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101706 COIAState and Local State and Local Government Conflict of Government Conflict of Interests Act Interests Act An Overview of the Act’s An Overview of the Act’s Provisions Concerning Provisions Concerning Transactions, Contracts, Transactions, Contracts, Conduct, Disclosures, and Conduct, Disclosures, and Enforcement Enforcement Conflict of Interests Act Conflict of Interests Act (“COIA”) (“COIA”) The Conflict of Interests Act is The Conflict of Interests Act is the primary law governing the the primary law governing the financial interests of financial interests of government officials and government officials and employees in contracts and employees in contracts and transactions that involve their transactions that involve their agency. agency. “Personal Interest” “Personal Interest” “Personal interest”means a financial benefit or liability accruing to an officer/employee or a member of his or her “immediate family.” Va. Code §2.2-3101. “Immediate Family” “Immediate Family” “Immediate family”means your spouse and also any other person who resides in your household if (i) the person is your dependent or (ii) you are a dependent of that person. Va. Code §2.2-3101. “Personal Interest” “Personal Interest” Such interest exists by reason of –Ownership of a business (> 3%) –Annual income > $10,000 from ownership in property or a business; –Annual salary > $10,000; –Ownership of property if interest is > $10,000; –Option to own business or property if ownership interest > 3% (business) or > $10,000 (property) –Personal liability, assumed on behalf of a business, that exceeds 3% of business’s total equity Related Business Entities Related Business Entities If you have a “personal interest”in a business, you also have a “personal interest”in any related business entity: •Parent-subsidiary (> 50% voting power) •Affiliated (shared owner, management, support staff, facilities, etc.) Va. Code §2.2-3112(A)(1). The next step The next step If you have a personal interest in a business or property, the next step in the analysis is to determine whether you have a “personal interest in a transaction.” “Personal interest in a “Personal interest in a transaction” transaction” “Personal interest in a transaction”exists when an officer (or “immediate family”member) (1) has a “personal interest”in property or a business OR (2) represents or provides services to an individual or business ANDthe property, business, or represented or served individual or business (i) is the subject of the transaction OR (ii) may realize a reasonably foreseeable direct or indirect benefit or detriment as a result of the action of the agency considering the transaction. Va. Code §2.2-3101. What happens if I have a “personal What happens if I have a “personal interest in a transaction”? interest in a transaction”? An officer with a “personal interest in a transaction,”will •be required to disclose the interest and abstain OR •be allowed to participate and vote, upon disclosure of the interest. THIRD POSSIBILITY: •An exception may apply. Exceptions Exceptions •Transaction affects the public generally •Member of a business, profession, occupation, or group (3 or more members), the members of which are affected by the transaction Representation Representation If the business is a client of your firm, but you do not personally provide services to the client, you may disclose and vote. If you personally provide services to the client, you must disclose and abstain (unless an exception applies). Sample Transaction Sample Transaction Disclosure for Public Official Disclosure for Public Official I am an employee of XYZ Corp. XYZ Corp. provides services to Company A. Company A is the owner of the land that is the subject of today’s vote. I do not personally provide services to Company A, and I am able to participate in this transaction fairly, objectively, and in the public interest. Personal Interest in a Personal Interest in a Contract Contract An officer or employee generally may not have a “personal interest in a contract”with his or her own governmental agency (or an agency that is part of, or subject to the control of, his or her governmental agency). Exceptions include certain contracts of employment. Prohibited Conduct Prohibited Conduct No officer or employee may accept anything of value for •Offering or considering obtaining governmental employment, appointment, or promotion of any person •Using his or her public position to obtain a contract with the government for any person or business Va. Code §2.2-3103(1)-(3). Insider Information Insider Information No officer may use for his own economic benefit, or that of another party, confidential information, not available to the public, that he has learned because of his public position. Va. Code §2.2-3103(4). Gifts Gifts No officer or employee may accept a gift from a person who has interests that may be substantially affected by the performance of the officer or employee’s official duties, where the timing and nature of the gift would cause a reasonable person to question the officer or employee’s impartiality. Additionally, no officer or employee may accept gifts on a basis so frequent as to raise the appearance that he is using his public office for private gain. Va. Code §2.2-3103(8). Gifts Gifts A “gift”is “any gratuity, favor, discount, entertainment, hospitality, loan, forbearance, or other item having monetary value. It includes services as well as gifts of transportation, local travel, lodgings and meals, whether provided in-kind, by purchase of a ticket, payment in advance or reimbursement after the expense has been incurred.” A ticket or pass is a “gift”only if it is actually used. Va. Code §2.2-3101. Annual Disclosures Annual Disclosures Prior to taking office, and annually during one’s term of office, City Council members are required to file the Statement of Economic Interests (the “long form”). Va. Code §2.2-3115. Enforcement Enforcement The Commonwealth’s Attorney enforces the Act with respect to City officers and employees. Va. Code §2.2-3126. Opinions of a Local Government Opinions of a Local Government Attorney: A Defense Attorney: A Defense A written advisory opinion from a local government attorney, made after a full disclosure of the facts, may be introduced as evidence that the officer did not knowingly violate the Act. Va. Code §2.2-3121(C). Opinions of a Commonwealth’s Opinions of a Commonwealth’s Attorney: Immunity Attorney: Immunity An officer may not be prosecuted for a knowing violation of the Act if the alleged violation resulted from his good faith reliance on a written opinion of the Commonwealth’s Attorney and the opinion was made upon written request in which the officer fully disclosed all pertinent facts. Va. Code §2.2-3121(B).