Page 20 - Microsoft Word - Lozano Smith Board Member Toolkit 2025

ETHICS IN PUBLIC SERVICE

Personal Gain or Interest
Public servants should not benefit financially from their positions. If a public official’s
financial interests are reasonably likely to be materially affected by the outcome of a
governmental decision, in ways that do not affect the public generally, the official
generally may not participate in the decision.

“Public officials, whether elected or appointed, should perform their duties in an
impartial manner, free from bias caused by their own financial interests or the financial
interests of persons who have supported them.”
- Gov. Code § 81001(b)

Political Reform Act
Under the Political Reform Act (Government Code sections 81000, et seq.), a public
official may not take part in a governmental decision if it is reasonably foreseeable that
the decision will have a material financial effect on one or more of the official’s
economic interests, or on those of his or her immediate family. Five kinds of economic
interests may cause a conflict under the Political Reform Act:
 Business positions (investment, employee, officer, director)
 Interests in real property held by the public official, including ownership,
leaseholds, beneficial or ownership interests, or options. This includes a pro rata
share of interests in real property of any business entity or trust in which the
individual or immediate family owns, directly or indirectly, a 10-percent interest or
greater.
 Source of income (including spouse or domestic partner’s income)
 Source of gifts (current gift limit is $630 or more per calendar year, per source. The
current $630 limit is effective for 2025 and 2026 and will be adjusted for inflation
thereafter.)
 Personal financial effect (income, assets, liabilities)

If a public official is disqualified from a decision, the official should identify the nature
of the conflict at the meeting and leave the room (unless the matter is on consent).
The official should not participate in the decision-making process or influence staff or
colleagues. The official may speak as a member of the public if he or she has a
personal interest in the matter.

Penalties
Penalties for violating the Political Reform Act include a fine up to $5,000 for each
violation, or a misdemeanor conviction.

Guide to Effective Governance 17