Filing Number: 18-03
Subject: Conflict of Interest
Keywords:
Decision By: Eric J. Monzo; Paula Jenkins-Massie, Sally Jensen; Robert Ralston; Kellie Tetrick and Charles H. Toliver, IV
Contact Email: admin@nccethics.org
 
Status: Active

Question:

If a New Castle County division may partner with non-County entities, such as a non-profit organization, a civic association, and an online advertiser, in efforts of the non-County entities to bring community awareness to, and generate funds for, a community fund-raising event, where the proceeds will be used to fund one or more are youth events held later in the year involving the County division and the non-County entities, will the County division be in violation of the Ethics Code?

Conclusion:

Under the facts presented here and with the observation of certain limiting factors, no, the Ethics Code will not be violated. In the matter presented, the upcoming fund-raising event to benefit area youth will be organized, advertised, and run by non-County entities. The involvement of the County division is primarily limited to its participation in the actual event and distribution of information about that fund-raiser, including, some word-of-mouth promotion on the part of a number of County employees. Neither the County name, symbols, etc., nor those of the County division, will be used in the advertising of this fund-raiser. Fund-raising by County officials or employees, in this instance, will not include solicitation of members of the public. And where solicitation is performed internally within the County government, supervisors will not solicit from subordinates. 

Facts:

A representative (“Requester”) of a County division (“Division”) presented the following fact pattern to the Commission for its opinion. The Division is involved in many forms of community outreach as a part of its essential functions and service to County residents. One of these events includes an event in the fall of each year, primarily intended to benefit the youth in the community, during which some Division employees are selected to interact with children and parents in the community at a special, formal party-like gathering. That gathering receives press coverage and has proven to be very enjoyable for everyone involved and is met with enthusiasm and anticipation from area residents. As with the fund-raising event at issue here, that autumnal gathering is organized by non-County entities, including a local non-profit organization, a Section 501(c)(3) entity (“Non-Profit”)[1], as well as a local civic association (Civic Association”).[2]  In addition to the events discussed herein, and many other programs and activities, both the Non-Profit and the Civic Association maintain websites which present an abundance of information for the community, with links to additional helpful resources. To the extent that the Civic Association is a maintenance corporation, it interacts with County government in various ways, but is not regulated by the Division at issue here.      

            The fall special event is funded from a variety of sources including some very generous donations of time and commodities from area businesses and residents; however, those donations are not sufficient to cover all of the expenses. For the youth to take part in this event, their families may incur expenses not found in the ordinary household budget. To raise both the funding for, and community awareness about, the fall event, the Non-Profit and the Civic Association, working in concert, have partnered with the Division to hold an upcoming fund-raiser. The more successful the fund-raiser, the nicer the fall event can be for the members of the community, and if it does better than expected, it may be able to fund additional special events for area youth, similar to the one which takes place in the fall.

            The upcoming fund-raiser, which is the subject of this request for an advisory opinion, is going to be advertised by an internet company hired by the Non-Profit and the Civic Association. The internet company exists for the sole purpose of promoting and marketing such charitable events (“Internet Company”). It assists in the organization of the fund-raiser, does the advertising, and provides a website for interested parties to register and/or donate to the cause. After the fund-raiser is over, results and photos of the event are posted to this company’s website for everyone to see and enjoy. Additionally, the organizers plan to use fliers and other print advertising. Significant to the Commission’s review of this matter is the fact that neither the County nor the Division, or any of their symbols, official or otherwise, will be used in the online or print advertising for the fund-raiser. Further, while some of the County employees will be participants in the activities of the fund-raiser and may make donations themselves, no County employees will be involved in collecting the donations on behalf of the Non-Profit and the Civic Association; the Internet Company will set up a website for pledging and collecting the donations.                  

 

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:

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

Authority of office or employment means the actual power provided by law, the exercise of which is necessary to the performance of duties and responsibilities unique to a particular County office or position of County employment.

