SAN FRANCISCO BAY CONSERVATION AND DEVELOPMENT COMMISSIONV Thirty Van Ness Avenue • Suite 2011 • San Francisco, California 94102 • (415) 557-3686 • FAx: (415) 557-3767

October 12, 1999

TO: Engineering Criteria Review Board Members

FROM: Will Travis, Executive Director [415/557-8775 travis@bcdc.ca.gov]Jonathan Smith, Senior Staff Counsel [415/557-8772 jons@bcdc.ca. gov]

SUBJECT: Ethics Training(For Commission information only)

California Government Code Sections 11146 through 11146.4, which became effective onJanuary 1, 1999, require the Commission to offer ethics training semiannually to all Commissionersand Alternates, to the Executive Director, to all persons who hold a Career Executive Appointment(CEA), to all general counsels, and to all persons who hold a position that is exempt from civilservice and who are required to file a Statement of Economic Interests (Form 700), which wouldinclude all members of the Design Review Board and all members of the Engineering CriteriaReview Board. If the person required to attend ethics training held his or her position on January 1,1999, the person must complete the training by December 31, 1999. Any person who assumedsuch a position after January 1, 1999 must attend the ethics training within six months of assumingthat position. The Commission is also required to keep records of all persons who have attendedsuch ethics training, their positions, and the dates of their attendance for at least five years after theattendance. These attendance records shall be a public record subject to inspection and copyingpursuant to the Public Records Act.

This new law also requires the Commission to consult with the Attorney General's Office andwith the Fair Political Practices Commission regarding appropriate course content. Generally, theethics training course includes the following areas: (1) conflicts and the Political Reform Act; (2)gift limitations; (3) the ban on honoraria; (4) contractual conflicts; (5) State contract conflicts; (6)the Code of Ethics; (7) the ban on free transportation; (8) the prohibition on incompatible activities;(9) the Incompatibility of Office Doctrine; (10) the prohibition on the misuse of public funds; (11)other laws; and (12) the rules that deal with post-state employment activities.

To ensure that the Commission complies with the course content requirements of ethicstraining, all persons required to take the training must either view in its entirety a videotapethat the Attorney General's Office and the Fair Political Practices Commission havejointly prepared or take the complete course on the Internet and in either case to certifythat they have done so.

The videotape runs approximately two hours: taking the Internet course also takesapproximately two hours. Copies of the videotape and an answer sheet for the questions asked onthe videotape are enclosed with this memorandum. The Internet course is available on the WorldWide Web at two locations: caag.state.ca.us [Go to "Other Programs and Services" on theAttorney General's Home Page; go to "Ethics Training Course;" and click to commence thecourse] or www.fppc.ca.gov [which contains a hot-link to the Attorney General's Home Page].Please note, however, that the Internet course will currently not work with those persons who useNetscape Navigator for Macintosh computers. Either Netscape Navigator or Microsoft Explorerwill work on a PC, and Netscape Navigator will work on a PC.

The substantive information from the videotape and the Internet course is reproduced in writtenform and attached. This material is copyrighted by the California Attorney General's Office in

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1999. In addition, the Commission' s Statement of Incompatible Activities is also enclosed at the- end of the materials that deal with incompatible activities.

However, simply reviewing these written materials without either viewing the videotape in itsentirety or completing the entire Internet course will not meet the ethics training requirement. Eachperson required to take the training must either view the videotape entirely or complete the entireInternet course. Both the videotape course and the Internet course contain example questions withanswers; the written materials do not contain the answers to the questions. An additional

publication that summarizes much of these materials is California Attorney General's Office,Conflict of Interests, 1998. In any case, if you believe that you may be involved in a conflictsituation or have any questions concerning the application of these ethics rules to you,you should contact either Jonathan Smith or Ellen Sampson, staff attorneys at BCDC, assoon as possible to allow sufficient time to analyze and evaluate the situation.

A form is attached at the end to allow all persons required to take ethics training to demonstratethat they have completed such training. Each person required to take ethics training shouldcomplete the form, deliver or mail the original to the Commission, and keep a copy for eachperson's personal files. In addition, if you complete the Internet course, please complete theinformation at the end of the course to demonstrate that you have completed the course.

Questions concerning ethics training should be directed to Jonathan Smith, Senior StaffCounsel, at the above telephone number or email address.

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RequirementsComDIetion of the OrientatiooTime Required to Take the Core Course

Completion of the Orientation

Government Code section 11146 requires all covered state

officials to complete an ethics orientation conducted by their

agency every two years. In an effort to ease the burden on

state agencies of conducting these orientations and to ensure

the uniform flow of information, the Attorney General's Office

and the Fair Political Practices Commission have devised this

core course in an Internet format that may be incprporatedinto an ethics orientation by any state agency. This coreethics orientation is also available in a video tape format.

Under the law, your agency must provide a public record of

who has attended its ethics orientation. If this Internet

course is a part of your agency's ethics orientation as

mandated by the law, you need to make sure that you arefollowing your agency's procedures in completing thisaspect of the orientation. Once you have completed this

Internet course, you will be able to print a certificate ofcompletion which you can sign and file with your agency. The

certificate likely will be retained by your agency as adiscloseable public record.

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Time Required to Take the Core Course

We recommend that you allocate approximately one and one-half hours to complete this orientation. While this may seemlike a long time, a lecture format would most likely take

longer. Once you have completed this Internet portion of the

course, please feel free to use it as a resource in the future '

and to recommend it to others you think could benefit from it.

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About the Core Course and the InternetAbout the Core CourseWhv the Internet Format?

About the Core Course

This course is not intended to make you into an expert.Rather, the goal is to expose you to these laws and theirapplication in order to create an early warning system in yourmind concerning potential conflict of interest situations. Onceyou can identify basic conflict situations, you should consultwith your agency's legal counsel or other resources whenconflict issues arise. We will identify a variety of resources foryou at the conclusion of the orientation.

Further, in order to make this orientation an efficient trainingexercise, we have avoided prolific references to legalcitations. In that vein, we also have avoided insertinghyperlink material into the. orientation. These hyperlinks are,however, available at the conclusion of the course.

Finally, each of the laws that we will examine in this coursemust be considered independently. It is quite possible thatany given transaction could involve more than one law. In thatvein, it is important to realize that a term such as "financialinterest' may have different meanings in the context ofdifferent laws. Similarly, conduct that is permissible under onelaw may violate another. Because these laws are complex, itis essential that you maintain close contact with your legalcounsel when ethics questions arise. The Office of theAttorney General is available to assist your counsel inanalyzing ethics questions. In addition, the Fair PoliticalPractices Commission can advise either you or your counselregarding. the provisions of the Political Reform Act, eitherorally or in writing.

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Why the Internet Format?

There are two primary factors that prompted an Internetformat. First, this format allows state officials. to take thecourse at a time most convenient to them. Second, thisformat provides the ability to interact directly wiih you as youtake the orientation by providing you with fact basedquestions that will allow you to apply the knowledge that youhave just gained. This approach should make the orientationmore engaging and simultaneously provide you with instantfeedback on your understanding. These features seem like

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dramatic advantages over the traditional lecture format.

To maximize your experience while taking this course, youshould use Netscape Navigator 4.0 or Internet Explorer 4.0 or5.0. Your monitor's resolution should be set at 800 by 600. If

your computer does not support this technology, 1

remember that this core ethics orientation is alsoavailable in a video tape format from the Department ofPersonnel Administration, State Training Center.

We hope you find this Internet orientation to be an effective

technique for providing you with information on the state'sethics laws. We will appreciate your feedback at theconclusion of the course.

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0 -Remember These PointsThis course is only a teaching tool which may be provided as

a part of your agency's orientation program. It is intended to

help you identify conflict of interest issues so that you canconsult with your agency's attorney.

Each law discussed in this orientation must be evaluated '

independently. Conduct which is permissible under one law

may violate another law. '

You should ensure that you are following all of youragency's requirements for completion of its ethicsorientation.

Next I

Click on Conflicts and the PRA to go to the next module.

Remember, you can also go to the next module by clicking onthe title in the left hand margin.

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Essential Conflicts and the PRA

Gift LimitationsHonoraria BanAll Contractual

ConflictsState Contract Conflicts

The Code of EthicsFree Transportation

Ban

Incompatible ActivitiesIncompatible Offices

Misuse of Pu-blic FundsOther Laws

Leaving Office Conflicts

e Ote

Wednesday. September 22. 1999 Ipopgl.htm

Conflicts Of Interest Under The Political Reform ActBy the California AG's Office and the FPPC 5/24/99 25-30 mins

Overview of the_Political Refomi Act

The Eight-Step Process

Step 1: Rules Aggly Only to Public Oficials

SteD 2: When Rules. Applf to Public Officials

Step 3: Recognizing Economic Interests

Steps 4-6: Does A Conflid Exits?

Step 7: Does Public Generally Exception ADDIYZ

Step 8: Participation May Be Legally Required

Reset

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Overview of the Political Reform ActThe Political Reform Act is the single most important conflict of interest law in

California. It includes several conflict of interest provisions that are covered in

this ethics orientation program.

The Fair Political Practices CommissionDisclosure RequirementDefining Some TermsConflicts of I ntereM

The Fair Political Practices Commission

The Fair Political Practices Commission administers the Political Reform Act.

The Commission is available to provide telephone or written advice to officials,or their representatives, concerning their duties under the Act. Written advice

from the commission is a discloseable public record. The Commission also can

provide you with fact sheets and brochures as well as copies of its regulations

and opinions. You may contact the Commission by telephone, letter, fax, e-mail

or on the web. At the end of this orientation, you will be given this and additional

reference information.

ADisclosure Requirement

The Political Reform Act also requires state and local officials to file Statements

of Economic Interests. Officials who are required to complete these statements

may be required to disclose investments and positions in business entities,interests in real property and sources of income and gifts. This orientation is nota tutorial on disclosure, although reference will sometimes be made to these

disclosure requirements.

ADefining Some Terms

Finally, a brief note about terms that are used throughout this orientation:

• official or public official refers to elected or appointed officers andemployees

• officer refers to high level officials who exercise some portion of thesovereign power

• employee refers to a person who is not an officer and who is employed.

by a government agency• designated employee refers to an officer or employee who is covered by

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the disclosure and disqualification provisions of an agency's Conflict ofInterest Code

Let's now begin with the first provision under the Political Reform Act.

