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Appearance of Impropriety

Eric Monzo, Paula Jenkins-Massie, Sally Jensen, Robert Ralston, Kellie Tetrick, Charles Toliver


Date:   October 10, 2018
Whether the policy as proposed by the County Administration on the formal, public recognition of donors of unsolicited gifts to the County meets the requirements of the Ethics Code?
With recognition and incorporation of the caveats set forth below, the proposed policy for the public recognition acceptance of unsolicited gifts meets the requirements of the Ethics Code. This approval of the policy in general, however, is not a substitute for a case-by-case determination of whether the acceptance of any particular unsolicited gift is permitted by the Ethics Code. Nor does this approval of the proposed policy qualify as approval by the Commission of the policy as applied or executed in any particular set of circumstances. The Commission encourages any County official or employee to consult the Commission before accepting any gift which may cause an appearance of impropriety and, therefore, violate the Ethics Code.
            The County Administration has proposed a policy to cover the procedure by which donors of unsolicited gifts offered to, and accepted by, the New Castle County government may be publicly recognized for the gift.  The proposed policy is entitled Administrative Policy 2018-1, is signed by the County Executive, and is dated October 1, 2018 (the “Proposed Policy”). The Proposed Policy has been drafted at this juncture at least in part because the County was approached by a nonprofit entity, along with some for-profit companies, to perform certain construction work on a structure located in a County park without compensation. The County would like to accept this gift, and to publicly and formally acknowledge these donations of work hours, materials, and expertise, as well as other unsolicited donations made to the County in the future, in a manner which is uniform throughout County government, and in compliance with the Ethics Code and any other applicable laws, rules, and regulations.[1] Appropriately, per County Code Section 14.01.005.B, the County has asked the Commission to review the Proposed Policy.[2]
Code or Prior Opinion:
Relevant Ethics Code Provisions and Case Law
            In Section 2.03.102, terms which may be relevant to this opinion are defined by the Ethics Code, as follows:    
Business means 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.
Business with which he or she is associated means 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.
Compensation means any money, thing of value or any other economic benefit of any kind or nature whatsoever conferred on or received by any person in return for services rendered or to be rendered by oneself or another.
Conflict or conflict of interest means conduct which is prohibited by Section 2.03.103.
Contract means an agreement or arrangement for the acquisition, use or disposal by the County of consulting or other services or of supplies, materials, equipment, land or other personal or real property. "Contract" shall not mean an agreement or arrangement between the County as one (1) party and a County official or County employee as the other party concerning his or her expense, reimbursement, salary, wage, retirement or other benefit, tenure or other matters in consideration of his or her current public employment with the County.
County means New Castle County, including any County Department.
County Employee means any person who receives compensation as an employee of a County Department or County row office.
County official means any person elected or appointed to any County office, board, commission or the New Castle County Council Audit Committee provided, however, that for purposes of Sections 2.03.103(B)(2), 2.03.103(C), and 2.03.104(C). "County official" does not include any member of a board or commission which operates solely in an advisory capacity, and whose members are not compensated, other than reimbursement for expenses.
De minimis means an economic consequence which has a cost or value less than fifty dollars ($50.00).
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.
Gift means anything that is received without consideration of equal or greater value. … A gift is considered accepted upon receipt or control or direction unless it is promptly returned in its entirety. An email invitation, unless specifically accepted, is not considered a gift.
Governmental body means any department, authority, commission, committee, council, board, bureau, division, service, office, official, administration, legislative body, or other establishment in the executive, legislative or judicial branch of a state, a nation or a political subdivision thereof or any department performing a governmental function.
Governmental body with which a County official or County employee is or has been associated means the governmental body within County government by which the County official or employee is or has been employed or by which the County official or employee is or has been appointed or elected and subdivisions and offices within that governmental body.
Income means any money, thing of value or other pecuniary benefit received or to be received in return for, or as reimbursement for, services rendered or to be rendered. The term does not include gifts; governmentally mandated payments or benefits; retirement, pension or annuity payments funded totally by contributions of the County official or employee; or miscellaneous, incidental income of minor dependent children.