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.

Business with which he or she is associated means any business in which the person is a director, officer, owner or employee; or a business in which a member of the person's immediate family is a director, officer, owner or has a financial interest.

Commission means the County Ethics Commission established by this Code.

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.

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.

Income means any money, thing of value or other pecuniary benefit received or to be received in return for, or as reimbursement for, services rendered or to be rendered. The term does not include gifts; governmentally mandated payments or benefits; retirement, pension or annuity payments funded totally by contributions of the County official or employee; or miscellaneous, incidental income of minor dependent children.

Nonministerial action means an action in which the person exercises his or her own judgment as to the desirability of the action taken.

Opinion means advice of the Commission issued pursuant to Section 2.04.102I setting forth the duties of a County official or County employee under this Division.

Person means a business, governmental body, individual, corporation, union, association, firm, partnership, committee, trust, joint venture, club or other organization or group of persons.

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.

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.

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.

The New Castle County Ethics Code recognizes that public office, that is, employment by the County, is a public trust, and a violation of that trust by a County official or employee for personal gain or profit may cause serious harm as such a violation will undermine the confidence of the public in its government.[1] For this reason, the Code requires, among other things, public disclosure of financial interests of certain County officials, employees, and candidates for office, so that the public may be assured that their financial interests do not conflict with the public trust.[2] The Code further recognizes that because the public confidence in County government is best secured by assuring the impartiality and honesty of their County officials and employees, the Ethics Code sets forth minimum standards for ethical conduct and that the Code should be liberally construed to promote complete public financial disclosure, and official and employee conduct, which is deserving of the public’s trust.[3] 

It is important that the Code also recognizes that County officials are citizens which bring to their office their knowledge and concerns for issues facing the ordinary citizen.[4]  The Code is not intended to cause County officials or employees to disengage from their contacts in their communities. However, the Ethics Code prohibits the disclosure of confidential information gained as a result of a County official or employee during their official duties.[5] For these reasons, the Commission strives to provide guidance to County officials and employees regarding the application of the Ethics Code to their actions taken as County officials or employees in a manner which best promotes compliance with the Ethics Code.[6]  

The New Castle County Ethics Code prohibits conduct on the part of County officials or employees which 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.[7] 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). Delaware court decisions must be interpreted such that the Commission must 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.

The Ethics Code, in its Code of Conduct section, contains directive related to solicitation.[8] A County official or employee may not solicit from any entity which does business with the County or is regulated by the County.[9] The only exception to this prohibition is when a written policy covering such solicitation has been issued by the authorized person representing the County government’s interest which states that such solicitation is in the best interests of the public.[10] A County official or employee may not solicit personal donations from other County subordinates including subordinate County officials or employees or members of their respective immediate family.[11] Further, on the subject of solicitation, the Code states that County elected officials are permitted to set “office-wide, non-coercive” solicitation policies which benefit charities or charitable events, so long as that policy does not violate the Ethics Code by creating a conflict of interest or an appearance of impropriety, or any other section of the Ethics Code.[12]

 

Additionally, the Code recites prohibitions on County officials concerning their involvement with outside interests which interact with the County government. Section 2.03.103.B.2 prohibits the official from representing or assisting any private enterprise with respect to any matter before the County. This restriction extends to non-profit organizations as well as private businesses or private concerns.[13] Further, the Code restricts the ability of a County official or employee to “represent of otherwise assist” any private or non-County entity in connection with any matter which comes before the County department or division with which the County official or employee is associated or employed.[14] Importantly, the Ethics Code expressly does not prohibit a County official or employee from appearing before the County or assisting a non-County entity on a matter in the exercise of his or her official County duties.[15] 

           

