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SUMMARY IF CHANGES TO FPPC REGULATIONS RE: CONFLICT OF INTEREST ANALYSIS AND MAERIALITY STANDARDS
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SUMMARY IF CHANGES TO FPPC REGULATIONS RE: CONFLICT OF INTEREST ANALYSIS AND MAERIALITY STANDARDS
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7/19/2019 1:40:30 PM
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7/19/2019 10:24:31 AM
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City Clerk
Date
5/11/2015
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IM!bk <br />BEST BE5T & KRIEGER <br />ATTORNEYS AT LAW <br />jettisoned the "direct" P'indirect" interest dichotomy.) <br />For a number of years, there was some confusion about what the term "reasonably <br />foreseeable" meant. Over time, this phrase was interpreted as "substantially likely," which in <br />practice required a very high degree of probability before disqualification of an official was <br />triggered. Amended Regulation 18701 lowers this threshold for explicitly involved economic <br />interests and states: <br />"A financial effect on an economic interest is presumed to be reasonably foreseeable if <br />the economic interest is a named party in, or the subject of, a governmental decision <br />before the official or the official's agency. <br />An economic interest is the subject of a proceeding if the decision involves the issuance, <br />renewal, approval, denial, or revocation of any license, permit, or other entitlement to, or <br />contract with, an economic interest. (See Regulation 18705.2(a)(1)-(6).)" <br />However, when an economic interest is not explicitly involved in the decision (as <br />described above), the financial effect can still be considered reasonably foreseeable if it is a <br />"realistic possibility." In other words, if the financial result cannot be expected, absent <br />extraordinary circumstances not subject to the public official's control, then it is not considered <br />"reasonably foreseeable." <br />The following six factors, as summarized, should be used to guide one's analysis <br />in specific circumstances: <br />1. Consider the extent the financial effect is contingent upon intervening events, not <br />including future public agency actions. <br />2. Consider whether the public official should anticipate the financial effect on his or <br />her economic interest as a potential outcome of the decision under normal <br />circumstances. <br />(3) Step Three: Can the public official demonstrate that the material financial effect on the public official's financial <br />interest is indistinguishable from its effect on the public generally? To determine if the material financial effect on <br />any of the public official's financial interest is indistinguishable from its effect on the public generally, apply <br />Regulation 18707 et seq. If the answer is yes, there is no conflict of interest under the Act. If the answer is no, <br />proceed to Step Four. <br />(4) Step Four: If after applying the three step analysis and determining the public official has a conflict of interest, <br />absent an exception, he or she may not make, participate in making, or in any way attempt to use his or her official <br />position to influence the governmental decision. To determine if the public official is "making, participating in <br />making, or in any way attempting to use his or her official position to influence a governmental decision," apply <br />Regulation 18704. If the public official will be called upon to make, participate in the making, or use his or her <br />official position to influence a governmental decision in which he or she has a financial interest as determined under <br />Step One through Step Three, he or she will have a prohibited conflict of interest." <br />-2- <br />93939.00001\9704968 2 <br />
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