An employee in a land use function requests guidance about whether he may operate a business which does work related to land use matters which are not regulated by New Castle County and whether that business may enter into subcontracts with other businesses which are regulated by New Castle County, even though the subcontracts would not involve work in New Castle County.
The employee is prohibited from entering into any outside relationship in which an associated business would come before him or his department. If the employee's proposed outside land use enterprise does not do business with or require any regulation by the County, the employee may operate such a business without violating the conflict of interest provisions of the Ethics Code. However, if such an outside business enters into a subcontract with a contractor which does do business with or is regulated by the employee's department, even if the subject of the subcontract is a project outside New Castle County, the employee would violate the appearance provisions of the Ethics Code.
A County employee with land use responsibilities asks whether he would violate the Code of Ethics if he operated a business involving land use matters if the business was located and operated outside New Castle County and not subject to its regulation. He additionally asks what he would be required to disclose to the County if that business accepted a subcontract for a project located outside of New Castle County with a contractor that is regulated by New Castle County. Finally, he asks for direction as to his responsibility if that contractor's plans were to be submitted to him for review in his County position.
Code or Prior Opinion:
The conflict of interest rules at New Castle County Code Section 2.03.103(A)(1) and (B)(1) prohibit the use of official authority by a County official or employee "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."1 These conflict rules mean that an official or employee may not exercise any authority derived from his or her County position in respect to his or her immediate family members or businesses associated with him or those family members, other than in those situations in which the employee or immediate family are affected in a manner like the general public, or an industry or occupation or group which includes them. The conflict rules also prohibit a County employee or official from assisting an outside interest or representing such an interest before his or her own department. This prohibition precludes an employee's submission of plans, services or products from his outside business for County review.2
The Ethics Code's conduct rules at Section 2.03.104 (B) and (A) recite prohibitions affecting the type of outside business which may be conducted by an official or employee. Subsection (B) prohibits an employee or official from acquiring a financial interest3 in a private enterprise which the individual has reason to believe may be directly involved in a decision to be made by such official or employee in official capacity.4 This rule clearly prohibits an employee's ownership of a business which has plans or business which may come before him for review.
Subsection (A) prohibits conduct creating an appearance that the decisions or actions of a County official or his or her department are influenced by factors other than the merits of the matter for decision because such conduct undermines public confidence in the impartiality of the governmental body with which the employee or official is associated.5 A department's regulation of a business associated with an employee falls into this category.
Prior Commission Opinions
The Ethics Commission has long ruled that outside employment is not prohibited "where there is no nexus between an employee's or official's County job and secondary employment". See Advisory Opinion 94-05. However, when that nexus does exist, 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 any business which does construction subject to County inspection. The Commission ruled not only 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, but also 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 p. 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 intended 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 department 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 Opinions 00-01 and 06-02. In Advisory Opinion 04-09, a senior County employee was prohibited from joining an outside business venture with his son in another State because the son was also in a business regulated by the employee's County department. The Commission found that the joint venture, even if conducted solely in another jurisdiction, would create a situation in which the employee would be associated with business which was regulated by his department and that a reasonable person, with knowledge of these facts, would perceive that because of the employee's status in the department, the ability of lower level personnel to impartially carry out their duties in regard to the son would be impaired. See alsoAdvisory Opinion 06-05.
The Commission is persuaded that the questions asked by the requester have been answered in its prior opinions. If the requesting employee's business is operated outside New Castle County and its work is never subject to County review, including in the status as a subcontractor, operation of the business would not violate the Ethics Code conflict of interest rules because the business would have no nexus with the exercise of County authority and the employee would never be in the prohibited position of acting on behalf of a private enterprise before his own department.
However, if the employee's company becomes a subcontractor for a business which does business with or is regulated by New Castle County, even if that association does not amount to a "financial interest" as defined in the Code, the reasonable member of the public could believe that the requester's fellow employees may provide County benefits or services to the contractor which are not available to the general public because of the requester's relationship with it. Therefore, any review or regulation by the employee's department of the associated contractor under such circumstances would violate the appearance of impropriety provision of the Ethics Code.
The answer to the requester's final question regarding his responsibility when an associated contractor's plans come before him in his County position is clear. He is prohibited from entering into any relationship in which such an event could conceivably arise as he would violate the code by both maintaining such a relationship and/or acting in any official capacity in respect to such an association.
If the employee operates an outside business in which the services or products of that business are not regulated or reviewed by New Castle County in any way, he will not violate the conflict of interest provisions of the Ethics Code. However, the appearance of impropriety provisions of the code would be violated if such a business were to enter into any joint or subcontract arrangement with any entity which is regulated by or which does business with his department, whether or not the subcontract actually involves work regulated by New Castle County. The employee is prohibited from entering into any outside relationship in which an associated business would come before him or his 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 MARCH 2007.
John McMahon, Chairperson
1New Castle County Code Section 2.03.102 defines
Business as "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. That section defines the phrase business with which he or she is associated as "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."
New Castle County Code Section 2.03.103. Prohibitions relating to conflicts of interest, states in pertinent part:
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).
2 The Commission has made an exception to this rule in cases where an employee cannot avoid coming before his or her department for permits and inspections relating to construction of a personal residence. See
3New Castle County Code Sec. 2.03.102. Definitions:
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.
4 New Castle County Code Sec. 2.03.104. Code of Conduct:
. . .
B. Restrictions on representing another's interest before the County.
1. 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.
. . .
3. This subsection shall not preclude any County employee or County official from appearing before the County or otherwise assisting any private enterprise with respect to any matter in the exercise of his or her official duties.
5 New Castle County Code 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) [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 decision or action of the County employee, County official or governmental body are influenced by factors other than the merits.