Filing Number: 06-09
Subject: Charitable Fundraising
Keywords: appearance of impropriety, appointed official, cash donation, contractor, donor, gifts, impropriety, private business, public policy, public purpose, solicitation, sponsor, supplier
Decision By: Commissioners: John McMahon, Kathryn Denhardt, Eugene McCoy, Ernest Price, James R. Soles
Contact Email: admin@nccethics.org
 
Status: Active

Question:

Whether the Chief Administrative Officer of the County may direct subordinates to solicit funds or services from private businesses for a County event if some of the target entities are regulated by or do business with the County or may be reasonably foreseen to do so in the next three years.

If the Chief Administrative Officer may solicit such businesses, whether those entities may be identified in advertising as "co-sponsors" of the County event.

Conclusion:

New Castle County Code Section 2.03.104(J) prohibits solicitation from entities which do business with or are regulated by New Castle County except when such solicitation is pursuant to a New Castle County written policy decision made for the benefit of the public. 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.

Facts:

The Chief Administrative Officer (hereinafter "CAO") requests guidance about seeking financial or in kind contributions to the County Ice Cream Festival from private sources, some of which may do business with or be regulated by the County or which may seek County business in the foreseeable future. The Festival is held each year at a County facility at County expense and is attended by tens of thousands of New Castle County residents and others. The donations will not be made for individual officials or employees but for the citizens of the County. The CAO proposes to identify contributors in advertising and signage as "co-sponsors."

Code or Prior Opinion:

Code provisions

The conflict of interest rules at Code Section 2.03.103(A)(1) restrict the use of official authority by a County official or employee "for the personal or private benefit of himself or herself, a member of his or her immediate family or a business with which he or she is associated."1 Section 2.03.103(B)(2) prohibits County officials and employees from representing the interests of a private enterprise in any matter before the County.2 Additionally, the Code's conduct rule at Section 2.03.104 (D) prohibits County employees and officials from using their status as public officers to obtain unwarranted privileges or gain.3 The conduct rules at Section 2.03.104(A) recite a prohibition on creating an appearance that the decisions or actions of a County employee, County official or governmental body are influenced by factors other than the merits of the matter before it, thus undermining the public confidence in the impartiality of the governmental body with which the individual is associated.4

New Castle County Ordinance 06-022, enacted into law as Code Sections 2.03.101(D), 2.03.103(H)(2) and (I)(2), was approved by Council on March 28, 2006, and signed into law on April 3, 2006.5 It permits a representative or agent of County government to accept a gift made to the people of New Castle County so long as that non-cash gift does not create an appearance of impropriety and the gift is recorded in a public gift log.6 New Castle County Code Sec. 2.03.104 (J) prohibits solicitation from entities which do business with or are regulated by New Castle County with the exception of solicitation which is conducted pursuant to written County policy that identifies the public benefit for the approved cause. Section 2.03.104(J) states:

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.

Prefacing these new solicitation and gift rules is the proposition woven throughout the Code that the Ethics Commission has jurisdiction to decide whether the conduct of members of County Government and whether certain policies created by those members comport with the minimum standards expressed in the Ethics Code. See, Sections 2.03.101 (D); 2.03.104(H); 2.04.102(A) and (I); 2.04.104(H).

Administrative policy

In addition to the Code, New Castle County administrative personnel policy 5.04 speaks to solicitation. It states that an employee may not solicit or accept any gift "from a vendor or supplier or offered to promote a product or service." However, it also states that the definition of gift does not include "items of a de minimus value such as . . .t-shirts, mugs, hats . . .and other unsolicited advertising or promotional items." It is not clear whether this exclusion applies to items from vendors. That policy also recognizes "that there may be rare circumstances where it is permissible for an employee to accept a gift or benefit. In such circumstances: a) approval must be obtained from the department general manager or row officer, and the Exception to Personnel Policy 5.04 Form shall be filed within 48 hours to fully disclose the specific exception; . . . c) questions regarding whether the gift is an exception to this policy shall be decided by the department general manager or row officer. If the department general manager or row officer is unable to make this decision, the New Castle County Ethics Commission shall be contacted for an advisory opinion." Unless Administrative rules or policy fail to comport with the minimum ethical standards established in the County Code of Ethics, interpretation of those rules and policy must be made by the Executive branch itself as such interpretation is not within the jurisdiction of the Ethics Commission.

