Interpretative Opinion 99-01: Conflict of Interest
January 14, 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 Jack Evans)
Dear Ms. Brookins-Hudson:
This responds to your request, by letter dated January 11, 1999, for an opinion concerning whether a potential conflict of interest exists for Councilmember Jack Evans as related to his recent employment with an insurance company, and his chairmanship of the Council Committee on Finance and Revenue. Specifically, you inquire whether Mr. Evans’ simultaneous service as a member of the Council and as an employee of an insurance company, or, as chair of the Council Committee on Finance and Revenue and as a local representative for an insurance company, pose a potential conflict of interest. You further inquire whether a potential conflict of interest generally exists or whether it may be characterized as limited or [qualified] pursuant to specific [factual] situations. In addition, you request guidance concerning measures that may be taken to prevent a conflict of interest.
You represented the following with respect to Central Benefits Mutual Insurance Company of Columbus, Ohio (Company) and Councilmember Evans’ employment therewith: (1) the Company intends to redomesticate to the District of Columbia; (2) Mr. Evans was hired to be the Company’s local representative; (3) the Company’s redomestication application is pending review before the Department of Insurance and Securities Regulation (Department), an agency for which Mr. Evans provides oversight as Chair of the Council Committee on Finance and Revenue; (4) as an employee of the Company, Mr. Evans is responsible for tracking the status of the redomestication application; and (5) the Company will be regulated by the Department if its redomestication application is approved. Further, you state the contacts that the Council has with the Department may be described as minimal.
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 . . .”.
DC Code § 1-1461(f) states, “[n]o member or employee of the Council of the District of Columbia . . . shall accept assignment to serve on a committee the jurisdiction of which consists of matters (other than of a de minimis nature) in which he or she or a member of his or her family or a business with which he or she is associated, has a financial interest.”
DC Code § 1-1461(h) provides, “[n]either the Mayor nor any member of the Council of the District of Columbia may represent another person before any regulatory agency or court of the District of Columbia while serving in such office. The preceding sentence does not apply to an appearance by such an official before any such agency or court in his or her official capacity or to the appearance by a member of the Council (not the Chairman) licensed to practice law in the District of Columbia, before any court or non-District of Columbia regulatory agency in any matter which does not affect his or her official position.”
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. In addition, 18 U.S.C. § 205(b) prohibits District Government employees from acting as agent or attorney for persons before District Government agencies. However, we suggest that you consult the DC Bar Counsel to determine whether any further restrictions exist in the DC Bar Rules.
Based on your representations herein, it would appear that Mr. Evans’ simultaneous service as Chair of the Council Committee on Finance and Revenue and to Central Benefits Mutual Insurance Company may present a potential conflict of interest on a limited basis, as you represent that Council contacts with the Department are minimal. As such, it is the opinion of this Office that Mr. Evans should avoid personal representation of the Company before the Department in the tracking of the application of the Company, and thereafter in any matters involving the regulation of the Company before the Department. Further, as Chair of the Council Subcommittee on Finance and Revenue, Mr. Evans should recuse himself, on a case-by-case basis, from any official action before the subcommittee as it relates directly to the Company. Where recusal is deemed appropriate, Councilmember Evans should follow the procedures outlined in DC Code § 1-1461(g), and fully implemented by regulations at 3 DCM.R. § 3303, to avoid a conflict of interest.