Whether a senior New Castle County employee who has secondary employment as a self-employed contractor in another jurisdiction may be associated in a construction business with his son in a geographic area outside New Castle County jurisdiction if the son's business is not regulated by New Castle County; whether it would be permissible for the employee to be associated in a construction business with his son outside this jurisdiction if his son's business is regulated by this jurisdiction; and, if his son becomes regulated by the employee's department, whether recusal would be an appropriate procedure?
Conclusion:
A County employee who has secondary employment as a self-employed contractor in another jurisdiction may be associated with his son's construction business in geographic jurisdictions outside New Castle County if his son's business is not regulated in New Castle County. However, if his son becomes subject to regulation by the employee's department it would not be permissible for the employee to be associated with the son's business in any way because recusal would not be sufficient to remove the appearance of impropriety from such association.1
Facts:
A County employee who has secondary employment as a self-employed contractor in another jurisdiction may be associated with his son's construction business in geographic jurisdictions outside New Castle County if his son's business is not regulated in New Castle County. However, if his son becomes subject to regulation by the employee's department it would not be permissible for the employee to be associated with the son's business in any way because recusal would not be sufficient to remove the appearance of impropriety from such association.
Code or Prior Opinion:
Prior Advisory Opinions
This Commission has long ruled that secondary employment is not prohibited "where there is no nexus between an employee's or official's County job and secondary employment". SeeAdvisory Opinion 94-05. However, when that nexus exists, the Code may restrict and, in some cases prohibit, County employees from secondary employment.
For example, in Advisory Opinion 92-07, the Commission found that an employee who performs inspections for the County must not be associated with a business which does any construction subject to County inspection. The Commission ruled that a County inspector had to limit work he did as an individual to construction which would not be subject to County inspection, either by virtue of the nature of the construction or its location outside the County's geographic jurisdiction. It further advised that a County inspector may not be associated with a business which does any construction subject to County inspection. "[A]llowing a County inspector to inspect construction done by his fellow inspectors or by a business with which the fellow inspector is associated creates an appearance of impropriety." Id. at 3.
In Advisory Opinion 97-07, an employee was prohibited from taking secondary employment in a business regulated by New Castle County even though the employee was to work in a different County for the private employer and had agreed to abstain from reviewing any work performed by the private employer in New Castle County. The Commission expressed concern that reviews of the private employer's work by the employee's co-workers would create an appearance that approvals were granted because of the fellow employee's relationship with the secondary employer, not because of the merits of the work. See also, Advisory Opinion 00-01.
Code Provisions
It is clear from the reported facts that there would be no nexus between the Ethics Code provisions and the employee's joint enterprises with his son when the son is not regulated by New Castle County and does not work here. In that case, his joint enterprises in his secondary business do not implicate any Ethics Code provisions. However, if the son becomes subject to regulation by the County, their joint enterprises, even if conducted solely in the other jurisdictions, create a situation where the employee is associated with a business coming before his department and the Ethics Code is implicated.2
The advisory opinions described above reflect consideration of Ethics Code principles which must be addressed in analyzing this employee's request for advice: conflict of interest, restrictions on representing another's interest before the County, acquiring an interest affected by official conduct, and appearance of impropriety.
Conflict of Interest
Section 2.03.l03 (A)(1) of the Ethics Code sets forth the activities prohibited as a conflict of interest, as follows:
[code]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.[/code]
In examining this Code provision, it must first be determined whether the employee would be using the authority of his office or confidential information to benefit his private interests, to benefit his immediate family, or to benefit a business with which he is associated. While the current Code does not define an adult child as part of the "immediate family", legislation is now pending to amend that definition to include adult children. However, at the current publication date, the father-son relationship is not implicated in the conflict provision. (When and if the Code is amended by inclusion of adult children in the definition of immediate family, a conflict of interest would be imputed to the employee on the basis of that relationship, even if the employee is not associated by joint enterprise or employment.) Nevertheless, the proposed joint enterprises with the son would create a financial interest (either as a partner, subcontractor, or employee) in the son's business at least for the duration of the joint enterprises. In that manner, the son's business, if regulated in New Castle County, becomes "a business with which the employee is associated" and approvals by the employee's department for the associated business would also create a personal benefit for the employee. In short, once the son's business becomes regulated by the employee's department, the potential for conflict of interest arises.
