Concerns for Local Government Employees:
The Fundamentals of Legal and
Training Session for County
Employees, December 2001
legal is not always ethical. The law may not tell you what is right.
In Virginia, the
legal rules establish a minimum standard for ethical behavior by local
and state officers and employees.
Ethical behavior goes
beyond these rules and relies on personal and professional integrity.
What are the legal
rules that help define ethical conduct by local officers and employees
In Virginia, there
are three basic statutes that concern themselves with ethical conduct
by state and local government employees and decisions regarding public
contracting: the Virginia State and Local Government Conflict of
Interests Act, §§ 2.2-3100-3127; the Ethics in Public
Contracting Act, §§ 2.2-4367-4377, and the Virginia
Governmental Frauds Act, §§ 18.2-498.1-498.5.
The Ethics in Public
Contracting Act supplements the other two. Compliance with the Conflict
of Interests Act may not be sufficient to assure compliance with the
Public Contracting Act provisions. The Governmental Frauds Act applies
primarily to those seeking to engage in commercial dealing with public
agencies but could apply to any public employee involved in commercial
dealings with his agency who falsifies or covers up a material fact or
makes or uses a false writing or document knowing it to be false.
Other laws have an
ethical component, for example, the Freedom of Information Act,
nondiscrimination and privacy rules, and prohibitions against misuse of
public property or funds.
What is the purpose
of the State and Local Government Conflict of Interests Act?
The General Assembly
passed the current version of the state ethics law in 1987 “declaring
that [Virginia’s] citizens are entitled to be assured that the
judgement of public officers and employees will not be compromised or
affected by inappropriate conflicts.” “To that end and for the purpose
of establishing a single body of law applicable to all state and local
government officers and employees on the subject of conflict or
interests, the General Assembly enacts this … Act so that the standards
of conflict of such officers and employees may be uniform throughout
the Commonwealth.” The legislature stated that the law shall be
liberally construed to accomplish its purpose.
What are the basic
requirements of the Conflict of Interests Act?
and unlawful conduct
The Act prohibits
local officers and employees from:
money or any other thing of value for services performed within the
scope of their official duties, other than the remuneration they
receive from their agency;
money or other thing of value for assisting someone to obtain
employment, appointment or promotion within a government or advisory
money or other thing of value for assisting a person or business to
obtain a contract with any governmental or advisory agency;
confidential information acquired through their public position for
their own or another’s economic benefit;
any money, loan, gift, favor, service, or business or professional
opportunity that reasonably tends to influence them in the performance
of their official duties;
a business or professional opportunity when they know that the
opportunity is being offered to influence them in the performance of
their official duties.
conduct regarding contracts
The Act has different prohibitions for members of local governing
bodies and local officers and employees.
The Act prohibits any local government employee from having a personal
interest in a contract with the agency of which he is an employee,
other than his own contract of employment.
The Act also prohibits an officer or employee of a local governmental
agency from having a personal interest in any contract with any other
governmental agency that is a component of his local government unless
the contract is:
as a result of competitive sealed bidding or competitive negotiation as
defined in the State Procurement Act, or is awarded as a result of an
authorized procedure embodying competitive principles;
awarded after a finding, in writing, by the administrative head of the
governmental agency that competitive bidding or negotiation is contrary
to the best interest of the public.
There are several
exceptions to the general prohibitions applying to local employees. One
exception exempts contracts of employment between an employee’s own
government agency and a member of his immediate family, provided the
employee does not exercise any control over the employment or the
employment activities of his immediate family member and the employee
is not in a position to influence these other activities. A second
exception exempts contracts for the sale by a government agency of
services or goods at uniform prices available to the general public. A
third excepts a personal interest in a contract of employment with any
other governmental agency that is a component part of his local
There are several
other exceptions that include:
sale, lease or exchange of real property between an employee and a
governmental agency, provided the employee does not participate in the
transaction on behalf of the public body and this fact is made a part
of the public record; and
for the purchase of goods or services when the contract does not exceed
A transaction is any
matter on which official action is taken or contemplated (such as a
zoning or permitting decision).
An employee with a
personal interest in a transaction must disqualify himself from
participating in the transaction if the transaction has application
solely to a property or business in which he has a personal interest.
