Date:   January 9, 2019

 

Whether the proposed Administrative policy to permit the County to solicit donations in the form of payment to the County from donors to hang banners in certain County parks meets the requirements in the Ethics Code?

 

            The Commission cannot approve the proposed policy in its current format because it does not contain a statement of a public purpose which informs the public of the basis for the adoption of the policy and how the policy will benefit the public. The requester may submit a revised policy in conformance with this opinion for Commission review.          

 

            The County Administration has recently drafted Administrative Policy 23.0, “Donors Recognition Banners in County Parks” (the “Policy” or “Policy 23.0”) and has asked the Ethics Commission to review it for compliance with the Ethics Code.[1] In the letter to the Commission regarding the policy, the requester stated:

Due to recent budgetary constraints, employees were tasked with finding additional revenue sources for New Castle County.  It was suggested that the County adopt a “sponsorship” policy comparable to Little League organizations. The Department conducted a market survey analyzing the average contribution solicited by organizations in exchange for a banner on outfield fences throughout New Castle County.  The Department determined that a minimum donation valued at $500.00 would allow for a broad range of individuals and businesses to participate.  The County estimates that this policy can generate up to $50,000 annually.  Property Maintenance Technicians, Property Supervisors, and Property Managers will be tasked with processing the applications, which are similar to the existing procedures utilized to reserve park pavilions.  The Department estimates that it will cost approximately $1,000.00 annually to administer this program.  The cost is associated with the labor required to install, remove, and return the banners.

 

            In addition, the requester provided the Commission with a sample donor form and proposed Policy 23.0, which states that its “Objective” is to “establish a formal policy for utilizing banners in County parks in recognition of donors. Donations will benefit the people of New Castle County.” Under the heading “Statement,” the Policy states: “All Parks Permits Office personnel will follow this procedure.” County Administrative Policy 23.0 should be compared with Administrative Policy 50, which was created by the County in response to, and in accordance with, Ethics Commission’s Advisory Opinion 06-09, referenced in more detail below. By contrast, Policy 50 states, in pertinent part, that its “Objective” is to “set forth the solicitation policy that will be implemented in order to obtain donations and/or contributions for the continued success and operation of New Castle County Special Events that are offered for the benefit of all New Castle County residents.” And the Statement section of Policy 50, states, in pertinent part: “The citizens of New Castle County benefit from the County special events because they provide the residents an opportunity to bring their friends and family to themed events. These events provide the public with musical and cultural entertainment, children’s games and activities, and cultural and educational activities, all of which improve the quality of life in New Castle County. This policy enables New Castle County and the Department of Community Services to solicit donations from individuals and businesses for the continued success of these special events.”

 

            Policy 23.0 references two County Code sections[2] and sets forth the framework for a program which would allow the County to accept a donation of a minimum of $500.00 from each donor for the purpose of allowing the donor to have the County hang a banner, supplied by the donor, on the inside of the baseball and softball outfield fences in one of the following County Parks:  Greenbank Park, Delcastle Recreational Park, Banning Regional Park, and Powell Ford Park. It provides that the County can accommodate up to 100 banners at all four parks, and that donors will be limited to one banner per park. The annual donation covers the period of April 1 through October 31. Locations for the banners will be allocated on a first come, first served basis. Policy 23.0 further states that the County will not accept cash donations. The Policy sets forth the material and dimensions of an acceptable banner, and the County reserves the right to refuse to hang any banner. According to the Policy, the banner must not violate the County Code. Additionally, Policy 23.0 provides specific guidance regarding permissible content for each banner, such as the donor’s official business name, slogan, brief description of its services, and its contact information.

 

            The Policy states that the “opportunity to make donations in accordance with this policy shall be listed in writing on New Castle County’s website, social media platforms, the New Castle County Happenings publication, and by way of a press release. Each written communication shall emphasize the voluntary nature of the donation and the absence of any effect on current or future relationships between the donor and the County.”

           

         The Policy vests authority in the General Manager of the Public Works Department to have any banner removed which “ceases to be in the best interest of the County.” And it states that the County reserves the right to amend the policy as it deems necessary. Further, the “Department of Public Works or New Castle County shall return any donation where the acceptance of which would create an appearance of impropriety.” Further, the Policy states that “[d]onations accepted pursuant to this policy from entities doing business with or regulated by New Castle County are permitted unless there is a real or perceived conflict of interest in receiving the donation.” The Policy includes language which also appears on the donation form, that is, that any such donation will “have no impact on current or future relationships with the County or in receiving County services.” The Policy also states that the County will consult the Ethics Commission for its advice “before accepting a donation pursuant to this policy that the General Manager believes may create an appearance of impropriety.” The Policy includes a provision that the Department of Public Works will “maintain a public document listing each donor and the value of all donations.”      