AConflicts of Interest

Under the Political Reform Act, a public official may not take any part in agovernmental decision in which the official has a disqualifying conflict of interest.

A public official has a conflict of interest with regard to a particular governmentaldecision if it is reasonably foreseeable that the decision will have a materialfinancial effect on one or more of the official's economic interests. Economicinterests are particular kinds of financial stakes held by public officials, such asinvestments in real property or for-profit businesses, or individuals ororganizations which have provided income or gifts to public officials.

A public official's conflict of interest is disqualifying if the financial effect on his orher economic interest is distinguishable from the financial effect of the decisionon the public generally.

To avoid violating this law, one should learn to recbgnize the economic interestsfrom which a conflict of interest can arise. No one ever has a conflict "on generalprinciples" under the Political Reform Act19a conflict can only arise from theparticular kinds of economic interests covered by the Act, which aresubsequently explained.

Conflicts Under the PRA 1-2

Remember These PointsThis law applies only to financial conflicts, that is, conflictsarising from particular kinds of economic interests.

The most important proactive step a public official can take toavoid conflict of interest problems is learning to recognize theeconomic interests from which conflicts can arise.

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1 OF 1The eight-step process for determining if a disqualifyingconflict of interest exists.The regulations of the California Fair Political Practices Commission (FPPC),establish an eight step approach for determining whether a public official has a

disqualifying conflict of interest under the Political Reform Act.

If you recognize that one or more of your economic interests is involved in a

government decision, you should consult with your agency's legal counsel and

think through the eight steps to decide if a conflict of interest actually exists. If youviolate the conflicts of interest provisions, you may be subject to monetary fines

or misdemeanor criminal penalties.

We will now explore the eight step process for analyzing a conflict of interest

under the Political Reform Act.

--Step One: The Political Refornr-Act-conflittrdfziliE6tTs-t.. -...-1 OF 2

rules apply only to public officials.The Political Reform Act's conflict-of-interest rules apply to "public officials," asdefined in the Government Code. Every member, officer, employee or consultantof a state or local government agency is a public official for purposes of the Act.

Judges and court commissioners, members of the Board of Governors anddesignated employees of the State Bar of California, members of the JudicialCouncil, and members of the Commission on Judicial Performance are notpublic officials, for purposes of the Act.

Be aware that sometimes difficult issues can surround consultants, individualswho manage public investments, and quasi-public organizations. If you havequestions about whether a given individual is a public official covered by the Act,consult your legal counsel or contact the FPPC for advice.

Conflicts Under the PRA 3-2

0Remember This PointThe Act's conflict-of-interest restrictions apply only to "public

officials," but that term is defined broadly.

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Step Two: The PRA's conflict-of-interestrules apply only to public officials as they aremaking, participating in making, orinf/uencing a governmental decision.The Act's conflict-of-interest rules apply when a public official:

. Makes a governmental decision (for example, by votingor making an appointment).

• Participates in making a governmental decision (forexample, by giving advice or making recommendationsto the decision maker).

• Influences a governmental decision by communicatingwith the decision maker.

A good rule-of-thumb for deciding whether a given publicofficial's actions constitute making, participating in making, orinfluencing a governmental decision is to ask whether he orshe is exercising discretion or judgment with regard to thedecision. If the answer is "yes," then his or her conduct withregard to the decision is most probably covered by theconflict-of-interest rules.

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0Remember This PointIf a public official is exercising discretion or judgment withregard to a governmental decisior., his or her conduct isprobably covered by the Political Reform Act's conflict-of-interest provisions.

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Step Three: Recognizing the economicinterests from which conflicts of interest mayarise is the most important step in complyingwith the law.The Act's conflict-of-interest provisions apply only to conflicts

arising from economic interests. There are five kinds of sucheconomic interests from which conflicts can arise.

• Economic interests in business entities• Economic interests in real property• Economic interests in sources of income to the public

official• Economic interests in sources of gifts to the public

official• The personal financial effect rule

Step Three, Economic Interest Type 1: -Economic Interests in Business EntitiesA public official has an economic interest in a for-profitbusiness entity if either of the following is true:

• The official has a direct or indirect investment of$1,000 or more in the business entity; or

• The public official is a director, officer, partner, trustee,employee, or holds any position of management in thebusiness entity.

A direct investment means an official personally owns aninvestment. An indirect investment means the official'sspouse, the official's dependent children or anyone acting onthe official's behalf has an investment. In addition, a publicofficial who owns 10% or more of a business entity has anindirect investment in any investment owned by the business

entity in proportion to the public ohicial's ownership stake.

If a public official has an econorrtic interest in a businessentity, the official must be constantly aware of whether thatbusiness entity is involved in or affected by governmentaldecisions in which the official takes part. If such a business is

directly or indirectly involved, a conflict of interest is possible.

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eRemember These PointsA public official has an economic interest in a business entityif:

• The official has a direct or indirect investment; or

. The official holds a position in the business.

OLet's ReviewRosa is a member of a state board. In her private capacity, sheworks for Madison's Hardware. Her husband owns 100 sharesof Microsoft. In which, if any, of the following business entitiesdoes Rosa have an economic interest?

c Madison's Hardwareo Microsoftc. Both Madison's Hardware and Microsoftc None of the above

Step Three, Economic Interest Type 2:Economic Interests in Real PropertyA public official has an economic interest in real property ifthe official has an equity or leasehold interest in real propertyvalued at $1,000 or more. The official's interest includes theofficial's direct, as well as indirect, interests.

A direct interest in real property means an official personally,holds the interest. An indirect interest means the official'sspouse, the official's dependent children or anyone acting onthe official's behalf has an interest in real property. Inaddition, a publi6 official. who owns 10% or more of abusiness entity has an indirect interest in any real propertyheld by the business entity in proportion to the public official'sownership stake.

If a public official has an economic interest in particular realproperty, the official must be constantly aware of whether thatreal property is involved in or affected by governmentaldecisions in which the official takes part. If such real propertyis involved, directly or indirectly, a conflict of interest ispossible.

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0Remember These PointsInterests in real property cover both equity and leaseholdinterests.

Direct and Indirect interests are also covered.

© Calitornia Attorney General's Office, 1999

OLet's ReviewLocke is a member of a state commission and an attorney. Heand his wife own a single-family home. He leases office spacefor his law practice. He also owns two of the ten limitedpartnership shares in a limited partnership which owns adowntown office building. Determine which of the followinganswers describe Locke's economic interest(s)? Click on all ..three answers to see if you were correct.

0 The home0 The office space he leases for his law practice0 The downtown office building

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Step Three, Economic Interest Type 3:Sources of Income to the Public OfficialA public official has an economic interest in sources ofincome to the official. A source of income to a public officialis anyone, whether an individual, business entity or anorganization, that provides or promises $250 or more inincome to the official within 12 months prior to thegovernment decision-in-question.

A person or entity that provides income to an official, eitherdirectly or indirectly, may be a source of income to the official.Indirect sources include the following:

. Source of income to the Official's Spouse InCalifornia, a public official has a community propertyinterest in his or her spouse's income. Therefore, aperson or entity that provides income to an official'sspouse may be a source of income to the public official,as well.

. Source of income to a Business EntityA public official who owns 10% or more of a businessentity is deemed to receive "pass-through" income fromthe business's clients in proportion to the public official'sownership stake. Therefore, the business's clients maybe sources of income to the public official, if the official'sproportionate share of the payments is $250 or more.

If a public official has an econornic interest in a personbecause that person is a source of income to the official, theofficial must be constantly aware of whether that source ofincome is involved in or affected by governmental decisions inwhich the official takes part. If such a source of income isinvolved, directly or indirectly, a conflict of interest is possible.

eRemember These PointsA public official has an economic interest in most individualsand entities that provide income to the official.

Sources of income to a public official's spouse or to abusiness in which the official has an investment may also bea source of income to the public official.

Even if a public official does not have an economic interest ina business entity by virtue of investment or by holding aposition in the business, the business may still beaneconomic interest if it provides income to the public official.

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9Let's ReviewHobbes is a state board member. Her husband, Calvin, isemployed by Chimerical Industries. She owns 5% of a heating  

oil business. Her share of the profits from the heating oilbusiness was over $5,Q00 last year. This business suppliesfuel, to many local businesses and residences. Determinewhich of the following describe Hobbes' source(s) of income?Click on all three answers to see if you were correct.

C Chimerical industries1 0 The heating oil business

El The customers of the heating oil business who havepurchased more than $5,000 worth of heating oil in thepast twelve months

Step Three, Economic Interest Type 4:Sources of Gifts to the Public OfficialA public official has an economic interest in anyone, whether

an individual, business entity or organization, that provides

gifts to the official totaling $300 or more within 12 months

  prior to the governmental decision-in-question. Do not

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confuse an economic interest stemming from a gift with aneconomic interest stemming from a source of income that

provides or promises $250 or more in income.

If a public official has an economic interest in a person orentity because that person is a source of gifts to the official,the official must be constantly aware of whether that source

of gifts is involved in or affected by governmental decisions in

which the official takes part. If such a source of gifts is

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involved, directly or indirectly, a conflict of interest is possible.

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Remember This PointA public official has an economic interest in any individual,business entity or organization that provides the official with

gifts totaling $300 or more within 12 months.

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9Let's ReviewHolmes is a director of a state department. He receives twogifts from a friend's business which is interested in hisdepartment's activities. In October, he receives two tickets to aSan Francisco 49er game valued at $100. In February of thenext calendar year, he receives a framed photograph ofYosemite valued at $220. In June, he is considering a decisionthat would affect his friend's business. Does Holmes have aneconJomic interest in his friend's business?

c Holmes has an economic interest in his friend's businessbecause he has received $320 value in gifts during the 12months prior to the decision.

c; Holmes does not have an economic interest because thegifts were received in separate calendar years.

Step 3, Economic Interest Type 5:Personal Financial Effect RuleA public official has an economic interest in the amount of hisor her own personal income, expenses, assets, orliabilities, as well as those of his or her immediate family.The interest is triggered when a government decision willeither increase or decrease the personal income, expenses,assets or liabilities of the official, or the official's immediatefamily. This is often called the "personal financial effects" rule.

