Whether a County official and his wife may accept a gift from a non-profit trust, which neither has nor will have any connection with County government, to attend a private event which is widely publicized in the media if the agent extending the gift on behalf of the trust is a profit making entity which is reasonably expected to seek business with the County in the future.1
The invitation may be accepted.2 A reasonable member of the public, who has knowledge of all the relevant circumstances, would not believe that accepting the invitation offered through the agent would impair the official's integrity, impartiality, or competence in matters concerning the agent. In this case, that negative perception of bias in favor of the agent is ameliorated because the value of the invitation, though significant, is not at a level which would create a sense of obligation in the recipient or concern on the part of the reasonable person, the official is required to report the acceptance and estimated value of the gift in a document which can be scrutinized by the public, and the opportunity for private contact with the agent is limited by the nature of the event. In addition, the event is widely reported and attended by the media, there are numerous other attendees representing a broad cross section of the public who do not have a business relationship with the agent who are also similarly invited, and the event celebrates examples of conduct important to the public which reinforce cherished public values. Finally, by requesting an Advisory Opinion from the Commission before accepting the gift, the official reduces the appearance of impartiality or bias.
The County official requests guidance on the question of whether he may accept an invitation tendered to himself and his wife which is extended by a local business acting as agent for a non-profit sponsor. The agent is a profit-making business reasonably expected to seek contracts with the County in the future and the County recipient has the official authority to affect County business relationships with the profitmaking agent. The sponsor of the event does not conduct any type of business with the County nor is it expected to do so in the future. The nature of the event is one which reinforces conduct important to the public and returns no direct benefit to the sponsor or the agent. The entire cost of the event is underwritten by the sponsor and while there is no value associated with the invitation, the Commission is aware that the event is conducted at a place and in a manner that are considered expensive, exceeding $75.00 per person if the cost was borne by the invitees.
The official relates that the event is widely publicized in the media and while it honors individuals for noteworthy achievements beneficial to the public, it is "invitation only". The Commission is aware that, historically, members of the media are among the invitees. The official has previously attended this event in his capacity as an official for another government employer. The Commission notes that invitations for this event are usually offered to a large number of civic and business leaders in a broad range of governmental and non-governmental professions and occupations who do not necessarily have a business relationship with the agent. The Commission is also aware that the official's County agency requires him to promptly record the date, source, and amount of these types of gifts in a publicly available record.
Code or Prior Opinion:
As repeated in prior Commission opinions, one of the Commission's governing policies, recited in New Castle County Code Section 2.03.101(B), recognizes that "many public officials are citizen-officials who bring to their public offices the knowledge and concerns of ordinary citizens and taxpayers. They should not be discouraged from maintaining their contacts with the community through their occupations and professions. Thus, in order to foster maximum compliance with its terms, this Division shall be administered in a manner that emphasizes guidance to public officials and public employees regarding the ethical standards established by this Division."
The Ethics Code, at Section 2.03.102, defines gift as "anything that is received without consideration of equal or greater value. The term "gift" shall not include a political contribution otherwise reported as required by law or a commercially reasonable loan made in the ordinary course of business."3
The conflict of interest rules at Code Section 2.03.103(A)(1) restrict 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." 4 Additionally, the Code's conduct rules at Section 2.03.104(A)recite a prohibition on creating an appearance that the decisions or actions of a County employee, County official or governmental body are influenced by factors other than the merits of the matter before it, thus undermining the public confidence in the impartiality of the governmental body with which the individual is associated.5
Because of the strong possibility of creating an appearance of impropriety insituations involving gifts from entities regulated by, doing business with, or seeking to do business with the County, these provisions must be carefully considered before accepting any gift, regardless of amount or to which member of the immediate family it is directed.
The Commission has addressed questions concerning the acceptance of personal gifts by individuals from entities regulated by or doing business with the County approximately 10 times in the period 1991 to date.6 The seminal Advisory Opinion on such gifts was issued on December 9, 1992 (a reissue of Advisory Opinion 91-07), and involved the question of whether officials and employees could accept gifts or invitations to social, sporting or other events generally open to the public from persons with whom the County has a relationship. That Opinion stated the basic and overriding principle that a gift, of whatever value, may not be offered or accepted where the intent of the gift is to influence the conduct of the County employee or official in an improper manner. In the Opinion, the Commission recognized that gifts which exceed "modest limits" may be viewed as a means of ingratiating the donor with the recipient and defined a modest gift as one valued at $75.00 or less per year per donor. It reasoned that while a gift below that amount was probably not intended to improperly influence employee or official, absent suspicious circumstances, gifts of higher value had to be evaluated individually to determine whether the recipient was in a position to take any official action which would be of direct interest to the donor. The Commission further held that gifts given to members of an official's or an employee's immediate family as a result of the official's or employee's County status would be considered to be a gift to the employee or official. Finally, it required that all gifts must be disclosed to the recipient's department head or superior and that each unit of government should establish a simple procedure for the disclosure of such gifts.
Last year, in Advisory Opinion 05-09, the Commission restated the premises of Advisory Opinion 91-07 after it reviewed all the subsequently issued opinions. As in Advisory Opinion 91-07, it found that the most significant issue was the donor's relationship to the County and the appearance that relationship created.
