Filing Number: 09-04
Subject: Conflict of Interest
Keywords: agency head, appearance of impropriety, business, conflict, gifts, impropriety, invitations, private business, representation, solicitation, undue influence, vendor
Decision By: Commissioners: Thomas P. Collins,Gerald Turkel, Edward Danberg, V. Eugene McCoy
Contact Email: admin@nccethics.org
 
Status: Active

Question:

             Whether an official may provide access to his staff for a free service from a for-profit business of which he is a customer.

Conclusion:

             The official may not provide access to the employees of his agency for the benefit of the private business.

Facts:

             An official patronizes a for-profit business which has no connection to the County. He proposes to give access to his staff to that business so that the business can provide a free service to the staff members during their lunch hours. The service would be provided as a form of new client solicitation by the business. The official is not paying the business for this service to the staff and has no financial interest in the business. The business is not reciprocating to the official.

Code or Prior Opinion:

             The New Castle County Ethics Code provides guidelines for the ethical conduct of public officials and employees. See Section 2.03.101.
 
            The conflict of interest rules at New Castle County Code Section 2.03.103A(1) prohibit the use of official authority or any confidential information by a County official or employee "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.  . . ."1 This conflict rule means that an official or employee may not exercise any authority or use confidential information derived from his or her County position in matters involving himself, his or her immediate family members or businesses associated with him or those family members, other than in those situations in which the employee or immediate family are affected in a manner no different from the general public, or a subgroup which includes them.
 
            Section 2.03.103 B(2) restricts representation by an official of the interest of another before the County. It states, in pertinent part, "No county official may represent or otherwise assist any private enterprise with respect to any matter before the County. . . ."
 
            Additionally, the Code's conduct rules at Section 2.03.104 A, E and F also recite prohibitions affecting the exercise of County authority by an official even when direct financial conflict is not at issue. Subsection A prohibits exercise of official authority which creates an appearance that the decisions or actions of a County official or his or her department are influenced by factors other than the merits of the matter for decision. This prohibition exists because such conduct undermines public confidence in the impartiality of the governmental body with which the employee or official is associated.2 The standard for judging the creation of such an appearance for judicial public officials has been described in Delaware courts as "conduct [which] would create in reasonable minds, with knowledge of all the relevant circumstances that a reasonable inquiry would disclose, a perception that the official's ability to carry out [official duties] with integrity, impartiality and competence is impaired." In re Williams, 701 A.2d 825, 832 (Del. Super. 1997). In determining the relevant circumstances, the courts advise the Commission to look at the totality of facts. The Commission has long applied this standard to the conduct of County officials and employees.
 
            Section 2.03.104D prohibits the "use of such public office to secure unwarranted privileges, private advancement or gain."
 
            Section 2.03.104 J (2) and (3) prohibit personal solicitation for donations by superiors from their subordinates and permit elected officials to set office-wide, non coercive solicitation policies intended to benefit charitable entities or events.

Analysis:

             There are no prior Commission opinions directly on point regarding providing direct access to the employees of a public office to a for-profit business. The Commission takes notice that in the past discount coupons have been distributed to all County employees from private businesses and have been permitted under the Ethics Code because they are considered to be advertising promotions no different from those available to the general public. For-profit businesses also have donated prizes to the County to be awarded to employees as part of the County sponsored United Way campaign. Those donations have been acquired under solicitation guidelines enumerated by the Commission. See, Advisory Opinion 06-09 (guidelines for solicitation of donor groups which do business with or are regulated by the County).
 
            In this case, however, County fundraising and charitable interests are not involved and the free service is targeted at only at the official's department. Since the official has no financial interest in the for-profit business and will not receive any form of remuneration for providing the access, a direct conflict of interest does not arise. However, the proposed conduct of the official is most akin to enabling the business to solicit County employees for future sales and raises a question the appearance of using a public office for the representation of, or for the private gain of, a for-profit business. The fact that the service to the County employees would be free is not relevant to resolving this issue.3 In affording access to the employees, the official is personally endorsing the for-profit business in a manner different from other such businesses which are not provided such access. Although the business is not aiming its services at County government, as appears to be contemplated in the Code's representation restrictions, the official would be acting in an official capacity when making this endorsement and therefore using his office for the future gain of the private entity as prohibited by Section 2.03.104(D).
 
            Additionally, the provision of such access certainly would be perceived by the reasonable person to affect the official's and business's outside relationship since other customers of the business may not be able to provide such an easy path to new customers and the future profit they might bring. The reasonable person would be justified in believing that a future conflict of interest would arise because the business would likely express its appreciation to the official in some demonstrable manner, perhaps by providing a reduced cost for special services or discounting its regular offerings to him.

Finding:

             The proposed conduct would violate Section 2.03.103 D and create an improper appearance in the mind of the reasonable member of the public. The official may not provide access to the employees of his agency for the benefit of the private business.
 
            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 13th DAY OF MAY 2009.
 
______________________________
Thomas P. Collins, Chairperson
 
Decision: Unanimous

Footnotes:

1 New Castle County Code Section 2.03.103. 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 New Castle County Code Sec. 2.03.104. Code of conduct.
A.     No County employee or County official shall engage in conduct which, while not constituting a violation of Section 2.03.103(A)(1) [conflict of interest], 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 The question of whether the employees could accept a gift from the business simply because they are County employees is not addressed in this opinion. The New Castle County Code discourages the acceptance of gifts by employees. A gift, of whatever value, "which creates the reasonable perception in the public that the vote, official action, or judgment of the recipient would be influenced or impaired" may not be accepted. See, Section 2.03.103 H. In addition, any gift which is not enumerated under Section 2.03.103 I (1 through 8) must be described in a request for approval to the Ethics Commission prior to acceptance.