Filing Number: 16-02
Subject: Gift of Cost of Attendance
Keywords: gifts, training
Decision By: Johanna Bishop, Beatrice Patton Dixon, Paula Jenkins-Massie, Sally Jensen, Robert Ralston
Contact Email: admin@nccethics.org
 
Status: Active

Question:

          Whether a New Castle County Department of Public Safety manager may accept the gift of the cost of flight, lodging, meals, and tuition for a HazMat training program for the management of response to railway accidents and disasters from a railroad company?

Conclusion:

          Under the circumstances presented here, yes, the County employee may accept the gift of the cost of flight, lodging, meals, and tuition for a HazMat training program for the management of response to railway accidents and disasters from a railroad company, as long as such gift is recorded in the departmental gift log as required by the Ethics Code.  The Ethics Code provides that a gift that covers training expenses, including reasonable transportation/lodging/subsistence costs, may be accepted by a County official or employee when such payment or reimbursement of such expenses is from a governmental body or associations of governmental bodies.  While the training program in question is run by a privately-held railroad company, such company does not do business with the County and, significantly, the HazMat program is underwritten by federal funds and sponsored by the railroad company in order to meet its duties under federal regulations.[1]  In sponsoring this training, the railroad company is not attempting to sell any product or service to the County or the County attendee.

Facts:

          A Public Safety Department employee has requested an Advisory Opinion from the Ethics Commission via email regarding the propriety of accepting the cost of flight, lodging, meals, and tuition for a HAZMAT training program for the management of response to railway accidents and disasters from a railroad company.  The sponsoring railroad company has extended this invitation and offer to governmental emergency response managers from 181 counties in the region to attend to this cooperative program.  The 181 counties involve areas through which the railroad carries crude oil and hazardous materials.  During the training, the attendees will have hands-on training to ensure the safest response to railroad emergencies.  The instructional staff is highly trained in response measures for emergencies involving hazardous materials, tank cars, and railroad operations. 

The materials from the sponsoring company show that the program will be held in Atlanta, GA, from May 23 through May 26, 2016.  Atlanta is where the Railroad Education and Development Institute (REDI) is located.  REDI has over forty railcars, five locomotives, various types of switches, and functioning highway crossing equipment.  The training will be held where more than twenty modern, well-equipped classrooms exist in a state-of-the-art training center which is complemented by extensive outdoor training grounds. The attendees will benefit from training on a full scale derailment, various types of tank cars, several leaking valves and equipment to repair and cap damaged tank cars.  There are no sponsored or free ‘side events’ during the program.  It is a hands-on emergency response training program.  The approximate total value of the gift of flight, lodging, meals, and tuition to the County is approximately $1,500. 

Code or Prior Opinion:

Relevant Ethics Code Provisions and Case Law

            In Section 2.03.102, the following relevant terms are defined by the Ethics Code, as follows:      

Business means any corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self-employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit.

Fiduciary position means a paid or unpaid position imposing a legal duty to act primarily for another's benefit as an officer, director manager, partner, guardian, trustee, agent, or other position of responsibility for a legal entity or other person.

Gift means anything that is received without consideration of equal or greater value. … A gift is considered accepted upon receipt or control or direction unless it is promptly returned in its entirety. An email invitation, unless specifically accepted, is not considered a gift.

Governmental body means any department, authority, commission, committee, council, board, bureau, division, service, office, official, administration, legislative body, or other establishment in the executive, legislative or judicial branch of a state, a nation or a political subdivision thereof or any department performing a governmental function.

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.

Trustee means a person, business, or nonprofit organization which holds or administers property or assets for the benefit of a third party.

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.[1]  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.

            It is a violation of the New Castle County Ethics Code if a County official or employee uses his or her office or employment for his or her personal or private benefit, the benefit of a member of his or her immediate family, or a business with which he or she is associated.[2]  Economic benefits thereby derived with a de minimus impact may be exempted. [3]    

            The acceptance of gifts by New Castle County employees and officials can be complicated, and the acceptance of gifts by County employees and officials is discouraged.[4]   The Ethics Code must be consulted to determine the circumstances under which a gift may be accepted.  The Code includes a description of the limited circumstances under which a gift may be accepted, and the “[p]ayment of training expenses, including reasonable transportation/lodging/subsistence costs or reasonable reimbursement for such expenses from governmental bodies or associations of governmental bodies may be accepted at any time without recording in a public gift log if approved by a department manager, agency head, or elected office holder.”  Section 2.03.104.I.7. Section 2.03.104.I.9 of the Code states that “[a]n Advisory Opinion request shall be made to the Ethics Commission prior to the acceptance of any gift not described by or limited in Subsections I.1. through I.9.”          

Prior Commission Opinions

            In Advisory Opinion 15-08, the Commission was asked whether a trustee of the New Castle County Employees Retirement System Board of Trustees may accept a gift of a conference registration fee waiver and travel stipend for a conference that is sponsored and offered by for-profit, private companies. In denying the request, the Commission explained that because the conference was, in essence, a vehicle for the sponsoring companies to advertise their services and gain more business, the acceptance of such a gift was prohibited by the Ethics Code.

