Whether an employee of the Department of Community Services may receive architectural salvage items from a contractor who participates in the Homeowner Rehabilitation Loan Program administered by the Department?
The circumstances surrounding the acceptance of architectural salvage items by a Department employee from a business currently regulated by her Department negate a conflict of interest or an appearance of impropriety. There is no conflict of interest because the employee does not have a personal relationship with the principals of the business, neither she nor any relative has a financial interest in the company, and she is not securing a private benefit as a result of confidential information or her status as a County employee. Furthermore, an appearance of impropriety has been eliminated because the employee has only ministerial contact with contractors involved in the Department's programs, the information about the availability of the salvage items is public knowledge, the value of the goods is negligible, and the transaction has been disclosed and made subject to the approval of her departmental superiors.
The Department of Community Services administers programs of housing rehabilitation which are entirely supported by federal funds from the Department of Housing and Urban Development (HUD). The County receives a fee from the federal authorities to administer the programs. There are several types of rehabilitation programs involving both grants and low interest loans to eligible low and moderate-income homeowners.
New Castle County is paid by HUD to determine eligibility of the homeowners according to federal standards, to review the bids from the contractors according to established guidelines, and to see that the conditions of the contracts between the homeowner and the contractor selected by that person are satisfied before rendering grant or loan payments as agent for the federal government. The County employs financial advisors to help qualified property owners secure financing for rehabilitation of their homes, to assist them in the financial aspects of housing loans, and to help them obtain good value for their funds. Such employees have limited contact with the contractors selected by the homeowner to perform the rehabilitation work and generally meet them only at the time of closing on the loans when the contractor executes a document outlining his obligations under the HUD contract. These employees also receive the contractor's invoices from rehabilitation specialists, other County employees who inspect the contractors' work, and compare the invoices to the original proposals for conformity. If the invoices conform they are forwarded to the fiscal department; if the invoices do not conform they are returned to the rehabilitation specialists for action.
An employee of the Department of Community Services who has responsibility for assisting qualified homeowners in housing rehabilitation financing engaged in a casual conversation in a County office with a contractor who was waiting to see another employee. The contractor noted that he had received approval from the New Castle County Historic Review Board to demolish a historic building he owned and said that the Board had encouraged him to salvage architectural elements of that property for reuse. This particular property is not involved in any Departmental program. The contractor showed the employee pictures of the badly deteriorated property when she expressed an interest in historic properties in the County. He told the employee that he had no market for the architectural items and intended to demolish them with the property. The employee expressed interest in a door and two built-in cabinets visible in the pictures. The contractor offered them to her for a nominal or even cost-free price if she agreed to remove them at her own effort and expense.
The employee does not have a personal relationship with the contractor, neither she nor any relative has a financial interest in his company, and she does not supervise the contracts with or the work of the contractor. Although she may be called upon to review his invoices, that review is ministerial and her contact about those invoices is limited to other County employees. The employee told her supervisors about the proposal from the contractor to determine whether she could accept his offer and was advised that her Department had no objection.
Code or Prior Opinion:
There are 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 is using the authority of her office or confidential information therefrom for her private benefit. Certainly, the employee will accrue a private benefit if she purchases or accepts free architectural salvage from a contractor doing business with her department. However, there is no evidence that benefit has any connection with her official position. The conversation in which she learned of the availability of the salvage items was unplanned, did not occur during the performance of her County function, and does not reflect an intent on the part of the contractor to influence her official conduct. The information that the historic property was to be razed was of public knowledge, the contractor placed no monetary value on the architectural items, the items are in poor condition, and the employee will be required to expend substantial personal effort to acquire them. There is no conflict of interest created by the acceptance of the offer of salvaged items.
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.
Any potential for an appearance of impropriety created by what may appear to be a gift from a contractor doing business with the employee's department is negated not only by the de minimis value of the salvage items themselves and the absence of circumstances showing an intent to induce improper conduct on the part of the employee, but also by the disclosure made by the employee to her superiors and their reported approval of her request to accept the proposal.
The Department of Community Services and the employee are to be commended for taking the additional step of bringing this matter to the attention of the Commission for review. The Commission suggests that the departmental procedure used by the employee in this case should be institutionalized by the Department and used when any employee intends to engage in a private transaction with a vendor associated with the Department or an entity regulated by the Department. A formal disclosure procedure demonstrates that the private financial interest of the employees do not conflict with the public trust.
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 APRIL, 2004.