Conflict of Interest Advice for the Real Estate Professional Public Official
By Roy Hanley and Teresa L. Highsmith*
There is an old saying that goes something like this: "The appearance of impropriety often depends on whose ox is being gored." As public attorneys, we are regularly tasked to provide instant guidance when a public speaker raises concerns that a public official should recuse himself or herself on an issue because of an apparent conflict of interest. This concern arises frequently when the public official is also a real estate professional, which can add an extra layer of complexity to the conflict analysis.
Public officials who are also real estate professionals do indeed have a complicated existence under the ethical regulatory scheme in California which includes not only the Political Reform Act (PRA)1 and Fair Political Practices Commission (FPPC) regulations,2 but all their own real estate and broker licensing regulations.3 All public officials have a duty to make a good faith effort to assess whether their economic interests will experience a material financial effect pursuant to the monetary thresholds laid out in the PRA and FPPC regulations.4 Since public officials who are real estate professionals are often accused that their business interests in the community create a conflict prohibiting their participation in the decision at hand, such public officials should create a record of having made that analysis – preferably in consultation with the FPPC – prior to taking any action.