Filing Number: 10-05
Subject: Conflict of Interest
Keywords: abstention, appearance of impropriety, business, compensation, conflict, disclosure, elected official, financial interests, immediate family, ordinance, public notice, similarly situated, spouse, subgroup, vote
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 elected official requested guidance about whether he may vote on an ordinance affecting all colleges locating in New Castle County in which one or more of those colleges have employed a member of his wife's business to lobby County government in favor of the ordinance.

Conclusion:

             The Code requires that the spouse's profits from her business' activity be imputed to the official. The ordinance in question affects the spouse's business in manner different from the general public or the subclass cited in the ordinance. Therefore, action by the official on the ordinance would constitute a conflict of interest. When such a conflict of interest exists, an official can avoid a violation of the Ethics Code by taking either of two courses of conduct: complete and total recusal from any County matters associated with the spouse's business and abstention from vote, or making full compliance with the disclosure provisions recited in subsection (2) of Section 2.03.103(A).

Facts:

             Proposed Ordinance 10-018 would amend the New Castle County United Development Code to permit college limited use in two areas in which colleges are currently not permitted.1 A member of the requesting elected official's spouse's firm has a client which would be affected by the ordinance. The souse's co-worker has spoken in favor of the ordinance at a Planning Board public hearing. The requesting official notes that the amendment "would affect all academic institutions to the same degree" and the client of the spouse's firm would not benefit "any more than clients of other . . . firms."

Code or Prior Opinion:

Code Conflict Provisions
 
           The conflict of interest rule at New Castle County Code Section 2.03.103(A)(1) prohibits the use of official authority 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."2 Under this rule, the benefits of a spouse's business are attributed to the County official or employee. However, the Code provides an exception to this conflict rule if an ordinance affects the spouse's business to the same degree as 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.
 
            The Ethics Code conduct rule at Section 2.03.104 D prohibits all County employees and County officials from using their "public office to secure unwarranted privileges, private advancement or gain."3
 
Code Conduct Provisions
 
            The law presumes that public officers act in good faith and in the public interest unless otherwise demonstrated by facts. 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 vote 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.4
 
Prior Commission Opinions
 
            The New Castle County Code extends an imputed barrier of conflict to an official for conduct performed by members of the official's immediate family. "Immediate family" is defined in Section 2.03.102 as "a spouse, child whether by blood or operation of law, parent, step-parent, spouse's parent or child, or sibling of the whole or half blood of a County official or employee". By virtue of this code definition, the financial gains of a spouse are imputed to the husband or wife office holder. Therefore, an official's vote on matters concerning his spouse's business raises a question of violation of subsection (1) of the conflict rule against using official authority for private benefit. See, Advisory Opinion 07-05.(vote on land use matter when an official's employer represents an interested party.)
 
            In Advisory Opinion 92-03 the employer of a County official's spouse anticipated submitting a bid to an organization which might subsequently apply for a County grant. Even though the Commission found no conflict of interest in the relationship of the organization with the official, the official was advised to abstain from all participation in the grant award in order to avoid creating an appearance of impropriety. Such a course of conduct was held to "reflect the highest ethical standards."
 
            In Advisory Opinion 99-08 a County official's parent was doing business on an unrelated project with the owner of land subject to County approval. Under the law at that time, a parent was not included in the definition of conflict of interest but the Commission held that an improper appearance would be created if the official did not recuse from the matter, publicly disclose the nature of the personal relationship and abstain from the vote.
 
            In Advisory Opinion 99-01 a conflict of interest was found and a County official was advised to recuse himself from voting if a client which his business represented had a financial interest before him. He was also advised that an improper appearance would be created if he did not recuse himself from voting when he knew or reasonably should have known that a client of his or his law firm had a financial interest in a matter, even if he or the firm represented the client only in unrelated matters.
 
            In Advisory Opinion 04-11 the Commission held that an official would create an appearance of impropriety if he did not publicly disclose the relationship between his wife and the applicant, recuse himself, and abstain from vote on a matter in which a client of his spouse's business had a pecuniary interest in the rezoning of a specific property.
 
            In Order C05-04, the Commission held that an official violated the Ethics Code when he cast his vote in a matter affecting his spouse's client, even if the spouse was not involved in the particular ordinance. The Commission cited prior opinions on the issue and reminded the official that the disclosure and vote procedure recited in Section 2.03.103(A)(2) had been available to him. "In the future, if the official elects not to recuse himself in matters concerning clients of his spouse, the Code requires that he notify the Ethics Commission in advance in the manner described in New Castle County Code Section 2.03.103(A)(2) so that the public will be on notice and the Commission may have an opportunity to offer guidance and prevent a similar violation."
 
            In Advisory Opinion 05-19, a regulatory issue affecting a private enterprise came before an official who had non-delegatable legal and/or statutory responsibility with respect to action or non-action in the matter. If the official did not exercise his authority in the matter, the function of County government ceased in that area. The official and his family had a specific pecuniary interest in the matter. The Commission acknowledged that a conflict of interest existed but determined that in this case the official's action was necessary. The official was advised he could exercise County authority if he recused himself as far as possible from involvement in the matter and followed the Section 2.03.103(A)(2) procedure by filing a written statement with the Commission fully disclosing the private interest and explaining why it was not possible to delegate responsibility for the matter.
 
