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Taking a deep dive into Texas code on conflicts of interest

On Behalf of | Mar 8, 2019 | Government Ethics And Compliance |

Public service, whether it’s fulfilled by someone elected or on the payroll of a Texas municipality, carries certain ethical obligations. The reason why is easy to understand. It can be tempting to abuse political power for financial gain at the cost of the common good.

Trust is foundational to community well-being so it should be no surprise that there are laws on the books that control what public officials and employees can and cannot do in the course of their duties. In Texas, two of the most relevant provisions are represented by Chapters 171 and 176 of the Local Government Code.

The first of these identifies what constitutes possible conflicts of interest and bans public officials who have a substantial interest in an outcome from participating in or voting on related matters. It also defines what “substantial interest” means and spells out requirements for publicly disclosing that interest. Chapter 176 expands the issue of conflict disclosure to include individuals doing business with the government.

Effective legal compliance is not something that happens as an afterthought. It requires strategic legal action in policy formation and strength in advocacy when issues arise. This post seeks to provide answers to some questions commonly raised about Chapter 176.

Who must disclose?

The short answer to this question is that the law covers any vendor who does business with a government entity. That is, anyone who sells or wants to sell property, goods or services to government has an obligation to disclose. That includes anyone acting as an agent on behalf of a vending source.

If the vendor has a business or family relationship with a government official or a family member of that official, and conditions are such that it appears that money exchanged hands and the government official or family member realized income from a transaction over a certain amount, then that official is obliged to file a disclosure statement.

Gifts or considerations given to an officer or officer’s family member in the preceding 12 months in excess of a certain amount also obliges disclosure. Exceptions are made if the gift was a political contribution, food accepted as a guest or given based on a relationship “independent of the official status of the recipient.” Other exceptions might also apply.

Failure to file a disclosure statement can result in serious consequences that could include fines in the thousands of dollars and up to a year in jail.

Certainly, with such penalties possible, it makes sense to prevent ethics breaches by consulting experienced counsel whenever there might be a question.



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