February 1, 1999
Charlotte Brookins-Hudson, General Counsel
Council of the District of Columbia
Suite 711 North
441 - 4th Street, NW
Washington, DC 20001
Re: Potential Conflict of Interest (Councilmember Phil Mendelson)
Dear Ms. Brookins-Hudson:
This responds to your request, by letter dated January 28, 1999, for an opinion concerning whether a potential conflict of interest exists for Councilmember Phil Mendelson as related to his holding of 225 shares of AT&T stock. Specifically, you inquire whether Mr. Mendelson’s holding of 225 shares of AT&T stock poses a conflict of interest with his voting on a matter scheduled for consideration at the February 2, 1999 legislative session. You state the Council will consider a bill to approve the proposed merger of AT&T Corporation and TCI. Under the agreement, Telecommunications, Inc. (TCI) would become a wholly owned subsidiary of AT&T. Telecommunications, Inc. is the parent corporation of TCI, DC, Inc., the limited partner of District Cablevision Limited Partnership.
As you are aware, DC Code § 1-1461(b) provides that “[n]o public official shall use his or her official position or office to obtain financial gain for himself or herself . . . other than that compensation provided by law for said public official. This subsection shall not affect a vote by a public official: (1) on any matter that affects a class of persons (such a class shall include no less than 50 persons) of which such public official is a member if the financial gain to be realized is de minimis . . .”.
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 applicability to officers and employees, including members of the Council, of the District of Columbia. Pursuant to 5 CFR § 2640.103, which implements 18 U.S.C. § 208, 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.” Moreover, 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 speculative, possibility that the matter will affect the financial interest. Based on your representations, it would appear that the passage of the legislation will not have a direct and predictable effect on Mr. Mendelson’s holding of AT&T stock.