Ethics: Reporting economic interests

The following article is the third and final in a series about properly filing the required annual Statement of Economic Interests with the State Ethics Commission. The first two articles appeared in the June and July issues and dealt with reporting income, benefits and gifts.

The public has a right to know if a public official receives any personal benefit because of his position with a governmental entity. Because of this, officials must report any economic interest in real, personal or business property when filing their mandatory Statement of Economic Interests with the State Ethics Commission.

For the purposes of the SEI, "economic interest" means an interest distinct from that of the general public in a purchase, sale, lease, contract, option, or other transaction or arrangement involving property or services in which a public official, public member, or public employee may gain an economic benefit""

Public officials must disclose any real estate interest they or their immediate family have if it can be reasonably expected to be a conflict of interest with their municipal position or if there has been $200 or more of public improvements made on the property or adjoining properties. A public improvement is defined as an expenditure of funds by a public entity (state, county, municipality, school district, special purpose district, public service district) that changes or adds to the property. Examples are streets; roads; sidewalks; streetscape; lighting; water, sewer or storm drainage systems; and other public infrastructure.

Public officials must also report any real or personal property sold, leased or rented by a public official or immediate family member to the state or any other public agency. This includes listing the property's physical address, compensation received and the public agency involved in the transaction.

Finally, the public official must report the name and relationship of every business (or entity) in which the public official or immediate family member has a 5 percent or greater interest in the business" (or entity's) value, if the value of the interest exceeds $100,000. If the municipality contracts with a business where the public official works, has an ownership interest or investment in, or has any other association, the official must disclose the relationship and compensation received from the business.

By reporting economic interest in real, personal and business property, the official allows the public to gauge the level of private benefit, if any, the public officials receives from public improvements, determine the income from the sale/rental of property to governmental agencies, and identify significant interests in private businesses and/or governmental contracts. 

Proper reporting on the Statement of Economic Interests requires understanding what must be reported. When in doubt about the need to disclose an item, the safest course of action is to make the disclosure.