Filing Number: 10-06
Subject: Conflict of Interest
Keywords: appearance of impropriety, board member, conflict, contract, employee, fundraising, non-profit, recusal, representation, undue influence, vendor
Decision By: Commissioners: Thomas Collins, Gerald Turkel, Edward Danberg, James Keeley, V. Eugene McCoy, Vincent White
Contact Email: admin@nccethics.org
 
Status: Active

Question:

             An employee requests guidance about whether he may serve on the Board of Directors for a non-profit organization which provides services for citizens at a County Park administered by his department.

Conclusion:

             Since the function of the Board of this non-profit is to oversee activity which is conducted under extensive and continuous regulation by the employee's County department, the employee may not assume a seat without violating the Code provision against representation of a private entity before his department. Additionally, assumption of a leadership role in an organization extensively regulated by his department would create an appearance of partiality in decisions made by that department concerning the non-profit.

Facts:

             The employee is an administrator in a Department which is responsible for the County park in question but does not have any official responsibility for the facility used by the non-profit. The non-profit's only function is to provide specialized services at the County facility for a particular population. While the non-profit does not operate under a written contract, any income it receives over and above the cost of providing those services is donated to the County through the department. The employee has been invited to serve on the Board of the non-profit.

Code or Prior Opinion:

Code Conduct Provisions
 
            Section 2.03.204A prohibits conduct which creates an appearance of impropriety. An improper appearance is created when a reasonable member of the public "with knowledge of all the relevant circumstances that a reasonable inquiry would disclose, [would hold] a perception that the official's ability to carry out [official duties] with integrity, impartiality and competence is impaired." Even when there is no conflict relationship or financial gain at issue, every County official and employee must consider the additional ethical prohibition in Section 2.03.104(A) against creating an impression in the reasonable member of the public that his or her official action is affected by personal interests which impair his or her competence, integrity and honesty or that his agency or department will look as though it is showing partiality in a matter.1
 
Code Conflict Provisions
 
            New Castle County Code Section 2.03.103B(1), Restrictions on representing another's interest before the County, states, in pertinent part: "No County employee or County official may represent or otherwise assist any private enterprise with respect to any matter before the County Department with which the employee or official is associated by employment or appointment." However, this prohibition does not preclude the employee or official from such representation if such conduct is part of his or her official duties. See, Section 2.03.103B (3).
 
Prior Commission Opinions
 
            In Advisory Opinion 92-02, the Commission found that "mere position on the board of directors of a non-profit which is not regulated by or does not contract with the County does not create, in itself, an appearance of impropriety .  . . . However, where the employee or official's County position figures prominently in the person's status with the non-profit, there is a potential for an appearance to arise. This is particularly true when a private organization seeks regulation, contract, or benefit from the County or in fundraising.  . . . Additionally, if the public would be ill served by an official's or employee's recusal from official duty or if recusal is not possible because of the nature of the public duties, an official or employee may be prohibited from serving in a leadership capacity in a non-profit."
 
            In Advisory Opinion 05-24, an employee was permitted to serve on the board of a non-profit because he would be able to recuse himself in those "few occasions when matters concerning the non-profit come before his agency."
 
            In Advisory Opinion 97-05, an appointed official wished to assume a leadership role in a non-profit. The Commission found that while the official could remain a member of the organization, she could not assume a leadership position because "in such a capacity she would be dealing with the same matters that she and her direct superior address in their County positions." The Commission held that "when a County Official has a high profile, leadership position in an organization whose purpose and /or actual activities center upon influencing County government, an appearance exists that the County official is mingling the two positions and raises impartiality concerns. The appearance would exist that the County Official would be using the authority of her [County] office to further the benefit of the organization."

Analysis:

             The non-profit in this case is the County's tenant, with or without formal contract, and subject to extensive and continuous regulation by the County in terms of the day to day conduct of its business. The Board of the non-profit oversees that interaction with the County. Since the entire business of the non-profit is conducted at a facility administered by the employee's department, the function of the non-profit Board inevitably includes more than occasional representation of the interests of the non-profit before the department and recusal is not an availably remedy in this situation. If the employee functions as a member of this board, he would violate the prohibition of Section 2.03.103B(1).
 
            Additionally, since the day to day work of the non-profit is inexplicably intertwined with the function of the County, the employee's department head is responsible for making and enforcing decisions which may be beneficial or detrimental for the non-profit. A member of the public would reasonably believe that the department's impartiality would be compromised and that those decisions would be influenced by the fact of the employee's high profile leadership position for the non-profit.

Finding:

             Since the function of the board of this non-profit is to oversee activity which is conducted under extensive and continuous regulation by the employee's County department, the employee may not assume a seat without violating the Code provision against representation of a private entity before his department. Additionally, assumption of a leadership role in an organization extensively regulated by his department would create an appearance of partiality in decisions made by that department concerning the non-profit.
 
            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.
 
BY AND FOR THE NEW CASTLE COUNTY ETHICS COMMISSION ON THIS 12th DAY OF MAY 2010.
 
______________________________
Thomas P. Collins, Chairperson
 
Decision: Unanimous

Footnotes:

1New Castle County Code Section 2.03.104 (A)(1) states:

No County employee or County official shall engage in conduct which, while not constituting a violation of Section 2.02.103(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 a appearance that the decision or action of the County employee, County official or governmental body are influenced by factors other than the merits.
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.