With all the buzz about Congressional ethics investigations and the kinks being worked out of the reformed Virginia General Assembly and Senate ethics rules, I thought it might be an appropriate time to reflect on the rules that govern our local officials here in Virginia. On this side of the river, conflicts of interests, prohibited conduct and disclosure requirements for local officials are set forth in the State and Local Government Conflict of Interests Act.

Not only does the Act prohibit the expected tainted conduct (see Section 2.2-3103) and contractual relationships (see Section 2.2-3107) that we would all consider to amount to corruption, the Act then provides a number of generous exceptions to the rules, like, for instance, apparently you can be an officer or employee of a governmental agency, have an interest in a contracting company in excess of $10,000.00 doing business with that governmental agency, so long as you don’t have the “authority” to participate in the procurement of the contract. The rules also apparently don’t apply if an officer or employee whose personal interest in a contract with a governmental agency is by reason of his marriage to his spouse who is employed by the same agency.

Quite surprisingly, legislators and public officials may also apparently participate in transactions in which they have an interest so long as they merely declare (see Section 2.2-3112(2)) their interest by stating (i) the transaction involved, (ii) the nature of their personal interest affected by the transaction, (iii) that they are a member of a business, profession, occupation, or group the members of which are affected by the transaction, and (iv) that they are able to participate in the transaction fairly, objectively, and in the public interest.

While local legislators and government officials may, but are not necessarily required to, recuse themselves from matters in which they have a personal interest, all local legislators, constitutional officers (such as the treasurer, sheriff, commissioner of the revenue, etc.), and certain government officials are still required to disclose their personal interests every year by January 15th. These disclosures are made by filing a Statement of Economic Interests as set forth in Section 2.2-3117 of the Code of Virginia. This Statement of Economic Interests is full of good information, such as whether the person (or someone in his or her family):

1. Is a paid officer of a business,
2. Owe more than $10,000 in debt to anyone,
3. Own (and outline the interests) securities in various types of entities,
4. Have been paid for speaking, meeting or publishing anything by anyone,
5. Accepted any gifts from anyone that might affect their judgment,
6. Have any other employers that pay them in excess of $10,000,
7. Have been paid as a lobbyist or to represent the interests of any businesses, or are closely financially associated with anyone that has,
8. Have any real estate assets, or any interest in a real estate asset, that could pose as a conflict.

An interesting loophole in the disclosure requirement for item #6 above existed until just this last legislative session, where legislators and officials, as well as their family members, did not have to report income they receive from other governmental or advisory agency positions. It should be noted that SB 4, during the last legislative session, was an attempt to close this loophole, and after being “incorporated” with SB 512, it looks like a compromise was struck and the language creating the loophole has been removed, so everyone’s disclosure statements next January should yield some additional interesting information.

So what happens to officials that aren’t even smart enough to scoot through one of the Act’s several loopholes? Well, they’re going to have to deal with the Attorney General, through the local Commonwealth Attorney’s Office, who can pursue a Class 1 Misdemeanor, among several other punishments, such as removal from office, civil penalties, etc.