O.C. Congressman Wants to Play It Safe : Politics: Jay C. Kim says he will sell his engineering business to avoid any perception of conflict of interest.
Rep.-elect Jay C. Kim, one of Orange County’s two new congressmen, said Monday that he will sell his lucrative civil engineering business to avoid possible conflicts of interest stemming from its large portfolio of government contracts.
“I actually have less than 5% federal contracts. But that isn’t the issue. Perception is the issue,” said Kim, 53, a Republican and former Diamond Bar mayor who is the first Korean-American elected to Congress. His district includes Yorba Linda and other parts of northern Orange County.
Born in Korea, Kim came to the United States in 1961, attended USC, and founded Jaykim Engineering Inc. in 1977. The business, which has won contracts for road, bridge, sewer and prison projects in California and other states, was recently appraised at about $4 million, Kim said.
Kim wholly owns the corporation, serves as its president and last year drew a salary of $160,000 from the business, according to financial disclosure statements filed with the House clerk. He listed additional income of $75,000 from other business ventures, primarily real estate investments. He will earn $133,600 a year as a member of Congress.
Jaykim Engineering, which is based in Diamond Bar, employs 130 people. It has offices in San Diego, Sacramento, Phoenix and Spokane.
There are no statutes or House rules that would require Kim or any other member-elect to divest himself or herself of any private holdings on taking office, according to the House ethics manual.
In fact, House rules generally give members wide latitude to vote on matters in which they have a potential financial interest.
That means that a member could ethically vote to approve an appropriations bill that would provide money for a firm in which he has an ownership interest. Only when the legislation would directly benefit that corporation alone would a member be advised to abstain from voting, the manual states.
“The bias is strongly in favor of voting,” one House lawyer said. “Otherwise you are disenfranchising the half-million people whom the member represents.”
At the moment, Kim said, his company holds only one direct federal contract--an agreement with the Navy to oversee a cleanup of toxic wastes at Port Hueneme in Ventura County. But he said the firm works on many other jobs, either as prime contractor or subcontractor, that could potentially involve some type of federal aid.
One recent contract involves designing two maximum-security prisons in Southern California. And Kim’s company is part of a consortium of minority-owned firms hired to demolish buildings damaged in the Los Angeles riots.
“I’m a civil engineer, and a civil engineer is most government projects. . . . (There is) no private building of bridges, or highways or mass transit systems,” the congressman-elect said. “Even though it’s not a direct federal contract, some projects are (partially) federally funded, and sometimes I work with another company as a sub.”
Kim said he hoped to avoid even the appearance of a conflict by selling his company, especially because he has applied for a position on the House Committee on Public Works and Transportation. The powerful House panel has direct oversight of federal aid programs for the just the kinds of projects from which Kim’s company earns its income.
Kim said he is negotiating with three potential purchasers. If negotiations are not concluded by the time he takes the oath of office on Jan. 5, Kim said he will put his interests in the corporation in a blind trust until the sale is completed.
“Legally I may be OK,” Kim said, “but perception-wise I just got to make sure I have absolutely nothing to do with it.”
Orange County’s other freshman congressman, Rep. Edward R. Royce (R-Fullerton), has said he and his wife plan to sell their businesses--two flavored-coffee boutiques. Royce earned his principal income for the past 10 years serving as a state senator.