Previously, we have discussed economic interests inbusiness entities and in real property. These interests areseparate and distinct from the personal financial effects rule.For example, a decision to fine an official for littering would becovered by the personal financial effects rule because thefine will directly affect the official's personal finances.However, a decision that affects the value of the official'shome would not be covered by the personal financial effectsrule because the decislion would affect the official's interest inreal property.

One place where the personal financial effects rule may ariseis in an exception to an exceptioL. Under what is commonlycalled the "government salary" exception, a public officialdoes not have a conflict of interest where the decision affectsonly the salary, per diem, or reimbursements for expensesreceived by the public official or his or her spouse from agovernment agency. However, under the personal financialeffects rule, this exception does not apply when the decisionsingles out the public official's spouse in a way that wouldparticularly affect income, expenses, assets or liabilities. Forexample, a decision to hire or fire, promote or demote, etc.would fall under the personal financial effects rule and wouldconstitute an economic interest.

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eRemember This PointAn official has an economic interest in decisions that directlyaffect the personal finances of the official or the official'sspouse or immediate family.

© California Attorney General's Office, 1999

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0Let's ReviewMaria is a deputy director of the Department of Finance. Herhusband works for another state department as a civil serviceemployee. Maria is working on a pay raise for state civil serviceemployees, including Maria's husband. Does Maria have aneconomic interest under the personal financial rule?

oeyes no

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Steps Four through Six: Once an economicinterest is potentially involved, how does anofficial determine if a conflict exits?Now that you have completed Step 3, the most important stepof the Eight-Step Process, let's look at Steps 4-6.

Making A Calculated PredictionDefining Some TermsSteps 4-6 of the Eight-Step Process

Making A Calculated PredictionTo determine whether a conflict of interest exists, the officialmust make a calculated prediction: Is it reasonablyforeseeable that the governmental decision will have amaterial financial effect on the public official's economicinterests?

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Defining Some TermsBefore we evaluate the interplay between "reasonablyforeseeable" and °material financial effect, n let's first definethem.

• The phrase "reasonably foreseeable" meanssubstantially likely. Deciding whether a financial effectis substantially likely must be based on the entire factualsituation

• The phrase °material financial effect" refers to theimpact of a governmental decision on an official'seconomic interests. As used in the phrase "materialfinancial effect," the word "material" means important.There are specific dollar thresholds in the FPPC'sregulations-called materiality standards-forevaluating whether a financial effect on an economicinterest is material.

There are two factors that control which materiality standardwill apply to any given conflict of interest situation.

. The first fact6r is the economic interest itself. That is,there is one set of materiality standards for businessentities, another for sources of income, etc.

• The second factor is whether the official's interest willbe directly or indirectly involved in the decision. Aneconomic interest which is directly involved in agovernmental decision creates a bigger risk of a conflict

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of interest than does an economic interest which isindirectly involved in a decision.

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Steps 4-6 of the Eight-Step ProcessThere are specific FPPC regulations that define themateriality standards for each type of economic interestdepending on whether the interest is directly or indirectlyinvolved. These regulations are much too complex to discussthem further in this ethics orientation. For purposes of thisorientation, it is sufficient that you understand the frameworkof the eight step process. To actually analyze a real conflict ofinterest situation, you must have the materiality standards inyour possession as you apply Steps Four through Six.

. Step Four: By referring to FPPC regulati6ns, decidewhether the economic interest is directly involved inthe governmental decision

. Step Five: Armed with the information from Step Four,examine the materiality standards for the type ofeconomic interest at-issue.

For example, if the public official has an economicinterest in a person because that person is a source ofincome to the public official, the official should go to themateriality standards for sources of income.

. Step Six: For each of the public official's economicinterests, ask whether it is substantially likely that thematerial financial effect will occur.

If the answer to this question is yes, then the public officialhas a conflict of interest unless the "public generallyexception" discussed in Step Seven. If the answer is no, thenthe public official does not have a conflict.

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If a conflict of interest exists, does the publicgenerally exception apply? Or is the conflictdisqualifying?Not all conflicts of interest result in disqualification. If thepublic generally exception applies, a public official maketake part in a governmental decision despite the conflict ofinterest.

This exception exists because a public official is less likely tobe biased by a financial impact on one of his or her economicinterests when a significant segment of the population is likelyto feel a substantially similar impact from a governmentaldecision that the public official's economic interests are likelyto feel.

The "public generally" exception must be considered withcare. You may not just assume that it applies. There arespecific rules for identifying the significant segments of thepopulation with which you may compare your economicinterest, and specific rules for deciding whether the financialimpacts are substantially similar.

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Remember This PointNot all conflicts of interest are disqualifying--but the publicgenerally exception must be rigorously analyzed and may notbe assumed.

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Step Eight: Despite a disqualifying conflict ofinterest, participation is occasionally legallyrequired.In certain very rare circumstances, a public official may becalled upon to take part in a governmental decision despitethe fact that he or she has a disqualifying conflict of interest.This legally required participation rule applies only in certainvery specific circurnstances where the government agencywould be paralyzed from acting. Public officials are moststrongly encouraged to seek advice from agency legalcounsel or the FPPC before acting under this rule.

© California Attorney General's Office, 1999

0Remember This PointThe legally required participation rule is rarely applied.

Next

Now that you have completed the conflicts of interest underthe political reform act module, click on Gift Limitations to goto the next module.

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Limitations On The Receipt Of GiftsBy the CalliBmia AG's Office and the FPPC 5/24/99 10-15 mins

What is the Gift Lime.How Does the Gift Limit Relate to Other Provisions

Concerning Gifts?

Who is Subject to the $300 Gift Umit?

Gifts - What When: and How

Are There Exceptions to the Gjft Umit?

Special Rules for Gifts of Travel

Penalties for a Violation of the Gift LimitI

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What Is the Gift Limit?The Political Reform Act actually establishes two separate giftlimits: the "gift limit" and the "lobbyist gift limit."

The gift limit restricts the total amount of gifts that officialsand candidates may receive from a single source during acalendar year. At present, the limit is $300 annually. In 2001,the amount of the limit will be adjusted to reflect changes inthe consumer price index.

The lobbyist gift limit restricts the receipt of gifts by officialsfrom lobbyists and lobbying firms that are registered to lobbythe official or the official's agency. The limit is $10 per monthand it is not adjusted for inflation. The lobbyist gift limitapplies only to state and not local officials.

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How Does the Gift Limit Relate to OtherProvisions Concerning Gifts?The Political Reform Act contains several provisionsconcerning gifts. These include disclosure, limits anddisqualification. Each receipt of a gift must be independentlyevaluated to determine if the gift triggers one or more of theprovisions. Here is a brief summary of these provisions:

. Disclosure on Statement of Economic interests.Receipt of gifts totaling $50 or more from a singlesource during the reporting period.

. The Gift Limit. Receipt of gifts totaling more than $300from a single source during the calendar year isprohibited.

. Lobbyist Gift Limit. Receipt of gifts totaling more than$10 in a calendar month from a lobbyist or lobbying firmis prohibited, if the lobbyist or lobbying firm is registeredto lobby the official or the official's agency.

. Disqualification. Public officials must disqualifythemselves from participating in government decisionswhich may affect sources of gifts of $300 or more duringthe previous 12 month period. This provision most oftencomes up when gifts have been made in two calendaryears but within a 1 2 month period. Under thesecircumstances, an official ma9 be disqualified fromparticipating in a decision affecting the source of a gifteven though the official had complied with the gift limit.

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Who is Subject to the $300 Gift Limit?The gift limit applies to the following officials:

• Elected state officers.

. Specified individuals who manage public investmentsand all members of the Public Utilities Commission, theFair Political Practices Commission, the State EnergyResources Conservation and Development Commissionand the California Coastal Commission.

• Members of other state boards and commissions,where the member is required to disclose the source ofthe gift on the member's Statement of EconomicInterests. This provision exempts a part4ime member ofthe governing board of any public institution of higherinstruction who is not an elected official.

• Officers and employees who are listed as "designatedemployees" in an agency's Conflict of Interests Codewhere the source of the gift must be reported on theofficial's Statement of Economic Interests.

• However, if a state board or commission member or adesignated employee of an agency would not berequired to report the receipt of income or gifts from asource on his or her Statement of Economic Interests,the gift limit is not applicable. Public officials shouldfamiliarize themselves with the "disclosure category°portion of their agencies' Conflict of Interest Codes todetermine what sources of income or gifts must bereported on their Statements of Economic Interests.

9Let's ReviewLeslie is the chair of a regulatory board. A friend of hers, who isregistered to lobby her board, offers to buy her a $15 lunch.Would acceptance of the lunch violate the law?

0eyes no

9Let's ReviewFor an official, who is a designated employee in a Conflict ofInterest Code, the gift limit applies only to sources of giftscovered by the official's disclosure category.

*etrue false

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Gifts - What; When; and HowWhat Is a Gift?When Does An Official Receive or Accept A Gift?How Are Gifts Valued?

What Is a Gift?

A 0gift" is any payment or other benefit provided to an officialthat confers a personal benefit for which the official does not

provide goods or services of equal or greater value. A giftincludes a rebate or discount in the price of anything of valueunless the rebate or discount is made in the regular course ofbusiness to members of the public.

Although most provisions of the Political Reform Act relate toeconomic interests within the official's jurisdiction, both thedisclosure of gifts and the gift limit apply to gifts received fromsources regardless of whether they are located inside oroutside of the official's jurisdiction.

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When Does An Official Receive or Accept A Gift?

An official receives or accepts a gift when the official hasactual possession of the gift or takes any action exercisingdirection or control over the gift, including discarding it orgiving it away.

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How Are Gifts Valued

To determine the value of a gift, an official must use the fairmarket value of the gift. If the gift is unique, the official shouldask the donor for the actual value. If the value is unknown tothe donor, the official should make a reasonable

approximation based on the value of similar products.

A

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Are There Exceptions to the Gift Limit?There are two types of exceptions to the gift limit:

• Items that are exempt from both the gift limit anddisclosure requirements.

Under specified circumstances, these exceptionsmay include gifts returned within 30 days; giftsfrom close relatives; unused tickets; informationalmaterials; personalized plaques; hospitality in afriend's home; and tickets to campaign events.