 

            In Section 2.03.102, terms which may be relevant to this opinion are defined by the Ethics Code, as follows:    

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.

Compensation means any money, thing of value or any other economic benefit of any kind or nature whatsoever conferred on or received by any person in return for services rendered or to be rendered by oneself or another.

Conflict or conflict of interest means conduct which is prohibited by Section 2.03.103.

Contract means an agreement or arrangement for the acquisition, use or disposal by the County of consulting or other services or of supplies, materials, equipment, land or other personal or real property. "Contract" shall not mean an agreement or arrangement between the County as one (1) party and a County official or County employee as the other party concerning his or her expense, reimbursement, salary, wage, retirement or other benefit, tenure or other matters in consideration of his or her current public employment with the County.

County means New Castle County, including any County Department.

County Employee means any person who receives compensation as an employee of a County Department or County row office.

County official means any person elected or appointed to any County office, board, commission or the New Castle County Council Audit Committee provided, however, that for purposes of Sections 2.03.103(B)(2), 2.03.103(C), and 2.03.104(C). "County official" does not include any member of a board or commission which operates solely in an advisory capacity, and whose members are not compensated, other than reimbursement for expenses.

De minimis means an economic consequence which has a cost or value less than fifty dollars ($50.00).

Financial interest means any interest representing more than five (5) percent of a corporation, partnership, sole proprietorship, firm, enterprise, franchise, organization, holding company, joint stock company, receivership, trust, or any legal entity organized for profit.

Gift means anything that is received without consideration of equal or greater value. … A gift is considered accepted upon receipt or control or direction unless it is promptly returned in its entirety. An email invitation, unless specifically accepted, is not considered a gift.

Governmental body means any department, authority, commission, committee, council, board, bureau, division, service, office, official, administration, legislative body, or other establishment in the executive, legislative or judicial branch of a state, a nation or a political subdivision thereof or any department performing a governmental function.

Governmental body with which a County official or County employee is or has been associated means the governmental body within County government by which the County official or employee is or has been employed or by which the County official or employee is or has been appointed or elected and subdivisions and offices within that governmental body.

Income means any money, thing of value or other pecuniary benefit received or to be received in return for, or as reimbursement for, services rendered or to be rendered. The term does not include gifts; governmentally mandated payments or benefits; retirement, pension or annuity payments funded totally by contributions of the County official or employee; or miscellaneous, incidental income of minor dependent children.

Indirect interest in real estate means:

A. Any business with which a County employee or official is associated whose assets are twenty-five (25) percent or more in real property; or

B. Any interest a County employee or official has in real estate, in which the person is not the record holder, including, but not limited to:

1. Real estate which the County official or employee rents;

2. Real estate held in trust in which the County official or employee is a trustee or a beneficiary;

3. Real estate upon which the County official or employee holds a mortgage;

4. Real estate used as collateral to secure a loan owed to the County official or employee;

5. Real estate in which the County official or employee has an equitable interest; or

6. Real estate owned by a business in which the County official or employee is a director, official, owner, or in which the County official or employee has more than five (5) percent ownership interest.

Negligible value means value of less than twenty-five dollars ($25.00).

Person means a business, governmental body, individual, corporation, union, association, firm, partnership, committee, trust, joint venture, club or other organization or group of persons.

Private enterprise means any activity conducted by any person, whether conducted for profit or not for profit and includes the ownership of real or personal property. Private enterprise does not include any activity of the federal, State or local government or of any department, authority or instrumentality of the federal, State or local government.

Promptly means within thirty (30) days when used in reference to recording the acceptance of a gift in a public gift log or returning such a gift to the donor.

Public gift log means a public document kept by County Council, a County department, or County agency for the purpose of memorializing the acceptance of gifts by County employees and officials and which shall include entries for the date of receipt, the name, workplace or other address of the donor and recipient, a description of the gift and an approximate valuation.

Real property means buildings and other structures attached permanently and directly to the land, as well as the land itself.

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.

Recordable gift means a gift which shall be promptly listed in writing by the recipient in a public gift log maintained for that purpose which is available to the public.