Indirect interest in real estate means:
A. Any business with which a County employee or official is associated whose assets are twenty-five (25) percent or more in real property; or
B. Any interest a County employee or official has in real estate, in which the person is not the record holder, including, but not limited to:
1. Real estate which the County official or employee rents;
2. Real estate held in trust in which the County official or employee is a trustee or a beneficiary;
3. Real estate upon which the County official or employee holds a mortgage;
4. Real estate used as collateral to secure a loan owed to the County official or employee;
5. Real estate in which the County official or employee has an equitable interest; or
6. Real estate owned by a business in which the County official or employee is a director, official, owner, or in which the County official or employee has more than five (5) percent ownership interest.
Negligible value means value of less than twenty-five dollars ($25.00).
Person means a business, governmental body, individual, corporation, union, association, firm, partnership, committee, trust, joint venture, club or other organization or group of persons.
Private enterprise means any activity conducted by any person, whether conducted for profit or not for profit and includes the ownership of real or personal property. Private enterprise does not include any activity of the federal, State or local government or of any department, authority or instrumentality of the federal, State or local government.
Promptly means within thirty (30) days when used in reference to recording the acceptance of a gift in a public gift log or returning such a gift to the donor.
Public gift log means a public document kept by County Council, a County department, or County agency for the purpose of memorializing the acceptance of gifts by County employees and officials and which shall include entries for the date of receipt, the name, workplace or other address of the donor and recipient, a description of the gift and an approximate valuation.
Real property means buildings and other structures attached permanently and directly to the land, as well as the land itself.
Reasonably foreseeable means an event which should be expected or anticipated based upon credible past and present facts known to a reasonable observer or participant at the time a decision is made or an action taken.
Recordable gift means a gift which shall be promptly listed in writing by the recipient in a public gift log maintained for that purpose which is available to the public.
Recusal means, including but not limited to, withdrawing from sponsorship, deliberation, vote, research, preparation, discussion, negotiation, contract formation, policy making, planning, decision making, and/or implementation of a matter. It also includes a prohibition on conducting, in an official capacity, any private or public discussion of a measure raising a conflict or improper appearance. As soon as a potential conflict or improper appearance arises or is recognized, an official or employee must end direct or indirect participation, advice, input, direction, recommendation, or discussion, as well as refraining from vote, if the person is a not an elected official. Elected officials may choose to avoid recusal and may vote if they follow the alternate process described in Subsection 2.03.103.A.2.
Regulated by New Castle County means that an entity operating in New Castle County as a business or nonprofit organization requires approval from or regulation by New Castle County in order to lawfully conduct one or more business activities.
Regulation includes, but is not limited to, obtaining permits, registering residential rental property, or trade licensing, but does not include the payment of property taxes, sewer service charges, individual library use charges, park fees, animal licensing fees or other similar fees.
The New Castle County Ethics Code prohibits conduct on the part of County officials or employees which either creates the appearance of impropriety even where no direct conflict of interest is present.  Specifically, conduct which creates an appearance of impropriety is prohibited by Section 2.03.104(A) of the New Castle County Code.[3]  To determine if an appearance of impropriety exists, the Delaware courts have stated that “[t]he test is… if the conduct would create in reasonable minds, with knowledge of all relevant facts, a perception that an official’s ability to carry out [his or] her duties with integrity, impartiality and competence is impaired.”  Hanson v. Delaware State Public Integrity Com’n, 2012WL3860732, at *16 (Del.Super. 2012), aff’d, 69 A.3d 370 (Del.Supr. 2013); and “[t]he test for appearance of impropriety is whether the conduct 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 [the official’s] responsibilities with integrity, impartiality and competence is impaired.”  In re Williams, 701 A.2d 825, 832 (Del.Super. 1997).  The courts have advised the Commission to look at the totality of the facts presented, and this Commission has historically applied this standard when reviewing the conduct of County officials and employees.
            It is a violation of the New Castle County Ethics Code if a County official or employee uses his or her office or employment for his or her personal or private benefit, the benefit of a member of his or her immediate family, or a business with which he or she is associated.[4]  Economic benefits thereby derived with a de minimus impact may be exempted. [5]  
            It is very important to note, here, that the Ethics Code discourages County officials and employees from accepting anything which the Code defines as a gift.[6]  The Ethics Code must be consulted to determine the circumstances under which any gift may be accepted by a County official or employee. The Code includes a description of some of the limited circumstances under which a gift may be accepted, and Section 2.03.104.I.9 of the Code states that “[a]n Advisory Opinion request shall be made to the Ethics Commission prior to the acceptance of any gift not described by or limited in Subsections I.1. through I.9.”
