Filing Number: 05-05
Subject: Outside Employment
Keywords: appearance of impropriety, city council, confidentiality provisions, contract, disclosure, employee, federal government, HUD, impropriety, outside employment
Decision By: Commissioners: Dennis S. Clower, Loren Grober , Wendy Jamison, Stephanie McClellan, Eugene McCoy, John McMahon, Ernest Price
Contact Email: admin@nccethics.org
 
Status: Active

Question:

           Whether a County employee whose job is to calculate non-discretionary federal Community Development Block Grant expenditure ceilings for recipients and whose department passes federal funds in a mandated amount to the City of Newark and performs paid ministerial administrative services for Newark in relation to those funds may serve on the Newark Planning Commission.

Conclusion:

           The employee may serve on the Newark Planning Commission as long as she recuses herself from any discussion or action on any non-ministerial matters performed in or by her Department concerning the City of Newark.

Facts:

          An employee of a County department which receives federal funds in form of a grant from the United States Department of Housing and Urban Development (HUD) also serves as a member of the City of Newark Planning Commission. Her County Department is required by the federal government to pass eleven percent of the HUD funds to the City of Newark for its operation of the Newark Community Development program. The Department's action is ministerial and it has no authority to determine conditions or eligibility for Newark's program.
 
          The employee's job is to calculate the administrative ceilings, pursuant to federal guidelines, for all recipients of the HUD grants. Her Department is paid by the City of Newark for performing certain ministerial administrative duties in relation to its HUD funds. The Department includes information about the Newark program in its Comprehensive Plan but Newark City Council makes all decisions for its HUD program through recommendations from a committee of the Newark Planning Department.
 
          The employee serves as a volunteer member of the Newark Planning Commission which advises Newark City Council on rezoning requests and other permitting applications. The Commission is staffed by an employee of the Newark Planning Department but is otherwise unrelated to that Department. The Newark Planning Commission does not have any connection to matters related to the application or use of the Newark HUD funds other than as they may underlie a rezoning or permitting issue. In the year that the County employee has served on the Commission no such application has come before it. The employee agrees that in the remote possibility that such an application were to be made to the Planning Commission she would recuse herself from Planning Commission involvement in the matter.

Code or Prior Opinion:

Code provisions
 
          The New Castle County Ethics Code Section 2.03.103 conflict of interest provision prohibits using official authority or confidential information received through County employment for the personal or private benefit of the employee. This means that an employee cannot use a County position or confidential information developed from that position to enhance his or her status on personal outside endeavors.1
 
          Code Section 2.03.104 (A) also prohibits conduct which undermines public confidence in the impartiality of a governmental body with which a County employee is associated by creating the appearance that the official actions and decision of the employee or department are influenced by factors other than the merits.2
 
          Section 2.03.104 (E) warns that County employees may not place themselves in outside positions which might reasonably be expected to require or induce them to disclose confidential information acquired by reason of their public position.3
 
Commission Precedent
 
          In Advisory Opinion 92-02, the Commission held that while there was no violation of the Code by officials and employees who served as members of the board of a non-profit corporation, the officials and employees would have to recuse themselves from matters involving organizations which had joint ventures with the non-profit.
 
          In Advisory Opinion 97-04, the Commission found no conflict of interest or appearance of impropriety when a member of a County Board also was a paid member of a State Board. The State occasionally submitted matters to the official's County Board. The Commission determined that because of the non-profit nature of the State and the limited scope and nature of the Board member's State position, there was no appearance that the member's actions would be influenced by factors other than the merits.
 