In Advisory Opinion 11-06, the Commission was asked whether an employee could accept an all-expense paid seminar trip from a vendor to attend a seminar offered by a manufacturer of products carried by the vendor.  In finding that the proposed action would violate the then-newly adopted gift law, the Commission held that Section 2.03.104.H.4[5] would be violated by the acceptance of the gift. 

In Advisory Opinion 92-09, a County official wanted to participate in a training session held for representatives of a manufacturer of equipment for which the County employee drafts plans and specifications.  The Commission held that an appearance of impropriety would not be created and the employee would not violate the Ethics Code by participating in the training session.  The Commission held, further, however, that the employee’s transportation costs, lodging and hospitality expenses incurred in the attendance of the seminar must be disclosed on the employee’s next filing of the Statement of Financial Interests.  

            In Advisory Opinion 04-07, an official asked whether he could accept a gift in the form of transportation and hotel expenses on behalf of an association of counties in which New Castle County was a member in order to participate in a forum sponsored by another non-profit organization to which the association of counties was invited.  The Commission held that the official could accept the gift of reasonable transportation and hotel expenses from the non-profit association of counties because he was not acting in his official capacity as a County official and because the circumstances do not reasonably raise the potential for the appearance of impropriety.  Both of the organizations involved were nonprofit, government–based entities. 

In Advisory Opinion 08-02, a County employee, who serves on a State board, asked whether he could accept gifts of reasonable costs of attendance at professional conferences given by the State board.  The Commission approved, and stated:

Section 2.03.104.I.7 of the New Castle County Ethics Code gift law is determinative regarding this request.  Unlike gifts, training expenses from private non-governmental sources which may not be accepted unless they are approved in advance by the Ethics Commission, gifts from governmental bodies or associations of governmental bodies of “training expenses, including reasonable transportation/lodging/subsistence costs or reasonable reimbursement for such expenses,” may be accepted at any time without the recording in a public gift log if approved by a department manager, agency head, or elected office holder.” (footnotes omitted.) 

Other Relevant Code Provisions

Section 2.05.505.A states that “[t]he pension program … shall be construed to be a trust separate and distinct from all other entities. The responsibility for the direction and operation of the program and for making effective the program is hereby vested in the Employees' Retirement System Board of Trustees.”   The trustee in this request before the Commission, therefore, has a fiduciary responsibility to the Pension Board.  As defined in the Ethics Code, and stated above, the word trustee means “a person, business, or nonprofit organization which holds or administers property or assets for the benefit of a third party.”[6]  Further, a fiduciary position is defined in the Code as “a paid or unpaid position imposing a legal duty to act primarily for another's benefit as an officer, director manager, partner, guardian, trustee, agent, or other position of responsibility for a legal entity or other person.”[7]

Analysis:

          The Ethics Code prohibition against the acceptance of gifts includes an exception specifically designed for the gift of the costs associated with the attendance at programs which are sponsored or organized by other governmental bodies.  While the training program at issue here is technically not organized by a governmental body, it is underwritten by federal funds and the attendees are all governmental emergency responders.  The purpose of the program is not an attempt by the sponsoring company to find new business among the attendees and to raise its profits in that manner.  Further, by sponsoring this training program, the sponsoring company is not trying to place itself in a more advantageous competitive position in its marketplace.  The purpose of the program is to expend federal funds earmarked for HazMat training in order to meet federal regulations placed upon transporters of hazardous materials.  The overwhelming benefit of such training programs inures to the citizens through state-of-the-art training to emergency responders.  The acceptance of the gift, here, would not create an appearance of impropriety or conflict in the mind of the reasonable observer.  The County employee accepting this gift must, however, record the gift in the departmental gift log. 

Finding:

          Under these circumstances, accepting the complimentary registration would create an appearance of impropriety and violate the New Castle County Code of Ethics.

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 CASTLE COUNTY             

                  ETHICS COMMISSION

                 ON THIS 13TH DAY OF APRIL, 2016.

 

                                                          __________________________

                                                          Johanna Bishop, Chairperson

                                                          New Castle County Ethics Commission

Decision:  Unanimous

 

 

 

Footnotes:

 [1] This HazMat training is required for all HazMat shippers, such as the sponsoring railroad company, by the United States Department of Transportation and the Federal Railroad Administration.  The funds to cover the County employee to attend the training comes from the United States Department of Transportation through the sponsoring railroad company.

[2] New Castle County Code Section 2.03.104(A) states: “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.” 

[3] New Castle County Code Section 2.03.103(A)(1).

[4] Id.

[5] See New Castle County Code Section 2.03.104.H.

[6] Section 2.03.104.H.4 states:  “Gifts of greater than negligible value from entities doing business with, regulated by, or which may be reasonably foreseen to do business with or be regulated by the County within the next three years, with the exception of gifts described in Subsections I.5. through I.7. of this Division, shall not be accepted by officials, employees, or governmental departments unless a prior Advisory Opinion is sought from the Ethics Commission regarding compliance with the Code of Ethics. Any such gift or donation of other than negligible value which is accepted following the receipt of an Opinion of the Commission shall promptly be recorded by the recipient in a public gift log.”

[7] New Castle County Code Section 2.03.102.

[8] Id.