Note that Debbie must disqualify herself from any vote on approval of her project under the “transactions” provisions of COIA. Note that Debbie must disqualify herself from any vote on approval of her project under the “transactions” provisions of COIA.

23 Scenario #2 Charlie Conservation, a SWCD Director, recently suggested that his SWCD hold its annual retreat at his wife’s fancy bed and breakfast. The SWCD has offered to pay Charlie’s wife $1000 for hosting the event. If Charlie’s wife hosts the retreat and accepts the money, does Charlie have a COIA problem?

24 Scenario #2 Answer: Yes. Here is an example of a prohibited contract. Even though it’s Charlie’s wife who is hosting the retreat, and not Charlie himself, Charlie still has a personal interest under COIA. No COIA exception applies. What if the price were only $400? Now, this would be permissible, as § 2.2-3110(A)(7) exempts contracts for goods or services that do not exceed $500. What if the price were only $400? Now, this would be permissible, as § 2.2-3110(A)(7) exempts contracts for goods or services that do not exceed $500.

25 Scenario #3 Joe Conservation is a DCR employee who wants to be elected a Director of his local SWCD. Can Joe be both a DCR (or other state agency) employee and a SWCD Director?

26 Scenario #3 Answer: Yes. Although COIA generally prohibits someone like Joe from having contracts with other agencies unless certain conditions are met, this is one situation that COIA permits (see § 2.2-3106(B)(3)).

27 Scenario #4 Danny District is a SWCD Director and also wholly owns and operates his own farm equipment dealership. The SWCD recently decided to purchase a new no-till drill, and even though these can be pricey, Danny promised that if they come see him at work, he’ll make them a good deal. Can Danny enter into a contract with his SWCD for a new no-till drill?

28 Situation #4 Answer: No. Even though Danny may have the best interests of his SWCD in mind, COIA prohibits this type of contract between himself and his SWCD. No COIA exception applies here. What if it were real estate, and not personal property? Then, it could be permissible if proper procedures were followed. See § 2.2-3110(A)(1). What if it were real estate, and not personal property? Then, it could be permissible if proper procedures were followed. See § 2.2-3110(A)(1).

29 Situation #5 Sammy Soil is a SWCD Director. His son, Stu, recently decided to apply for a job that he saw advertised at the SWCD. Stu lives right down the street from Sammy. Is there a COIA problem with Sammy being a Director of the same SWCD that Stu wants to go to work for?

30 Situation #5 Answer: No. Even though a parent/child relationship exists, COIA doesn’t prohibit this arrangement, as Stu is not a member of Sammy’s “immediate family” for COIA purposes (requires both living in the same household and one of them being the dependent of the other).

31 Questions? See the official COIA training at: http://www.vaag.com/LEGAL_LEGIS/COI/index.html See the official COIA training at: http://www.vaag.com/LEGAL_LEGIS/COI/index.html http://www.vaag.com/LEGAL_LEGIS/COI/index.html For questions concerning this presentation, or for assistance in potentially getting in touch with the Office of the Attorney General for advice regarding a particular case, contact: For questions concerning this presentation, or for assistance in potentially getting in touch with the Office of the Attorney General for advice regarding a particular case, contact: Ryan J. Brown, Policy and Planning Assistant Director VA Dept. of Conservation and Recreation (804) 786-2871 ryan.brown@dcr.virginia.gov


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