            In Advisory Opinion 05-23 the Commission found that no conflict of interest or appearance of impropriety would arise if an official exercised County authority regarding a land use matter since the official's ownership interest in real property would not be affected by his vote and any benefit or detriment flowing from the vote would have approximately equal and de minimis affect on a large subclass of the public which included the official.
 
            In Advisory Opinion 06-06 a County official asked whether he could vote on a land use measure affecting all homes in his community in like manner. The Commission held that if the official did not have a financial interest affected by the measure, there was no conflict of interest. If, however, the official determined that he did have an affected financial interest or there were other circumstances impairing his integrity, impartiality or competence in the public eye, he must follow the directive of Section 2.03.103(A)(2) if he intended to vote.

Analysis:

             The substance of Ordinance 10-018 targets and affects only a class consisting of "colleges" and the general public. Apparently, the spouse's business is being paid to publicly address County government to advance the interests of its specific client. Thus, the spouse's business benefits financially from its conduct regarding the ordinance in a manner different in type and degree from its client.
 
            The class or industry exception of Section 2.03.103(A)(1) does not apply to the spouse's business, unlike the situation of the homeowner-officials in Advisory Opinions 05-23 and 06-06 who were part of the target class of the ordinance. Although the ordinance affects all colleges equally and the spouse's firm's client is not benefitting differently than other colleges, the spouse's business is not in the same class or industry as the colleges and it has a financial interest different from that of the general public.
 
            The Code requires that the spouse's profits from her business' activity be imputed to the official and, therefore, since the class exemption does not apply in this case, a vote by the official on this ordinance would constitute a conflict of interest since his wife's business has a discrete financial interest.
 
            The Commission is mindful that the official has obligations related to the exercise of County authority which cannot be delegated and that, as an elected official, he is directly responsible to the County citizens for his conduct. When a conflict of interest such as this one exists, an official can avoid a violation of the Ethics Code by either of two courses of conduct. The best and most frequently recommended method is complete and total recusal from any County matters associated with the spouse's business and abstention from vote. That is the teaching of most of the Advisory Opinions recited in the preceding section of this Opinion. The Commission has recommended the choice of full recusal and abstention from vote because such a course of conduct is held to "reflect the highest ethical standards." See, Advisory Opinion 92-03. If an official decides to recuse and abstain from voting, he or she is still required to place the reason for the abstention on the record prior to the vote but is not required to file a written statement with the Commission in advance.
 
            The alternate method is full compliance with the exception provisions recited in subsection (2) of Section 2.03.103(A). Subsection (2) has detailed provisions for avoiding an ethical violation when County authority is exercised in the face of a conflict by an official who has non delegable legal or statutory responsibility. If an official decides to vote, subsection (2) requires the official to file a written statement with the Ethics Commission fully disclosing the personal or private interest involved and explaining why it is not possible to delegate or refrain from the exercise of authority. The law also requires the official to read the written statement of conflict into the public record prior to the time his or her vote is cast. See, e.g., Order 05-04.

Finding:

            The Code requires that the spouse's profits from her business' activity be imputed to the official. The ordinance in question affects the spouse's business in manner different from the general public or the subclass cited in the ordinance. Therefore, action by the official on the ordinance would constitute a conflict of interest. When such a conflict of interest exists, an official can avoid a violation of the Ethics Code by taking either of two courses of conduct: complete and total recusal from any County matters associated with the spouse's business and abstention from vote, or making full compliance with the disclosure provisions recited in subsection (2) of Section 2.03.103(A).
 
            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 14th DAY OF APRIL 2010.
 
______________________________
Thomas P. Collins, Chairperson
 
Decision: Unanimous

Footnotes:

1Pursuant to Ordinance 10-018, colleges but not schools would be permitted in ON designated parcels and colleges, in addition to schools, would be permitted in CN parcels. The colleges shall be required to use existing structures and buildings in such districts under the amendment.

2New 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.     In any case where a person has a legal and/or statutory responsibility with respect to action or nonaction on any matter where the person has a personal or private interest and there is no provision for the delegation of such responsibility to another person, the person may exercise responsibility with respect to such matter, provided that promptly after becoming aware of such conflict of interest, the person files a written statement with the Commission fully disclosing the personal or private interest and explaining why it is not possible to delegate responsibility for the matter to another person. If the matter is one in which the legal and/or statutory responsibility requires the person to vote upon the issue, the written statement filed with the Commission shall be read into the public record prior to the time the person's vote is cast. Any person choosing to abstain from voting on an issue where [he] or she has a conflict shall state the reasons for his or her conflict on the record; an abstaining voter need not file the written statement with the Commission required when acting on, rather than abstaining from, an issue involving a conflict.

3New Castle County Code Section 2.03.104. Code of conduct.
D. No county employee or County official shall use such public office to secure unwarranted privileges, private advancement or gain.

4New 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.