• FPPC Adopts New Conflict of Interest Gift Regulation
  • November 9, 2012 | Authors: Parissh A. Knox; Grover C. Trask
  • Law Firms: Best Best & Krieger LLP - Los Angeles Office ; Best Best & Krieger LLP - Riverside Office
  • The Fair Political Practices Commission has adopted a new regulation directing local agencies to tailor their gift disclosure categories for designated employees. The regulation comes in response to case law limiting the reach of financial disclosure laws.

    FPPC Regulation 18730.1, effective Nov. 2, 2012, is intended to narrow the reporting requirements for designated employees who report sources of gifts from outside the agency’s jurisdiction when those sources are unlikely to influence the designated employee in his or her official capacities. Meanwhile, the reporting of gifts received from sources within a designated employee’s agency’s jurisdiction would be further tailored through the disclosure categories developed by each local agency.

    Existing state law requires every public agency to adopt a Conflict of Interest Code covering agency officials who engage in governmental decision-making. The Conflict of Interest Code must satisfy the prerequisites contained in Government Code section 87309. In addition, the Code must meet certain constitutional standards and therefore the Code must avoid over-breadth.

    The FPPC’s prior interpretation of its gift rules resulted in the reporting of virtually all gifts by employees with full disclosure obligations, regardless of where the source of those gifts was located. This was the case, even if the source of the gift had no connection whatsoever to an employee's agency. This new regulation clarifies that designated employees are only required to disclose those economic interests, including sources of gifts, that have some bearing or connection to their existing job duties or functions.

    As a result, many local Conflict of Interest Codes will need to be updated, since many still require disclosure by designated employees even where there is no foreseeable potential conflict of interest. By following this new guidance, these changes will improve the defensibility of an agency’s Conflict of Interest Code if ever challenged in court.