Filing Number: 96-03
Subject: Gifts
Keywords: appearance of impropriety, contract, educational, expenses, gifts, recommend, reimbursement, undue influence, vendor
Decision By: L. Susan Faw, Ethics Commission Counsel
Contact Email: admin@nccethics.org
 
Status: Active

Question:

           Whether a vendor may pay the costs attendant a demonstration of an upgraded product to County officials where the vendor currently has a long-term contractual relationship with the County agency and the demonstration is offered to resolve complaints through acquisition of the upgraded product, available to the County under the current contract at no additional cost.

Conclusion:

           Yes, the vendor may pay the costs attendant the demonstration. This does not constitute an appearance cf impropriety because the County officials' decision whether to acquire the upgraded product is not influenced by factors other than the merits.

Facts:

           A County agency was experiencing maintenance complaints with a product provided by a vendor under the terms of a long-term contract. The vendor invited County officials, as agency representatives, to a demonstration of an upgraded product which the vendor believed would satisfy the agency's complaints. Because the demonstration was conducted at a distant site, the vendor provided transportation, overnight lodging and meals for the officials. As a result of the demonstration, the County officials are Likely to acquire the upgraded product, - which, under the current contract, would be at no cost to the County. The County officials ask whether the vendor must be reimbursed for these costs.

Analysis:

           The issue arising under the New Castle County Ethics Code is whether the vendor's payment of the officials' expenses creates an appearance of impropriety. The Code bars officials and employees from conduct which constitutes the appearance cf impropriety,1 defined as:
 
conduct of a county official or county employee which does not constitute a conflict of interest but which undermines the public confidence in the impartiality of a governmental body with which a county officer or employee is or has been associated by creating an appearance that the decisions or actions of the county official, county employee or the governmental body are influenced by factors other than the merits.2
 
          This is not a situation in which the vendor is vying with others to sell the County agency a new product or service.3 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.
 
          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".

Finding:

           Thus, under these circumstances, the vendor may provide the costs attendant the demonstration, e.g., transportation, lodging and meals, and the County agency need not reimburse the vendor for these costs.4
____________________________
L. Susan Faw, Ethics Counsel
February 20, 1996

Footnotes:

1 Section 2-173(g). Restricted activities.
 
2 Section 2-172. Definitions. Appearance of impropriety.
 
3 The Commission would be concerned that payment of expenses incurred as a result of a product demonstration by a vendor competing for County business would violate the Ethics Code by creating the appearance that the officials or employees whose expenses were paid by the vendor would then recommend contracting with the vendor because it paid their expenses. In other words, it could create the appearance that their judgment was "influenced by factors other than the merits." This negative appearance would be exacerbated were the vendor to provide, for instance, lavish accommodations. But as mentioned, these facts are not presented.
 
4 However, the County officials must disclose the vendor's payment of expenses on their next Statement of Financial Interests if the costs meet the threshold requirements. Section 2-175(8) requires disclosure of "any payment for or reimbursement of any actual expenses for transportation and lodging or hospitality received in connection with county office or employment where such actual expenses for transportation exceed $200.00 or where lodging and hospitality exceed $100.00 in the course of a single occurrence."  See Advisory Opinion 92-09. (In this case, the costs appear to fall below these threshold requirements.)