BILL ANALYSIS
AB 850
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Date of Hearing: April 28, 2009
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 850 (De La Torre) - As Introduced: February 26, 2009
PROPOSED CONSENT (As Proposed to be Amended)
SUBJECT : CONFLICTS OF INTEREST: PUBLIC CONTRACTS
KEY ISSUE : SHOULD THE EXISTING PROHIBITION REGARDING CONFLICTS
OF INTEREST IN THE AWARD OF PUBLIC CONTRACTS BE BROADENED TO
PROHIBIT OTHERS FROM INDUCING OR PARTICIPATING IN A VIOLATION
WITH A PUBLIC OFFICIAL?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
Members of the Legislature and other public officials and
employees are prohibited from having a financial interest in any
contract made by them in their official capacity or by any body
or board of which they are a member. This sensible measure
would extend that protection against conflicts of interest to
anyone who knowingly induces or participates with a covered
public official in a violation of that law. There is no known
opposition.
SUMMARY : Prohibits participation in or inducement to violate
public conflict of interest prohibitions. Specifically, this
bill provides that no person shall knowingly induce or
participate in or conspire with a public official to violate the
law prohibiting financial conflicts of interest in the award of
public contracts.
EXISTING LAW provides that members of the Legislature, state,
county, district, judicial district, and city officers or
employees shall not be financially interested in any contract
made by them in their official capacity, or by any body or board
of which they are members. Nor shall state, county, district,
judicial district, and city officers or employees be purchasers
at any sale or vendors at any purchase made by them in their
official capacity. (Government Code Section 1090.)
COMMENTS : The author explains the reason for the bill as
AB 850
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follows: "Under current law, Government Code section 1090
prohibits members of the Legislature and [others] from being
financially interested in any contract made by them in their
official capacity, or by any body or board of which they are
members. In several cities throughout California, elected or
appointed officials have been convicted in cases involving
illegal expenditures of public funds. Assembly Bill 850
protects the expenditure of public money by eliminating
temptation, avoiding the appearance of impropriety, and assuring
the public entity of the official's undivided and uncompromised
allegiance by holding all parties accountable for corrupt
actions. Assembly Bill 850 will protect public funds by
extending liability to include not just elected officials but
third parties who are also participants of the corrupt schemes.
This bill will provide that the associated contractual party can
also be held liable for the wrongdoing associated with the
corrupt expenditure of public funds."
This Bill Responds To Shortcomings in the Law Revealed by the
Klistoff Case. In Klistoff v. Superior Court, 157 Cal. App. 4th
469 (2007) the City of South Gate sued a waste hauling business
and its principal (Klistoff) for conspiracy to violate
Government Code section1090 alleging that the principal, through
the waste hauling business, made payments to a city official in
exchange for the official's efforts to ensure that a refuse
collection and recycling services provider, in which the
principal was vice-president and operations manager, obtained a
contract from the city. The court held that because only public
officials or employees can violate section 1090, the principal
and the waste hauling business, who were not public officials or
employees, could not be held liable for conspiracy to violate
section 1090.
Author's Clarifying Amendment . To better capture the intent of
the measure, the author appropriately proposes to replace the
current proposed subdivision (c) with the following language:
(c) No person shall knowingly induce or participate in a
violation of subdivision (a) or conspire with a person subject
to subdivision (a) to commit a violation of this section.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 850
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None on file
Opposition
None on file
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334