An official has asked if hiring a qualified person who maintains outside employment as a real estate agent, a fundraiser, and private investigator would violate the Ethics Code.
Conclusion:
The County may hire the best candidate for any position despite that person's outside employment as long as the outside employment does not create a conflict of interest or an appearance of impropriety. In this case, the outside employment as a real estate agent and fundraiser do not create a conflict or improper appearance as long as the employee conceals his employment with the County and does not solicit clients of his agency when engaged in those activities. However, given the particular confidential information involved in the County position, an appearance of impropriety would be created if the candidate were permitted to continue his employment as a private investigator
Facts:
An official seeks to hire a qualified candidate for a County position which, among other things, involves duties relating to real estate matters and criminal justice concerns. The candidate is qualified for the position but maintains outside employment as a part-time real estate agent, a contracted fundraiser for a police association and a non-profit community group, and as a private investigator.
The Agency states that the real estate matters in the County position involve information that is of public record in every aspect. The candidate has no association with the County in his fundraising business, which he has successfully administered for many years, and does not participate personally in the direct fundraising activity.
The criminal justice duties of the County position involve use of confidential information from DELJIS, the State criminal justice information agency. That agency trains and permits access for specific individuals in criminal justice agencies to non-public criminal justice information. Violation of DELJIS confidentiality rules are punishable as a crime in the State criminal code. At present, every other person hired for this class of position by the County agency is certified by DELJIS. While DELJIS states it will not certify an individual who maintains outside employment as a private investigator, the agency states that it is not absolutely necessary for this person to have DELJIS access since there would always be an individual with such access available to get the necessary information for the candidate.
Code or Prior Opinion:
Sec. 2.03.103. Prohibitions relating to conflicts of interest states:
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).
. . .
C. Restrictions on contracting with the County.
No County official or County employee his or her spouse, child, parent, step-parent or sibling of the whole or half-blood or any business with which the County official or County employee or his or her spouse, child, parent, step-parent, or sibling of the whole or half -blood is associated or who has a legal or equitable ownership of more than five (5) percent (more than one (1) percent in the case of a corporation whose stock is regularly traded on an established securities market) shall enter into any contract with the County (other than an employment contract) or any subcontract with a County contractor unless such contract or subcontract was made or let after public notice and competitive bidding. Such notice and bidding requirements shall not apply to contract not involving more than five hundred dollars ($500.00) per year if the terms of such contract reflect arms' length negotiations, if the subcontractor is a sole source provider, or if there are exigent circumstance. There will be a rebuttable presumption of a knowing and willing violation of the section only if the contract or subcontract is award to a spouse or child of the County employee or official.
Sec. 2.03.104. Code of Conduct states:
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.
. . .
E. No County employee or County official shall engage in any activity beyond the scope of such public position which might reasonably be expect to require or induce such County employee or Count official to disclose confidential information acquired by such employee or official by reason of such public position.
. . .
F. No County employee or County official shall engage in any activity 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.
Commission Precedent
In Advisory Opinion 05-06, citing a collection of older opinions, the Commission restated the proposition that an official or employee may generally engage in outside employment if the employment has no relation to his or her public duties and does not create an appearance of impropriety. However, the Commission advised that the official or employee is prohibited from using his or her County status or resources to advance his or her interests in business or the interests of the outside business itself.
The Code provision on contracting with the County by businesses associated with an official or employee has been consistently interpreted by the Commission. In Advisory Opinion 94-06, the Commission stated its holding that outside employers or businesses associated with County officials and employees may not contract with the County in an amount over $500.00 unless the contract is subject to an open and public bid process. In Advisory Opinion 05-04 the Commission restated this rule in the context of professional services contracts.1
The issue of solicitation was addressed in several opinions both as a conflict of interest and as an appearance of impropriety. In Advisory Opinion 93-02, the Commission held that an employee would create a conflict of interest if he solicited clients of his agency for his outside employer. In Advisory Opinion 96-07, an appearance of impropriety was held to be created if clients of an employee's department were solicited for fundraising tickets benefiting a non-profit. In Advisory Opinion 01-08, the Commission found that an employee who was a volunteer director for a non-profit organization could participate in fundraising for the non-profit as long as did not seek to use his County position to raise the funds, he did not personally solicit his County clients, and he abstained from participating in any matter between the non-profit and his department.
