City and County of San Francisco
Ethics Commission

Understanding Conflicts of Interest

A conflict of interest occurs when a public official’s personal financial interests have the potential to interfere with their duty to act in the public’s best interest. All City elected officers, commissioners, and employees are considered public officials, as are certain consultants working for the City.

Public officials must always prioritize the public’s best interests. To uphold this principle, public officials are prohibited from making, participating in making, or attempting to influence a governmental decision, if they have a financial interest in that decision. A public official has a financial interest in a government decision if it is reasonably foreseeable that the decision will have a material financial effect on the official’s personal financial interests.

What constitutes a personal financial interest?

For public officials, personal financial interests include:

• Business Positions: Any business entity for which they are a director, officer, partner, trustee, employee, or hold any position of management.
• Investments: Any investment in a business entity of $2,000 or more.
• Real Property: Any investment in real property of $2,000 or more.
• Sources of Income: Any source of income of $500 or more in the last 12 months.
• Sources of Gifts: Any source of a gift of $630 or more in the last 12 months.
• Immediate Family Finances: Financial interests of a spouse or close relative.

What constitutes making, participating in making, or influencing a decision? 

If an official has a financial interest in a government decision, they cannot make, participate in, or use their official position to influence that government decision.

• Making a government decision includes authorizing or directing any action, voting on a matter, making an appointment, entering into a contract, or otherwise obligating the City to a course of action.
• Participating in a government decision is when an official provides information, an opinion, or a recommendation for the purpose of affecting a government decision.
• Influencing a government decision is when an official contacts or appears before their own agency or an agency over which they have authority or budget control. It also includes when an official contacts any agency while acting, or purporting to act, within the scope of their official duties.

When does a government decision affect an official’s personal financial interest?

• Foreseeable and material effect. In order for there to be a conflict of interest, the effect of a government decision on the official’s personal financial interest must be reasonably foreseeable and significant enough to be considered material. This will depend on the type of decision being made and the type of financial interests that could be affected.
• Exception: Effects on the general public. Sometimes, a public official can participate in a government decision even if it might affect their personal financial interests, but only if that effect is indistinguishable from how the decision will affect a significant segment of the public.

Procedures for When a Conflict of Interest Exists

When a conflict of interest exists for a public official, the official must abstain from discussing or participating in the decision in any way. This is true for City elected officers, members of boards or commissions, employees, and consultants.

There are also specific recusal processes for City officers, including elected officers and members of boards and commissions. When a City officer has a conflict of interest, they must:

• Publicly identify the circumstances requiring their recusal.
• Abstain from participating in discussions or decisions on the matter.
• Leave the room during discussions and when decisions are being made until the matter is concluded.

Additionally, the City requires members of City boards and Commissions to file a recusal notification with the Ethics Commission whenever they are required to recuse themselves from participating in a matter due to a conflict of interest. This disclosure is not required for members of the Board of Supervisors. More information on this disclosure requirement and how to file it is available on the Notification of Recusal guidance page. Information from these recusal notifications is then made available on the Notification of Recusal Filings page.

Conflicts of Interest in Government Contracting

This is a separate rule related to conflicts in government contracting, distinct from the general prohibition on conflicts of interest described above. This contracting rule is from California Government Code Section 1090. In some situations, both rules may apply.

• Financial Interest is Broadly Defined. A financial interest under Section 1090 includes any interest which would prevent the officials involved from exercising absolute loyalty and undivided allegiance to the best interest of the City. There are exceptions to this broad definition of financial interest which apply when the interest is remote or is otherwise specified as not a financial interest.
• Making a Contract Includes All Steps. Under Section 1090, making a contract can include planning, preliminary discussion, compromising, drawing or plans and specifications, and solicitations of bids that lead to the formal making of a contract.
• Recusal May Not Be Enough. To comply with this rule, a public official may be required to choose between maintaining their private interest and remaining in public office. In other words, a potential conflict under this rule cannot always be remedied through recusal.

Additional Conflict of Interest Rules

In addition to the rules above, the City has additional rules related to conflicts of interest.

• Disclosure of Personal, Professional, and Business Relationships. If a public official has a personal, professional, or business relationship with the subject of a government decision, that does not necessarily create a personal financial interest that would prevent the official from participating in the decision. However, the official may be required to disclose the existence of such relationships when making the decision.  Learn more about this disclosure requirement on the Relationships Disclosure for City Officers and Employees page.

• Future Employment Restrictions. City officers or employees are prohibited from making, participating in, or attempting to influence any governmental decision that directly impacts a person or entity with whom they are discussing or negotiating an agreement for future employment.
• Use of Public Position for Private Gain. City elective officers and members of boards and commissions are prohibited from using their public position or office to seek or obtain anything of value for the private or professional benefit of themselves, their immediate family, or for an organization with which they are associated.
• Conditioning Public Actions on Contributions. City elective officers and members of boards and commissions are prohibited from giving, offering or promising to give, withholding, or offering or promising to withhold their vote or influence, or promising to take or refrain from taking official action with respect to any matter, in consideration of, or upon condition that, any other person make or refrain from making a political contribution.
• Payments to Influence or Reward Public Actions. City elective officers and members of boards and commissions are prohibited from soliciting or accepting anything of value if it could reasonably be expected to influence them or their judgement with respect to an official action, or if it could reasonably be considered to be a reward for any official action or inaction.

Applicable Laws

• California Government Code Section 87100
• California Government Code Section 1090
• San Francisco C&GCC Section 3.206
• San Francisco C&GCC Section 3.207
• San Francisco C&GCC Section 3.209

Additional Resources

• An Overview of Conflicts of Interest Under the Political Reform Act (FPPC)
• A Quick Guide to Section 1090 (FPPC)
• City Attorney’s Good Government Guide

Get Advice

If a public official is unsure whether they have a conflict of interest, they should seek advice from the Ethics Commission through the Ethics Advice portal.