Commission Precedent

Past interpretations of the Code of Ethics have permitted solicitation activities by County employees under restricted circumstances but the relevant Commission precedent predates the newly enacted law found at Sections 2.03.104 (H), (I), and (J). A majority of the existing opinions relate to situations in which the official or employee is seeking donations on behalf of a private charitable enterprise. In most of those opinions the Commission analyzed questions of the appropriate boundaries for the relationship between the County status of the employee or official and the targeted entity.

Advisory Opinion 96-07 held that a County official or employee may not seek contributions on behalf of a non-profit from persons or businesses regulated by their County department or area of County business over which they have authority. Similarly, in Advisory Opinion 93-02, the Commission found that an employee could not seek contributions on behalf of his outside employer from persons seeking a benefit from his County department.

In Advisory Opinion 01-08, the Commission determined that an employee could participate in fund-raising for a nonprofit as long as the employee did not seek to use his County position to influence official action for the nonprofit and abstained from participating as a representative of the County department on matters involving the nonprofit. It required the employee to avoid personally soliciting funds from entities for which he directly performed County services. It also required him to minimize any appearance that the party being solicited would receive favorable treatment from the County or feel compelled to donate because of the employee's County status by prohibiting the employee from signing any direct written solicitation made to persons regulated by his department and requiring him to avoid mention of his County department in solicitations.

Advisory Opinion 95-02 addressed the question of whether a County agency could co-sponsor an educational seminar about the legal process administered by the County agency with one of the private users of the agency. The Commission found while the agency could participate in the seminar, co-sponsorship would violate the Code by creating an appearance of impropriety. "The agency's cosponsoring of a seminar with one of the several private entities which must conduct business with the agency creates the appearance of a cozy relationship between the Sponsor and the agency, thereby enhancing Sponsor's public image. This appearance would engender in the public a perception that the agency favors Sponsor over its competitors or officially sanctions Sponsor's activities."

The Commission is not aware of any Executive branch interpretation of the administrative prohibition about accepting gifts from vendors and suppliers.

Analysis:

Conflict of Interest

The Commission precedent in the Advisory Opinions generally involved conflict of interest situations. In those opinions, officials and employees were requesting guidance about soliciting for charitable organizations in which they had a private or personal interest either as a member of the board or as a volunteer representative of a charity. Conflict of interest is not implicated in the described fact situation in this case because the proposed soliciting is not on behalf of a personal interest but directed by the County employer for the benefit of the citizens of the County. Similarly, the conduct rule which prohibits using County status for personal gain or benefit does not apply to this situation for the same reason.

Appearance of Impropriety

However, the prohibition on creating an appearance that a donation to the County for the Ice Cream Festival will result in a special benefit to or preference for the donor is not eliminated by these facts. That concern arises from two issues: the method used to select the donors and the inherently coercive effect of County status on the entity solicited.

In some of the Advisory Opinions discussed in the preceding section, the Commission did consider the appearance created by public alignment of the County with some chosen entities with which the County does business. In Advisory Opinion 95-02, while the Commission recognized the public benefit in the County's participation in an educational seminar concerning legal procedures used by a County agency, it prohibited co-sponsorship because that would have created an impression in the public that the County favored or endorsed the private entity which sponsored the event and thereby increased its status over that of its competitors. In Advisory Opinion 01-08 the Commission created guidance which prevented the appearance of entanglement between an employee's private interest and his County status. It not only prohibited inherently coercive personal solicitation of recipients of direct services but also eliminated the identification link in written solicitations between the employee doing the soliciting and the entity being asked to donate. These limitations minimized the possibility of unspoken coercion or improper donor motive resulting from a solicitor's County status.

