Filing Number: 15-12
Subject: Non-Profit
Keywords: appearance of impropriety, board member, compensation, conflict, council member, County official, disclosure, elected official, financial interests, fundraising, impropriety, non-profit, recusal
Decision By: Johanna Bishop, Eric Monzo, Beatrice Patton Dixon, Paula Jenkins-Massie, Sally Jensen Christopher Simon
Contact Email: admin@nccethics.org
 
Status: Active

Question:

     Whether an elected County official may serve on the advisory board of a local nonprofit heritage association? 

Conclusion:

     Yes, the requester may serve on the advisory board of a local nonprofit heritage association, as long as he recuses himself from participation in all County matters that involve the nonprofit organization and informs the public and County employees and officials of his involvement with the nonprofit association.  

Facts:

   The requester, who is an elected official, has been asked to serve as an unpaid member of the advisory board of a local, nonprofit, heritage association.  The requester contacted the Ethics Commission for its opinion on the matter before accepting the position on the advisory board in question.  The requester has been informed by the nonprofit association that he would not be required to pay dues or attend meetings.  As an advisory board member of the nonprofit, the requester would be occasionally consulted for advice to the association, and his name would appear on the letterhead of the nonprofit as a member of its advisory board.  The purposes of the nonprofit are to provide education about the local heritage and history; preserve open spaces, green ways, and historic artifacts and buildings; and to attract tourists to the region.  Since 2007, the nonprofit has owned and maintained a small museum.  It also maintains an organizational website and issues a periodic newsletter about the association and the activities it sponsors or promotes.  One of the website pages lists the names of board members and advisory board members.  The nonprofit is staffed by volunteers and it collects yearly dues of $10.00 from each of its members.     

Code or Prior Opinion:

     Relevant provisions in the definition section of the Ethics Code, Section 2.03.102, include the following:

Appearance of impropriety means conduct which is prohibited by Section 2.03.104A.

Compensation means any money, thing of value or any other economic benefit of any kind or nature whatsoever conferred on or received by any person in return for services rendered or to be rendered by oneself or another.

Conflict or conflict of interest means conduct which is prohibited by Section 2.03.103.

Financial interest means any interest representing more than five (5) percent of a corporation, partnership, sole proprietorship, firm, enterprise, franchise, organization, holding company, joint stock company, receivership, trust, or any legal entity organized for profit.

Private enterprise means any activity conducted by any person, whether conducted for profit or not for profit and includes the ownership of real or personal property. Private enterprise does not include any activity of the federal, State or local government or of any department, authority or instrumentality of the federal, State or local government.

Recusal means, 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 a 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. 

Regulated by New Castle County means that an entity operating in New Castle County as a business or nonprofit organization requires approval from or regulation by New Castle County in order to lawfully conduct one or more business activities.

Code of Conduct Provisions

            Certain portions of the New Castle County Ethics Code are relevant to this opinion, including Sections 2.03.101.B; 2.03.103.A.1 and A.2; 2.03.104.A:

Sec. 2.03.101. - Purpose of Division.

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B. It is recognized that many public officials are citizen-officials who bring to their public offices the knowledge and concerns of ordinary citizens and taxpayers. They should not be discouraged from maintaining their contacts with their community through their occupations and professions. Thus, in order to foster maximum compliance with its terms, this Division shall be administered in a manner that emphasizes guidance to public officials and public employees regarding the ethical standards established by this Division.

Sec. 2.03.103. - Prohibitions relating to conflicts of interest.

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 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.

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 Subsection 2.03.103.A.1., 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 decisions or actions of the County employee, County official or governmental body are influenced by factors other than the merits.

Case Law and Commission Precedent

The New Castle County Ethics Code prohibits conduct on the part of County officials or employees which either creates the appearance of impropriety even where no direct conflict of interest is present.  Specifically, conduct which creates an appearance of impropriety is prohibited by Section 2.03.104(A) of the New Castle County Code.  To determine if an appearance of impropriety exists, the Delaware courts have stated that “[t]he test is… if the conduct would create in reasonable minds, with knowledge of all relevant facts, a perception that an official’s ability to carry out [his or] her duties with integrity, impartiality and competence is impaired.”  Hanson v. Delaware State Public Integrity Com’n, 2012WL3860732, at *16 (Del.Super. 2012), aff’d, 69 A.3d 370 (Del.Supr. 2013); and “[t]he test for appearance of impropriety is whether the conduct 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 [the official’s] responsibilities with integrity, impartiality and competence is impaired.”  In re Williams, 701 A.2d 825, 832 (Del.Super. 1997).  The courts have advised the Commission to look at the totality of the facts presented, and this Commission has historically applied this standard when reviewing the conduct of County officials and employees.

            In Advisory Opinion 15-09, the Commission was asked whether a County employee of the Department of Community Services could serve as an uncompensated member of a nonprofit that advocated on housing issues.  While the Commission advised that the County employee may serve on the board of the nonprofit advocacy organization, it cautioned the employee against engaging in any conduct that was or could be perceived as a conflict of interest by recusing herself from any County process that involved the nonprofit and ensuring that both the County and the nonprofit were made aware of her requirement to recuse from any matter with potential conflict. 