This disqualification must be on the record. Disqualification means
that the employee cannot act in any manner on behalf of his agency in
The employee may
participate in a transaction if he is a member of a business,
profession, occupation, or group the members of which are affected by
the transaction, if he complies with the declaration requirements.
He may also
participate in the transaction if it affects the public generally, even
though his interest, as a member of the public, may be affected.
What constitutes a
To understand these
prohibitions, one must first understand the definition of a “personal
The Act defines
“personal interest” as a “financial benefit or liability accruing to an
officer or employee or to a member of his immediate family.” It goes on
to say that “such interest shall exist by reason of (i) ownership in a
business if the ownership interest exceeds three percent (3%) of the
total equity of the business; (ii) annual income that exceeds, or may
be reasonably be anticipated to exceed, $10,000 from ownership in real
or personal property or a business; (iii) salary, other compensation,
fringe benefits, or benefits from the use or property, or any
combination thereof, paid or provided by a business that exceeds or
reasonably may be anticipated to exceed, $10,000 annually; (iv)
ownership of real or personal property if the interest exceeds $10,000
in value and excluding ownership in a business, income, or salary,
other compensation, fringe benefits or benefits from the use of
property; or (v) personal liability incurred or assumed on behalf of a
business if the liability exceeds three percent (3%) of the value of
means a spouse or any other person living in the same household, who is
a dependent of the employee or of whom the employee is dependent.
What are the
disclosure requirements for local employees?
designated in an ordinance passed by the local governing board are
required to file a Statement of Economic Interests annually on or
before January 15. The clerk of the local governing body maintains the
forms as public documents.
What are the
penalties for violating the Act?
An employee who
knowingly violates the Act shall be guilty of a class 1 misdemeanor and
malfeasance in office. Upon conviction, a judge may order forfeiture of
public office in addition to any other fine or penalty. A contract made
in violation of the Act may be declared void and may be rescinded
within 5 years. Any money or thing of value the employee received shall
What conduct is not
covered by the Conflict of Interests Act?
The Act provides
minimum rules for sate and local officers and employees. The Act
defines certain standards or types of conduct that are clearly
improper. The law cannot, however, protect against all appearances of
conflict. It is incumbent on all individuals to determine whether their
conduct will present an appearance of impropriety that is unacceptable
and that will affect the confidence of the public in their ability to
perform their public duties.
What is the purpose
of the Ethics in Public Contracting Act?
This Act is designed
to supplement other laws governing the ethical conduct of public
officials. Conduct that does not violate the Conflict of Interests Act
may violate the Ethics in Public Contracting Act.
For example, while
personal interest is defined the same, “immediate family” is a broader
term for purposes of the Contracting Act. “Immediate family” includes a
“spouse, children, parents, brothers and sisters, and any other person
living in the same household as the employee.” There is no requirement
that such persons be dependents of the employee or that the employee be
What are the basic
requirements of the Ethics in Contracting Act?
A public employee may
not participate in any procurement transaction if any bidder or offeror
contemporaneously employs him. Furthermore, participation is prohibited
if the public employee, his partner or a member of his immediate family
holds certain positions with a bidder, offeror or contractor (vendor)
such as being an officer, director, trustee or if that person is in a
position that involves personal and substantial participation in the
procurement transaction. Similarly, participation is prohibited if the
public employee owns or controls an interest of more than five percent
of the vendor company.
Whenever a public
employee, the employee’s partner or any member of the employee’s
immediate family has a pecuniary interest (personal interest) arising
from a procurement transaction, the employee is barred from
participating. Finally, if the employee, the employee’s partner, or any
member of the employee’s immediate family is negotiating for, or has
arranged for employment with, any vendor, the employee is barred from
participating in any transaction involving that vendor.
No public employee
may solicit or accept anything of more than nominal value from a
bidder, offeror, contractor or subcontractor.
An employee who has
had procurement responsibility for a public body, who within one year
of his employment with the public body accepts employment with a bidder
or contractor with whom he has dealt in the past, must give notice of
his new employment before he begins with the new employer.
prohibited from demanding, receiving, or making kickbacks or engaging
in price fixing.
