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Interpretative Opinion 05-04: Conflict of Interest

April 15, 2005

Russell A. Smith, Executive Director
District of Columbia Public Schools
Board of Education
825 North Capitol Street, NE
Washington, DC 20002

Dear Mr. Smith:

This responds to your request for an opinion concerning whether a potential conflict of interest would exist if Jeff Smith, a member of the Board of Education, which serves as a Chartering Authority and exercises oversight over various charter schools in the District of Columbia, enters into a contract with D.C. Public Charter School Association (PCSA) a local non-profit.

You indicated that, under a contractual agreement with PCSA, Mr. Smith would work with charter school association members of PCSA as an independent contractor to assist with Medicaid reimbursement and he will produce a report for each association member that outlines the process for obtaining Medicaid reimbursement. You further assert that the contractual relationship between PCSA and Mr. Smith is in no way related to Mr. Smith’s status as a member of the District of Columbia Board of Education but, rather for services he will provide based upon expertise he acquired prior to his membership on the Board. Moreover, pursuant to our telephone conversation today, you stated that the Board of Education does not have oversight authority over PCSA to perform professional services in the area of medical billing.

D.C. Official Code § 1-1106.01(b) (2001 Edition) provides that “[n]o public official shall use his or her official position or office to obtain financial gain for himself or herself, any member of his or her household, or any business with which he or she or any member of his or her household is associated with, 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 which 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…”

D.C. Official Code § 1-1106.01(i) (2) defines the term “business” as “any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self-employed individual, holding company, joint stock, trust, and any legal entity through which business is conducted for profit.”

D.C. Official Code § 1-1106.01(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, hospitality, political contributions, or promise of future employment, 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 § 1-1102.06 and transactions made in the ordinary course of business of the person offering or giving the thing of value.”

D.C. Official Code § 1-1106.01(g) requires recusal by public officials when “ [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 interest 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…”

Based upon your representations herein, it does not appear that the services Mr. Smith will provide under a contract with PCSA are related to his official duties as a member of the District of Columbia Board of Education. In fact, it appears that Mr. Smith’s expertise was gained prior to his membership on the Board and that he is providing a service in the ordinary course of business.

Additionally, there does not appear to be any indication that Mr. Smith’s official actions or judgment could be influenced by his employment. Nor does it appear that in the discharge of his official duties Mr. Smith will be required to take actions that will directly or indirectly affect any financial interest linked to his contract. Nonetheless, if Mr. Smith is presented with either scenario, he should forthwith follow the recusal procedures outlined in DC Official Code §1-1106.01(g) or remove or disqualify himself from official action on matters before the Board of Education that involve PCSA or any of PCSA’s members only where there is a direct and predictable effect on his financial interest or that of PCSA.

Accordingly, there is no evidence to suggest that Mr. Smith’s employment as an independent contractor with PCSA and his position as a member of the Board of Education would present a conflict of interest. Based upon the information you have provided, it is the opinion of the Office of Campaign Finance that Board of Education member Jeff Smith would not violate the District of Columbia Campaign Finance Reform and Conflict of Interest Act by entering into an agreement as an independent contractor with PCSA to assist charter school association members in obtaining Medicaid reimbursement.

The foregoing is an Interpretative Opinion of the Director of the Office of Campaign Finance. Pursuant to D.C. Official Code §1-1103.05, you are entitled to request an Advisory Opinion from the Board of Elections and Ethics on this transaction or activity.