            Prior Commission Opinions

             In Advisory Opinion 06-09, the Commission was asked some questions with respect to solicitations for the annual Ice Cream Festival. In that fact pattern, the Chief Administrative Officer was directing subordinates to solicit funds or services from private businesses for the festival even though some of the target entities were regulated by or doing business with the County. The Commission was asked whether the Chief Administrative Officer may solicit such businesses per the Ethics Code, and, if so, whether those entities may be identified in advertising as "co-sponsors" of the County event. The Commission stated that:

Any proposed solicitation of donor groups which include entities doing business with or regulated by the County must be reviewed in advance by the Ethics Commission for compliance with the appearance of impropriety provisions of the Ethics Code. The Executive branch must review administrative policy prohibitions regarding acceptance of gifts from vendor and suppliers. Improper appearance and ethical violations can be avoided only if the following limitations are observed: a public purpose is clearly identified in the written policy authorizing the solicitation; cash donations shall not be accepted; the donors are not identified publicly or privately as joint sponsors; 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 a 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 donor; a contemporaneous public document is maintained which lists the donors, type and value of all donations.

Taking into consideration such factors, in that opinion, the Commission found:

From the standpoint of the Ethics Code rule against creating an appearance of impropriety, the Commission believes that if restrictive conditions are imposed, improper expectation and coercion can be minimized to a degree whereby the reasonable County citizen would not conclude that a donation to the Ice Cream Festival is coerced or would return an unfair benefit to the donor. 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 sponsors; 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 he department may not provide in the reasonably foreseeable future, direct services for the donor; a contemporaneous public document is maintained which lists the donors, type and value of all donations.

            In Final Order 11-02, the Commission responded to a complaint which was filed against a County official, alleging that the official coordinated efforts to solicit gifts for a public program from entities which had done business with and were regulated by the County, in the absence of a written policy as required by the Ethics Code and per Advisory Opinion 06-09. In this instance, the official arranged an informative program, featuring a nationally known speaker who had previously advised on a public project in Delaware.  This was performed at the suggestion from a member of the public. The County agency issued a press release, advertised the meeting as a function of the County agency, and scheduled the program to take place in a County building. There was no other coordination between the County agency and the subcommittee.

 

             But, some days prior to the advertised date of the program, the official learned that the speaker expected payment for his presentation. A civic group volunteered to financially sponsor the speaker. The evening before the day of the program the official contacted the other subcommittee member and informed that person for the first time that the speaker required a fee and that the civic group was meeting that expense. The following day, the subcommittee member told the official that payment by the civic group was unacceptable because the subcommittee member felt it would create an improper appearance. They decided to go forward with the program with different financial donors for the speaker's fee, a change that they believed cured the improper appearance. At the beginning of the public service program that evening, the official announced that the speaker's $1500.00 fee plus minimal costs were being donated for the benefit of the public and identified the five businesses making the shared gift.

 

            The Commission found that the County official, upon clear and convincing evidence, had violated the Ethics Code; that a reasonable person reviewing the facts of this case and applying the Ethics Code would conclude that the failure of the official's agency to enact a clear written policy for solicitation as well as its lack of oversight of the subcommittee were the root causes of the violation of the written solicitation rule and ensuing creation of an appearance of impropriety. A reasonable person would also find that a contributing cause to the improper appearance was the late notice provided by the official to the fellow subcommittee member about the civic group's participation as donor of the speaker's fee.

            In Advisory Opinion 14-07, the Commission was asked to review a proposed solicitation situation where the requesting Department provided the Commission with a copy of the proposed administrative policy underlying the purpose of the solicitation, a copy of the proposed solicitation letter, and a list of targeted businesses, as outlined in Advisory Opinion 06-09. The administrative policy stated that the public purpose of the solicitation of businesses served by the sponsoring Department is to assist underprivileged New Castle County residents to meet specific seasonal needs. The letter is to be sent to approximately 20 local businesses which stock a specific type of goods being solicited for the charity drive. Only donations of the specified goods will be accepted, and donations of cash or checks are specifically banned. The letter notes that all donations are voluntary and will not affect current or future relations with the County or the sponsoring Department. The donations will be collected or received by members of a Department which is not conducting the solicitation, and which does not directly serve the businesses receiving the letter. The donations will be listed in a public document which identifies the donor, the type, and value of the donation. The Commission found that policy and supporting information conformed with prior Commission decisions and the Ethics Code.

