On June 26, 2017, the California Supreme Court in People v. Superior Court (Sahlolbei) held that independent contractors who have been entrusted with entering into transactions on a public entity’s behalf can be held criminally responsible for a conflict of interest under §1090. What happens when outside general counsel direct public work to firms in which they have or had either a direct or indirect financial interest? What about public employees with contracting or purchasing power, later hired to perform the same duties as an outside independent contractor?
In his Law360 article “Calif. High Court Raises Conflict Issues For Public Entities,” Partner Gregory Rolen examines the Court’s decision and discusses how independent contractors who have entered into transactions on a public entity’s behalf can be held criminally responsible for a conflict of interest.
In an era where the line between public and private is becoming increasingly blurred by the increased reliance on contractors, consultants, advisers, managers and yes, attorneys, the California Supreme Court made clear that if you exercise any influence over the public fisc, self-dealing is at your own risk.”