Finding:

Reviewing the totality of the circumstances, the Commission finds that the proposed solicitation would not benefit any of the official or employee solicitors in a prohibited personal manner. Obviously, the County may not limit its targets for solicitation to only those entities which are regulated by or do business with it. Such a narrow focus would unavoidably violate the Ethics Code's appearance provisions. However, assuming that the County targets a population that is representative of a broad swath of County individuals and businesses for solicitation, the remaining issues are whether a donation from a vendor or supplier may be accepted, whether solicitation would create an appearance that the donors would have an improper expectation of favor in return for a donation, and whether reasonable contributors would feel forced to donate to maintain competitive status regarding County business or regulation.

The Commission cannot speak to the effect of the County Administrative prohibition regarding gifts from vendors and suppliers. Interpretation of the effect of that policy is a matter for the Executive branch.

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 issuing this Advisory Opinion, the Ethics Commission is applying the New Castle County Code of Ethics, which establishes the minimum level of ethical conduct required of County officials and employees. The Commission reminds each County elected official that he or she has authority to impose as part of his or her own policy additional or greater restrictions on subordinate officials and employees than those set forth in this Opinion. See, Section 2.03.101(D).

BY AND FOR THE NEW CASTLE COUNTY ETHICS COMMISSION ON THIS 14th DAY OF JUNE, 2006.

_________________________

John McMahon, Chairperson

Decision: Unanimous

Footnotes:

1 Section 2.03.103. Prohibitions relating to conflicts of interest, states in pertinent part:

(A.) Restrictions on exercise of official authority.

1. No County employee or official knowingly or willfully shall use the authority of his or her office or employment or any confidential information received through his or her holding County office or employment for the personal or private benefit of himself or herself, a member of his or her immediate family or a business with which he or she is associated. This prohibition does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the County official or employee, a member of his or her immediate family or a business with which he or she or a member of his or her immediate family is associated. There will be a rebuttable presumption of a knowing or willful violation of this section if the action benefits the County official or employee, his or her spouse, or his or her dependent children (whether by blood or by law).

________________________

2 Sec. 2.03.103. Prohibitions relating to conflicts of interest, states in pertinent part:

(B.) Restrictions on representing another's interest before the County.

. . .

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 the 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.

_________________________

3 Sec. 2.03.104. Code of conduct, states in pertinent part:

. . .

(D.) No county employee or County official shall use such public office to secure unwarranted privileges, private advancement or gain.

. . .

_________________________

4 Sec. 2.03.104. Code of conduct, states in pertinent part:

(A.) No County employee or County official shall engage in conduct which, while not constituting a violation of Section 2.03.103(A)(1) [conflict of interest], 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 decision or action of the County employee, County official or governmental body are influenced by factors other than the merits.

________________________

5 Ordinance 06-022 added new definitions to Section 2.03.102 and added Sections 2.034.104 (H), (I), and (J) to the New Castle County Code. It has been described as not as stringent as State law by the Public Integrity Commission because the State law contains no provisions referencing solicitation of any nature and in prior Opinions the Public Integrity Commission has prohibited any form of solicitation by State agencies without express General Assembly authorization. The County Ethics Commission has requested reconsideration of that finding as applied to County government.

__________________________

6 Section 2.03.104(I) states in pertinent part:

2. Gifts made to the people of New Castle County may be accepted by a representative or agent of County Government as long as the gift does not create an appearance of impropriety. Such a gift shall not become the property of or be attributed to the representative or agent. The gift shall remain in locations controlled by New Castle County. Any such gift shall be promptly recorded in a public gift log.

Section 2.03.104(H)(2) prohibits acceptance of gifts of cash other than a political contribution otherwise reported as required by law.

________________________

7 This restriction does not preclude public acknowledgment of donations.

__________________________

8 Section 2.03.102,Definitions, in pertinent part:

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.