 

            In Advisory Opinion 14-1, the Commission was asked whether a County department may hold a fundraising event without violating the Code prohibition on employee and client solicitation. In that scenario, the beneficiary of the fundraiser was to be a section of the County department sponsoring the fundraiser. The sector of the public to be solicited was composed, primarily, of persons who were professionally associated with the department, although not as vendors or regulated entities. The Commission found that the County Executive or his designee may permit the sale of fundraiser tickets to employees of the department as long as the office procedures for such sales are non-coercive and do not contravene the prohibition on solicitation by superiors of their subordinates or employees in a lower pay grade. Further, the department’s staff may solicit members of the public who have a professional relationship with the department as long as they are not current or foreseeable vendors or persons in businesses regulated by the County.

 

            The scenario included department members who wore a County uniform and the solicitations of both department personnel and members of the public would take place while the employee was wearing obvious County insignia. The Commission determined that the provisions of the Ethics Code, when read together, meant that an elected official may permit a department to use County resources to solicit employees for a charitable benefit as long as the solicitation procedures adopted contain no taint of coercion and ensure that participation is truly voluntary. The Commission retained the authority to judge whether a particular practice creates an improper appearance, as set forth in the Code.



Analysis:

When applying the Ethics Code and prior Commission decisions to the facts presented here, several questions arise before the Commission can make a finding. This analysis must begin with the question: are County officials or employees soliciting donations for the upcoming fund-raiser? The answer to that question is yes and no. More specifically, the non-County entities are performing the ‘lion’s share’ of the solicitation of donations for the upcoming fund-raiser, and the marketing materials will not contain any County insignia. The majority (if not all) of donations will be managed through the website set up for this purpose by a non-County entity.

            The Division employees are not soliciting donations from members of the public, but, because of their involvement as part of the Division’s community outreach, some of them will discuss the upcoming event with co-workers who may want to become involved because this is a function which not only will benefit the targeted community, it will benefit the Division’s ability to provide essential Division service to that community. While this is a result which is desired by all officials and employees of the Division, it is not the purpose of the fund-raiser as marketed to the public by the non-County entities. As such, the possibility of any solicitation of donations by Division employees which could be considered to be coercive or involuntary is reduced here. Nevertheless, in order to avoid an Ethics Code violation, Division employees who are in supervisory roles may not solicit employees over whom they hold supervisory authority.

             Another question which must be answered is whether the non-County entities do business with or are regulated by the County and, if so, are they regulated by the Division? The Division interacts with businesses all over New Castle County as a regular part of the exercise of its official acts and duties. Per the definition of “regulated by New Castle County” in the Code, the neither the County nor the Division regulate any of the non-County entities. 

            Yet another question to be answered is whether the Division will be violating the prohibition in the Code against representing another’s interest before the County. The upcoming fund-raiser is a new community outreach initiative of the Division and any assistance to the non-County entities with respect to this matter will be actions taken “in the exercise of [the Division employees’] official duties.”

            Taken together, the facts presented here do not set forth a situation in which the Ethics Code is likely to be violated. The upcoming fund-raiser will be held to support events in which Division officials and employees, to the extent they are involved, will be performing official County duties. Division employees might engage in solicitations for the upcoming event, but such activity will be amongst themselves. Caution must be taken to avoid any form of coercive solicitation of donations, including ensuring that supervisors do not solicit from persons which he or she supervise, and solicitations may not be requested while Division officials or employees are wearing clothing which includes County insignia.