There is also an exception for gifts made to apublic entity, but specific steps must be followedunder procedures established by the Fair PoliticalPractices Commission and the Department ofFinance.

• Items that are exempt from the limit but which arediscloseable.

Examples include wedding gifts, prizes that result froma bona fide competition, and some gifts of travel outsideof California. In addition, these items may triggerdisqualification.

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Special Rules for Gifts of TravelGifts of travel are particularly tricky. As a general rule,transportation, lodging and accomrnodations are covered bythe gift limit. However, there are a number of exceptions. Theprimary exception concerns when an official makes a speech,conducts a seminar or serves on a panel in California. In thatcircumstance, payments or reimbursement for the followingare not gifts:

. transportation to and from an event within California.

. food and beverages at the event.

• "necessary" lodging and accommodations in connectionwith the event.

If the travel is outside of California, a different set of rulesapplies, which are too complex for this training. There areadditional exceptions for travel paid for by:

• campaign funds;

• nonprofit organizations pursuant to section 501 (c)(3) ofthe Internal Revenue Code;

. foreign governments; and

. other entities for which the official performs seivices.

If you have questions, consult your legal counsel.

AA

0Let's ReviewEileen is a deputy director of a state department. Herdisclosure category in her Conflic  of Interest Code for herdepartment provides that she must disclose gifts from anysource. A Napa winery presents her with some wines to thankher for improving marketing of Napa wines in Oregon. Which ofthe following should Eileen do to determine the fair marketvalue? Click on each answer to see if she should:

C Call the winery and ask them for the retail price.13 Call the winery and ask them for the wholesale price.

0 Taste the wine and determine its value accordingly.|3 Look for the price on the open market

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0Let's ReviewDan, a member of a state commission, receives four tickets forfront row seats at an NBA basketball game from a business intown. He and his daughter use two of them, and give the othertwo to his friend Pete. The face value of each ticket is $75 andthe accompanying parking pass is valued at $10.

Does Dan avoid potential violation of the gift limit by giving twotickets to Pete?

oeyes no

0Let's ReviewPaul is a director of a state agency. He is offered theopportunity to rent a Hawaii condo from Good Times Inc. for itscost, rather than the standard rental fee.

Does the difference between the standard rental fee and theamount paid by Paul constitute a gift?

Oeyes no

9Let's ReviewLinda, a state board chair who lives in Sacramento, has beenasked to give a speech in San Diego. She receives thefollowing from the sponsoring professional association:roundtrip airfare; lodging the night before her 9:00 a.m.speech; and coffee and Danish at the speech. Has sheviolated the gift limit?

r Since the value exceeds $300, she has violated the giftlimit.

r Violation depends on her disclosure obligations.r. She has not violated the gift limit because these items are

exempt from the definition of a gift.r Because the hotel and meals are exempt and the air fare

does not cost $300, she has not violated the gift limit.

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Penalties for a Violation ot the Gift LimitAny official who violates the gift limit is liable in a civil actionbrought by the FPPC for an amount of up to three times theamount of the unlawful gift. Violators are also subject toadministrative sanctions, which include fines of up to $2,000per violation.

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0Remember These PointsGift limit:

• gifts totaling $300• from a single source. in a calendar year

Exceptions are very technical

Lobbyist gift limit:

• gifts totaling $10. from a registered lobbyist or lobbying firm• in a calendar month

Next

Now that you have completed the limitations on the receiptsof gifts module, click on Honoraria Ban to go to the nextmodule.

A

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Honoraria BanBy the California AG's Office and the FPPC 5/24'99 5-10 mins

What Does the Honoraria Ban Prohibit?What Activities Are Covered bv the Ban?What Are the Exceotions to the Ban?Special Rules for TravelThe Earned Income ExceptionAn Honorarium Mav Be Returned. Donated. or the SourceReimbursed

Penaltiesfor a Violation of the Honoraria Ban

2R2/661ril:'. i. • ,1 -, i

. - I

What Does the Honoraria Ban Prohibit?The honoraria ban prohibits most public officials and allcandidates for public office from accepting any honoraria.Honoraria are payments made to an official, from other thanthe official's public employer, for making speeches, publishingarticles, or attending public or private conferences,conventions, meetings, social events, meals, or likegatherings.

For members of state boards and commissions andemployees who are designated in an agency's Conflicts ofInterest Code, the honoraria ban only applies to paymentsfrom any source of income or gifts which is required to bereported on the official's Statement of Economic Interests.

http://caag.state.ca.us/ethi/lchonorariaban/lpOpgl.htm---Ii-.

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What Activities Are Covered by the Ban?The ban covers the acceptance of payrnents, either cash orin-kind, for giving a speech, attending a meeting, andparticipating in panels, writing, being identified as an author

of, or doing more than secretarial work in connection with anonfictional published article. Being paid for writing books,plays, or screenplays is not covered.

.-

Remember This PointAccepting a payment for making a speech, writing an article,or serving as a panelist is prohibited unless an exceptionapplies.

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What Are the Exceptions to the Ban? 'There are three major exceptions to this broad prohibition.

. The special rules for travel that exempt certain travelfrom the ban are the most notable.

. The earned income exception concerns incomereceived for speaking or writing as a part of one'sprivate employment.

. Under certain circumstances, an honorarium may bereturned, donated, or the source reimbursed.

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30

Special Rules for Travel .-.-

You will recall that these special travel rules applied to the giftlimit as well. When an official makes a speech, participates ina seminar or serves on a panel, the following items areexempt from the honoraria ban:

. transportation to and from an event within California.

. food and beverages at the event

• "necessary" lodging and accommodations in connectionwith the event.

If the travel is outside of California, different rules apply whichare too complex for this training.

There are additional exceptions for travel paid for by:

• campaign funds;

. nonprofit organizations pursuant to section 501 (c)(3) ofthe Internal Revenue Code;

• foreign governments; and,

• other entities for which the official performs services.

AA

Remember This PointSome travel benefits are exempt from the ban, but the rulesare very technical.

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The Earned Income ExceptionA payment received in return for rendering personal servicescustomarily provided in connection with the practice of a bona .fide business, trade, or profession is considered "earnedincome" and is not prohibited under the honoraria ban.However, earned income of $250 or more may be reportableas income and may result in disqualification from decisionsaffecting the source of the income.

For purposes of the "earned income" exception, a profession,trade or business means an enterprise or employmentseparate from one's state employment and may includeteaching, practicing law, medicine, insurance, real estate,banking, or building contracting, and others.

. A department director may be a professor at a collegeor university and receive earned income for thatemployment. Because of the exception for earnedincome from a bona fide profession, the paymentswhich the director receives for speaking in the form ofteaching are exempt from the honoraria ban.

However,· a business, trade or profession is not "bona fide"unless it is independent from an official's public office.

• A toxicologist with the State Department of HealthServices cannot be paid to make speeches ontoxicology unless he or she has an independent "bonafide business" that allows the official to accept theearned income.

Even if an official has an independent business, the officialmay not make a speech in an "official" capacity and be paidfor it.

The FPPC has established certain criteria that must befollowed to demonstrate that an official is practicing a bonafide business, trade, or profession. The maintenance ofbusiness records, licensure as a member of a profession, andproof of employment as a teacher are examples of the typesof records that will demonstrate that a business, trade orprofession is bona fide.

If the sole or predominant activity (50% of gross income) ofthe business, trade, or profession is making speeches, thebusiness, trade, or profession will not be considered "bonafide." There is a specific exception for teaching. Therefore, aconsulting business that receives most of its income frommaking speeches is unlikely to fit under the "earned income"exception.

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eRemember These PointsYour public office, even if you are considered the expert inyour field, cannot be used to generate additional income fromspeaking or writing.

Unless you teach, a business set up to make speeches willnot fit into the earned income exception.

An Hon6rarium May Be Returned, Donated,or the Source ReimbursedAn honorarium may be either returned unused to the donor ordelivered to the State Controller within 30 days of receipt. Ifneither option is possible, and no cash payment is involved,the official may reimburse the source for the value or use ofthe honorarium.

A payment made to a bona fide charitable, educational, civil,religious, or similar tax-exempt, nonprofit organization in lieuof an honorarium is not an honorariurn, if certain conditionsare met. To qualify, the payment must be sent directly to thenonprofit organization without being first received by theofficial. In addition, the official may not be identified inconnection with the payment or otherwise benefit from thepayment.

Penalties for a Violation of the HonorariaBanAny person who makes or receives a prohibited honorariumis liable in a civil action brought by the FPPC for an amount ofup to three times the amount of the unlawful honorarium.Violators are also subject to administrative sanctions, whichinclude fines of up to $2,000 per violation.

httn'//r.9,0 Rtpte rn „c/pthi/l r.honnrAriah:in/lnfnoO h,rn

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eRemember These PointsAlthough return, reimbursement, or donation of anhonorarium is possible, there are very specific conditions thatmust be met.

Cash honoraria may not be reimbursed.

Once an official receives an honorarium, the ban cannot beavoided by donating it to a charity.

Any person who makes or receives a proibited honarium issubject to penalties.

Next

Now·that you have completed the honoraria ban module, clickon All Contractual Conflicts to go to the next module.

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34

Contractual Conflicts Of Interest: All ContractsBy the California AG's Office and the FPPC 5/24/99 10-15 mins

* What Does Government Code Sedon 1090 Prohjbit?

Contact Requirement

Most Officials Covered

Participation in the Making of a Contract

Finandal Interest Broadly Defined

Timing is Crucial

Harsh Penalties and Remedies--..

What Does Government Code Section 1090 Prohibit?Government Code section 1090 provides that an officer or employee may notmake a contract in which he or she is financially interested. Any participation byan officer or an employee in the process by which such a contract is developed,negotiated and executed is a violation of section 1090. If the governmentaldecision in question does not involve a contract, or if a contract in which anofficer or employee has a financial interest is not ultimately executed, no violationexists.

Contract RequirementFor the prohibition of section 1090 to apply, there must be a contract. Section1090 does not apply to other types of governmental action such as adoptingregulations, issuing permits or licences, conducting investigations, issuingreports etc.

