On June 26, 2017, the California Supreme Court in People v. Superior Court (Sahlolbei) held that independent contractors who enter into contracts on the public’s behalf can be held criminally responsible for conflict of interest under Government Code §1090. In his California Political News article “People v. Superior Court (Sahlolbei),” Partner Gregory Rolen examines the Court’s decision and its implications for public entities.
Hossein Sahlolbei was an independently contracted surgeon at a public hospital and a member of the hospital’s executive committee. He used his influence over hospital policy to serve his own financial interest by pressuring the board to hire his anesthesiologist and negotiated a monthly salary of $36,000. After obtaining approval from the board to hire the anesthesiologist, Mr. Sahlolbei negotiated an even higher salary of $48,000 per month, and it was later discovered that the anesthesiologist’s salary was being deposited directly into Mr. Sahlolbei’s account. Mr. Sahlolbei would then pay the anesthesiologist the originally agreed-upon $36,000 monthly salary, and keep the rest as a bonus for getting his friend a job.
“In light of a virtually unbroken line of cases expanding §1090 liability to independent contractors, why do we still labor under the misconception that only government officials can commit conflicts of interest?” wrote Rolen. “The Court finally recognized that the victims are the same, regardless of the perpetrator – the taxpayer. It’s time we reevaluate this hypocrisy while at the same time reevaluating public consultancy contracts in light of the Sahlolbei decision. Now more than ever, good government requires rejecting passive acceptance and business as usual.”