Whether a New Castle County employee may accept a gift of a complimentary registration from the sponsor of a conference in which the employee will participate?

           Acceptance of the gift of a complimentary registration from the sponsor of the conference would create an appearance of impropriety since the sponsor is a current vendor for the County, the conference will include presentations about the vendor's new products, and the employee has the authority to affect the County's future contractual relationships with the vendor.

          The Commission has received a request for advice on whether the Ethics Code permits a County employee to accept a gift of a complimentary conference registration from Hansen, Inc, a for-profit software vendor which is the sponsor of a conference the employee plans to attend. Hansen asked the employee to present at a session of the conference and offered to waive his conference fee in return.¹  The conference is open only to users of Hansen products and the County is sending a number of employees. Only one employee per user group may receive a $550.00 complimentary registration.

 

          Numerous Hansen products are currently licensed and in use by the County. Most of the information to be provided at the conference revolves around updates on current Hansen systems, changes in current Hansen systems, feedback to Hansen, and sharing information and solving problems users are experiencing with Hansen products. However, Hansen also uses this conference to present new products to the attendees.

 

          New Castle County contracts with Hansen are executed through the Information Services Department (IS) and the employee requesting this opinion, although not a member of that department, has significant input into and participation with IS about the purchase of products used by his department. In fact, Hansen created and currently licenses a product to the County which is used exclusively by the employee's department.

 

          Hansen asked the employee to conduct a question and answer session about that product at the conference. The employee agreed because New Castle County is the only licensee and Hansen has been reluctant to make necessary changes in the product at the County's request, apparently because of economic considerations. The employee hopes that his participation in the conference will interest others in purchasing the product and thereby create an economic incentive for Hansen to make changes beneficial to NCC.

           The rationale of existing Advisory Opinions regarding the acceptance of gifts from conference sponsors has generally revolved around the status of the sponsor in terms of regulation or contract with NCC and the authority of the County official or employee to affect that relationship. If the sponsor has no current or potential relationship with the County, acceptance of a reasonable gift is not a problem if there is some benefit to the public in acceptance. In Advisory Opinion 04-07, the Commission found that a County official was not acting in his official capacity when participating in a conference and that there was no relationship between the County and the non-profit sponsor. Transportation and lodging in exchange for participation could be accepted by the County employee and was reportable on his Statement of Financial Interests.

 

          If there is a current or potential relationship with the County but the employee or official has no current or future ability to affect that relationship, acceptance of a reasonable gift of which is of benefit to the public may be considered. In Advisory Opinion 96-03, a for-profit company and current vendor offered to pay the costs attendant to a demonstration of an upgraded product which was offered as a solution to problems which had developed under an existing long-term contract. The upgraded product would be made available to the County at no additional cost under the current contract. The Commission did not find an appearance of impropriety in these circumstances because the decision to accept the upgraded product could not be influenced by factors other than the merits of the upgrade and the gift of the costs attendant to the demonstration could not affect the already completed contract formation and vendor selection.

 

          In Advisory Opinion 92-09, a County employee was permitted to accept transportation, lodging and hospitality expenses for participation in a manufacturer's training session. The manufacturer was not a current County vendor and did not currently sell the type of products that the County purchased. The manufacturer asked the employee to participate because the employee had expertise in the installation of products similar to those of the manufacturer. Although the employee drafted plans and specifications for the purchase of similar products for the County, he did not participate in bid review or vendor selection. The Commission found that no appearance of impropriety existed because the employee did not participate in the selection process.

 

          Where there is a current or potential relationship and the individual has the authority to affect it, the gifts have usually been disallowed. In Advisory Opinion 03-07, a County official was not permitted to accept expenses from a potential vendor for a demonstration of a new product because the official had decision-making authority for similar purchases for his agency. The Commission concluded that a reasonable person with knowledge of the relevant facts would entertain the suspicion that the vendor had an illegitimate purpose in offering the trip or that the official's ability to impartially carry out his duties related to such purchases would be impaired. In Advisory Opinion 91-01 the Commission found that an employee could not accept a $100.00 honorarium for participating in a trade symposium held by or on behalf of a current vendor. The Commission determined that participation in the symposium had a public purpose but receiving remuneration would create an appearance of impropriety.

           The foregoing Advisory Opinions reflect consideration of two principles which the Commission must address in analyzing this request for an Advisory Opinion, conflict of interest and appearance of impropriety.

 

          Section 2.03.l03 (A)(1) of the Ethics Code sets forth the activities prohibited as a conflict of interest, as follows:

 

No County employee or County official 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 County 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.

 

          In examining this Code provision, it must first be determined whether the employee would be using the authority of his office or confidential information therefrom for his private benefit. While both Hansen and New Castle County may benefit from the complimentary registration, the employee will not receive a personal or private benefit. Further, although Hansen is a business organized for profit² and will receive the benefit of the employee's service at the conference, the employee is not "associated" with Hansen. Section 2.03.102 defines such association as being a director, officer, owner, or employee or having a member of one's immediate family in such capacity. In this case, there is no "employment" of the County employee by Hansen. A conflict of interest does not exist in this situation.

 

          Section 2.03.104(A) of the Ethics Code sets forth the activities prohibited as an appearance of impropriety. It states:

 

No County employee or County official shall engage in conduct which, while not constituting a violation of Section 2.03.l03 (A)(l), 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 decisions or actions of the County employee, County official or governmental body are influenced by factors other than the merits.

 

          In this case, Hansen singled the employee out from other attendees for such a benefit by asking him to participate and Hansen, a profit making entity, has the opportunity to use the conference to present its new products to the County employee. The employee receiving the complimentary registration has the authority to affect the future contractual relationship between the County and Hansen. A reasonable competitor may well believe that Hansen is using the waiver of the fee to influence the County in its favor and that a future award of a contract to Hansen may be influenced by goodwill generated from the gift and not based strictly on the merits of the product.

          Under these circumstances, accepting the complimentary registration would create an appearance of impropriety and violate the New Castle County Code of Ethics.

 

          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 THE 17^th DAY OF JUNE, 2004.

 

_____________________________

Dennis S. Clower, Chairperson

 

Decision: Unanimous