Section 1090 applies not only to written state contracts, it also applies to oralcontracts and purchases made outside of the formal contract process. Grantsgenerally qualify as contracts for purposes of section 1090.

OLet's ReviewThe Department of Cyberspace is considering adoptingregulations which would regulate access to the Internet, andthereby adversely affect stocks owned by the director. Doessection 1090 apply?

*eyes no

.P-/3 '...6...

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Most Officials CoveredThe prohibition of section 1090 applies to virtually all state and local officers,employees and multimember bodies, such as boards or commissions, whetherelected or appointed, at both the state and local levels.

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Participation in the Making of a ContractGeneral RuleThe Rule As Aoplied To Multimember Bodies

General Rule

An official participates in the making of a contract if the official is involved with itspreparation at any stage in the process. The contract making process begins atthe time the idea for the contract is conceived and continues through the actualexecution of the contract. That means that planning, determining the scope of the

contract, drafting plans and specifications, setting contract terms, evaluating

applicants, and negotiating are all included.

Under the general rule, officials may avoid a violation of section 1090 bydisqualifying themselves from participation in the making of the contract

whenever they have a financial interest in the contract. There are limited

exceptions to the general rule which are strictly interpreted.

AThe Rule As Applied To Multimember Bodies

Members of bodies with contracting power are conclusively presumed toparticipate in the making of all contracts under the body's jurisdiction.

lf a member of a multimember body with contracting power has a financialinterest in a contract, section 1090 generally provides that the contract cannot bemade even if the member has disqualified himself or herself from actuallyparticipating in the contract. The law does provide several limited exceptionswhich will permit a financially interested board member to disqualify himself orherself and allow the remaining members of the body to enter into the contract.

These exceptions are termed "remote interest exceptions." They are quite limitedand are strictly interpreted.

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0Let's ReviewTom is an employee in the statistics division of the department.He spoke with his supervisor concerning the benefits ofcontracting with a private vender for certain services.Subsequently, the department decided to solicit bids fromvendors for the performance of such services. Did Tom'sconversation with his supervisor constitute "participating in themaking of a contract" according to section 1090?

OeFinancial Interest Broadly DefinedSection 1090 does not define when an official is financially interested in acontract. However, the courts have applied the prohibition to include a broadrange of interests. The courts have continually reiterated that no matter howtwisted and winding the trail may be, if the connection between the financialinterest of the official and the contract can be made, a violation of section 1090will be found.

Under section 1090, financial interests are often defined in terms ofrelationships. For example, if you have an employment relationship with theperson or entity which seeks to contract with your agency, you are deemed tohave a financial interest in the contract. Other examples of economicrelationships which constitute a financial interest within the meaning of section1090 include:

• attorney, agent or broker of a contracting party;

• supplier of services or goods to a contracting party;

• landlord or tenant of a contracting party; and

• officer or employee of a nonprofit corporation which is a contracting party.

The official's interest also includes the community property and separateproperty interests of the official's spouse.

9Let's ReviewUnder section 1090, the term "financial interest" is specificallydefined in statutes and regulations.

Oetrue false

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37

9Let's ReviewThe separate property of an official's spouse is not a financialinterest under section 1090.

*etrue false

Timing is CrucialAs you know by now, section 1090 prohibits officials with financial interests frommaking contracts in their official capacity. If a person has previously entered intoa contract with the state prior to appointment or employment with a governmentagency, the contract is unaffected by section 1090. However, section 1090 wouldapply to any modification, option, renewal or extension of the contract.

Harsh Penalties and RemediesAny contract made in violation of section 1090 is void and cannot be enforced. Anofficial who commits a violation of section 1090 is subject to criminal, civil andadministrative sanctions. A person convicted of violating Section 1090 is alsoforever disqualified from holding any office in this state.

Recent court decisions underscore the adverse consequences of violatingsection 1090.

• Thomson v. Ca# : In this case, a city councilmember had sold a parcelof land to a third party, which in tum re-sold the property to the city.Despite the fact that the councilmember had abstained from the council  vote which authorized the city's acquisition of the property, and had actedthroughout in good faith, the California Supreme Court concluded that hehad violated section 1090. As a sanction, the Court required thecouncilmember to forfeit the entire sales price of $258,000, while the citywas permitted to retain the property. Thus, where section 1090 isviolated, the government can get its money back without having to restoreany of the benefits received under the contract. The fact that the contract isfair, or even highly advantageous to the government, is irrelevant.

0 Peop/e v. Honig : The State Superintendent of Public Instruction wasfound guilty of violating section 1090 by entering into official contracts inwhich he had a financial interest. Superintendent Honig was crirriinallyconvicted of this offense, and eventually was required to relinquish hispublic office as a result.

A...

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  Let' s ReviewViolation of section 1090 can lead to which of the· following?Click on all four answers to see if you were correct.

r 4 void contractr State retains benefit; any payment received must bereturnedC; Felony conviction0 Permanent loss of office in California

eRemember These PointsApplies to contracts

Participation at any stage of the process counts

Financial interests broadly defined

. Violation voids contract, but government keeps the benefits

Felony and permanent ban from holding office

Next

Now that you have completed the contractual conflicts ofinterest, all contracts module, click on State ContractConflicts to go to the next module.

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39

Contractual Conflicts Of Interest:State Contracts Only

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By the California AG's Office and the FPPC 5/24/99 5-10 mins

  What Is Public Contract Code Section 10410?

The General Ban Is Yery_Broad

Ban.on Independent Contracting

What Is Public Contract Code Section 10410?Public Contract Code section 10410 imposes additional conflict of interestrestrictions concerning state contracts and contractors. This section containstwo separate prohibitions. First, there is a general ban on state officers andemployees from having economic interests in state contracts. Second, there is aseparate ban against state officers and employees acting as independentcontractors with state agencies. Violations 9oid the contract and can result incriminal penalties or civil remedies.

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The General Ban Is Very BroadReduced to its essentials, the general ban provides that:

• no state officer or employee• shall engage in any employment, activity or enterprise• from which the officer or employee receives compensation, or in which he

or she has a financial interest and• which is sponsored or funded, in whole or in part, by any state agency or

department through a contract.

An exception is provided for unsalaried pa,t time members of boards andcommissions. A variety of other specific exceptions are set forth in the law.

.--I./-

Ban on Independent ContractingIn addition to the general prohibition, section 10410 specifically prohibits a stateofficer or employee from contracting on his or her own behalf with a state agencyas an independent contractor to provide goods or services.

Next

Now that you have completed the contractual conflicts of interest, state contractonly module, click on The CQde of Ethics to go to the next module.

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Government Code Section 8920, Code of EthicsGovernment Code section 8920, the Code of Ethics, applies to state elected andappointive officers. It does not apply to civil service employees. The Code ofEthics generally prohibits officers from participating in decisions which will havea direct monetary effect on them.

Specifically, the Code of Ethics prohibits officers from

• having any direct or indirect financial interest or• engaging in any business transaction or professional activity or• incurring any financial obligation

which is in substantial conflict with the proper discharge of the official's duties.

A substantial conflict arises when an official expects to derive a direct monetarygain or suffer a direct monetary loss by reason of his or her official activity. Wherethe officer will be so affected by a decision, the officer should disqualify himselfor herself from the decision.

A substantial conflict does not exist if an official accrues no greater benefit ordetriment as a member of a business, profession, occupation or group than anyother member.

Violations are punishable as misdemeanors.

A

eRemember These PointsThe Code applies to state elected and appointive officers.

Officers are prohibited from participating in decisions that willhave a direct monetary effect on them.

Next

Now that you have completed the code of ethics module, clickon Free Transportation Ban to go to the next module.

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41

Free Transportation BanBy the California AG's Office and the FPPC 5/24/99 10-15 mins

* What Does the Ban Do?

What Is the Oriain of the Ban?

What Are the Bements of the Ban?

Gifts/Discounts from a TransDortation Compaoy

Onlv Officers Are Covered

Ban Covers Both Interstate and Intrastate Trayfl

Ban Covers Both Public and Personal Business

Violation Means Forfeiture of Office

,aRK -di

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What Does the Ban Do?The California Constitution prohibits public officers from accepting passes ordiscounts from transportation companies. The ban is currently contained inarticle XII, section 7, of the California Constitution.

What Is the Origin of the Ban?The genesis of the ban emanates from the early days of California and lies withthe historical relationship between the legislature and the railroads. The banfocused on corruptive influences of gifts of free transportation by railroads andother transportation companies to legislators and other public officials. In 1970,a proposal to repeal this provision from the Constitution was defeated by theelectorate.1

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Gifts/Discounts FromA Transportation CompanyThe ban only applies to gifts made by transportation companies. An airline ticketor rail pass provided by the airline or railroad to officers would be covered by theban. The ban does not apply when a ticket or pass is donated to a charity for adoor prize and an officer wins the prize.

For purposes of the ban, the receipt of free transportation includes all otherbenefits accompanying the transportation. For example, when a railroad wishedto provide transportation to a number of state and local public officers along withfood, beverages, and entertainment from San Francisco to the Dixieland JazzFestival in Sacramento, the officials in question were advised that the railroadshould not merely charge the officer the standard fare for the transportation.Rather, all of the benefits rleceived along with the transportation should beincluded in computing the value of the transportation. Officials who paid the fullvalue of the goods and services could avoid receipt of a prohibited gift.

Where the gift or discount is made to the officer, as part of a larger group, andwithout regard to official status, the ban may not apply. For example, if theofficer's spouse is employed by a transportation company and receives free ordiscounted transportation as an employment benefit, receipt of such a benefit bythe officer solely as a result of the marital relationship would not trigger the ban.

Similarly, when a honeymooning official received an upgrade in airline service,the ban was not triggered because the upgrade was provided as a part of theairline's policy of providing free first class upgrades to all persons on theirhoneymoons.

These situations are distinguishable from the case in which a mayor received afree first class airline upgrade as a part of a promotion designed to bestow suchupgrades on high profile, prominent individuals in the community. In that case,the mayor received the upgrade as a result of his status as mayor and not as aresult of his participation in some larger group unrelated to his official status. Forthat reason, the mayor was found to have violated the ban.