Conflict of Interest
The invitation at issue clearly falls within the definition of "gift" since the recipient will not provide greater or equal value to the sponsor or host for attending the event. However, even though the gift seems to be offered because of the official's status with the County, acceptance of the invitation does not appear to implicate the conflict of interest rules prohibiting use of official authority for private benefit because the official is not using the authority of his office to seek out the invitation for his private benefit. He is one of a broad group of community policy makers and leaders invited. Furthermore, the official is not attempting to improperly enrich himself at the expense of the public interest since, while the value of the invitation is greater than $75.00, the event occurs only once per year and the value is neither extreme or unusual nor so large as to incur a sense of obligation to the host in the reasonable recipient. In addition, the invitation is for a community social function that has no direct or indirect benefit for the sponsor. The situation described in this request does not appear to represent a violation of the conflict rules of the Ethics Code.
Appearance of Impropriety
Even when a gift presents no financial conflict of interest, the question of acceptance of gifts always requires a careful analysis of the appearance of impropriety prohibitions in the Code. The Commission judges whether an appearance of impropriety would be created by the acceptance of this invitation by using the standard developed by the courts for judicial public officials which has been described 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 determining the relevant circumstances, the courts advise looking at the totality of facts. In re Williams, 701 A.2d 825, 832 (Del. Super. 1997); Advisory Opinion 05-06.
In the situation described in this request, the official is being offered an invitation to a prestigious event which, because of extensive media coverage, is best described as a community event, even though the public is not invited. While the usual motive of such invitations is to encourage a favorable attitude toward the sponsor, in this case that does not appear to be the case because the trust sponsor does not and will have any business relationship with the County. As a result of offering the gift, the sponsor will enjoy only the incidental prestige of securing the official's presence at the event. No appearance of impropriety arises from the sponsor - official relationship.
However, in this case the appearance analysis must also extend to the conduit of the gift, the agent, since it reasonably may be expected to seek a business relationship with the County in the future. Because it has the opportunity to select the invitees and offer the gift on the sponsor's behalf, a perception could arise that the agent has chosen the official to receive the gift in order to advance the agent's profit making activities by currying goodwill with the official.
The most important negative perception which can arise from the acceptance of a substantial gift by a public official is that the donor is getting access to and/or official action from the public official different from that a member of the general public can achieve. This invitation could be viewed to provide such access. A member of the public would have reason to question the impartiality and integrity of an official who accepts an expensive gift from an entity which hopes to do business with the County, particularly if the official does not make prompt public disclosure of the source and amount of the gift or if the official intentionally exchanges private access to himself or subordinates in return for a gift.
However, in this case, that negative perception is dissipated because the value of the invitation, though significant, is not at a level which would create a sense of obligation in the recipient or concern on the part of the reasonable person, the official is required to report the acceptance and estimated value of the gift in a document which can be scrutinized by the public, and the opportunity for private business contact with the agent is limited by the nature of the event. In addition, the event is widely reported and attended by the media, there are numerous other attendees representing a broad cross section of the public, and it is an event which celebrates examples of good citizenship and reinforces cherished public values and aspirations, not private ones. The Commission also recognizes that this type of event provides a useful and inexpensive opportunity for County officials to exchange ideas with a broad range of important community contacts which probably could not be assembled at a County sponsored function. Finally, by requesting an Advisory Opinion from the Commission, the official has successfully reduced negative inferences about favoritism and private access.
The Commission finds that a reasonable member of the public who has knowledge of all the relevant circumstances described herein, would not believe that the official's integrity, impartiality, or competence would be impaired by accepting the invitation or that, in exchange for the gift, the agent of the trust would acquire private access to a County decision maker different from that available to the public. Therefore, the official may accept the invitation so long as it is timely reported by date, source and value in a public record and, if valued at $200.00 or more, reported on the Statement of Financial Interests when that form is next filed with the Ethics Commission.
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 8th DAY OF MARCH, 2006.
John McMahon, Chairperson
1 Funding for the event comes from a trust set up by a deceased business executive and philanthropist. The event was first held in the late 1970s and continues to reward and encourage "the best of human performance". Over 150 individuals of international renown have received more than $2 million in cash awards conferred by the trust. The profit-making entity acts as the trust's agent in administrating the event.
2 If the invitation has a value of $200.00 or more, it must be reported as a gift on the recipient's Statement of Financial Interests when that form is next filed with the Ethics Commission.
3 The Ethics Code, at Section 2.03.107(B)(7), also requires an official or employee who receives any gift valued at $200.00 or more in the aggregate, including transportation, lodging or hospitality payments and reimbursements exceeding $200.00 in the course of a single occurrence, to report that gift to the Ethics Commission on a Statement of Financial Interests form. The only exceptions are gifts received from a member of the immediate family which are motivated by that relationship and expense payments or reimbursements from governmental bodies or associations of governmental bodies.
4 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).
5 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.
6 The Commission has addressed gift giving between County employees and officials, as opposed to gifts from outside sources to employees or officials, on only one occasion. In Order 03-04, the Commission found that group gifts from subordinates to a County official, valued at less than $75.00 per donor, given on traditional ceremonial occasions under circumstances reflecting the voluntariness of the gift, and not intended to or received to affect the recipient's official conduct in an improper manner, did not violate the Ethics Code.