Filing Number: 14-05
Subject: Business Relationships
Keywords: candidate, conflict, County board, County official, outside employer, public bid, recusal, vendor
Decision By: Johanna Bishop, James Keeley, Beatrice Patton Dixon, Paula Jenkins-Massie, Sally Jensen, Christopher Simon
Contact Email: admin@nccethics.org
 
Status: Active

Question:

     Whether the ethics code would be violated if a department selected a vendor which was the employer of person who serves on a County advisory committee.

 

Conclusion:

            The Ethics Code does not prohibit an otherwise lawful selection of a vendor simply because the vendor employs an individual who volunteers to serve on a committee which addresses matters unrelated to the subject of the vendor contract. If a potential conflict or improper appearance relating to the outside vendor or its affiliates arises or is recognized, the Ethics Code in Section 2.03.102 requires that “an [appointed] official or employee must end direct or indirect participation, advice, input, direction, recommendation, or discussion, as well as refraining from vote.”

Facts:

            A department issued a request for proposals (RFP) and a number of vendors replied.1 One vendor provided information that an employee serves as a volunteer on a County committee which offers advice to another branch of County government. That advice relates to matters other than the subject of the RFP. The employee is employed by a large subsidiary of the vendor that provides services totally different from those which are the subject of the RFP. The vendor has internal policies governing the employee which require him to identify potential conflicts and recuse himself from discussing or voting on matters regarding the vendor or its affiliates.

Code or Prior Opinion:

Code provisions
 
           The conflict of interest rules at New Castle County Code Section 2.03.103(A)(1) prohibit 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 This conflict rule means that an official or employee may not exercise any authority derived from his or her County position to benefit 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 like the general public, or an industry or occupation or group which includes them.
 
           The Ethics Code’s conduct rules at Section 2.03.104(A) also recite prohibitions affecting the exercise of County authority by an official when direct financial conflict is not at issue. That subsection 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 individual or governmental body with which the employee or official is associated3
 
            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." 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.
 
            In 2014, the County Council added a definition of Recusal to Ethics Code Section 2.03.102. Recusal is defined as “including but not limited to, withdrawing from sponsorship, deliberation, vote, research, preparation, discussion, negotiation, contract formation, policy making, planning, decision making, and/or implementation of a matter. It also includes a prohibition on conducting, in an official capacity, any private or public discussion of a measure raising a conflict or improper appearance. As soon as a potential conflict or improper appearance arises or is recognized, an official or employee must end direct or indirect participation, advice, input, direction, recommendation, or discussion, as well as refraining from vote, if the person is not an elected official. Elected officials may choose to avoid recusal and may vote if they follow the alternate process described in Subsection 2.03.103.A.2.”
Prior Opinions
 
           A person may not use his position as a County official to advance his interests in the private business, Advisory Opinion 04-11. In other published guidance, the Commission has stated "As soon as the potential conflict or improper appearance arises or is recognized, the official or employee must cease participation in the matter . . . ". Commission Recusal Brochure at 2.
 
            In Advisory Opinion 92-05, a board member was required to recuse himself from participation in decisions concerning consultants hired by the Board when he had a business relationship with some of them. In Advisory Opinions 94-04 and 06-06, officials were required to disclose and abstain from voting on matters which would affect their personal pecuniary interests. In Advisory Opinion 99-01, a County official was required to recuse himself from voting when a client of his employer had a financial interest in the matter. In Advisory Opinion 04-11, an official was advised to recuse himself entirely from sponsorship and vote on a matter concerning a client of his wife's business, and in Order 05-04 an official was found to have inadvertently violated the Code when he failed to recuse himself in a matter brought by a client of his wife.
 
            Even when the private business itself is not a conflict, relationships stemming from it may be problematic under the Ethics Code. If another business jointly associated with an official’s business comes before him or his agency, the official must recuse himself from any act of authority regarding either business. See, Advisory Opinions 04-09 and 05-05. In Advisory Opinion 92-03, the Commission found that even where the relationship between a County official and an organization was very remote, abstention would avoid any allegation of an appearance of impropriety, however slight, and would reflect the highest ethical standards.

Analysis:

            In this case, the facts show that there is no conflict between the official’s duty on the County committee and the subject matter of the RFP and no overlap between the official’s function for his employer and the subject matter of the proposed contract. Both the employer and the Ethics Code require the official to identify potential conflicts or improper appearances and take immediate steps to remove himself from them by recusal. As stated in Advisory Opinion 92-03, recusal “would avoid any allegation of an appearance of impropriety, however slight, and would reflect the highest ethical standards.”
 

Finding:

            The Ethics Code does not prohibit an otherwise lawful selection of a vendor simply because the vendor employs an individual who volunteers to serve on a committee which addresses matters unrelated to the subject of the vendor contract. If a potential conflict or improper appearance relating to the outside vendor or its affiliates arises or is recognized, the Ethics Code in Section 2.03.102 requires that “an [appointed] official or employee must end direct or indirect participation, advice, input, direction, recommendation, or discussion, as well as refraining from vote.”
 
           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 10th DAY OF SEPTEMBER 2014.
 
 
 
 
_______________________________
Johanna P. Bishop, Chairperson
New Castle County Ethics Commission
 
Decision: Unanimous
 
 
 

Footnotes:

1The Ethics Commission considers the RFP process as in compliance with New Castle County Code Section 2.03.2.03.103 (C) for public bid which states:
No County official or County employee, his or her spouse, child, parent, step-parent or sibling of the whole or half-blood or any business with which the County official or County employee or his or her spouse, child, parent, step-parent or sibling of the whole or half-blood is associated or who has a legal or equitable ownership of more than five (5) percent (more than one (1) percent in the case of a corporation whose stock is regularly traded on an established securities market) shall enter into any contract with the County (other than an employment contract) or any subcontract with a County contractor unless such contract or subcontract was made or let after public notice and competitive bidding. Such notice and bidding requirements shall not apply to contracts not involving more than five hundred dollars ($500.00) per year if the terms of such contract reflect arms' length negotiations, if the subcontractor is a sole source provider, or if there are exigent circumstances. There will be a rebuttable presumption of a knowing and willing violation of the section only if the contract or subcontract is awarded to a spouse or child of the County employee or official. (Emphasis added)

2 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).
.     .     .
B. Restrictions on representing another’s interest before the County.
1. 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.
2. No County official may represent or otherwise assist any private enterprise with respect to any matter before the County. This prohibition is to be considered personal to the County official and is not, for purposes of the New Castle County Ethics Code only, deemed to impact other members of a firm, business or other employer by which the County official is employed.
3. This subsection shall not preclude any County employee or County official from appearing before the County or otherwise assisting any private enterprise with respect to any matter in the exercise of his or her official duties.
 
3New 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.