Advisory Opinion 95-07-1126

Assessments/Conflict of Interest

ISSUES: WHETHER AN EMPLOYEE IN THE DEPARTMENT OF ASSESSMENTS MUST DISCLOSE PARTICIPATION IN AN OUTSIDE BUSINESS IF HE OR SHE RECEIVES NO COMPENSATION?

WHETHER AN EMPLOYEE IN THE DEPARTMENT OF ASSESSMENTS SHOULD DISCLOSE HIS OR HER COUNTY EMPLOYMENT IF THE OUTSIDE BUSINESS MAY REVEAL PROPERTY INFORMATION WHICH AFFECTS VALUE?

WHETHER MARKETING ACTIVITIES CONDUCTED BY AN OUTSIDE BUSINESS COULD CREATE A CONFLICT OF INTEREST FOR AN EMPLOYEE IN THE DEPARTMENT OF ASSESSMENTS?

Opinion: County employees must disclose an outside business interest of a spouse or other immediate family member if they participate in the operation of the business, even if no compensation is received. Disclosure, however, may not serve to mitigate an employee's conflict of interest. Whenever an employee assesses property values, and participates in an outside business that can directly affect property values, the Board of Ethics sees no way for the employee to avoid a conflict of interest other than divesting himself or herself from further involvement.

Marketing activities for outside businesses must conform to the provisions of sections 3.04.020 and 3.04.030 of the Code of Ethics and cannot result in use of position or information to the benefit of the employee or an immediate family member.

Statement of Circumstances: An employee in the Department of Assessments participates in an outside architectural business operated by the employee's spouse; however, the employee receives no compensation for his or her services. While accompanying the spouse to conduct architectural reviews, it is possible that the employee may become aware of information that could affect property valuation. However, the employee believes that if he or she has to disclose employment with the department, this fact could negatively impact marketing activities directed at property owners. The Board of Ethics has been asked to determine whether the employee must disclose this outside interest to the County even if no compensation is received; whether the employee should disclose his or her employment with the County; and, whether marketing activities could create a conflict of interest for the employee?

ANALYSIS

Disclosure of Interest

The stated policy of the King County Code of Ethics is to ensure that the private conduct and financial dealings of public officials and employees shall present no actual or apparent conflict of interest between the public trust and private interest (K.C.C. 3.04.015). The Code of Ethics provides, in relevant part, that certain county officials and employees, and members of their immediate families, are required to disclose income, investments, offices or directorships, and real property transactions within ten days of appointment and by April 15 of each year thereafter while employed by King County (K.C.C. 3.04.050). Under the authority granted in this subsection, the Board of Ethics has determined that all persons classified as "auditors" or "appraisers" in the Department of Assessments are subject to financial disclosure requirements.

An appearance of conflict can occur whether or not an employee receives compensation for services rendered to an outside business, particularly when this business is operated by a spouse or immediate family member. For example, an employee can be in a position to make official decisions which affect the ability of the outside business to gain clients, thereby accruing a financial benefit to a family member. Under these circumstances, the employee would have to disclose this business on a financial disclosure form provided by the Board of Ethics.

Disclosure of Employment with the Department of Assessments

The Board of Ethics does not have the authority to decide whether an employee should disclose the fact of his or her employment with the County to clients of an outside business. The employee must make this decision. In this case, however, the Board is more concerned that the outside business interests of the employee appear to conflict with his or her official duties and responsibilities to the County. Subsection 3.04.030 I of the Code of Ethics provides that a County employee shall be deemed to have a conflict of interest if that employee directly or indirectly:

Engages in or accepts compensation, employment, or renders services for any person or a governmental entity other than King County when such employment or service is incompatible with the proper discharge of official duties or would impair independence of judgment or action in the performance of official duties.

While the Board does not interpret state law, it would appear that chapters 84.40 and 84.41 RCW grant considerable authority in the area of property valuation to the County Assessor and his designees, and that the foremost obligation of this office is to ensure accurate property valuation. A conflict with this obligation would seem to be unavoidable in this instance.

Under many circumstances, an employee is able to remove a conflict of interest by disclosure and recusal. For example, in this case the employee could disclose all properties he or she worked on through the outside business, and not appraise any of the disclosed properties. Because disclosure and recusal in this instance may only be accomplished by the employee who has a private interest, such remedies cannot apply.

The Board sees no clear way for the employee to avoid a conflict of interest in this situation and therefore advises that the employee divest himself or herself from any participation in the outside business. Indeed, subsection 3.04.030 I(5) requires that non-elected employees of the Department of Assessments obtain the prior written consent of their highest ranking supervisor for new or continued employment, or for that acceptance of any compensation or any thing of value for services performed outside King County government. If the highest ranking supervisor deems that such employment or service poses a conflict of interest, the employee is obligated to divest such employment or service.

Marketing Activities for Outside Business Concerns

Without specific information concerning the types of marketing activities which might be used by an outside business operated by employees or immediate family members, the Board of Ethics cannot categorically determine which activities are more likely to create conflicts than others. Instead, the Board offers these general guidelines:

• Marketing activities should not use the County employee's position to imply or guarantee that special consideration, treatment or advantage may accrue to any one citizen or groups of citizens over another when using the employee's services;

• Marketing activities cannot be linked to the performance or non-performance of an official duty by a County employee; and,

• Marketing activities may not use or disclose confidential information, or information not generally available to the public, for the personal benefit of the employee or an immediate family member.

In addition, county equipment, property, resources, and funds may not be used to support any outside business interest. (K.C.C. 3.04.020)

References: King County Code of Ethics, section 3.04.020, subsections 3.04.030 I, Q, and R. Chapters 84.40 and 84.41 RCW.

ISSUED THIS ___________ DAY OF ___________________, 199__.

Signed for the Board: Dr. J. Patrick Dobel, Chair

Members:

Dr. J. Patrick Dobel, Chair
Timothy Edwards, Esq.
Rev. Paul Pruitt
Ron Carlson
Dr. Lois Price Spratlen

JPD/mag

cc:

Gary Locke, King County Executive
Metropolitan King County Councilmembers
Scott Noble, King County Assessor
Jan Davies, Acting Director-Ombudsman, Office of Citizen Complaints
Robert I. Stier, Senior Deputy Prosecuting Attorney and Counsel to the Board of Ethics
Bob Roegner, Manager, Administrative Services Division, Department of Assessments