Financial Conflict of Interest and Disqualification Rules under the CA Political Reform Act

Overview

  • Under the State of California Political Reform Act of 1974, all University employees are disqualified from participating in or attempting to influence University business decisions when their personal financial or economic interests may be affected by those decisions. 
  • Certain employees, called "Designated Officials," must file financial disclosure forms (Form 700) annually. Who becomes a Designated Official is a function of the job responsibilities being assumed. The purpose of these public filings is to alert public officials, and the public, to potential conflicts of interest.

What are financial and economic conflicts of interest?

A financial or economic conflict of Interest involves relationships in which an individual benefits by receiving a payment, gift, royalty, consulting fee, or other financial benefit. Under the Political Reform Act, if one of the following could be influential in a University decision that you make, participate in, or influence, you may need to disqualify yourself from making, participating in, or influencing that decision:

  1. Any person or organization that gave or promised you income totaling $500 or more within twelve months prior to the University decision;

  2. Any person or organization that gave or promised you gifts totaling $590 or more within twelve months prior to the University decision (note: for 2025 this will increase to $630);

  3. Any real property, other than your primary residence, in which you or your spouse or domestic partner or dependent children have an interest worth $2,000 or more;

  4. Any business entity seeking to do business with the University in which you are a director, officer, partner, trustee, or employee, or hold any position of management;

  5. Any business entity seeking to do business with the University in which you or your spouse or domestic partner or dependent children have an investment worth $2,000 or more;

  6. Your personal finances (and those of you or your spouse or domestic partner or dependent children) – if you or your spouse or domestic partner or dependent children will receive a measurable financial benefit or loss from a University decision. (Cal. Gov’t Code § 87103; 2 C.C.R. § 18702.5)

What does it mean to make, participate in, or influence a decision?

You make a decision when, acting within the authority of your office, you:

  • vote on a matter,
  • appoint a person to a position,
  • obligate or commit the University to any course of action,
  • enter into any contractual agreement on behalf of the University

Note: deciding not to do any of these things is also “making a decision”

You participate in the making of a decision when, acting within the authority of your University position, you:

  • negotiate with a governmental entity or private person regarding the decision or
  • advise, make recommendations
  • OR use your employee status to influence the decision-maker or any other person with respect to this matter.

You influence a decision when you:

  • communicate your thoughts on the matter to someone else within the University, for the purpose of swaying the decision maker
  • using your position or authority to intimidate the decision maker,
  • or otherwise make suggestions towards an expected outcome.

The Political Reform Act’s Disqualification Rule is designed to be applied on a decision-by-decision basis.  If you have questions, please contact UC Berkeley’s Conflict of Interest Coordinator at conflict@berkeley.edu.

Who is a "Designated Official" who must file Form 700?

  • The California Political Reform Act requires certain state and local government officials (including some University employees), by nature of their positions, to disclose their personal financial interests. The current list of designated positions is available on the website of the UC Office of the President. Disclosures are made on the Statement of Economic Interests (Form 700). 
  • Form 700 must be filed annually.
  • Forms are public documents that must be made available to anyone who requests them. 
  • The type of information you must disclose (what category of Form 700 filer you are) is associated with the type of position you hold.

Form 700 filer categories

  1. All interests in real property, all investments, all income, including gifts, loans and travel payments, and business positions.
  2. Interests in real property located within two miles of the laboratory or campus at which the designated employee works, or within two miles of land owned or used, or proposed for acquisition or use by such laboratory or campus.
  3. Investments and business positions in business entities and income, including gifts, loans, and travel payments, from sources of the type which, within the last two calendar years, have contracted with the University to (a) supply goods or services to, and/or (b) receive licenses in existing patents, patent applications, and rights in patents and patent applications from, the University, campus, laboratory, or portion thereof (including but not limited to, department, section, or office) over which the designated employee has authority relevant to these contracts. Services include providing grant, contract, or gift funds for research.
  4. Interests in real property located within the State of California.
  5. Investments and business positions in business entities and income, including gifts, loans and travel payments, from sources of the type which, within the last two calendar years, have contracted with the University to supply goods or services (including providing grant, contract, or gift funds for research) to the unit(s) for which the designated employee has authority relevant to these contracts.
  6. All investments and business positions in and income, including gifts, loans and travel payments, from any private, nongovernmental entity (other than one deemed by the FPPC as exempt under FPPC regulation 18755) which will be providing funds, or support for the research project for which the filer is the principal investigator. (The required disclosure shall be made on FPPC Form 700-U).
  7. All investments and business positions in business entities, and income (including gifts, loans and travel payments) from sources which are of the type in which University of California funds are or may be invested.

More details about Designated Officials and filing categories can be found in this document on the UC Office of the President website.

How does a Designated Official file Form 700?

  • Form 700 filers will be notified by the Conflict of Interest Coordinator and by the UC Office of the President of their filing requirements. If you are not sure whether you are a Form 700 filer, please contact the Confict of Interest Coordinator at conflict@berkeley.edu.
  • The annual deadline to file the Form 700 is April 1st.  Filers will receive multiple reminder emails regarding this filing deadline, as well as instructions for accessing the filing platform.
  • Filers must also submit Assuming and Leaving office forms within 30 days of the relevant change in position status. Filers will be notified when one of these forms is due.

Penalties for Violations of the Political Reform Act

The University's Conflict of Interest Code, revised annually and submitted to the Fair Political Practices Commission for approval, has the force of law. Any violation of the Code by a designated employee is deemed a violation of the Political Reform Act. Penalties for violating the Political Reform Act include:

  • Administrative fines* to the individual of $5,000 per violation
  • publication of a designated official's name and fine amounts on the FPPC website
  • criminal prosecution (§ 91000)
  • civil action (§ 91004 et seq.)
  • disciplinary action (Gov’t Code § 91003.5)

Common Form 700 Errors to Avoid

Other relevant information

  • Form 700U. Principal Investigators must complete an official Principal Investigator's Statement of Economic Interests (Form 700U), if the research project is funded from a non-governmental source, and disclose any financial interests in the sponsor.  See Research Conflict of Interest  for more information about this policy.
  • Outside Professional Activities. The University of California Policy on Outside Professional Activities established by the President on July 1, 1995 requires certain University officials and designated staff as defined in the policy to disclose Outside Professional Activities. The disclosure is made on an annual basis. The call for the request is made in the fall, for the prior 12-month reporting period of July to June.  See Outside Professional Activities for more details on this University policy.
  • Honoraria. The general rule is that designated officials cannot accept honoraria.