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I've decided that Friday is Horrifying Legal Pitfall Day. Today let's talk about one near and undear to my heart: California's government conflict of interest law, Government Code Section 1090. /1
Section 1090 says that a government employee or official can't be financially interested in a government contract they "make" in their official capacity.

The easy version: Mayor McCheese can't have McDonaldland contract with his own construction company to build a new park. /2
But from there, it gets deadly confusing and deceptive. "Making" a contract can mean doing absolutely ANYTHING in connection with something that results in a contract. Negotiate it, discuss it with officials, define the parameters of what the government needs in the contract./3
So if Mayor McCheese says "McDonaldland needs a 4-acre park on Ptomaine Street," then steps out of the process, and the city contracts with his company to build the park, he "made" the contract. /4
Also "financial interest" can be almost anything, no matter how remote. Courts say that 1090 is to be read very broadly and boy to they mean it. It's the opposite of RICO: if something is close to the line and you ask "is this 1090?" the court will probably say "yes." /5
Also: you don't have to know or understand how 1090 works to be in violation. In fact, even if the City Attorney reviews the contract and tells you it's not a 1090 violation, and the city council agrees and votes on it, if a court later says it is, you're guilty. /6
The problem here is that very few people understand 1090 or how it works or how broad it is. Some of the standard government materials about it are wrong or misleading. Even City Attorneys often don't understand it or get it right. So you're very lucky to get good advice. /7
I have had multiple clients charged with felonies after their government entity PROPOSED the contracts in question, the government's attorneys vetted them and cleared them as not-1090, and the government body voted on them in public. "Too bad, so sad" say courts. /8
This is particularly bad for people who became independent contractors for the government during California's privitization boom in the 80s and 90s. California has a shit-ton of weird government agencies like the West Arrugula Sewer Improvement District or whatever. /9
In the 80s and 90s these entities saw that hiring and paying benefits to government employees to run them was expensive, and started turning to subject-matter experts to hire as "independent contractors" to run the districts. /10
Often these were technical experts: an environmental engineer with an engineering firm might be hired to be independent contractor head of a Water District or something.

Government attorneys blessed it, boards of directors voted to approve it in public. But ... /11
Years later, DAs looked at these arrangements and decided they were 1090 violations. After all, they said, that independent contractor engineer determines how much work needs to be done and therefore how much he's paid. The DA's didn't care that everyone thought it was legal. /12
As a result, there have been prosecutions of technical experts, hired as independent contractors to lead small government agencies, who wouldn't know 1090 from a hole in the ground, charged with felonies for contracts that the public entities proposed and approved. /13
In short: be really careful working for the government in California. /end
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