Filing Number: 14-06
Subject: Solicitation
Keywords: cash donation, employee, fundraising, gifts, private business, public purpose, solicitation, unwarranted privilege
Decision By: Johanna Bishop, James Keeley, Beatrice Patton Dixon, Sally Jensen, Eric Monzo, Christopher Simon
Contact Email: admin@nccethics.org
 
Status: Active

Question:

           Whether the provisions in a proposed solicitation letter for certain County events would violate the Ethics Code.

Conclusion:

           The provisions in the solicitation letter that reward businesses which donate specified levels of money for an event or events with the right to set up information tables and have special banners would violate the Ethics Code requirement of impartiality and create an appearance of prohibited endorsement. Furthermore, equating the level of donation with a more prominent display for recognition creates the appearance that the County is providing preferential treatment based on financial ability. Additionally, the Department conducting the events may not allow its employees to accept solicited donations from any entity which it directly serves. Such donations must be accepted by employees associated with another department or outside agency.
 

Facts:

          A department requested an opinion about its solicitation letter for raising funds for New Castle County sponsored programs. It sent the Commission a draft letter and associated documents for review. The draft letter, over the County Executive’s signature, is to be sent to numerous businesses operating in New Castle County, soliciting them to donate to any or all of ten (10) County sponsored events. The letter contains language warning the businesses that a donation will not affect current or future relations with the County.
 
           If a business donates to an event, it will be publicly listed as a “Contributor” or “Donor.” If the business donates $250.00 or more, it is given the right to set up an “information” table at one event; if it contributes higher amounts, it has the right to set up tables at more than one event, depending upon the amount contributed. If it contributes $5,000.00 or more, it has the right to have its logo displayed on a special “Donor Banner”. If it contributes $10,000.00 or more, the donor’s name and logo will appear on all the advertising for the events on the County television channel and web pages and will be announced over the public address system at all ten events.
 
           Cash donations are not permitted and checks are to be made payable to the Delaware Community Foundation but sent to the Department conducting the solicitation. In kind donations are not mentioned.
 

Code or Prior Opinion:

Code provisions
 
            The New Castle County Ethics Code at Section 2.03.104 J (1) limits the circumstances under which solicitation of employees or the public may occur.
 
            Section 2.03.104J. Solicitation.
1. Solicitation from entities which do business with or are regulated by New Castle County are prohibited unless such solicitation is pursuant to New Castle County written policy decision and for the benefit of the public. 
 
            The Ethics Code’s conduct rules at Section 2.03.104(A) also recite prohibitions affecting such solicitation. 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 associated.1
 
            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 carryout [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.
 
Prior Opinions
 
           The seminal opinion on the topic of solicitation of County businesses is Advisory Opinion 06-09, June 14, 2006. In that opinion the Commission determined that Code Section 2.03.104(J) permitted solicitation of entities which do business with or are regulated by New Castle County only when a number of restrictive conditions were fulfilled, including a written County policy describing the solicitation's benefit for the public, and required prior Commission review.
 
            In that opinion, the Commission analyzed the impact of older decisions:
 
           Past interpretations of the Code of Ethics have permitted solicitation activities by County employees under restricted circumstances but the relevant Commission precedent predates . . . Sections 2.03.104 (H), (I), and (J). A majority of the existing opinions relate to situations in which the official or employee is seeking donations on behalf of a private charitable enterprise. In most of those opinions the Commission analyzed questions of the appropriate boundaries for the relationship between the County status of the employee or official and the targeted entity. 
 
            In Advisory Opinion 01-08, the Commission determined that an employee could participate in fund-raising for a nonprofit as long as the employee did not seek to use his County position to influence official action for the nonprofit and abstained from participating as a representative of the County department on matters involving the nonprofit. It required the employee to avoid personally soliciting funds from entities for which he directly performed County services. It also required him to minimize any appearance that the party being solicited would receive favorable treatment from the County or feel compelled to donate because of the employee’s County status by prohibiting the employee from signing any direct written solicitation made to persons regulated by his department and requiring him to avoid mention of his County department in solicitations. [Emphasis added]
 