Recusal means, including but not limited to, withdrawing from sponsorship, deliberation, vote, research, preparation, discussion, negotiation, contract formation, policy making, planning, decision making, and/or implementation of a matter. It also includes a prohibition on conducting, in an official capacity, any private or public discussion of a measure raising a conflict or improper appearance. As soon as a potential conflict or improper appearance arises or is recognized, an official or employee must end direct or indirect participation, advice, input, direction, recommendation, or discussion, as well as refraining from vote, if the person is a not an elected official. Elected officials may choose to avoid recusal and may vote if they follow the alternate process described in Subsection 2.03.103.A.2.

Regulated by New Castle County means that an entity operating in New Castle County as a business or nonprofit organization requires approval from or regulation by New Castle County in order to lawfully conduct one or more business activities.

Regulation includes, but is not limited to, obtaining permits, registering residential rental property, or trade licensing, but does not include the payment of property taxes, sewer service charges, individual library use charges, park fees, animal licensing fees or other similar fees.

 

The New Castle County Ethics Code prohibits conduct on the part of County officials or employees which either creates the appearance of impropriety even where no direct conflict of interest is present.  Specifically, conduct which creates an appearance of impropriety is prohibited by Section 2.03.104(A) of the New Castle County Code.^[3]  To determine if an appearance of impropriety exists, the Delaware courts have stated that “[t]he test is… if the conduct would create in reasonable minds, with knowledge of all relevant facts, a perception that an official’s ability to carry out [his or] her duties with integrity, impartiality and competence is impaired.”  Hanson v. Delaware State Public Integrity Com’n, 2012WL3860732, at *16 (Del.Super. 2012), aff’d, 69 A.3d 370 (Del.Supr. 2013); and “[t]he test for appearance of impropriety is whether the conduct 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 [the official’s] responsibilities with integrity, impartiality and competence is impaired.”  In re Williams, 701 A.2d 825, 832 (Del.Super. 1997).  The courts have advised the Commission to look at the totality of the facts presented, and this Commission has historically applied this standard when reviewing the conduct of County officials and employees.

           

          It is a violation of the New Castle County Ethics Code if a County official or employee uses his or her office or employment for his or her personal or private benefit, the benefit of a member of his or her immediate family, or a business with which he or she is associated.[4]  Economic benefits thereby derived with a de minimus impact may be exempted. [5] Importantly, Section 2.03.104.J.1 of the Ethics Code is specifically relevant here, and it states that the “[s]olicitation 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.”      

 

            It is very important to note, also, that the Ethics Code discourages County officials and employees from accepting anything which the Code defines as a gift.[6]  The Ethics Code must be consulted to determine the circumstances under which any gift may be accepted by a County official or employee. The Code includes a description of some of the limited circumstances under which a gift may be accepted, and Section 2.03.104.I.9 of the Code states that “[a]n Advisory Opinion request shall be made to the Ethics Commission prior to the acceptance of any gift not described by or limited in Subsections I.1. through I.9.”

 

            Ethics Code Section 2.03.104.I.2  states that a gift which is “made to the people of New Castle County may be accepted by a representative or agent of County Government.”[7] It is important to bear in mind, however, that this Code section is not a ‘blanket’ approval of the acceptance of all gifts made to the County for the benefit of the County citizens. Whether the acceptance by the County of such a gift is permitted necessarily requires a determination of whether the acceptance creates a conflict of interest and/or an appearance of impropriety, and the Commission is the entity which ultimately makes such a determination. The Code states that the gift, unsolicited or otherwise, may be accepted by the County official only when the acceptance of that “gift does not create an appearance of impropriety.”[8] The Code further states that such a “gift shall not become the property of or be attributed to the [County] representative or agent”[9] and that the “gift shall remain in locations controlled by New Castle County.”[10]  Additionally, such a gift must be “promptly recorded in a public gift log.”[11]

           

            The Commission considered, in Advisory Opinion 06-09, 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; and, if the Chief Administrative Officer may solicit such businesses, whether those entities may be identified in advertising as "co-sponsors" of the County event. The Commission decided, assuming that the County targeted a population that was representative of a broad swath of County individuals and businesses for solicitation, the issues included 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. Ultimately, the Commission found that any appearance of impropriety could be minimized if the following conditions were met: the Executive must comply with the ordinance by issuing a written policy authorizing the solicitation for the Ice Cream Festival which identified the public benefit; cash donations would not be accepted; no public or private identification of the donors as joint sponsors could be allowed; 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 her department may not provide in the reasonably foreseeable future, direct services for the donor; and a contemporaneous public document is maintained which lists the donors, type and value of all donations.

