Whether the Ethics Code would be violated if a recently appointed County official provides, though a corporation in which he has a financial interest, a donated service unrelated to his County duties to the public at a County sponsored event under a long standing contract with a local business.
Under the reported facts, the official's performance under a private contract with a local business, which predates his tenure with the County, to provide a free service to the public which is unrelated to his County duties, does not violate the Ethics Code.
The requester, an individual with a significant financial interest1 in a subchapter S corporation, recently became a County official. The S corporation has had a decade long contractual relationship with a local business, performing in an advertising capacity 5 to 8 times a year at charitable or public events on behalf of the business. The local business has had a frequent past practice of donating the services of the official's advertising vehicle to the County's annual Ice Cream Festival for use, without charge, as a benefit to the public. The official appears in public as the operator of the advertising vehicle but does not function as a spokesperson for the local business. The business of the S Corporation is not related to any County government function and the official's position with in the S Corporation is not in anyway similar to his County function. The local business is not involved in issues pending before his County department, and he would be able to recuse himself and delegate involvement in any matters concerning the local business if they arose.
Code or Prior Opinion:
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."2 An issue of conflict of interest is not raised in this request. First, there is no financial relationship between the County and the official's Corporation.3 Second, given the recency of his County employment and the preexisting duration of his relationship with the local business, there is no possibility that he is using his public office for personal or private pecuniary benefit in obtaining this contract.
The code of conduct provisions at Code 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. It states in pertinent part:
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.
Under the facts as reported, this provision has some application since the private contract would be performed at a County function.4
One of the concerns reflected in the prior Opinions of the Commission is that when an official becomes widely known as a County policy maker or as a spokes person for such an individual, the official's actions in his or her County role and his or her private role may become confused in the eye of the public. Such confusion may create an appearance of impropriety, lending County authority to the private pursuits or creating an appearance of County partiality to the private endeavor. When this is foreseeable, the Commission has required the official to forgo the private conduct. For example, in Advisory Opinion 97-05, a Council member's aide was prohibited from holding a leadership role in a civic group which advocated before Council. In Advisory Opinion 04-14, a County official was prohibited from accepting outside employment because his recusal from involvement in public business concerning the employer would have been detrimental to the public interest. In Advisory Opinion 05-03, an official who functioned as a public spokesperson for a County policymaker was prohibited from filling an executive position in an outside business because the business publicly advocated and discussed positions concerning County practices and expenditures for which the policymaker was responsible.
In this case, there is no likelihood of public confusion between the official's public duties and his private business similar to that experienced in the Opinions recited above. The business of the Corporation and the duties of the County official are not similar and do not overlap in any way. The Corporation is not regulated by, does not contract with, or advocate before the County. It would be obvious to the reasonable person that the advertising vehicle is not County sponsored, owned, or affiliated and, since the official has been only recently employed by the County, he has not yet developed a high profile in the public's eye and would suffer little recognition when appearing in his private capacity. The requester reports that he is would be able to recuse himself from any official involvement with the local business and the law prevents him from contracting with the County on behalf of his S Corporation absent arms' length negotiation or public bidding. A reasonable person with knowledge of all these facts would not find that the impartiality of the governmental body associated with the official has been impaired or that the integrity or competence of the official would be called into question if he fulfilled his contract with the local business to donate the services of his Corporation's vehicle to the public at the Ice Cream Festival.
The official's corporation may continue to perform under its longstanding contract with the local business to provide a benefit to the public at the County's Ice Cream Festival without creating a conflict of interest or appearance of impropriety.
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 11th DAY OF MAY, 2005.
Dennis S. Clower, Chairperson
1Financial 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.
2 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).
3 Contractual relationships between the County and its officials and employees are restricted according to Section 2.03.103 (C) which states:
No County official or County employee, his or her spouse, child, parent, step-parent or sibling of the whole or half-blood or any business with which the County official or County employee or his or her spouse, child, parent, step-parent or sibling of the whole or half-blood is associated or who has a legal or equitable ownership of more than five (5) percent (more than one (1) percent in the case of a corporation whose stock is regularly traded on an established securities market) shall enter into any contract with the County (other than an employment contract) or any subcontract with a County contractor unless such contract or subcontract was made or let after public notice and competitive bidding. Such notice and bidding requirements shall not apply to contracts not involving more than five hundred dollars ($500.00) per year if the terms of such contract reflect arms' length negotiations, if the subcontractor is a sole source provider, or if there are exigent circumstances. There will be a rebuttable presumption of a knowing and willing violation of the section only if the contract or subcontract is awarded to a spouse or child of the County employee or official. [Italics added for ease of understanding.]
4 Absent obvious error or facial conflict, the Ethics Commission assumes "that the requesting party requested the opinion in good faith and disclosed truthfully all material facts to the Commission . . . ." Advisory Opinion 01-10 at 5; see also Section 2.04.102(I).