Restrictions on representing another's interest
Even situations in which private action by the employee is not in conflict because it does not directly inure to the personal benefit of an employee or associated business may violate the Code. The Code prohibits an employee from taking any personal position on behalf of a private enterprise before his own department. Section 2.03.102 B (1) states:
[code]No County employee or County official may represent or otherwise assist any private enterprise with respect to any matter before the County Department with which the employee or official is associated by employment or appointment.[/code]
Thus, anything short of total recusal on the part of this employee if his son's business became regulated by the employee's department would violate the conflict and representation provisions of the Code.
Acquiring an interest in a private enterprise affected by official conduct
Furthermore, the Ethics Code sec. 2.03.104 B prohibits County officials or employees from acquiring a financial interest in a private enterprise which such persons have reason to believe may become directly involved in their official decisions. That section states:
[code]No County employee or County official shall acquire a financial interest in any private enterprise which such employee or official has reason to believe may be directly involved in a decision to be made by such official or employee in an official capacity on behalf of the County.[/code]
Analysis:
Since the employee requesting this opinion is a senior manager in his department, it is conceivable that he may make policy decisions and interpretations that would directly affect the son's business in New Castle County. Assuming that a joint enterprise with the son is deemed to be a financial interest in the son's business as described in the Code,above, the Code provision would be violated by a joint venture outside this jurisdiction if the son's business were regulated within it. Therefore, this Code provision also precludes the employee from participating in a joint enterprise if his son's business becomes regulated by New Castle County.
Recusal
Recusal and abstention from official action is frequently used to prevent potential conflicts from developing. Recusal means terminating all direct or indirect official activity connected with or affecting the private or personal interest. The Code recommends recusal when an official duty can be delegated. See Sec. 2.03.103A(2). In this case, recusal on the part of the employee is not a satisfactory solution because of the breath of managerial authority this employee holds in his department and the close family relationship involved.
Furthermore, even if it were possible for the employee to completely recuse himself from matters affecting the son's regulated business, an appearance of impropriety would remain, and the Code would be violated because of the relationship. Section 2.03.104(A) of the Ethics Code states:
[code]No County employee or County official shall engage in conduct which, while not constituting a violation of Section 2.03.l03 (A)(l) [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 decisions or actions of the County employee, County official or governmental body are influenced by factors other than the merits.[/code]
The standard for judging appearance of impropriety for judicial public officials 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 re Williams, 701 A.2d 825, 832 (Del. Super. 1997). The Commission believes that standard is equally applicable to the conduct of County employees.
In determining the relevant circumstances, the courts advise the Commission to look at the totality of facts. The most important facts in this situation are the employee's managerial status in the his department, his activities with the son's business, and the close family relationship involved. In this matter, despite recusal, the Commission concludes that a reasonable person, with knowledge of these facts, would perceive that the ability of lower level employees of the department to carry out their duties with impartiality would be impaired.
Finding:
Therefore, the employee may not become associated with or continue an association with his son's business in another jurisdiction if the son's business becomes regulated by the employee's department.
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 14th DAY OF JULY, 2004.
_____________________________
Dennis S. Clower, Chairperson
Decision: Unanimous
Footnotes:
1 This Opinion does not address the situation in which the employee wishes to work with his son in another jurisdiction, when the son is not regulated by New Castle County, but the son is a subcontractor for a contractor who is regulated by New Castle County. In such a case, the employee would be prohibited from working with his son in the other jurisdiction. See Advisory Opinions 92-07 and 97-07.
2 Sec. 2.03.102 defines Business as
[code]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.[/code]
That section defines Business with which he or she is associated as
[code]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.[/code]
Sec. 2.03.102 defines immediate family as
[code]A spouse or dependent child of a County official or employee whether by blood or operation of law.[/code]
3 Sec. 2.03.103A(2):
[code]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.[/code]