 

            In Advisory Opinion 10-10, the Commission considered whether an entity of New Castle County, such as a committee or subcommittee of County Council, may accept a gift made for the benefit of the public. The Commission concluded that the Code permits agents or representatives of County Council to accept gifts made to the people of New Castle County as long as acceptance of the gift does not create an appearance of expectation or favoritism for the donor and the gift is recorded in the public gift log maintained by Council. More specifically, in that opinion, the requester asked whether a Council entity was permitted to accept donations from private donors to pay an expert to make a presentation at a public meeting sponsored by the Council. The requester informed the Commission that the expert was not associated with the donors, the presentation would address matters of public concern, it would not be designed to advance the interests of the donor, and, in the opinion of the requester, the type and size of the gift would not create an expectation of favoritism for the donor. Applying the express provisions of the Ethics Code and the reasoning found in past Commission opinions which involved both solicited and unsolicited proposed gifts to the County, the Commission concluded that “[i]f a gift to the citizens creates the impression that the County is endorsing the donor or that because of the type or size of the gift, the public would reasonably believe that the donor would have improper expectations of favor from County employees or officials, the gift may not be accepted.”

 

            In Final Order 11-02, the Commission found a violation of Code Section 2.03.104.J in the failure to create a written policy covering the solicitation of regulated entities. The Commission concluded that a “reasonable person would not believe that in this case the type of gifts solicited for the benefit of the public were of an improper nature in themselves. However, the reasonable person reviewing the facts of this case would conclude that the failure of the official's agency to enact a clear written policy for solicitation as well as its lack of oversight of the subcommittee were the root causes of the violation of the written solicitation rule and ensuing creation of an appearance of impropriety.” Thus, the Commission found that an Ethics Code violation had occurred in part because a County department failed to create a procedure in conformity with Code Section 2.03.104. J.

 

            In Advisory Opinion 13-07, the Commission was consulted about whether a proposed ordinance, which authorized solicitation and acceptance of gifts for a public purpose, must specify a comprehensive solicitation policy. The Commission opined that the ordinance was not required to include a comprehensive solicitation policy because Code Section 2.03.104 J.1. and prior Commission opinions prescribe the parameters of any solicitation by County officials or employees from entities that do business with or are regulated by the County.

 

            In Advisory Opinion 14-06, The Commission was asked whether the provisions in a proposed solicitation letter that rewarded businesses which donated specified levels of money for an event or events with the right to set up information tables and have special banners would violate the Ethics Code requirement of impartiality and create an appearance of prohibited endorsement. The Commission decided that the proposed solicitation letter would violate the Ethics Code because providing a more prominent display for recognition based on the amount of the donation would have created the appearance that the County is providing preferential treatment at the County event based on the financial resources of the donor. Further, the Commission cautioned that allowing County departmental employees to accept solicited donations from any entity which that department directly serves could be in violation of the Code, and that any such donations must be accepted by County employees associated with another department.

 

            Gifts and donations present problematic situations for government employees across the nation. The act of accepting gifts by government official or employees opens the door to misperceptions on the part of the public, and these misperceptions can result in the erosion of trust the public vests in its own government. In recognition of that reality and in an effort to prevent a dissolution of that trust, the Ethics Code disfavors the acceptance of gifts by County officials and employees. But, also in recognition of reality, the Ethics Code provides for certain situations in which the acceptance of gifts by County officials and employees may be permissible, so long as the acceptance of that gift does not create a conflict of interest or an appearance of impropriety per the Code.

 

            When the government itself solicits the gifts, or donations, an already problematic situation can become especially complicated. For those reasons, solicitation by County officials and employees should be kept to a minimum. The Commission, in Advisory Opinion 06-09, stated that any such solicitation may take place only when the following conditions have been met: 

(1) A written policy which identifies the public benefit authorizes the solicitation;

(2) Cash donations shall not be accepted;

(3) No public or private identification of the donors as joint sponsors of a County event;

(4) The voluntary nature of the contribution, and the absence of any effect on current or future County relationships, should be made in writing to all potential donors;

(5) The donor must provide written corroboration identifying and valuing the donation at the time it is made;

(6) The official or employee 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; and

(7) A contemporaneous public document is maintained which lists the donors, type, and value of all donations.

