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Interpretative Opinion 96-05: Conflict of Interest

May 7, 1996

The Honorable Kevin P. Chavous
Councilmember - Ward 7
Council of the District of Columbia
1350 Pennsylvania Avenue, NW
Washington, DC  20004

Re: Conflict of Interest

Dear Councilmember Chavous:

This responds to your request for an opinion, which was received near closing last evening, concerning whether a conflict of interest exists with respect to your vote on Bill 11-258, the “Telecommunications Competition Act of 1996."  The legislation states that you co-sponsored this Bill.  You state that your brother is employed by Bell Atlantic as Director of Sales, Long Distance Division, in Rosslyn, Virginia.  The issue is, therefore, whether your participation and/or vote on the Bill would be considered a conflict of interest in view of your brother’s employment with Bell Atlantic, a telecommunication’s company necessarily affected by this legislation.

DC Code § 1-1461(b) states 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 . . . a member of his or her household is associated . . .”.  The term, “household”,  is defined in DC Code §1-1461(i)(4)  as  “the  public official and his or her immediate family.”  Pursuant to DC Code § 1-1461(i)(5), “immediate family” includes “the public official’s . . . brother . . .”.

Although the preamble to this legislation states as its purpose “to authorize and encourage the Public Service Commission to permit all forms of entry to District telecommunications services providers, and to direct the Public Service Commission to regulate telecommunications services providers according to their respective market power”, the true impact of this legislation could have far-reaching effects due to the present highly competitive climate in the telecommunications industry.  While the issue on its face may appear to be somewhat straightforward, it is complicated by issues impacting Bell Atlantic, the dominant local telecommunications services provider in the District of Columbia. Further, a thorough analysis of the financial impact this legislation could have on Bell Atlantic would require the expertise of a specialist in telecommunications law.

Based on our limited knowledge in this area, the impact of this legislation on Bell Atlantic is arguable and speculative at best.  However, since what we know of the long range plans of Bell Atlantic to enter the long distance market by merging with Nynex, the implications of such a merger could ultimately affect the financial interests of your brother, a long distance Sales Director for Bell Atlantic.

While the Public Service Commission (PSC) regulates Bell Atlantic based on its positioning as the dominant or “market power” in this jurisdiction, Bell Atlantic is interested in increasing its market share in the long distance business.  It may be presumed that in order to effect its long range plans, Bell Atlantic may be prepared to negotiate certain trade-offs.  This legislation could be viewed as a vehicle by which the doors to the long distance business could be opened locally for Bell Atlantic, thereby favorably affecting the financial interests of your brother.

Based on the foregoing, we recommend that you recuse yourself from voting on this legislation to avoid even the appearance of a conflict of interest.