Filing Number: 94-04
Subject: Voting Conflict
Keywords: abstention, appearance of impropriety, conflict, council member, County official, developer, disclosure, elected official, family, financial interests, impropriety, joint venture, land use, legislation, private business, public notice, real estate, recusal, undue influence, variance, vote, zoning
Decision By: L. Susan Faw, Ethics Commission Counsel
Contact Email: admin@nccethics.org
 
Status: Active

Question:

           Whether a Member of County Council may vote on an ordinance which would affect the value of land conveyed by that Member's father, a portion of which was later reconveyed to the father's estate to satisfy a debt to that estate.

Conclusion:

           Voting on such an ordinance would create a conflict of interest.  Ethics Code Section 2-30.2(f) requires the Member of County Council to abstain from voting and, prior to the vote being taken, to publicly announce and disclose the nature of his interest.

Facts:

           In 1988, the Member of County Council's father sold an approximately 490 acre parcel of land to a developer. An institutional lender held the first mortgage and the Member's father held the second mortgage.
 
          Subsequently, an agreement was reached to divide the parcel into two parts: The institutional lender would hold the first and only mortgage on the 75 acre portion which was to be subdivided and developed, and the Member's father would hold the first and only mortgage on the remaining 415 acres. The father died prior to consummation of this agreement.
 
          The councilperson became the executor and a partial beneficiary of his father's estate. As executor, he is required to marshall and preserve the assets of the estate.
 
          At some point, the developer sought to have its 75 acre parcel included within revised growth area boundaries. Revision of growth area boundaries must be accomplished by County ordinance. Land included within such boundaries gains access to County water and sewer, increasing its value by making it capable of subdivision into smaller lots. Pending before Council is the proposed ordinance which would expand growth area boundaries to include the developer's 75 acre parcel.
 
          In the meantime, the developer, who was in arrears on its mortgage obligations, agreed to retain the 75 acres slated for development, but to convey to the Member's father's estate the adjoining 415 acres via a deed in lieu of foreclosure.
 
          The councilperson asks whether he may vote on the ordinance revising growth area boundaries, - which would affect many constituents in his district.

Analysis:

Conflict of Interest
 
         
Section 2-30.(c) of the New Castle County Ethics Code provides:
 
It is [ ] recognized that in serving the public interest, it is a Member of the County Council's right and responsibility to vote upon all questions before County Council and to participate in the business of County Council and its Committees, and in doing so, he or she is presumed to be acting in good faith and in the public interest. The Members of County Council, however, acknowledge that the exercise of legislative rights is subject to limitations provided in this division when personal or private interests conflict with the public interest.
 
          In delineating restricted activities, the Code states: "No county official or county employee shall engage in conduct that constitutes a conflict of interest",1 defined as "[u]se by a county official . . . of the authority of his office . . . for the private pecuniary benefit of himself, a member of his immediate family or a business with which he is associated."2
 
          As stated, the councilperson is the executor of his father's estate and a partial beneficiary. Thus, any action which enhances the value of the assets of the estate inures, to some extent, to his "private pecuniary benefit". In this case, the councilperson's official action, i.e., his vote on this ordinance, would redound to his private pecuniary benefit by enhancing the value of the real property received by deed in lieu of foreclosure. The increase in value may be small and difficult to calculate. Nevertheless, it seems clear to the Commission that inclusion of adjoining land in the expanded growth area boundaries has a positive impact on neighboring property values, - which would include the adjoining 415 acres conveyed to the Member's father's estate.3
 
Abstention & Disclosure
 
          Section 2-30.2.(f) of the Ethics Code provides:
 
Where voting conflicts are not otherwise addressed by the Constitution of the State of Delaware or by any law, rule, regulation, order or ordinance, the following procedure shall be employed. Any county official or county employee, who in the discharge of his official duties would be required to vote on a matter that would result in a conflict of interest, shall abstain from voting and, prior to the vote being taken, publicly announce and disclose the nature of his interest at the meeting at which the vote is taken, provided that whenever a governing body would be unable to take any action on a matter before it because the number of members of the body required to abstain from voting under the provision of this section makes the majority or other legally required vote of approval unattainable, then such members shall be permitted to vote if disclosures are made as otherwise provided herein. (Emphasis added.)

Finding:

           Accordingly, the Member of County Council must abstain from voting on the ordinance revising the growth area boundaries and must disclose the reason for his abstention prior to the vote being taken.
____________________________
L. Susan Faw, Ethics Counsel
August 29, 1994

Footnotes:

1 See Section 2-30.2(a).
 
2 See Section 2-30.1. Definitions.
 
3 Also, were the councilperson to vote on this ordinance, it would create the appearance that his vote was partial consideration for the reconvoyance of the property via the deed in lieu of foreclosure. The Ethics Code cautions county officials and county employees to "avoid an appearance of impropriety", (Section 2-30.2(g)), defined as "conduct of a county official or county employee . . . which undermines the public confidence in the impartiality of a governmental body with which a county official or employee is or has been associated, by creating the appearance that the decisions or actions of the county official, county employee or the governmental body are influenced by factors other than the merits." This provides an additional basis for the Commission's opinion and advice.