Filing Number: 97-11
Subject: Non-Profit
Keywords: appearance of impropriety, board member, conflict, county grant, Department of Community Development and Housing, disclosure, employee, federal government, grant, HUD, impropriety, non-profit, recusal, undue influence
Decision By: Commissioners. David Facciolo, Vincent Oliver, Lawrence Sullivan, Jane Tripp, Frances West
Contact Email: admin@nccethics.org
 
Status: Active

Question:

          May a County employee involved in community, housing and development, who exercises some discretion in the administration of HUD funds with regard to a particular project, serve on the Board of Directors of a non-profit organization which may be an applicant for said funds?

Conclusion:

           A County employee involved in community, housing and development, who exercises discretion in the administration of HUD funds with regard to a particular project, may serve on the Board of Directors of a non-profit organization which may be an applicant for said funds. The employee, however, must exercise caution to ensure that he is aware of any potential areas which may result in appearances of impropriety, and recuse himself, when appropriate.

Facts:

           The requesting party is a County employee1, involved in community, housing and development, who specifically oversees a particular project for the County. As such, he exercises some discretion in the area of budgeting for the particular project, recommending which individuals or agencies should receive funds within his line-item budget. The ultimate budgeting decision, however, is made by his superiors. His County job also requires him to be intimately involved and knowledgeable with regard to all agencies involved with the project.
 
          The requesting party wishes to serve on the Board of Directors of a non-profit organization which will be an applicant for funds and which he exercises some discretion over. The limited request from the non-profit organization would fit in a line-item in the budget. There are very few, if any, other agencies and individuals making requests for said specific line-item funding. The non-profit organization he wishes to serve on would be providing a service which is viewed as in furtherance of the County's policy in regard to the particular project.

Analysis:

          The New Castle County Ethics Code prohibits County employees from engaging in behavior which constitutes a conflict of interest2, defined as:
 
use by a county official or county employee of the authority of his or her office or employment of any confidential information received through his or her holding county office or employment for the private pecuniary benefit of himself or herself, a member of his or her immediate family or a business with which he or she is associated.3
 
          Under Section 2-172 of the Ethics Code and previous decisions of the Ethics Commission, the term "business with which he or she is associated" is deemed not to include non-profit organizations. See, Advisory Opinion 97-04 (March 14, 1997); and Advisory Opinion 97-09 (October 29, 1997). Accordingly, since the County employee's membership would not result in the "private pecuniary benefit of himself or herself, a member of his or her immediate family or a business with which he or she is associated"4, there is no conflict of interest.
 
          The Ethics Code, however, also prohibits appearances of impropriety5, defined as:
 
the 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.6

Finding:

          In the present situation, since there are very few, if any, applicants for the specific line-item funding, the request is limited, and it is part and parcel of the employee's position in the County to be involved in such issues, the Commission does not believe an appearance of impropriety exists merely by his serving on the Board of Directors. However, to avoid any appearance of impropriety, the employee should disclose any relationship prior to discussing, voting, or abstaining on the non-profit organization's application for funding, in a manner consistent with Section 2-173(f) of the Ethics Code.
 
          In making such a ruling, however, the Commission notes that the employee must exercise caution to ensure that he is aware of any potential areas 'which may result in appearances of impropriety. The employee should also be sensitive that there may be occasions where recusal at either, or both, his County job and/or the non-profit agency, may be necessary to avoid an appearance of impropriety which may result in the imposition of sanctions. When such instances occur in his County position, the employee must follow the procedure set forth in Section 2-173(f) of the Ethics Code requiring disclosure and abstention.7 Finally, the Commission notes that this decision merely addresses possible violations under the New Castle County Ethics Code. It does not address any other law, Code, rule or regulation which also may be applicable.
 
BY AND FOR THE NEW CASTLE COUNTY ETHICS COMMISSION ON DECEMBER 10, 1997.
 
_______________________________
David J.J. Facciolo, Chairperson

Footnotes:

1 Section 2-172. Definitions.
2 Section 2-173(a). Restricted Activities.
3 Section 2-172. Definitions.
4 Section 2-172. Definitions.
5 Section 2-173(g). Restricted Activities.
6 Section 2-172. Definitions.
7 See, Advisory Opinion 91-02 (July 30, 1991) and Advisory Opinion 92-02 (June 12, 1992), both holding that a County official should follow the procedure set forth under Section 2-173(f) for voting conflicts, when, in the discharge of his official duties, he is required to vote on a matter which would give rise to an appearance of impropriety.