A County Department has asked for guidance from the Commission in three areas concerning the impact of the Section 2.03.103(D) two-year post employment prohibition on potential contracts between the County and a business which employs a recently resigned County employee: whether the employee may be a consultant in a previously funded project for which he was individually responsible when he was in County employment; whether the employee may be a consultant in a project he had reviewed when it was funded in the department's budget but to which he was not assigned; whether the employee may be a consultant in a previously unfunded project if he was "aware" of that project during his County employment.
Conclusion:
The two-year post employment provision of Section 2.03.103(D) impacts the former employee and the County for all projects which were funded in the Department's budget during the individual's County employment because his assignment to or review of those projects is understood to be direct and material responsibility for them or giving an opinion about them. If the employee was merely conscious of the unfunded projects and did not review or have any other responsibility for them, the post employment provision will not apply to his participation with the new employer. That section also permanently prohibits the former employee's use of confidential information acquired while in County employment after termination of that service. Since Section 2.03.103, by its terms, is directed only to the conduct of the employee and the County, if the new employer agrees not to use the employee in the affected contracts during the two-year period, the section does not prevent a contractual relationship between the employer and the County.
Facts:
A recently resigned County employee now works as a project manager for a private consulting company. While employed by the County the former employee supervised employees working on specific projects and managed projects himself, was responsible for recommending projects that were to be placed in the budget for later action, and also reviewed and was aware of all projects in the capital budget whether or not he was assigned to supervise or manage them. The Department anticipates that the new employer will bid for unspecified County work that was funded but not bid while the individual was a County employee and also for County projects which were proposed but not funded while the former employee was in County service. The Department is requesting guidance in three areas involving the former employee: whether the employee may be a consultant for a funded project for which he was individually responsible when he was in County employment; whether the employee may be a consultant for a project he reviewed which was funded in the department's budget but to which he was not assigned when in County employment; and whether the employee may be a consultant for a previously unfunded project if he was "aware" of it during his County employment.
Code or Prior Opinion:
The New Castle County Ethics CodeSection 2.03.103(D) conflict of interest provision prohibits a person who has served as a County employee or County official from representing
. . . or otherwise assisting any private enterprise on any matter involving the County for a period of two (2) years after termination of employment or official status with the County, if the person gave an opinion, conducted an investigation or otherwise was directly and materially responsible for such matter in the course of official duties as a County employee or official. Nor shall any former County employee or County official disclose confidential information gained by reason of public position nor shall the person otherwise use such information for personal gain or benefit.
Section 2.03.103(G) provides that contracts in violation of the Division are voidable by court action:
In addition to any other penalty provided by law, any contract entered into with any County Department in violation of this Division shall be voidable by the County Department; provided, that in determining whether any court action should be taken to void such a contract pursuant to this subsection, the County Department shall consider the interests of innocent third parties who may be damaged thereby. Any court action to void any transaction must be initiated within thirty (30) days after the County Department involved has, or should have, knowledge of such violation.
Section 2.03.103(F) provides criminal sanctions for violation of this rule:
Any person who knowingly or willfully violates any provisions of this Division shall be subject to the sanctions contained in Section 1.01.009 of the New Castle County Code.1
Analysis:
One of the important purposes of Section 2.03.103 (D) is to prevent a former County employee or official from giving a private enterprise a "leg up" over its competitors by using his or her prior connection with the County to exert undue influence on former colleagues. It also prevents a former official or employee from using confidential information acquired during the course of the performance of public duties for his or her own benefit or for that of an associated enterprise. Section 2.03.103(F) and G) provide the County with civil and criminal remedies when it discovers that a contract was formed in violation of that policy.
When Section 2.03.103(D) applies, a former County official or employee is prohibited, for a period of two years following the official or employee's termination from County employment, from entering into or acting upon a contract with the County involving any matter over which the former employee gave an opinion, had investigatory authority, or provided direct and material input while holding a County position.