          In Advisory Opinion 97-09, the Commission found that it did not violate the Code for a County employee who exercised discretion in the administration of HUD funds to serve on the board of a non-profit which, through a joint venture, operated a program with a second organization which had been a recipient of County HUD funds, as long as the employee recused himself in his County position from consideration of any application for HUD funds from any enterprise associated with the non-profit. The Commission noted that "the employee must be knowledgeable, with regard to the organizations the non-profit organization funds or is in a joint venture with, to ensure that she has no involvement at the County if they are also applicants for the County administered HUD money." A similar theme was recited in Advisory Opinion 97-11, in which the Commission held that an employee who exercised discretion over HUD funds could serve on the Board of a non-profit which may become an applicant for the funds. The employee was advised to exercise caution to ensure that he became aware of any potential areas which may result in appearances of impropriety and recuse himself when appropriate. Again, in Advisory Opinion 99-04, the Commission held that a County Official could serve as an officer of a non-profit association as long as the County official recused himself when matters involving the association came before his County board.

Analysis:

           The County employee who has requested guidance does not violate the conflict of interest provisions of the Code by membership on the non-profit Newark Planning Commission because she is not using the authority of office for the financial benefit of herself, her family or an associated business.4 However, as the Advisory Opinions indicate, if she were to act on applications made by the City of Newark for HUD funds allocated to New Castle County she would create the appearance that her Department may be showing favoritism to the City of Newark over other grant recipients.
 
          Such a situation is avoided in this case because the HUD grants received by Newark were never County funds and are not subject to County discretion. They are a federal resource, subject to federal conditions and limitations, and the County's involvement with them is ministerial; calculating ceilings, passing on a mandated amount to Newark, reporting its disbursements to the federal authorities, and making information available to the public about the various HUD programs in the County. The only other connection the County has with the Newark funds is as a paid administrator under a contract dictated by the City of Newark and under federal guidelines. Additionally, the employee's position on a Commission which hears land use and permit matters in Newark would not reasonably be expected to require or induce her to disclose confidential information acquired by reason of her County position in relation to HUD funds. Thus, as in Advisory Opinion 97-04, given the ministerial nature of the County function in relation to Newark's HUD funds and "the limited scope and nature of the [employee's position on the Planning Commission], there is no appearance that [her] actions would be influenced by factors other than the merits."

Finding:

          The employee may retain her position on the Newark Planning Commission as long as she exercises caution to ensure that she becomes aware of any potential areas which may result in appearances of impropriety and recuses herself when appropriate.
 
          In issuing this Advisory Opinion, the Ethics Commission is applying the New Castle County Code of Ethics, which establishes the minimum level of ethical conduct required of County officials and employees. The Commission cautions, however, that each County department, board, or other unit of County government is free to, and may impose as part of its own policy, additional or greater restrictions on its officials and employees than those set forth in this Opinion.
 
          BY AND FOR THE NEW CASTLE COUNTY ETHICS COMMISSION ON THIS 9th DAY OF MARCH, 2005.
 
_____________________________
Dennis S. Clower, Chairperson
 
Decision: Unanimous

Footnotes:

1 Section 2.03.203. Prohibitions relating to conflicts of interest, states in pertinent part:
A. Restrictions on exercise of official authority.
1. No County employee or official knowingly or willfully shall use the authority of his or her office or employment or any confidential information received through his or her holding County office or employment for the personal or private benefit of himself or herself, a member of his or her immediate family or a business with which he or she is associated. This prohibition does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the County official or employee, a member of his or her immediate family or a business with which he or she or a member of his or her immediate family is associated. There will be a rebuttable presumption of a knowing or willful violation of this section if the action benefits the County official or employee, his or her spouse, or his or her dependent children (whether by blood or by law).

2 Section 2.03.104. Code of conduct, states in pertinent part:
]A. No County employee or County official shall engage in conduct which, while not constituting a violation of Section 2.03.103(A)(1), undermines the public confidence in the impartiality of a governmental body with which the County employee or County official is or has been associated by creating an appearance that the decision or action of the County employee, County official or governmental body are influenced by factors other than the merits.

3 Section 2.01.104. Code of conduct, states in pertinent part:
E. No County employee or County official shall engage in any activity beyond the scope of such public position which might reasonably be expected to require or induce such County employee or County official to disclose confidential information acquired by such employee or official by reason of such public position.

4 Additionally, the Newark Planning Commission is also not a business because it is not a legal entity organized for profit as described in Section 2.03.102 which states: "Business means any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self-employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit."