The Statute at the Heart of the District's Strategy

THE DISTRICT V. SUTTERThe lawyers for the Eden Township Healthcare District are attempting to void the 2008 Memorandum of Understanding between the District and Sutter Health. At the heart of the lawsuit filed today in Alameda County Superior Court is a quite simple and straightforward government statute prohibiting officials from participating in contracts from which they may have a financial interest. Below is the text of California Government Code Section 1090:

Members of the Legislature, state, county, district, judicial district, and city officers or employees shall not be financially interested in any contract made by them in their official capacity,or by any body or board of which they are members. Nor shall state, county, district, judicial district, and city officers or employees be purchasers at any sale or vendors at any purchase made by them in their official capacity.

As used in this article, "district" means any agency of the state formed pursuant to general law or special act, for the local performance of governmental or proprietary functions within limited
boundaries.

Although the statue does not specifically define the moment an official begins to possess a financial interest in the contract, the state's attorney general says, "courts have applied the prohibition to include a broad range of interests."

The courts have continually reiterated that no matter how twisted and winding the trail may be, if the connection between the financial interest of the official and the contract can be made, a violation of section 1090 will be found.

For more information on Code Section 1090, click here to go to the state attorney general's web site.

-STEVEN TAVARES

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