In Advisory Opinion 15-03, the Commission was asked whether an appointed official could serve as a member of a nonprofit board which has occasionally received federal funds that are administered by the official’s department.  In concluding that the official may join the board of the nonprofit, the Commission required the official to disclose potential areas of improper appearance to both the nonprofit and the appropriate County authority and to recuse him or herself from any activities which may cause the appearance of conflict, including policy making, promotion, or other activities concerning the nonprofit’s relationship with the County.   

In Advisory Opinion 13-02, a County employee wanted to serve as an unpaid volunteer to advise a nonprofit on its budgetary and fiscal matters.  Because the requester would serve in a volunteer capacity, with no financial benefit to himself or his family, the Commission approved the request on the condition, however, that the requester recuse himself from involvement in any matters associated with issues of change in valuation policy by the County that may affect the nonprofit.   

In Advisory Opinion 10-11, a County employee sought advice from the Commission as to whether he may accept a position on the board of a nonprofit given that his department made recommendations on grants to members of a larger community which the nonprofit represented.  In its opinion allowing the employee to serve on the board, the Commission noted that the “[b]oard’s purpose is limited to making advisory operational recommendations regarding a division in the requester’s department but those recommendations are not made to the department but to a separate County entity…which has discretion to support, change or ignore [the recommendations].“  This service on the board, however, was conditioned upon the employee’s recognition and knowledge that he must recuse himself from any matters which involved either the County or the nonprofit or any recommendations made to his department by the board.

Analysis:

     County employees and officials are encouraged to participate in social and charitable community functions.  The Ethics Code, at Section 2.03.101.B, states:

It is recognized that many public officials are citizen-officials who bring to their public offices the knowledge and concerns of ordinary citizens and taxpayers. They should not be discouraged from maintaining their contacts with their community through their occupations and professions. Thus, in order to foster maximum compliance with its terms, this Division shall be administered in a manner that emphasizes guidance to public officials and public employees regarding the ethical standards established by this Division. 

New Castle County Code Section 2.103.101.B.  Every County official and employee must consider the ethical rules stated in the Code of Conduct to determine whether his or her volunteer activities might create an appearance of conflict with his or her County duties.

In Section 2.03.103.A of the Code, conduct on the part of County employees or officials for personal or private financial benefit is prohibited. Further, Section 2.03.104.A.1 prohibits the creation of an impression in the reasonable mind of a member of the public that an official or employee’s official action is affected by personal interests which impairs his or her competence, integrity and honesty, or that the department in which he serves will look as though it is showing partiality in a given matter.    

            Prior Commission decisions are instructive on the issues raised by this request for an advisory opinion.  The requestor is an elected official who has been asked by a local, nonprofit, historical association to serve in an uncompensated, advisory capacity.  The requester has no financial interest in the nonprofit.  While the department for which the requester works has general authority over issues which may impact the nonprofit, there is no direct regular or anticipated interaction between the entities.  Nevertheless, while the potential for actual conflict is minimal, the requester must remain vigilant in his awareness of actual or potential conflict, and must follow the processes set forth in the Ethics Code, and outlined in this Commission’s prior advisory opinions, with respect to recusal from any issues regarding the nonprofit and/or the interests of the nonprofit which come before the County for consideration or action. Toward that end, the requester must inform County departments, boards and commissions of his involvement with the nonprofit. In addition, the requester must inform the nonprofit that, in the event that the requester is asked by the nonprofit to engage in any activity or issue that involves the New Castle County government, he must recuse from any participation in such activity or issue.

            The Commission recognizes and commends the fact that the requester sought this opinion before accepting the nonprofit’s request to serve on its advisory board.  The Commission further commends the requester’s desire and willingness to serve his community in this manner, in addition to the duties of his County office.  The Commission encourages the requester to seek similar advice in advance should the nonprofit ask him to engage in any activity which may be interpreted by members of the public, or other County employees or officials, as a real or potential conflict of interest.  The issues that come before the requester’s department are dynamic and complex, and the members of the public are oftentimes not fully knowledgeable of the details involved in such issues.  This presents the potential for misinterpretation even when there is no inappropriate action on the part of the County official.  Any such potential for confusion on the part of the public must be prevented or minimized through the dissemination of information and diligent exercise of the recusal mechanism provided in the Code. 

Finding:

     Under the facts presented, the requester may join the advisory board of the nonprofit historical association under certain conditions and only if he does not appear before New Castle County officials or employees on behalf of the nonprofit organization, or appear in front of the nonprofit historical association on behalf of New Castle County.   The requester must disclose the potential areas of conflict or improper appearance to both the nonprofit and any appropriate County entity, and the requester must recuse himself from any activities which may cause the appearance of conflict, including policy making, promotion, giving of advice, or other activity concerning the nonprofit’s interaction with the County, if any.  The requester must clearly disclose to all parties, with respect to his participation and activities with the nonprofit organization, that, at no time, he is acting or speaking on behalf of New Castle County.  Similarly, the requester must clearly disclose to all parties, with respect to his participation and activities with the County, that, at no time, he is acting on behalf of the nonprofit historical association.

In rendering this advisory opinion, this Commission has applied the New Castle County Ethics Code, which establishes the minimum level of ethical conduct required of County officials and employees.

BY AND FOR THE NEW CASTE COUNTY ETHICS COMMISSION

ON THIS 16TH DAY OF NOVEMBER, 2015.

___________________________________

Johanna P. Bishop, Chairperson

           New Castle County Ethics Commission

 

 
 
            

Decision:  Unanimous