Public bodies may
require employees to submit certificates annually that they have
complied with this Act.
No public employee
with responsibility for a procurement transaction shall knowingly
falsify, conceal or misrepresent a material fact, make false statements
or make false writings.
What are the
penalties for violating the Ethics in Public Contracting Act?
An employee convicted
of a violation is guilty of a class 1 misdemeanor. In addition, he
shall forfeit his employment. [Note: the Conflicts Act allows the judge
to require the employee to forfeit his employment; this is not
What are the basic
requirements of the Governmental Frauds Act?
This Act provides
criminal penalties for persons who engage in fraudulent practices in
commercial dealings with the Commonwealth or local government.
is defined as any “offer, acceptance, agreement, or solicitation to
sell or offer to sell or distribute goods, services or construction, to
the Commonwealth of Virginia or any local government within the
Commonwealth or any department or agency thereof.”
What is the penalty
for violating the Governmental Frauds Act?
The Frauds Act makes
it a class 6 felony for any person, in any commercial dealing, to
knowingly falsify, conceal, mislead or cover up by any trick, scheme or
device a material fact or to make any false, fictitious or fraudulent
statements or representations or make or use any false writing or
document knowing it contains false or fictitious statements or entries.
Looking beyond state
laws for guidance regarding ethical behavior by Caroline County
policy, 12.7 Gratuities and/or Gifts to County Employees, prohibits
employees from accepting “any personal gift or gratuity of value from
any firm, contractor, consultant, individual or others that may relate
to County businesses or services provided.”
The policy requires
employees to “exercise careful judgment with the overriding
consideration being that any gift, regardless of value, is accepted as
a courtesy, has no value to the employee, is not requested by the
employee, and is in no way related to ‘special treatment’ for the
The policy expressly
advises employees to discourage any gift when possible.
Employees who have
questions about any gift are advised by County policy to talk with the
department head who may seek clarification from the County
An employee who is
determined to have violated the County’s policy on gifts may be
disciplined, and may be dismissed, depending on the severity of the
standards that address public service at the local government level
City/County Management Association has adopted a code of ethics that
can be found on the web at http://www.icma.org. These standards
provide general ethical standards to which all public employees can
aspire and to which your managers subscribe.
The ICMA has
published advice on the website regarding gifts and special events,
‘Tis the Season: Advice on Gifts and Events, that underscores the
appearance of favoritism that can arise out of the acceptance of any
gift no matter how small.
Tenet 11 of the ICMA
Code encourages all members to “handle all matters of personnel on the
basis of merit so that fairness and impartiality govern a member’s
decisions, pertaining to appointment, pay adjustments, promotions and
Tenet 12 of the ICMA
Code encourages members to “seek no favor; believe that personal
aggrandizement or profit secured by confidential information or by
misuse of public time is dishonest.”
Broader concepts of
personal and professional integrity
Writing in his book,
Integrity, Stephen L. Carter says that integrity “requires three steps:
1) discerning what is right and what is wrong; 2) acting on what you
have discerned, even at personal cost; and 3) saying openly that you
are acting on your understanding of right from wrong.
In order to “work”
these steps, Carter argues that you must do serious soul searching to
decide what you truly believe to be right and good; that you must do
something rather than “drift as activists in behalf of none of [your]
beliefs;” and that you must say what you do.
In other words,
according to Carter, integrity means you must “do right,” “play by the
rules” and “keep your commitments.”
What Carter calls
“unintegrity” or “corruption” is “getting away with things we know to
be wrong.” He says that inconsistency is the easiest example of
unintegrity to spot and that unintegrity is “corrosive” to an
individual or an organization.
concept of integrity is Robert Kelley’s concept of the “courageous
conscience” set out in his book, The Power of Followership. Kelley
describes a variety of followership styles including that of the
For a follower to
exemplary, Kelley says the follower must have a “courageous conscience”
which he defines as “the ability to judge right from wrong and the
fortitude to take affirmative steps toward what one believes is right.
It involves both conviction and action, often in the face of strong
societal pressures for followers to abstain from acting on their
Included in Kelley’s
concept is not merely the ethical duty to refrain from acts that are
wrong, but an affirmative motivation to make a positive contribution to
the organizations of which we are part.