Finding:

The Commission commends the Division for consulting the Commission before undertaking this activity. The upcoming fund-raising event to benefit area youth must be organized, advertised, and run by non-County entities. The involvement of the County division is primarily limited to its participation in the actual event and distribution of information about that fund-raiser, including, some word-of-mouth promotion on the part of a number of County employees. Neither the County name, symbols, etc., nor those of the County division, will be used in the advertising of this fund-raiser. Fund-raising by County officials or employees, in this instance, will not include solicitation of members of the public. And where solicitation is performed internally within the County government, supervisors will not solicit from subordinates.  If these conditions are met, the Ethics Code will not be violated in this matter. 

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 9th DAY OF MAY 2018.

 

                                                  Eric J. Monzo, Esquire,Chairperson

                                    New Castle County Ethics Commission

 

Decision:  Unanimous

Footnotes:

[1] The Commission has been informed that the stated purpose of this non-profit is to “assist residents in achieving self-sufficiency to reach and maintain their full potential through advocacy, education, resources and support.” Further, the non-profit “works in connection with [the civic association] offering various programs and/or services designed to help those in need to help themselves.”  

[2] The Commission has also been informed that the civic association has existed for more than 30 years. While its stated main purpose is the maintenance of open spaces, it also serves as a link to resources such as a site for community meetings, after-school programs and other family services.   

[3] New Castle County Code, Section 2.03.101.A:

It is hereby declared that public office is a public trust and that any effort to realize personal financial gains through public office other than compensation provided by law is a violation of that trust. It is further declared that the people have a right to be assured that the financial interests of holders of or nominees to or candidates for public office do not conflict with the public trust. Because public confidence in government can best be sustained by assuring the people of the impartiality and honesty of public officials, this Division shall be liberally construed to promote complete financial disclosure as specified in this Division. Furthermore, it is recognized that clear guidelines are needed in order to guide public officials and employees in their actions. Thus, this Division intends to define as clearly as possible those areas which represent conflict with the public trust.

[4] Id.

[5] Id. See also New Castle County Code, Section 2.03.101.D, which states:

This Division is intended to establish a minimum standard for ethical conduct and financial disclosure. Elected officials may superimpose conduct rules for officials and employees which are more strict, but not less strict, than these minimum standards. The Ethics Commission has jurisdiction to decide whether superimposed rules fall below the minimum standards expressed in this Division.

[6] New Castle County Code, Section 2.03.101.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.

[7] New Castle County Code, Section 2.03.104.F:

No County employee or County official shall, beyond the scope of such public position, disclose confidential information gained by reason of such public position nor shall such employee or official otherwise use such information for personal gain or benefit.

[8] Id.

[9] New Castle County Code, Section 2.03.104.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. 

[10] New Castle County Code, 2.03.104.J: 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.

2. Personal solicitation of donations by County officials and County employees, or by their agents, spouses or minor children, from subordinates of the County official or employee is prohibited.

3. Elected Officials may set office-wide, non-coercive solicitation policies intended to benefit charitable entities or events if the policy does not create a conflict of interest or appearance of impropriety and does not violate Subsection J.2.

[11] See New Castle County Code, Section 2.03.104.J.1, fn. 10.

[12] Id.

[13] See New Castle County Code, Section 2.03.104.J.2, fn. 10.

[14] See New Castle County Code, Section 2.03.104.J.3, fn. 10.

[15] New Castle County Code, Section 2.03.103.B.2, and 3:  

2. No County official may represent or otherwise assist any private enterprise with respect to any matter before the County. This prohibition is to be considered personal to the County official and is not, for purposes of the New Castle County Ethics Code only, deemed to impact other members of a firm, business, or other employer by which the County official is employed. 

[16] New Castle County Code, Section 2.03.103.B.1:

No County employee or County official may represent or otherwise assist any private enterprise with respect to any matter before the County department with which the employee or official is associated by employment or appointment. 

[17] New Castle County Code, Section 2.03.103.B.3:

3. This subsection shall not preclude any County employee or County official from appearing before the County or otherwise assisting any private enterprise with respect to any matter in the exercise of his or he