 

            The proposed Policy 23.0 and the donor form satisfy most of the above-referenced conditions.  A statement of a public purpose in Policy 23.0 explaining why undertaking solicitations by the County from its public creates a benefit to its public, however, is lacking. As referenced above, and by way of example, Policy 50 provides an explanation as to the public purpose which supports the policy. Inclusion of a meaningful public purpose in the proposed Policy is critical, here, because without any such written policy, the actions authorized by the policy would be prohibited by the County Code. In other words, the proposed Policy is not one which simply refines actions and procedures which are clearly permitted by Code. At issue in this instance is whether the County should adopt a policy where the exercise of the Policy, even if the proposed Policy is ultimately approved, very possibly may give rise to allegations of violations of the Ethics Code.[12] The inclusion of a thoughtful public purpose in the proposed Policy is, therefore, necessary to provide a justification and explanation to the public as to why and how the public is benefitted by the solicitation and acceptance by County officials and employees of donations from the public in the manner set forth in the Policy.[13]   

 

            Additionally, The Commission notes that it did not receive any verbiage to be used by the County on, or in, its various media outlets to advertise or to solicit donations under this Policy. The Commission is aware that the County may not have developed any advertising documents at this preliminary stage, which is understandable. While those advertisements of solicitations may not require Commission review, however, without an opportunity to review them, the Commission is not in a position to provide an opinion or any guidance in that respect. In the event that the requester submits a revised Policy for Commission review, it would be advisable to include proposed advertisement verbiage as well.

 

            For the reasons stated above, Policy 23.0 is not approved as submitted to the Commission. The requester may resubmit a proposed Policy when it is has been revised per this opinion of the Commission.            

            Pursuant to the Commission’s decision in this matter as originally presented and set forth above, the requester submitted a revised policy to the Commission for review, as well as sample verbiage for use in advertising the new policy. Specifically, the requester submitted a revised policy which included the following language as the stated public purpose of the policy:

Soliciting donations to be recognized by banners on the inside of the baseball and softball outfield fences located at Greenbank Park, Delcastle Recreational Park, Banning Regional Park, and Powell Ford Park will benefit the citizens of New Castle County because the donations will serve as contributions to the cost of providing vital services to the public.  New Castle County maintains one of the State’s largest park systems, which provides a wide range of recreational amenities, natural lands and open space, and improves the quality of life in New Castle County.  The citizens of New Castle County benefit from well-maintained parks that provide quality opportunities for passive and active recreation.  This policy enables New Castle County and its Department of Public Works to solicit and accept voluntary monetary donations from individuals and businesses to assist the County financially in continuing to providing vital services, including park maintenance, to citizens.

New Castle County Code Section 14.01.005(B)the empowers the County Executive to promulgate rules and regulations, subject to the approval of the County Ethics Commission to “recognize on County assets (including, but not limited to, real property), those who have donated funds and/or resources to the County.”  As such, the County Executive has formulated this policy to allow for donor recognition banners on County ballfields.  All County government personnel will follow this procedure.

Additionally, the proposed advertisement contained the following language:

Support County Parks. Contributions of $500 or more will be recognized with a banner at designated display locations on the inside of the baseball and softball outfield fences at Greenbank Park, Delcastle Recreational Park, Banning Regional Park and Powell Ford Park.  Donor recognition banners must be supplied by the donor in accordance with certain design standards. The donor recognition banner period each year will be April 1^st to October 31^st.

Please note: All donations are voluntary and will have no effect on current or future relations with New Castle County.  Cash donations are not permitted.  Checks should be made payable to New Castle County.  All donations and accompanying sponsorship forms should be sent to New Castle County, Department of Public Works, Parks Permit Office, at New Castle County Gilliam Building, 77 Reads Way, New Castle, DE 19720.

 

The Commission has reviewed the submitted revised and new documentation and has applied it to the law and principles set forth in its opinion, above. The Commission finds that the policy as revised, and the sample advertisement language, comply with the Ethics Code. To the extent that Ethics Code issues arise in connection with this revised policy and advertisement, these issues will occur in the administration or execution of this policy, and it strikes the Commission that this policy lends itself to opportunities for abuse and/or favoritism, public misperception, and situations where good intentions may easily go awry. Nevertheless, the Commission finds that the revised policy and sample advertisement, as submitted in January 2019, meet the requirements of the Ethics Code.

 

 

 

 

 

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