            Ethics Code Section 2.03.104.I.2  states that a gift which is “made to the people of New Castle County may be accepted by a representative or agent of County Government.”[7] It is important to bear in mind, however, that this Code section is not a ‘blanket’ approval of the acceptance of all gifts made to the County for the benefit of the County citizens. Whether the acceptance by the County of such a gift is permitted necessarily requires a determination of whether the acceptance creates a conflict of interest and/or an appearance of impropriety, and the Commission is the entity which ultimately makes such a determination. The Code states that the gift, unsolicited or otherwise, may be accepted by the County official only when the acceptance of that “gift does not create an appearance of impropriety.”[8] The Code further states that such a “gift shall not become the property of or be attributed to the [County] representative or agent”[9] and that the “gift shall remain in locations controlled by New Castle County.”[10]  Additionally, such a gift must be “promptly recorded in a public gift log.”[11]
Prior Commission Opinions
            The Commission considered, in Advisory Opinion 06-09, whether the Chief Administrative Officer of the County may direct subordinates to solicit funds or services from private businesses for a County event if some of the target entities are regulated by or do business with the County or may be reasonably foreseen to do so in the next three years; and, if the Chief Administrative Officer may solicit such businesses, whether those entities may be identified in advertising as "co-sponsors" of the County event. The Commission decided, assuming that the County targeted a population that was representative of a broad swath of County individuals and businesses for solicitation, the issues included whether a donation from a vendor or supplier may be accepted, whether solicitation would create an appearance that the donors would have an improper expectation of favor in return for a donation, and whether reasonable contributors would feel forced to donate to maintain competitive status regarding County business or regulation. Ultimately, the Commission found that any appearance of impropriety could be minimized if the following conditions were met: the Executive must comply with the ordinance by issuing a written policy authorizing the solicitation for the Ice Cream Festival which identified the public benefit; cash donations would not be accepted; no public or private identification of the donors as joint sponsors could be allowed; a written solicitation, emphasizing the voluntary nature of the contribution and the absence of any effect on current or future County relationships, should be made to all potential appropriate donors by the County Executive on behalf of the citizens of the County; a donor must provide written corroboration identifying and valuing the donation at the time it is made; the employee or official who accepts the donation may not have provided, and his or her department may not provide in the reasonably foreseeable future, direct services for the donor; and a contemporaneous public document is maintained which lists the donors, type and value of all donations.
            In Advisory Opinion 10-10, the Commission considered whether an entity of New Castle County, such as a committee or subcommittee of County Council, may accept a gift made for the benefit of the public. The Commission concluded that the Code permits agents or representatives of County Council to accept gifts made to the people of New Castle County as long as acceptance of the gift does not create an appearance of expectation or favoritism for the donor and the gift is recorded in the public gift log maintained by Council. More specifically, in that opinion, the requester asked whether a Council entity was permitted to accept donations from private donors to pay an expert to make a presentation at a public meeting sponsored by the Council. The requester informed the Commission that the expert was not associated with the donors, the presentation would address matters of public concern, it would not be designed to advance the interests of the donor, and, in the opinion of the requester, the type and size of the gift would not create an expectation of favoritism for the donor. Applying the express provisions of the Ethics Code and the reasoning found in past Commission opinions which involved both solicited and unsolicited proposed gifts to the County, the Commission concluded that “[i]f a gift to the citizens creates the impression that the County is endorsing the donor or that because of the type or size of the gift, the public would reasonably believe that the donor would have improper expectations of favor from County employees or officials, the gift may not be accepted.”
            In Final Order 11-02, the Commission found a violation of Code Section 2.03.104.J in the failure to create a written policy covering the solicitation of regulated entities. The Commission concluded that a “reasonable person would not believe that in this case the type of gifts solicited for the benefit of the public were of an improper nature in themselves. However, the reasonable person reviewing the facts of this case would conclude that the failure of the official's agency to enact a clear written policy for solicitation as well as its lack of oversight of the subcommittee were the root causes of the violation of the written solicitation rule and ensuing creation of an appearance of impropriety.” Thus, the Commission found that an Ethics Code violation had occurred in part because a County department failed to create a procedure in conformity with Code Section 2.03.104. J.