A non-exclusive definition of the terms "opinion", "investigation", or "direct and material responsibility" is involvement, while in County service, in making policy, providing advice, deciding, developing, constructing, monitoring, selecting, authorizing, evaluating, regulating, supervising, inspecting, representing, or managing the same or a factually overlapping issue, contract, program, proposal or agreement. The mere fact that an individual was not a final decision-maker does not mean that the individual was not directly and materially responsible.
Although the bar on the use of confidential information applies in all circumstances, the two year assistance rule does not apply at all if the employee did not give an opinion, conduct an investigation, or was not directly and materially responsible for the matters in issue. Whether a former employee or official is restricted by the Section 2.03.103(D) two year rule must be decided on a case by case analysis by the Commission based upon the particular constellation of the official or employee's past duties and proposed future activity. In the instant request, the Department advises that the former employee "reviewed and was aware of all projects in the capital budget whether he was to supervise or manage the projects or not." The Commission interprets the language of the request to indicate that the employee, at a minimum, had direct and material responsibility to provide professional advice or opinion on all projects in the capital budget. Therefore, in his new employment, the employee is precluded for a period of two years following employment with the County from any involvement in projects which were in the capital budget during his service with the County.
The request is silent the about the degree of the former employee's involvement in projects which were not funded in the capital budget and indicates only that the individual would have been "aware" of them. The word "aware" has the general meaning of "consciousness". If he was merely conscious of the existence of the projects and did not review them for advisory or other purposes, he would not have given an opinion, conducted an investigation, or been directly or materially responsible for them and Section 2.03.103 would not apply. If the former employee had actually reviewed the projects for advice purposes in the manner of the funded projects, he would be barred from participation with his new employer for the two-year period.
Section 2.03.103, by its terms, is directed only to the conduct of the employee and the County. In respect to contracts impacted by that section, if the new employer agrees not use the employee who is prohibited under that Section, the County is not prevented from entering into a contractual relationship with the employer.
Finding:
The two year post employment provision in Section 2.03.103(D) impacts the former employee for those projects which were in the capital budget during the individual's County service and does not affect unfunded projects if the former employee was merely conscious of them and did not have any direct and material responsibility or advisory input. That section also permanently prohibits his use of confidential information for personal or business benefit if it was gained during County service. Since Section 2.03.103, by its terms, is directed only to the conduct of the employee and the County, if the new employer agrees not to use the employee in any respect for contracts prohibited under that Section, the County is not prevented from entering into a contractual relationship with the employer.
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 10th DAY OF AUGUST, 2005.
_____________________________
Dennis S. Clower, Chairperson
Decision: Unanimous
Footnotes:
1 New Castle County Code Section1.01.009. General Penalty; continuing violations, states:
Whenever in this Code or in any ordinance of the County any act is prohibited or is made or declared to be unlawful or criminal or an offense or a misdemeanor or the doing of any act is required or the failure to do any act is declared to be unlawful or criminal and an offense or a misdemeanor, where no specific penalty is provided therefor, the violation of any such provision of this Code or any such ordinance shall be punished by a fine of not less than one hundred dollars ($100.00) for the first conviction. For the second conviction occurring within twelve (12) months of the date of the first conviction, the penalty shall be a fine of not less than one hundred twenty-five dollars ($125.00) and not more than five hundred dollars ($500.00). For a third or subsequent conviction occurring within twelve (12) months of the date of the first conviction, the penalty shall be a fine of not less than one hundred fifty dollars ($150.00) and not more than one thousand dollars ($1,000.00) or imprisonment of not more than thirty (30) days or both. Each day any violation of this Code or of any such ordinance shall continue shall constitute a separate offense for which a separate conviction may be obtained and a separate penalty for each day shall be imposed. Notwithstanding any other provision of law, the court shall not suspend the sentence of any person, corporation, partnership, firm or any other entity convicted of a violation of this Code.
