An elected official has asked whether he may become a member of a non-profit board which receives federal community development funds administered by the County and a small County grant. The official does not have a financial interest in the business of the non-profit as defined by the New Castle County Ethics Code.1
Conclusion:
The elected official may join the board of the non-profit if he reveals the potential areas of conflict to both the private entity and the appropriate County authority and requests that both the entity and the County permit him to recuse himself from the activities which cause the appearance of conflict, including policy making, promotion, or other activities concerning the non-profit's relationship with the County.
Facts:
An elected official has been asked to become a board member of a non-profit community agency. That agency does not advocate before his office but does receive a small County grant for certain of its community activities as well as County administered federal grant. Both grants are received pursuant to written applications and the federal grant is awarded and monitored subject to federal criteria. The official understands that if he becomes associated with the non-profit that he would be required to recuse himself from policy making, sponsorship and voting on matters affecting the non-profit.
Code or Prior Opinion:
The relevant New Castle County Code provisions regarding this request are the conflict of interest and appearance of impropriety provisions.
Sec. 2.03.103. Prohibitions relating to conflicts of interest.
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).
Sec. 2.03.104. Code of Conduct.
A. No County employee or County official shall engage in conduct which, while not constituting a violation of Section 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 decision or action of the County employee, County official or governmental body are influenced by factors other than the merits.
Commission Precedent
Although the Commission has not previously addressed this precise question, it has issued Opinions on analogous issues. In Advisory Opinion 92-02 the Commission found that mere position on the board of directors of a non-profit entity which is not regulated by or does not contract with the County does not create, in itself, an appearance of impropriety. Indeed, one of the enunciated purposes of the Code of Ethics, at Section 2.03.101(B), is that public officials and employees "should not be discouraged from maintaining their contact with their community through their occupations and professions". However, where the employee or official's County position figures prominently in the person's status with the non-profit there is a potential for such an appearance to arise. This is particularly true when a private organization seeks regulation, contract, or benefit from the County or in fund raising. See the analysis in Order C03-03 in which an official was found not to have violated the Code after he directed a state pass-through grant to a non-profit organization on whose board he was a member. Additionally, if the public would be ill served by an official's or employee's recusal from official duty or if recusal is not possible because of the nature of the public duties, an official or employee may be prohibited from serving in a leadership capacity in a non-profit. SeeAdvisory Opinions 97-05 in which a senior staff employee for an elected official was not permitted to serve as an officer or committee head in a civic group which advocated on land use issues, and Advisory Opinion 04-14 in which an official was not permitted to accept outside employment which would have caused his agency to be prohibited from participation in certain private events which benefited the public.
Analysis:
Since the financial interests of the board member, his immediate family or a business with which he is associated will not be affected as a result of any official action by the officer, no issue of conflict of interest arises. However, existence of a conflict is not a predicate for examination of whether an appearance of impropriety would be created by official action. The standard used by the Commission for judging whether an appearance of impropriety would be created is one that has been developed for judicial public officials and has been described in Delaware courts as "conduct [which] 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 [official duties] with integrity, impartiality and competence is impaired." In determining the relevant circumstances, the courts advise the Commission to look at the totality of facts. In re Williams, 701 A.2d 825, 832 (Del. Super. 1997). That standard is equally applicable to the conduct of County officials and employees. Advisory Opinion 05-06.
When there is no actual conflict but the potential for an appearance of impropriety looms because of an official's or employee's relationship with a private entity, the generally accepted procedure used by the official or employee is disclosure and recusal. The employee or official must reveal the conflict to both the private entity and the appropriate County authority and request that both the entity and the County remove him or her or permit the person to remove him or herself from the activities which cause the appearance of conflict. The recusal must be complete: the County official or employee may not even participate in advising or planning on behalf of either the governmental or private entity in the matter. In the circumstance where the official or employee finds that a particular County duty is non delegatable, he or she must utilize the conflict procedure described in Section 2.03.103A(2).2
The totality of circumstances in this case show that the official will be able to recuse himself in those few occasions when matters concerning the non-profit come before his agency. In the instance of the federal community block grants, his County responsibility is largely non-discretionary. The application, criteria and approvals are restricted by federal regulations. His recusal can be easily accomplished without damaging the public's confidence that the grant is properly administered. In the matter of the other small County sponsored grant, his duty to oversee the conduct of the public's business must be balanced against the public's confidence that he is conducting its business impartially. That latter interest supercedes the former and mandates that the official recuse himself in the grant matters. If the official fully recuses himself as to both grants, a reasonable member of the public would not believe the board member's ability to carry out his County duties with integrity, impartiality and competence is impaired and the appearance of impropriety will be dissipated.
Finding:
The official may join the board of the non-profit if he recuses himself from all planning, advising or other action concerning the County relationship with the non-profit.
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 cautions, however, that each County department, board, or other unit of County government is free to, and may impose as part of its own policy, additional or greater restrictions on its officials and employees than those set forth in this Opinion.
BY AND FOR THE NEW CASTLE COUNTY ETHICS COMMISSION ON THIS 28th DAY OF DECEMBER, 2005.
________________________________
John McMahon, Acting Chairperson
Decision: Unanimous
Footnotes:
1 Sec. 2.03.102. Definitions.
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.
Financial interest means any interest representing more than five (5) percent of a corporation, partnership, sole proprietor ship, firm, enterprise, franchise, organization, holding company, joint stock company, receivership, trust or any legal entity organized for profit.
2 New Castle County Code Section 2.03.103A(2):
In any case where a person has a legal and/or statutory responsibility with respect to action or nonaction on any matter where the person has a personal or private interest and there is no provision for the delegation of such responsibility to another person, the person may exercise responsibility with respect to such matter, provided that promptly after becoming aware of such conflict of interest, the person files a written statement with the Commission fully disclosing the personal or private interest and explaining why it is not possible to delegate responsibility for the matter to another person. If the matter is one in which the legal and/or statutory responsibility requires the person to vote upon the issue, the written statement filed with the Commission shall be read into the public record prior to the time the person's vote is cast. Any person choosing to abstain from voting on an issue where [he] or she has a conflict shall state the reasons for his or her conflict on the record; an abstaining voter need not file the written statement with the Commission required when acting on, rather than abstaining from, an issue involving a conflict.
