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[Code of Federal Regulations]
[Title 24, Volume 3]
[Revised as of April 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR570.611]
[Page 155-157]
TITLE 24--HOUSING AND URBAN DEVELOPMENT
CHAPTER V--OFFICE OF ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND
DEVELOPMENT, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
PART 570 COMMUNITY DEVELOPMENT BLOCK GRANTS --Table of Contents
Subpart K Other Program Requirements
Sec. 570.611 Conflict of interest.
(a) Applicability. (1) In the procurement of supplies, equipment,
construction, and services by recipients and by subrecipients, the
conflict of interest
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provisions in 24 CFR 85.36 and 24 CFR 84.42, respectively, shall apply.
(2) In all cases not governed by 24 CFR 85.36 and 84.42, the
provisions of this section shall apply. Such cases include the
acquisition and disposition of real property and the provision of
assistance by the recipient or by its subrecipients to individuals,
businesses, and other private entities under eligible activities that
authorize such assistance (e.g., rehabilitation, preservation, and other
improvements of private properties or facilities pursuant to Sec.
570.202; or grants, loans, and other assistance to businesses,
individuals, and other private entities pursuant to Sec. 570.203,
570.204, 570.455, or 570.703(i)).
(b) Conflicts prohibited. The general rule is that no persons
described in paragraph (c) of this section who exercise or have
exercised any functions or responsibilities with respect to CDBG
activities assisted under this part, or who are in a position to
participate in a decisionmaking process or gain inside information with
regard to such activities, may obtain a financial interest or benefit
from a CDBG-assisted activity, or have a financial interest in any
contract, subcontract, or agreement with respect to a CDBG-assisted
activity, or with respect to the proceeds of the CDBG-assisted activity,
either for themselves or those with whom they have business or immediate
family ties, during their tenure or for one year thereafter. For the
UDAG program, the above restrictions shall apply to all activities that
are a part of the UDAG project, and shall cover any such financial
interest or benefit during, or at any time after, such person's tenure.
(c) Persons covered. The conflict of interest provisions of
paragraph (b) of this section apply to any person who is an employee,
agent, consultant, officer, or elected official or appointed official of
the recipient, or of any designated public agencies, or of subrecipients
that are receiving funds under this part.
(d) Exceptions. Upon the written request of the recipient, HUD may
grant an exception to the provisions of paragraph (b) of this section on
a case -by -case basis when it has satisfactorily met the threshold
requirements of (d) (1) of this section, taking into account the
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cumulative effects of paragraph (d)(2) of this section.
(1) Threshold requirements. HUD will consider an exception only
after the recipient has provided the following documentation:
(i) A disclosure of the nature of the conflict, accompanied by an
assurance that there has been public disclosure of the conflict and a
description of how the public disclosure was made; and
(ii) An opinion of the recipient's attorney that the interest for
which the exception is sought would not violate State or local law.
(2) Factors to be considered for exceptions. In determining whether
to grant a requested exception after the recipient has satisfactorily
met the requirements of paragraph (d)(1) of this section, HUD shall
conclude that such an exception will serve to further the purposes of
the Act and the effective and efficient administration of the
recipient's program or project, taking into account the cumulative
effect of the following factors, as applicable:
(i) Whether the exception would provide a significant cost benefit
or an essential degree of expertise to the program or project that would
otherwise not be available;
(ii) Whether an opportunity was provided for open competitive
bidding or negotiation;
(iii) Whether the person affected is a member of a group or class of
low- or moderate -income persons intended to be the beneficiaries of the
assisted activity, and the exception will permit such person to receive
generally the same interests or benefits as are being made available or
provided to the group or class;
(iv) Whether the affected person has withdrawn from his or her
functions or responsibilities, or the decisionmaking process with
respect to the specific assisted activity in question;
(v) Whether the interest or benefit was present before the affected
person was in a position as described in paragraph (b) of this section;
(vi) Whether undue hardship will result either to the recipient or
the person affected when weighed against the public interest served by
avoiding the prohibited conflict; and
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(vii) Any other relevant considerations.
[60 FR 56916, Nov. 9, 1995]
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