Government Code Section 1090 prohibits an officer, employee, or agency from participating in making government contracts in which the official or employee within the agency has a financial interest. Section 1090 applies to virtually all state and local officers, employees, and multimember bodies, whether elected or appointed, at both the state and local level.
“Making” a contract includes final approval of the agreement, as well as involvement in preliminary discussion, planning, negotiation, and solicitation of bids.
A broad range of agreements are considered a contract under Section 1090. Generally, there is a contract when an offer is made and accepted and there is something of value bargained for and exchanged by each party. This includes written contracts, purchase of goods or services, employment agreements, leases, development agreements, etc.
An official can have a “financial interest” in a contract in a variety of ways and it is not limited by the amount of the interest or how closely connected the official’s interest is to the contract.
Several exceptions to Section 1090’s general prohibition also exist and, when applicable, officials may be considered to have no financial interest or a “remote” financial interest, so that a contract, or the official’s participation in the contracting process, is not prohibited under Section 1090.
Violations of Section 1090 can result in the voiding of contracts, criminal, civil, and administrative penalties, as well as a ban on holding public office.
The FPPC issues advice letters and opinions to persons subject to Section 1090 and enforces the provisions of Section 1090 through administrative and civil actions. More information about the advice letter process is available at the FPPC’s Formal Advice webpage. To file a complaint alleging a violation of Section 1090, go to the FPPC’s File a Complaint webpage.
How to Request Advice
If you have questions about your obligations under the Act you can request advice directly from FPPC staff