Unlawful Taking of Interest: Can an Elected Official Be Convicted for Preparing Decisions?

Imagine for a moment: you are the mayor of a small commune in Haute-Savoie, like Cluses or Saint-Julien-en-Genevois. You are supervising a project to build a multi-purpose hall. At the same time, your construction company is bidding for the contract. Nothing illegal, you think, since you are not the sole decision-maker. A serious mistake. The Court of Cassation, in a judgment of 14 December 2005, reminds us that the mere fact of preparing or proposing a decision is enough to constitute the offence of unlawful taking of interest. A warning that concerns all elected officials, civil servants, and even certain real estate professionals.

But what exactly does this change for you? Whether you are a property owner leasing to the commune, a property developer, or a simple citizen, understanding this decision will help you avoid conflicts of interest with serious criminal consequences. In this article, I dissect this essential case law, with concrete examples from the Annecy region.

For the law is not an abstraction: it governs everyday situations. And when the line between public interest and private interest becomes blurred, the judges do not hesitate to sanction. Let us dive together into this case.

The facts: a story that happens every day

Mr. Bernard, an elected official of a public health establishment (a hospital centre), is also the manager of a construction company. In 1999, he closely follows a project to build housing for hospital staff. But here's the thing: at the same time, he is building his own private villa. And he uses the same estimates, the same companies, the same materials as for the public project. Worse: during a meeting on 12 October 1999, he presents the estimates for his villa as the basis for the hospital works.

This dual role did not escape the public prosecutor. Bernard is prosecuted for unlawful taking of interest (Article 432-12 of the Criminal Code: the act, by a person holding public authority, of taking, receiving or retaining an interest in a matter with which they are charged). The Lyon Court of Appeal convicts him on 25 May 2005. He appeals to the Court of Cassation, arguing that he only had a preparatory role and that the final decision was up to others.

But the Court of Cassation dismisses his appeal on 14 December 2005. It affirms that the offence is constituted as soon as the defendant has taken an interest in a matter which they administered or supervised, even if their power was limited to preparing or proposing decisions taken by others. In other words, the guilty intention outweighs the degree of influence.

The reasoning of the court — dissected

The Court of Cassation relies on Article 432-12 of the Criminal Code. This text prohibits any person entrusted with a public service mission from interfering in a matter in which they have a personal interest. The aim: to protect the impartiality and equal treatment of citizens. What few people know is that this article does not distinguish according to the weight of the decision: a simple advisory opinion may suffice.

In this case, Bernard certainly had a preparatory role: he prepared estimates, participated in meetings, proposed orientations. But the final decision was collegial. Yet the judges consider that his personal involvement in the project (his villa) created a conflict of interest, even if others validated it. The reasoning is strict: the law punishes not only the final act, but any active participation in a matter in which one has an interest.

The decision confirms consistent case law: the magistrates want to prevent public officials from indirectly favouring their own affairs, under the guise of simple preparatory tasks. This is an evolution from older decisions which required a real influence on the decision. Now, the mere fact of following a file, even without decision-making power, is risky.

In short, if you are an elected official and you supervise a property development project while having interests in a company that participates in it, you are in danger. It does not matter that the municipal council votes alone: your mere presence in preparatory meetings can lead to a conviction.

What this changes for you — concretely

This decision has direct implications for several profiles:

• Landlord owner: if you lease premises to a local authority and are also an elected official in that authority, you must abstain from any participation in deliberations concerning your lease. Example: in Saint-Julien-en-Genevois, a municipal councillor who owns a warehouse leased to the town hall must recuse himself from votes on rents. On pain of prosecution.
• Property developer: if you are also a municipal councillor, do not prepare calls for tender for your own projects. Even if you are not the final decision-maker, your preparatory role is illegal.
• Public official: a civil servant who processes a building permit application for a project in which they have an interest (e.g., neighbouring land) must have themselves replaced. The mere processing constitutes "supervision" within the meaning of the law.

undefined, I have come across cases where local elected officials, in Annecy or elsewhere, have found themselves before the criminal court for having participated in preparatory meetings on projects they indirectly financed. Sentences can be up to 5 years' imprisonment and a fine of €500,000 (Article 432-17 of the Criminal Code).

If you are in this situation, you must immediately recuse yourself from any case in which you have an interest, even indirect. And if you are suspected, do not try to minimise your role: the case law is clear, any participation counts.

Four tips to avoid this type of dispute

• Declare your interests: keep a register of your mandates and private activities. In case of doubt, consult the High Authority for Transparency in Public Life (HATVP).
• Systematically abstain: as soon as a matter concerns you directly or indirectly, leave the meeting room. Do not participate in any vote, nor even in the preparatory discussion.
• Consult a lawyer lawyer: before accepting a mandate or launching a project, legal advice can save you years of proceedings.
• Train yourself in business criminal law: local authorities often organise awareness sessions. Do not neglect them.

Further reading: related case law and developments

This judgment is part of a strict line. Already in 2002 (Crim. 9 January 2002, No. 01-84.783), the Court of Cassation had ruled that the offence of unlawful taking of interest was constituted even if the elected official had only taken part in preparatory acts. The 2005 judgment merely confirms this orientation.

Conversely, some more recent decisions (Crim. 10 October 2018, No. 17-82.566) have attempted to limit the scope of the offence by requiring an "effective influence" on the decision. But the majority case law remains that of 2005: the mere quality of participant in a matter is sufficient. However, caution: the courts assess on a case-by-case basis.

For the future, the trend is towards strengthening public probity. Cases of conflicts of interest are multiplying, and judges are becoming less and less lenient. If you are an elected official or public official, consider any matter in which you have a personal interest as a ticking time bomb.

Key points to remember

• The offence is constituted from preparatory participation: even without a final decision, the mere fact of preparing or supervising a matter in which you have an interest is illegal.
• The interest may be indirect: a company you manage, a property you own, or even a member of your family.
• The penalties are severe: up to 5 years in prison and a fine of €500,000, not to mention ineligibility.
• The only safeguard: total abstention: from preparation to decision, avoid any involvement.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →