Filing Number: 17-08
Subject: Appearance of Impropriety
Keywords: appearance of impropriety, business, compensation, conflict, contract, contractor, County policy, County resources, Department of Public Safety, dinner, employee, expenses, gifts, impropriety, invitations, official business, presumption of good faith, private advantage or gain, private business, public bid, public purpose
Decision By: Paula Jenkins-Massie, Sally Jensen, Robert Ralston and Charles Toliver, IV
Contact Email: admin@nccethics.org
 
Status: Active

Question:

Whether a County vendor may provide travel expenses for two County employees for three days for the purpose of inspecting emergency vehicles being purchased by the County per contract, the purchase of which has been placed on hold by the County due to a previous delivery of vehicles from this vendor which did not meet the bid specifications, had warranty issues, and required post-delivery repairs and adjustments, at delay and cost to the County?

Conclusion:

The travel expenses being offered by the County vendor to the County is a gift pursuant to the Ethics Code.[1]  In the Ethics Code, the County has stated clearly that the acceptance of gifts by County employees is discouraged.[2]  The gift, here, of travel expenses by this County vendor to two County employees for three days to inspect County vehicles before the delivery and acceptance of these vehicles by the County is a one-time permissible gift due to the unique circumstances involved and discussed herein.  Acceptance of these gifts must be recorded in the appropriate gift log(s).    



[1] Section 2.03.102 defines “gift” as follows, in pertinent part: “Gift means anything that is received without consideration of equal or greater value….” 

[2] Section 2.03.104.H states, in pertinent part: “New Castle County discourages the acceptance of gifts from the public by County employees or County officials.  No County employee or County official shall accept any compensation, gift, payment of expenses, promise of future financial benefit, or any other thing of monetary value which is intended or received to influence the vote, official action or judgment of the recipient or which creates the reasonable perception in the public that the vote, official action or judgment of the recipient would be influenced or impaired by the gift. …”

Facts:

 
          The Ethics Commission was contacted by County management (“Requestors”) in a coordinated effort after they received an offer from a County vendor to pay for the travel expenses of two County employees in connection with the vendor’s performance under a current contract with the County to, ultimately, provide ten emergency vehicles.  Prior to being awarded the current contract at issue, the County experienced many difficulties with the product supplied by this vendor under a previous contract for purchase of the same type of emergency vehicles.  The prior contract was fraught with significant delays and costs: the production and delivery of the vehicles did not meet the bid specifications; the vehicles delivered had warranty issues; and the vehicles required post-delivery repairs and adjustments.  
            This kind of highly-specialized contract and purchase involves the efforts of employees from many different departments and divisions, and several County employees have been working together to find a way to make sure that the County does not, again, experience the problems it had with the previous delivery of vehicles from this vendor.  Toward that end, and due to the issues experienced with the prior contract, the County placed a “hold” on the current order of ten emergency vehicles from this vendor. After many teleconferences among the County employees and the vendor, it has been decided that the best way for all concerned to handle this contract is for the vendor to produce only 1 or 2 vehicles, and if those vehicles are inspected and are found to have met the bid specifications per County approval, then the vendor would produce the remaining vehicles under the contract in the same manner as the approved vehicles.
 
            The vendor, in its attempts to satisfy its contractual obligations to the County, offered to cover the costs of travel, lodging, and meals for the two County employees who would travel to Woodbury, GA, for three days.  It was the vendor’s idea, and was not offered at the suggestion of a County employee. The coverage of travel expenses by the vendor does not include side trips or leisure activities. It is not a trip for promotional purposes on the part of the vendor. 
The two County employees who would go on this on-site inspection are not County officials or employees who make decisions regarding the awarding of contracts.  These employees are employed in two different departments and are the employees who are best-acquainted with the bid specifications for the vehicles. This on-site inspection would expedite the time for delivery of the vehicles under the current contract and prevent other previously experienced problems, thus saving time and money for the County and its citizens.     

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:

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.

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.

Promptly means within thirty (30) days when used in reference to recording the acceptance of a gift in a public gift log or returning such a gift to the donor.

Public gift log means a public document kept by County Council, a County department, or County agency for the purpose of memorializing the acceptance of gifts by County employees and officials and which shall include entries for the date of receipt, the name, workplace or other address of the donor and recipient, a description of the gift and an approximate valuation.

