How to Determine if a Substantial Segment of the Population Shares a Financial Interest with a Public Official Under G.L. c. 268, § 19

Section 19 of the Conflicts of Interest Law, G.L. c. 268A, generally prohibits a public official from participating in a matter in which they have a financial interest. It is not a violation, however, if among other exceptions, “if the particular matter involves a determination of general policy and the interest of the municipal employee or members of his immediate family is shared with a substantial segment of the population of the municipality.” G.L. c. 268A, § 19(b)(3). 

A recent Public Education Letter discussed in detail how the exception in 19(b)(3) is to be applied. A Brockton City Councilor was also a business owner in the city. The businesses were located near a commuter rail bridge and bounded by three downtown streets. The Councilor voted in favor of an ordinance to prohibit anyone from sleeping under any bridge, on public property, or property abutting a public sidewalk. The ordinance passed by overriding the Mayor’s veto, a vote in which the Councilor also participated. 

The location of the Councilor’s businesses directly abutted the areas covered by the ordinance. As such, he was presumed to have a financial interest at stake. The Commission considered whether the interest was shared with a substantial segment of the population, which the Commission has determined to be 10% or more of the municipality’s population. The ordinance was aimed at banning unhoused persons from sleeping virtually anywhere in the city. All landowners therefore had a financial interest in the ordinance, assumed by the Commission to be at least over 10% of the population. However, the pertinent question was whether 10% of the population “share the same or a substantially similar financial interest in the particular matter.” The interest is one of “kind rather than degree.”

The Commission has interpreted Section 19(b)(3) to mean that even if a matter is written as one of general policy, if the effect is only on relatively few residents, then the exception is not applicable. Here, the Councilor himself had said that unhoused persons had a particular negative effect on his businesses to the extent that he was thinking of relocating them. His businesses were in one of three city locations that experienced a much greater negative impact from unhoused persons than the rest of the parcels and businesses in the city. The Commission concluded that those who shared the significant negative impact with the Councilor’s businesses were fewer than 10% of the population. As a result, the Councilor could not take advantage of the exception in Section 19(b)(3) and violated the Act by voting in favor of the ordinance and in overriding the Mayor’s veto. 

If a public official is considering whether to participate in a matter utilizing the 19(b)(3) exception, remember to estimate based not solely on the entire municipal population, but based on those whose financial interest “in kind” is shared with the interest held by the official.