           Advisory Opinion 95-02 addressed the question of whether a County agency could co-sponsor an educational seminar about the legal process administered by the County agency with one of the private users of the agency. The Commission found while the agency could participate in the seminar, co-sponsorship would violate the Code by creating an appearance of impropriety. “The agency’s cosponsoring of a seminar with one of the several private entities which must conduct business with the agency creates the appearance of a cozy relationship between the Sponsor and the agency, thereby enhancing Sponsor’s public image. This appearance would engender in the public a perception that the agency favors Sponsor over its competitors or officially sanctions Sponsor’s activities.” [Emphasis added]
 
            In Advisory Opinion 06-09, the Commission was concerned with the elimination of the appearance that the donation would result in a special benefit to or preference for the donor and the inherently coercive effect of County status on the entity solicited, and focused on the method used to select the donors. After reviewing all of the circumstances surrounding the solicitation, the Commission found that the particular proposed solicitation could be conducted but imposed a number of parameters under which solicitation could take place.
 
            If the restrictions are accepted, solicitation may be undertaken. Those conditions are: the Executive must comply with the ordinance by issuing a written policy authorizing the solicitation for the Ice Cream Festival which identifies the public benefit; cash donations shall not be accepted; there can be no public or private identification of the donors as joint sponsors2 ; a written solicitation, emphasizing the voluntary nature of the contribution and the absence of any effect on current or future County relationships, should be made to all potential appropriate donors by the County Executive on behalf of the citizens of the County; a donor must provide written corroboration identifying and valuing the donation at the time it is made; the employee or official who accepts the donation may not have provided, and his or her department may not provide in the reasonably foreseeable future, direct services for the donor3 ; a contemporaneous public document is maintained which lists the donors, type and value of all donations.

Analysis:

           In this case, the Commission is being asked to review the proposed letter to be sent to many in the business community and will address only its contents. The Commission assumes that the other restrictions stated in Advisory Opinion 06-09, such as a written policy, solicitation of a representative group of businesses, and a publicly available log showing all donations, are known and will be observed.
 
            The proposals in the letter must be reviewed in light of two of the major concerns underlying Advisory Opinion 06-09, appearance of partiality or endorsement and appearance of coercion. The plan to reward businesses which donate $250.00 or more with permission to maintain “information” tables to advertise the businesses, and the linking of level of donation to unique “Donor Banners” and other special and prominent means of recognition, arguably rise to prohibited endorsement by the County. These proposals would create an aura of partiality toward businesses which are able to make significant financial contributions, to the detriment of equally worthy County businesses which do not have that financial ability. The Commission notes, however, that the provision of listing all donors on a “Donor Board” does not contravene Advisory Opinion 06-09 since it is a factual report to the public and does not provide undue prominence to those able to donate higher amounts. Therefore, the Commission suggests that the entire page attached by the Department entitled “Donor Opportunities for Special Events” as well as the paragraph on the “Pledge Sheet for 2015” referencing donor levels both be eliminated. The letter should also be amended to remove language relating to levels of donation.
 
            In addition, the proposal to have employees of the Department presenting the events as the persons who accept donations contravenes the guidance of Advisory Opinion 06-09 and creates the appearance of coercion in relation to businesses that are regulated by or do business with the Department. The fact that the donations are made in the name of a non-County entity does not affect that guidance. The Commission suggests that the Department follow the lead of other departments which have resolved this issue by using employees from sister departments or which have turned to outside agencies to accept and record donations.

Finding:

           The provisions in the solicitation letter that reward businesses which donate specified levels of money for an event or events with the right to set up information tables and have special banners would violate the Ethics Code requirement of impartiality and create an appearance of prohibited endorsement. Furthermore, equating the level of donation with a more prominent display for recognition creates the appearance that the County is providing preferential treatment based on financial ability. Additionally, the Department conducting the events may not allow its employees to accept solicited donations from any entity which it directly serves. Such donations must be accepted by employees associated with another department or outside agency.
 
            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 NOVEMBER 2014.
 
 
_______________________________
Johanna P. Bishop, Chairperson
New Castle County Ethics Commission
 
Decision: Unanimous

Footnotes:

1New 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.

2This restriction does not preclude public acknowledgment of donations.

3Section 2.03.102, Definitions, in pertinent part:
Reasonably Foreseeable means an event which should be expected or anticipated based upon credible past and present facts known to a reasonable observer or participant at the time a decision is made or an action taken.