A

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0 Let' s ReviewCy is a deputy director. He has accumulated twenty thousandmiles on his personal airline mileage program, and is entitled toa free ticket to any location in the country where his airline flies.

c Cy may accept the free ticket because it was earned aspart of a program designed to promote that airline, and theprogram was offered to the public generally without regardto official status.

c Cy should not accept the ticket because he did not pay fullvalue for it.

Only Officers Are CoveredThe ban specifically applies to public officers and does not apply to employees.However, the officer/employee distinction is not always an easy one to make.

It is generally said that an office requires the vesting in an individual of a portionof the sovereign powers of the state.

For purposes of the ban, if a particular individual actually sets or makes policy,he or she is an officer. However, if the official merely advises policy makers, theofficial is probably not an officer.

Both /nterstate and intrastate Travel Are CoveredOver the years, the Attorney General has interpreted the constitutional banagainst the acceptance of passes or discounts from transportation companiesto apply to interstate as well as intrastate carriers and transportation. It does

not matter if the interstate carrier in question does business in California and istherefore under the officer's jurisdiction.

For example, the ban applies to a California official who accepts freetransportation in another state or country.

Ban Covers Both Public and Personal BusinessThe issue of public versus personal business is generally not viewed asrelevant to the application of the ban. There is a specific exception for PublicUtility Commissioners who are authorized to accept free transportation inconnection with the performance of their official duties. For all others, the banagainst the acceptance of free passes or discounts for transportation appliesequally to personal and business travel.

Violation Means Forfeiture of OfficeThe Constitution specifically provides that an officer can be removed from officefor accepting a pass or discount from a transportation company.

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44

9Let's ReviewJanet is a deputy director with a state agency. An airline wishesto persuade California to embrace a new technology in publictransportation. The airline wishes to give Janet a pass on itsairline to fly her to Germany to witness the technology. Receiptof the transportation is not a violation of the ban because thereis no intent to benefit Janet personally.

*etrue false

0Let's ReviewSusan is a civil servant computer programmer who works forJanet. An airline has given her a free airline trip to Hawaii.Would she be in violation of the ban if she accepted the gift?

oeyes no

0 Let's ReviewAssume that Susan is promoted to officer status. The airlinewhich gave her the trip does not do business in California.

r Acceptance is a violation of the ban.r Acceptance is a violation if the airline is contemplating

doing business in California because the gift may be anattempt to influence the government.

r Acceptance is not a violation of the ban.

OLet's ReviewAn airline donates two tickets to a charity. The tickets are usedas a prize at a free drawing to promote a charity fund raisingcampaign. Keith, a director of a state department, wins theprize.

c · Keith's acceptance of the tickets would not violate the banso long as they were for personal use, not business use.

c Keith's acceptance would not violate the ban unless thetickets are for an out of state destination.

c Keith's acceptance of the tickets would violate the ban.c Keith's acceptance would not violate the ban since the

tickets were provided to Keith by the charity and not theairline....... .. . ..I.--Il. I . - -

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9Let's ReviewJeff accepted transportation in violation of the ban. Basedsolely on the ban:

r. Jeff must reimburse the transportation company for the fullvalue of the gift or discount.

r Jeff may be subject to criminal prosecution.r Jeff may be removed from office.c Jeff may be subject to a civil lawsuit for money damages.

e.Remember These Points

. The ban on free transportation:o Applies to passes or discounts from transportation

companieso Applies only to officers; not employeeso Covers both personal and business useo Covers inter and intrastate transportation

companies. Violation means forfeiture of office

Next

Now that you have completed the free transportation banmodule, click on Incompatible Activities to go to the nextmodule.

1,

6t

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46

Incompatible Activities of State Officers andEmployeesBy the California AG's Office and the FPPC 5/24/99 5-10 mins

What Does Government Code Section 19990 Prohibit?

What Does An Incomoatible Activities Statement Indude?

Specit Activ es Are Prohibited

Violations May Result in Sanctions

What Does Government Code Section 19990 Prohibit?Government Code section 19990 prohibits state officers and employees fromengaging in activities which are incompatible with their positions as stateofficials. State agencies are required to adopt incompatible activities statementsin order to implement this provision. Because you are required to obey youragency's incompatible activities statement, you should examine it to determinethose activities whiclh are prohibited.

What Does An Incompatible Activities Statementinclude?Every statement must cover activities specifically identified by the law. However,agencies may include additional activities in the statement as well.

The activities covered by an incompatible activities statement may vary widely.They may point to behavior on the job or they may focus on private behaviorwhich takes place outside the work place or in off-hours. The incompatibleactivities statemelnt should clearly inform the agency officials of those activitiesthat are incompatible with the officiars state service.

A civil service employee must be afforded the same notice and appeal rights fora suspected violation of an incompatible activities statement as the employeewould have for any other personnel action. In addition, the provisions of anincompatible activities statement may be superseded by a memorandum ofunderstanding between the state agency and an employee union.

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Specific Activities Are ProhibitedThe law specifically requires that certain activities be prohibited in each agency's

incompatible activities statement. Here is a summary of these provisions:

Type of Activity Example

Using the prestige or influence of the Use of official title or stationery for

state for private gain private gain is prohibited.

Using state facilities, time, Using state telephones, computers, fax

equipment, or supplies for private machines, mail, paper, vehicles, office

gain space, or compensated employee timefor private gain is prohibited.

Using confidential information for Information which is not a matter of

private gain public record is not to be used forprivate gain.

Receiving compensation from other An official's state salary fullythan the state for the performance of compensates the official for thestate duties performance of official duties.

Acceptance of private funds for thesepurposes is improper.

Performing private activities which A person may not act in an official

later may be subject to the control, capacity to regulate his or her privatereview, inspection, audit, or activity. For example, an employee who

enforcement by the officer or reviews license applications may notemployee review his or her own license

application.

Receiving anything of value from a Persons who wish to influence

person seeking to do business with government often seek to do so by,the official's agency where the item of bestowing gifts of food, drink,'value could be reasonably interpreted entertainment and similar favors on

as having been intended to influence officials. Unlike the Political Reform Act,the official. which limits the amount of gifts, this

provision focuses on thecircumstancels surrounding the giftand whether it reasonably appears thatthe purpose of the gift was to influencethe official. Where a gift is from aperson doing business with the agencyor regulated by it, and it is intended toinfluence an official, acceptance of thegift is an incompatible activity eventhough it is not prohibited under thePolitical Reform Act.

.

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Violations May Result in SanctionsSection 19990 does not establish any particular penalty for violating anincompatible activities statement. However, civil service laws specifically providethat violation of an incompatible activities statement can result in disciplinaryaction against civil service employees. Violation of an incompatible activitiesstatement also may constitute a violation of other laws as well. For example, useof statel resources for private gain may violate other provisions of theGovernment Code as well as Penal Code provisions.

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SAN FRANCISCO BAY CONSERVATION AND DEVELOPMENT COMMISSION

l Thirty Van Ness Avenue, San Francisco 94102 557 - 3686

July 3, 1987 -

Policy and Procedure 87-21

TO: All StaffFROM: Russell A. Abramson, Assistant Executive Director

SUBJECT: INCOMPATIBLE ACTIVITY STATEMENT FOR COMMISSION STAFF

On July 2, 1987, the Commission adopted the following 'Statement of

Activities Considered Inconsistent, Incompatible, or in conflict with Duties

as a Staff Member of the Commission.-

The staff of the San Francisco Bay Conservation and Development

Commission deals with matters of significant financial and economic importance

to private property owners nd to governmental agencies in the Bay Area. The

Commission insists, therefore, that its staff observe the highest ethical

standards and avoid any possibility of conflict of interest between official

and private activity.

In accordance with Section 19990 of the Government Code, a member of the

  Commission's staff shall not engage in any employment, activity, or enterprise

i which is clearly inconsistent, incompatible, in conflict with, or inimical to

his or her duties as a State officer or employee.

Activities and enterprises deemed to be inconsistent, incompatible, or

in conflict with their duties as state officers or employees of the Commission

shall include, but not be limited to, all of the following:

a. Using the prestige or influence of the state or the

appointing authority for the officer's or employee's private

gain or advantage or the private gain of another.

b. Using the state time, facilities, equipment, or supplies for

private gain or advantage.

c. Using, or having access to, confidential information

available by virtue bf state employment for private gain or

advantage or providing confidential information to persons to

whom issuance of this information has not been authorized.

d. Receiving or accepting mohey or any other consideration fromanyone other than the state for the performance of his or her

duties as a state officer or employee.

.

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Policy and Procedure 87-21( ' Incompatible Activity Statement for Commission Staff

Page 2

e. Performance of an act in other than his or her capacity as astate officer or employee knowing that the act may later be

subject, directly or indirectly, to the control, inspection,review, audit, or enforcement by the officer or employee.

f. Receiving or accepting, directly or indirectly, any gift,including money, or any service, gratuity, favor,

entertainment, hospitality, loan, or any other thing of

value, from anyone who is doing or is seeking to do business

of any kind with the·officer's or employee's appointing

authority or whose activities are regulated or controlled by

the appointing authority under circumstances from which it

reasonably could be substantiated that the gift was intendedto influence the officer or employee in his or her official

duties or was intended as a reward for any official actions

performed by the officer or employee.

g. Subject to any other laws, rule, or regulations as pertain

thereto, not devoting his or her full time, attention, and

efforts to his or her state office or employment during hisor her hours of duty as a state officer or employee.

44.

JI'ly 3, 1987

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The Doctrine of Incompatible OfficesBy the California AG's Office and the FPPC 5/24/99 10-15 mins

What Is the Doctrine of Incompatible Oflices?

Only Offices Are Covered bvlhe.Doctrine

The Conlict Between Offices Need Not.Be Actualized

Penales and Enforcement

Reset

What Is the Doctrine of incompatible Offices?The doctrine of incompatible offices concerns a potential clash of two

incompatible public offices held by a single official. In other words, the doctrine

concerns a conflict between an individual's performance of potentially* overlapping public duties. This type of conflict is distinguishable from the

concept of conflicts of interest which involves a potential clash between anofficial's private interests, lon the one hand, and the official's public duties, on the

  other. This legal doctrine will be important to you if you are ever being considered

for appointment or election to a board, council commission, or other off,ce during

your tenure as a state officers or employee.

To fall within the doctrine of incompatible offices, two elements must be present.