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]   Further, 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.  

The Ethics Code must be consulted to determine the circumstances under which a gift may be accepted.  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 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 reaching this conclusion, the Commission stated: “The requester has been offered the trip because of his status as a County employee and his professional expertise in advising on products purchased for use by the County. The vendor clearly states its intention in offering the trip: to affect the employee's judgment about future purchases….The Commission believes the reasonable member of the public would believe that acceptance of this all-expense paid trip from the vendor would influence the judgment of the employee and would violate the Ethics Code.” 

            In Advisory Opinion 96-03, a County employee asked the Commission whether a vendor may pay the costs incurred from the provision of a demonstration of an upgraded product to County officials where the vendor had a long-term contractual relationship with the County agency and the demonstration was offered to resolve complaints through acquisition of the upgraded product, available to the County under the current contract at no additional cost.  In deciding that the vendor demonstration would not violate the Ethics Code, the Commission stated:  “This is not a situation in which the vendor is vying with others to sell the County agency a new product or service. The County agency is currently contractually committed to a long-term relationship with this vendor. There is a longstanding history of complaints concerning the vendor's current product. In an effort to resolve these complaints, the vendor invited agency officials to a demonstration of an upgraded product which, under the contract, is available at no additional cost.”  The Commission stated, further: “This does not create an appearance of impropriety because the vendor's payment of these costs does not create the appearance that the County officials' decision to acquire the upgraded product was improperly influencing ‘by factors other than the merits’.”

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.  



[1] 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.” 

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

[3] Id.

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

Analysis:

          The contract at issue here involves the delivery to the County of ten very expensive and highly-specialized vehicles, the use of which occurs in emergency situations for the benefit of citizens and persons in medical distress in New Castle County.  Here, both the County and the vendor are attempting to avoid a costly situation, in time and money, which had been experienced previously under similar circumstances.  Because of the nature of a regulated bid and contract award process, County employees have no control over the selection of the vendor which will supply products that are essential to their jobs, and also, as here, essential to the health and safety of New Castle County citizens.  Technically, under the provisions of the Ethics Code, the payment by the vendor of travel expenses of two County employees to Georgia for an on-site inspection of one or two vehicles under the contract is a gift to these two employees.  If the vendor in this instance was a company located in Delaware, Pennsylvania, New Jersey, Maryland, perhaps even Virginia or New York, most likely the issue would not be presented to the Commission as the travel and the on-site inspection could be performed in one or two work days, including drive time.  But this vendor is located in Georgia, and the most cost-effective method to perform an on-site inspection, which serves everyone’s interests, is to fly to the vendor’s location. 

The facts presented in this matter are persuasive to the Commission to make an exception here, despite the fact that the receipt of these travel expenses is a gift under the Ethics Code to each of the two employees who perform the on-site inspection.  Accordingly, in these unique circumstance, such a gift by this vendor will be allowed by the Commission.[1] The gifts must be logged in the respective department’s gift logs in a timely manner.  The Commission wants to be very clear, however, that, in rendering this decision, the Commission is not in any way stating that similar circumstances will be deemed permissible under the Ethics Code without the express, written permission of this Commission.

 

 



[1] The Commission would prefer that the County cover the travel expenses of this on-site inspection and, before accepting this gift, the departments and divisions involved should first determine whether the cost of this travel could reasonably be covered by County funds. 

Finding:

          Acceptance of gifts by County officials and employees is discouraged by the Ethics Code and, therefore, also by the Ethics Commission.

           Acceptance of gifts by County officials and employees often raise serious issues which can negatively affect the public trust.  These issues include potential conflicts of interest, decisions made through improper influence, appearance of impropriety, and personal gain by virtue of County employment.  The potential for the existence of these issues is enhanced when the gift is offered by a County vendor.  The facts presented here and outlined above, however, reduce or nullify the likelihood that these issues will result from the acceptance of travel expenses by this County vendor under these limited circumstances.  The need for these emergency vehicles to perform as specific in the contract is a critical matter.  Acceptance of the gift of travel expenses must be promptly reported in the departmental gift log.        

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 14TH DAY OF NOVEMBER 2017. 

                                        Eric J. Monzo, Esquire, Chairperson

                                     New Castle County Ethics Commission