There have been only limited references in the opinions to the Code prohibitions on disclosure of confidential information obtained in the course of public duties. Code Section 2.03.104 (F) bars as a conflict of interest any disclosure or use of confidential information for personal benefit. Code Section 2.03.104 (E) is more proactive and bars outside employment which by its nature would induce or appear to expect disclosure of such information. In Advisory Opinion 05-08, an employee who had confidential duties in one branch of County government transferred to another branch of County government but the new position was found not to implicate the employee's duty to maintain confidences to the prior County employer. In Advisory Opinions 05-18, and 05-20, the Commission underscored the permanent duty to maintain confidences imposed on all County officials and employees after they leave public office or employment. In Advisory Opinion 05-21, under an appearance of impropriety rationale, an employee was advised to recuse himself from all County matters involving confidential information which would be of interest to his outside local government employer.
Analysis:
Real Estate Business
The outside employment in real estate sales reported in this request does not implicate either the conflict or conduct provisions of the Code. The Agency reports that it does not hold any confidential information relevant to a real estate business. The candidate would simply have to avoid using his County status or resources in furtherance of this outside employment, a duty imposed on all officials and employees who participate in outside employment.
Fundraising Business
Operating the fundraising business also does not implicate the personal benefit provisions as long as the potential employee does not solicit clients of the agency. The Commission cautions the Agency to advise the potential employee about the public notice and bid limitation on County contracts in excess of $500.00 as that prohibition may affect his outside business and create an unanticipated conflict problem if he accepts County employment.
Even if there is no direct conflict in operating the business, fundraising is soliciting value without providing a corresponding value and an appearance of impropriety must always be considered when the potential for an appearance of favoritism or bias arises.
The standard used by the Commission for judging whether an appearance of impropriety is 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.
In this case, because of the criminal justice character of the Agency and the potential for expectation of bias and favoritism in return for a donation, the candidate must not be personally involved in the solicitation and must conceal the nature of his County employment from the persons targeted by his fundraising business in order to avoid creating an appearance of impropriety.
Private Investigator Employment
The private investigator employment is fraught with potential for an appearance of impropriety. The function of the Agency involves access to confidential personal and criminal information compiled in the DELJIS files. That information is aggressively guarded by procedure and protected by law from non-governmental entities which would use if for economic gain. Since DELJIS will not certify the candidate's access if he maintains outside employment as a private investigator, he would have to ask other employees to obtain it for him, which may cause them to be in violation of DELJIS rules, a clearly untenable situation for the Agency.
Additionally, a reasonable member of the public may question the candidate's loyalty and integrity, believing that the nature of the outside economic interest creates a situation in which the candidate would be expected or induced to disclose some of the confidential information to which he could obtain access. The denial of certification by DELJIS only reinforces that view. Clearly, Section 2.03.104(E) prohibits the creation of such a situation. Therefore, the Agency would create an appearance of impropriety if it hired this candidate and permitted him to maintain his outside employment as a private investigator.
Finding:
The outside employment of real estate agent and fundraiser do not create a conflict or improper appearance as long as the employee does not use County status or resources to advance those interests, conceals his employment with the County from targets of the fundraising business, and does not solicit clients of his agency when engaged in those activities. However, given the particular nature of the County position, an appearance of impropriety would be created if the candidate were permitted to continue his outside employment as a private investigator.
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 26th DAY OF DECEMBER, 2005.
_________________________
John McMahon, Chairperson
Decision: Unanimous
Footnotes:
1 New Castle County Code Section 2.03.102, in pertinent part:
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. 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.