• The official in question must hold two public offices simultaneously.

• There must be a potential conflict or overlap in the functions or

responsibilities of the two offices.

The doctrine of incompatible offices is a court made or common law doctrine,and was announced by· the California Supreme Court in 1940.

It is important to understand that the common law doctrine can be superseded

by legislative enactment. This means that the Legislature may choose to

expressly authorize the dual holding of offices under particular circumstances

even though the dual holding would otherwise be prohibited by the doctrine. Forexample, the Legislature passed a measure which specifically provides that the

common law rule does not apply to joint powers agencies or their governingboards. Because of this legislation, a membler of a state commission may serve

as a member of a joint powers agency even though the joint powers agency maysometimes act inconsistently with the best interests of the state commission.

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52

0Let's ReviewThe doctrine of incompatible offices is concerned with apotential clash between:

r A public office and a private office.r A public office and a private financial interest.r Two public offices held by different people.r Two public offices held by a single person.

OLet's ReviewThe doctrine can be superseded by legislative enactment.

oetrue false

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53

Only Offices Are Covered by the DoctrineFor the purpose of the doctrine of incompatible public offices, a public office is a

position in government

• which is created or authorized by the Constitution or some law;• the tenure of which is continuing and permanent, not occasional or

temporary; and• in which the incumbent performs a public function for the public benefit

and exercises some of the sovereign powers of the state.

Since an employment is not an office, the doctrine of incompatible offices does

not preclude an official frorn simultaneously holding an office and an

employment.

A deputy to a principal is not necessarily deemed to be holding the same office

as the principal for purposes of the incompatible offices doctrine; only where the

deputy stands in the principal's shoes with respect to policy making decisions

will the deputy be deemed to be holding the same office as the principal for

purposes of the doctrine. Examples of offices for purpose of the incompatibleoffices doctrine include elected offices, agency secretaries or department

directors, deputy secretaries and directors, members of decision making boards

and commissions. Examples of employment positions, which are not covered bythe doctrine, include clerical positions, mid-level and low-level civil servants, and

others who are not vested with discretion.

AA

OLet's ReviewIf a position is important, it need not be an office to be covered

by the doctrine.

*etrue false

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54

The Conflict Between Offices Need Not Be ActualizedWith respect to a conflict between the duties or functions of two offices, a clashbetween the two offices in the context of a particular decision need not be proved,in order to activate the doctrine of incompatibility of office. It is enough that thereis a potential for a significant clash between the two offices at some point in thefuture. The California Supreme Court discussed the conflict between offlices inthe following language:

Two offices are said to be incompatible when the holder cannot inevery instance discharge the duties of each. Incompatibilityarises, therefore, from the nature of the duties of the offices, whenthere is an inconsistency in the functions of the two, where thefunctions of the two are inherently inconsistent or repugnant, aswhere antagonism would result in the attempt by one person todischarge the duties of both offices, or where the nature andduties of the two offices are such as to render it improper fromconsiderations of public policy for one person to retain both.

Frequently, offices are incompatible when one office has power over the other.For example, the offices of water district director and school board memberwould be incompatible when the school district is located partially or whollywithin the boundaries of the water district if the water district has power over theschool district concerning new or expanded access to water. Similarly, the officeof city planning commissioner and state highway commissioner were found tobe incompatible because the best decision for the state with respect to highwaylocation could be in conflict with the wishes of the city.

A:,

Penalties and EnforcementWhere a public official is found to have accepted two public offices, the doctrine

provides for an automatic vacating of the first office.

© California Attorney General's Office

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 Let's ReviewDetermine which of the following answers describe when6ffices are generally incompatible. Click on all three answers to

see if you were right.

r when one has budgetary or regulatory power over the other

r. When the offices are of the same type, but in different

jurisdictions13 When the offices exercise authority over the same

geographical area

OLet's ReviewWhen an individual violates the doctrine of incompatibleomces:

r, The officeholder may be asked to resign one of the offices.c The officeholder is deemed to have vacated the first office.r, The officeholder must disqualify himself or herself.from the

decision in question.c The officeholder will receive administrative fines.

Remember These PointsThe doctrine applies only to offices, and not employmentpositions

Potential, not actual, conflict is sufficient

First office vacated when offices are incompatible

Disqualification will not cure incompatibility

Next

Now that you have completed the doctrine of incompatibleoffices module, click on Misuse of_Public Funds to go to thenext module.

. . . i.., ·:r· ----- -4·..CC'1.-A--1- A.....

56 -

Misuse of Public FundsB the California AG's Office and the FPPC 5/24/99 5-10 minsd

1-1 Public Fuods May Not Be Used For Personal Purposes

Examoles-of Misuse for Personal Pumoses

State Agency Particioation in Ballot Measure Elections

Reset

Public Funds May Not Be Used For Personal PurposesThe starting point for any analysis concerning the misuse of public funds beginswith the principle that public funds must be expended for an authorized publicpurpose. An expenditure is made for a public purpose when its purpose is tobenefit the public interest rather than private individuals or private purposes.

Once a public purpose is established, the expenditure must still be authorized. Apublic official possesses only those powers that are conferred by law, eitherexpressly or impliedly.

The California Constitution and a variety of state statutes make it clear that publicfunds may not be expended for purposes that are primarily personal. Suchexpenditures are neither for a public purpose nor are they authorized.

The prohibition against using public funds for personal purposes does notmean that no personal benefit may result from an expenditure of public funds.For example, the payment of a public employee's salary confers a personalbenefit on the employee, but it is an appropriate expenditure of public fundsbecause it is procuring the services of the employee for public purposes. Themisuse of public funds occurs when the personal benefit conferred by a publicexpenditure is not merely incidental. The telrm "public funds" is not limited tomoney, but includes anything of value belonging to a public agency such asequipment, supplies, compensated staff time, and use of telephones,computers, and fax machines etc.

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57

Examples of Misuse for Personal Purposes:• In Peop/e v. Harby, a city official used a city car, entrusted to him for use

in connection with official business, to take a pleasure trip from LosAngeles to Great Falls, Montana and back.

• In Peop/e v. D#/on , a city commissioner used official governmentdiscounts to purchase items for himself and others. This was a misuseof public funds, even though those receiving the discount paid for theitems with personal funds.

• In People v. Battin , a county supervisor used his county compensatedstaff to work on his political campaign for Lieutenant Governor.

• In Peop/e v. Sperl , a county marshal furnished a deputy marshal andcounty vehicle to transport a political candidate, his staff and family.

Violations of the laws prohibiting misuse of public funds may subject the violatorto criminal and civil sanctions. These penalties may include imprisonment for upto four years and a bar from holding office.

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58

State Agency Participation in Ballot Measure ElectionsThere is another issue involving the misuse of public funds that does notconcern the personal use of public funds.

Using Public Funds and Ballot Measure CamoaignsStanson v. Mo#Endorsements and Informational MaterialsImproperly Using Public Funds May Trigger Fines

Using Public Funds and Ballot Measure Campaigns

This issue concerns the use of public funds in connection with ballot measurecampaigns. The California Supreme Court case of Stanson v. Mott is thecornerstone case concerning the expenditure of public funds in electioncampaigns. In that case, a private citizen sued the Director of the CaliforniaDepartment of Parks and Recreation, challenging the Director's expenditure ofDepartment funds to support passage of a bond act appearing on a statewideballot. The Supreme Court unanimously Ifound that the Director had actedunlawfully, concluding that "in the absence of clear and explicit legislativeauthorization, a public agency may not expend public funds to promote a partisanposition in an election campaign."

AStanson v. Mott

The Supreme Court wrote in Stanson :

A fundamental precept of this nation's democratic electoralprocess is that the government may not 'take sides' in electioncontests or bestow an unfair advantage on one of severalcompeting factions. A principal danger feared by our country'sfounders lay in the possibility that the holders of governmentalauthority would use official power improperly to perpetuatethemselves, or their allies, in office..; the selective use of publicfunds in election campaigns, of course, raises the specterl of justsuch an improper distortion of the democratic electoral process.

AEndorsements and Informational Materials

Subsequently, court cases have said that a government agency may endorse ameasure which is related to its expertise so long as it does not expend funds topromote its passage. Similarly, a government agency may draft legislation or a

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59

ballot measure related to its expertise, but may not promote the passage of themeasure in an election campaign.

The Stanson Court also noted that if a state agency or department has authorityto disseminate information relating to its activities, it may spend funds to providethe public with a fair presentation of relevant information. The Court found that "itwould be contrary to the public interest to bar knowledgeable public agenciesfrom disclosing relevant information to the public, so long as such disclosure isfull and impartial and does not amount to improper campaign activity." To be fair,a prelsentation must consider all important points and provide equal treatmentto both sides of the issue.

AImproperly Using Public Funds May Trigger Fines

Improper use of public funds also may trigger fines from the Fair PoliticalPractices Commission for failing to report campaign contributions. For example,in 1996, Sacramento County paid a $10,000 fine to the Commission inconnection with a utility bill insert explaining the effect on the County of severalballot measures. The Commission ruled that the insert advocated a position onthe ballot measures and was not a neutral and fair presentation of the facts.

Misuse of Public Funds 3-2q

0Let's ReviewExpenditures made to benefit the public are permissible.

oetrue false

9 Let's ReviewEvelyn is an agency secretary.·She has just completed a longday and she wishes to make a few telephone calls before sheleaves her office to invite potential contributors to theincumbent Governofs campaign fundraising dinner. Since thepeople she will be calling frequently have dealings with state

government on a variety of issues, may she charge these callsto the state?

Oeyes no

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9Let's ReviewRamon is the director of a state department. He wishes toproduce informational materials to answer questions about theimpact of the measure. It is permissible to expend funds forthis purpose so long as:

r The materials stop short of advocating a vote for or againstthe measure.

r The materials do not make false statements.r The materials present a balanced description of the

favorable and unfavorable impacts of the measure.

0Remember These PointsExpenditures must be for a public purpose

Expenditures must be authorized

Public funds may not be expended for personal purposes

Information may be fairly presented

Violations bring crin,inal, civil and administrative sanctions

Next

Now that you have completed the misuse of public fundsmodule, click on Other Laws to go to the next module.

