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Interpretative Opinion 01-05: Conflict of Interest

February 16, 2001
 

Charlotte Brookins-Hudson, General Counsel
Council of the District of Columbia
441-4th Street, NW
Washington, DC  20001

Re: Potential Conflict of Interest – The Honorable Kevin Chavous

Dear Ms. Brookins-Hudson:

This responds to your request for an interpretative opinion, on behalf of Councilmember Chavous, concerning the real estate transaction between Mr. Chavous and a District realtor who may represent clients seeking business with the District of Columbia.  You state that Mr. Chavous has recently leased office space from George Lowe and Associates for his law practice.  You further state that the lease is similar to that which is typically obtained by solo practitioners in the District of Columbia, and that it has no favorable terms attached.  Moreover, you state Mr. Chavous is not aware that he has been given a reduced rental rate for the space, but that he is being assessed a rental rate consistent with the market rental rate.

Additionally, you state that Mr. Chavous informed you that Mr. Lowe is a federal lobbyist, and that he may have some clients who are seeking to do business with the District.  Further, Mr. Chavous is unaware that Mr. Lowe has any involvement in legislation pending before the Council.

  DC Code § 1-1461(b) states, “[n]o public official shall use his or her official position or office to obtain financial gain for himself or herself, . . ., or any business with which he or she or a member of his or her household is associated, other than that compensation provided by law for said public official . . .”.

  DC Code § 1-1461 (c) provides, “[n]o person shall offer or give to a public official or a member of a public official’s household, and no public official shall solicit or receive anything of value including a gift, favor, service, loan gratuity, discount . . ., based on any understanding that such public official’s actions or judgment or vote would be  influenced  thereby,  or  where  it  could  reasonably be inferred that the thing of value would influence the  public official in the discharge of his or her duties, or as a reward, except for political contributions publicly reported pursuant to § 1-1416 and transactions made in the ordinary course of business of the person offering or giving the thing of value.”

  DC Code § 1-1461(g) states, “[a]ny public official who, in the discharge of his or her official duties, would be required to take an action or make a decision that would affect directly or indirectly his or her financial interests or those of a member of his or her household, or a business with which he or she is associated, or must take an official action on a matter as to which he or she has a conflict situation created by a personal, family, or client interest, shall:  (1) [p]repare a written statement describing the matter requiring action or decision, and the nature of his or her potential conflict of interest . . .; (2) [c]ause copies of such statement to be delivered to the Board of Elections and Ethics; (3) [i]f he or she is a member of the Council . . ., deliver a copy of such statement to the Chairman thereof . . .”.

18 U.S.C. § 208 further restricts District employees from participating personally and substantially in government matters requiring decision-making and/or advice when, to their knowledge, they have a direct or indirect financial interest in the matter (emphasis added).  This federal statute has had longstanding aplicability to officers and employees, including members of the Council, of the District of Columbia.  Pursuant to its implementing regulations at 5 CFR § 2640.103, an employee's participation is personal and substantial when he or she directly takes part in the matter, and his or her involvement is of “significance to the matter.”  Further, an employee is prohibited from participating in an official capacity in a matter in which he or she has a financial interest, “if the particular matter will have a direct and predictable effect on the interest.”  The test for a direct financial interest is whether there is a “close causal link between any decision or action to be taken in the matter and any expected effect of the matter on the financial interest.”  A predictable effect is found where there is a real, rather than a speculative, possibility that the matter will affect the financial interest.  Further, this law imputes to the employee the financial interests of any organization with which the employee serves as an officer, director, trustee or general partner.

18 DPM § 1800.3, applicable to all District employees, states, “[n]o employee of the District government shall engage in outside employment or private business activity or have any direct or indirect financial interest that conflicts or would appear to conflict with the fair, impartial, and objective performance of officially assigned duties and responsibilities (emphasis added).  Further, 18 DPM § 1803.1 (b) provides, in pertinent part, “[a]n employee shall avoid action, whether or not specifically prohibited by this chapter, which might result in, or create the appearance of . . . giving preferential treatment to any person . . .”.
Based on your representations, the agreement entered between Mr. Chavous and George Lowe and Associates appears to have been transacted in the ordinary course of business, thereby raising no apparent conflict of interest issues.  However, should Mr. Lowe seek to lobby Mr. Chavous directly on behalf of his clients, any favorable action taken by Mr. Chavous relative to Mr. Lowe and/or his clients may be perceived as giving preferential treatment based on the parties’ existing business relationship.

Finally, it would be prudent for Mr. Chavous to examine closely any future legislation before the Council, particularly where it involves G. Lowe and Associates.  Knowledge of the foregoing will assist Mr. Chavous in seeking advice from the Office of Campaign Finance, on a case-by-case basis, concerning whether a potential conflict of interest exists.