            In Advisory Opinion 13-07, the Commission was consulted about whether a proposed ordinance, which authorized solicitation and acceptance of gifts for a public purpose, must specify a comprehensive solicitation policy. The Commission opined that the ordinance was not required to include a comprehensive solicitation policy because Code Section 2.03.104 J.1. and prior Commission opinions prescribe the parameters of any solicitation by County officials or employees from entities that do business with or are regulated by the County.
            Acceptance of gifts by County officials and employees often causes negative perception issues on the part of the public as it gives rise to questions of trustworthiness and impartiality.  For those reasons, the Ethics Code disfavors the acceptance of gifts by County employees and officials. The Code provides for some instances, however, where acceptance of certain gifts may be permitted. One of those instances includes the acceptance of gifts by a County government representative on behalf of the public.[12] The Administration has asked the Commission to review the Proposed Policy, which is appropriate per County Code Section 14.01.005.B. The Proposed Policy, however, was created at this time, at least in part, because the County would like to accept certain gifts on behalf of the citizens of New Castle County.[13]
            Assuming the acceptance of the gift is not violative of the Ethics Code, due care must be taken in the administration or execution of the Proposed Policy so as to avoid prohibited conflicts of interest, the appearance of impropriety, and any other potential violation of the Ethics Code.  With respect to the Procedure section of the Proposed Policy, alternatives should be included to handle the circumstance where the official or employee designated in the Proposed Policy to perform certain tasks has an actual or perceived conflict. Also, the Commission recommends that his or her involvement should be handled by a designee only when the County Executive has a real or perceived conflict of interest in taking part in the matter. Importantly, while the County Executive may make the decision whether to accept the unsolicited donation on behalf of the County, the Commission encourages the County Executive to consult the Ethics Commission for its opinion before accepting any such gift where the circumstances are such that a complaint might be filed regarding the decision.    
            The Proposed Policy for the public recognition of unsolicited donations to New Castle County meets the requirements of the Ethics Code if the concerns raised by the Commission in this opinion are met.  The Commission recommends that any County official or employee consults the Commission for an opinion prior to accepting any gift, even if unsolicited, and regardless of whether public recognition will be provided. Further, any such gift must be promptly recorded in the public gift log. 
          In rendering this advisory opinion, this Commission has applied the New Castle County Ethics Code, which establishes the minimum level of ethical conduct required of County officials and employees.
                                                                                                Eric J. Monzo, Chairperson
                                                                                                New Castle County Ethics Commission
Decision:  Unanimous, 6-0
[1] The County has a policy on solicitations (Administrative Policy #50, dated March 12, 2007), and it plans to create a policy for the formal recognition by the County of permissible, solicited donations, in the near future. Administrative Policy #50 was discussed in Ethics Commission Advisory Opinion 06-09. 
[2] New Castle County Code Sec. 14.01.005.B states:
Sale, lease, and/or rent of County advertising space, and donor recognition.
B. Donor recognition. The County Executive may also recognize, on County assets (including, but not limited to, real property), those who have donated funds and/or resources to the County, subject to those rules and regulations that shall be promulgated by the County Executive, which rules and regulations shall be subject to the approval of the County Ethics Commission.
[3] New Castle County Code Section 2.03.104(A) states: “No County employee or County official shall engage in conduct which, while not constituting a violation of Subsection 2.03.103(A)(1), 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.” 
[4] New Castle County Code Section 2.03.103(A)(1).
[5] Id.
[6] See New Castle County Code Section 2.03.104.H.
[7] New Castle County Code Section 2.03.104.I.
[8] Id.
[9] Id.
[10] Id.
[11] Id.
[12] See New Castle County Code Section 2.03.104.I.2.
[13] The Commission has not been asked to provide advice with respect to the gifts which may have given rise to the drafting of the Proposed Policy, and, thus, this opinion does not rule on the propriety of the acceptance of those gifts.

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