0 California Attorney General's Office, 1999

http://caag.state.ca.us/ethi/7misuse/!p3pgzle.htm 9/27/99

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Other LawsBy the California AG's Office and the FPPC 5/24/99 5-10 mins

Conflicts of Interests and Campaign Contibutions

Special Restrictions on Personal Loans

The Commgn Law Doctrine Against Conflicts of Interest

Reset

Conflicts of Interests and Campaign ContributionsThroughout this tutorial, we have discussed financial interests that can affect

governmental decision-making. Campaign contributions generally are notcovered by conflict of interest laws because of their relationship to firstamendment political speech. However, there is one provision in the PoliticalReform Act which addresses campaign contributions in *a conflict of interestcontext.

Briefly stated, Government Code section 84308 provides the following:

• The law applies to proceedings on licenses, permits, and entitlementsfor use pending before certain state and local boards and agencies.

• Covered officials are prohibited from receiving or soliciting campaigncontributions of more than $250 from parties or other financiallyinterested persons during the pendency of the proceeding and for threemonths after its conclusion.

• Covered officials must disqualify themselves from participating in theproceeding if they have received contributions of more than $250 duringthe previous 12 months from a party or a person who is financiallyinterested in the outcome of the proceeding.

• At the time parties initiate proceedings, they must list all contributions tocovered officials within the previous 12 months.

• The law expressly exempts directly elected state and local officials.However, the exemption d6es not apply when they serve in a capacityother than that for which they were directly elected.

This provision is contained in the Political Reform Act and is subject to theregulations of the Fair Political Practices Commission.

A© California Attorney General's Office

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Special Restrictions on Personal LoansHigh ranking state officials are prohibited from receiving personal loans of $250or more from persons who contract with or are employed by the official's agencyor any agency over which the official has direction and control. There areexemptions for specified commercial loans made to officials in the ordinarycourse 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 thecontract is in writing and the officer complies with specified requirements.(Government Code € 87461)

The Common Law Doctrine Against Conflicts of InterestEven though most of the conflict of interest laws in California are based onlegislative enactment, there also is the common law doctrine against conflicts ofinterest. This court-made doctrine provides that a public officer is impliedlybound to exercise his or her powers with disinterested skill, zeal, and diligenceand primarily for the benefit of the public. A personal interest, whether financial ornonlfinancial, that interferes with an official's ability to act in such a manner couldpotentially violate the doctrine.

Next

Now that you have completed the other laws module, click on Leaving OfficeConflicts to go to the next module.

http://caag. state.ca.us/ethi/Botherlaws/Ip2pgl.htm

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Conflicts of Interest When Leaving OfficeBy the California AGis Office and the FPPC 5/24/99 5-10 miRE

Overview of Laws

Restric8ons While Seeking Employment

One Year Ban

Permanent Ban For Specifed Proceedjngs Or Contrad

Overview of LawsIf you do not stay in state government service for the remainder of your career,you need to know there are restrictions imposed on you once you begin to

contemplate your departure from state service. Some of the restrictions applyduring the time you are seeking future employment. Several restrictions apply fora one or two year period after your departure from state service. Still othersremain in effectl for the duration of particular proceedings or contracts.

Restrictions While Seeking Employment -

Prior to leaving government office or employment, Government Code section87407 prohibits most state officials from making, participating in the making orusing their official position to influence the making of government decisionsdirectly relating to any persons with whom they are negotiating or otherwiseinvolved in connection with prospective employment.

One Year BanGovernment Code section 87406 places a one year ban on former stategovernment officials from contacting specified government agencies. Therestrictions prohibit the former officirIs from accepting compensation to act asthe agent, attorney or representative of another person for purposes ofinfluencing specified government agencies through oral or writtencommunications. (For additional restrictions, see Plublic Contract Code €10411.)

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Permanent Ban For Specified Proceedings Or Contracts 1 OF 4

The prohibition contained in Government Code section 87400 et seq. providesthat:

• no former state administrative official,• shall for compensation act as agent or attorney for any person other than

the State of California,• before any court or state administrative agency,• in a judicial or quasi-judicial proceeding if previously the official

personally and substantially participated in the proceeding in his or herofficial capacity.

If the elements of the prohibition are found to be present, a former stateadministrative official is forever banned from acting as an agent or attorney in acovered proceeding or from assisting another to so act.

Government Code section 1090 reaches a similar result with respect tocontracts which the official participated in making.

Conflicts of Interest When Leaving Office 4-2

0Remember This PointAs you contemplate leaving office, familiarize yourself withthese laws so that you do not violate them.

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ConclusionThis concludes the core course on conflict of interest lawspresented by the Attorney General's Office and the FairPolitical Practices Commission. The purpose of thisorientation was to familiarize you with California's ethics lawsin order to help you avoid conflict of interest situations.Remember - when conflict of interest situations arise, youneed to consult with your legal counsel. You may alsolwish to consult other sources such as informational materialsprepared by the Attorney General's Office or the Fair PoliticalPractices Commission.

Additional Resources on the World Wide WebGive Us Your FeedbackYour Certificate of Completion

Additional Resources on the World Wide Web

Here are some suggestions for additional informationregarding California's ethics laws. Many of these sites willprovide you with additional links. Remember to use yourbrower's back button to return here after you have visitedthese sites.

California Attorney General (Department of Justice)http://www.caag.state.ca. usThis site hosts the Internet core course Ethics Orientationfor State Officials.

California Fair Political Practices Commissionhttp://www.fppc.ca.govThis is the site for the FPPC, California's independentregulatory agency, created by a vote of the people, to carryout the mandate of the Political Reform Act of 1974. The Act'smajor provisions regulate political activities in campaignfinance, lobbying registration and conflicts of interest.

Department of Personnel Administrationhttp:#www.dpa.ca.aovThis site contains links to the Training & ContinuousImprovement Division of the Department of PersonnelAdministration. Information regarding the ethics orientationvideo tape will be available here.

Official California Legislative Informationhttp://www.leginfo.ca.govFrom here you can link to the Government Code, includingsection 8920, the Code of Ethics, and section 8314,concerning the misuse of public funds, as well as all other

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66

Government Code provisions referred to in this course. Youcan also link to Penal Code Section 424 and the CaliforniaConstitution, Article 16, Section 6, which relate to the misuseof public funds.

1998 Conflicts of Interest Pamphlethttp://caag.state.ca.us/piu/coi.htmThis publication, prepared by the California AttorneyGeneral's office, focuses on financial conflicts of interests bylocal and state executive and legislative officials. It does notcover judicial conflicts of interests, the Legislative Code ofEthics, nor the ethical requirements of the state bar. It isavailable for viewing in two different formats. You can view itas an HTML document via your browser or in PDF format. Toview the document in PDF format you must have an AcrobatReader which can be downloaded free.

1998 Conflicts of Interest Pamphlet, SupplementalInformationhttp://caag.state.ca.us/piu/coisupp. htmThere have been several noteworthy occurrences since thepublication of the Attorney General's 1998 Conflicts ofInterests pamphlet. This is a link to a brief summary of themost important issues.

Issue Spotter Checklisthttp://caag.state.ca.us/piu/conflict/issue.htmThis links you to a checklist of conflicts of interest issues.

A

Give Us Your Feedback

If you have a suggestion, comment or criticism to make aboutthe course, we would very much like to hear it. Your feedbackis invaluable if we are to continue to make improvements tothe course.

You can e-mail us directly atethics@hdcdojnet.state.ca. us.

Your Certificate of Completion

Please click the next page button for your certificate. Placeyour cursor in each box on the certificate and type in theinformation requested. You can move from box to box byusing the tab key. After you have typed in the information

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- requested, you can print your certificate by pressing Ctrl+P.

If this Internet course is a part of your agency's ethicsorientation as mandated by the law, you need to makesure that you are following your agency's procedures incompleting this aspect of the orientation.

A

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. .

ETHICS ORIENTATION FOR STATE OFFICIALSRESPONSE FORM FOR VIDEO TAPE PRESENTATION

Conflicts of Interest Limitations on the Contractual Conflicts of Ban on Free The Doctrine of Misuse ofUnder The Political Receipt of Gifts Interest: Transportation Incompatible Public

Reform Act All Contracts omces Funds

Rosa Leslie Dept of Cyberspace Cy Potential Clash ExpendituresOa 0 Yes 0 Yes applies 0 a can accept Oa 0 True

Ob 0 No 0 No does not apply 0 b cannot accept 0 b 0 False

0 a&b OC0 none Designated Employee Tem Janet Od Evelyn

0 True 0 Yes 0 True 0 all of the 0 Yes

Locke 0 False 0 No 0 False above 0 No0aOb Eileen Financial Interest Defined Susan Legislative Ramon

OC 0 a ask for retail price 0 True 0 Yes supersession Oa0 b ask for wholesale 0 False 0 No 0 True Ob

Hobbes price 0 False OC

Oa 0 c taste the wine to Separate Property Susan

Ob determine value 0 True Oa Important position· OC 0 d look for price on 0 False Ob 0 True

open market OC 0 False

Holmes Violation of section0 a economic Dan 1090 can lead to Keith Office includes

interest 0 Yes Oa Oa Oa0 b no 0 No Ob 0 b Ob

economic OC OC 0 Cinterest Paul Od Od Od

0 Yes OeMaria 0 No Jeff

0 Yes Oa Offices are usually

0 No Linda Ob incompatible when

Oa OC OaOb Od ObOC OC

' 0 dIndividual0a0b0C0d

.

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SAN FRANCISCSO BAY CONSERVATION AND DEVELOPMENT COMMISSION

Ethics Orientation for State Officials

1999

Certificate of Completion

I am aware of and have complied with the requirements for State Agency EthicsTraining as provided in California Government Code Sections 11146 through 11146.4 byreviewing the materials enclosed with the BCDC memorandum to all Commissioners. andAlternates entitled "Ethics Training" and dated October 8, 1999 and by either viewing thevideotape enclosed with those materials or completing the on-line ethics training course

established by the Office of the California Attorney's General's Office and the CaliforniaFair Political Practices Commission on

, 1999. [Please fill in the month and day that youcompleted either the videotape course or the on-line Internet course.]

(Signature and typed or handwritten nameof person certifying completion of ethics training)

(Date of signature)

Box 7, Folder 5

Item 10

ACCNO_000859