Advisory Opinion 94-4-1099
CCS/Pager Group Plan

ISSUE: WHETHER IT WOULD BE A CONFLICT OF INTEREST FOR COUNTY EMPLOYEES TO PARTICIPATE IN A GROUP PLAN PAGER SERVICES?

Opinion: The offer of discount or group plans does not violate the Code of Ethics if the terms are available to a group or class of employees generally, i.e., government employees, and if not based on the existence of a contractual relationship with the County. However, County employees who participate in contract negotiations with vendors or businesses who offer such a discount may not take advantage of that discount. In circumstances where a discount offer is not generally available and results from a contractual relationship, the offer could be perceived as a gift with intent to influence and should be declined.

Statement of Circumstances: The County's only pager vendor, Telepage Northwest, would like to offer a group discount plan which would allow County employees the opportunity to purchase pager service at a reduced rate over what they could acquire as individual subscribers. This service is offered by Telepage to all its corporate, government, and hospital accounts with over 100 pagers. The Computer and Communications Services Division would like the Board of Ethics to determine whether participation in this plan would violate the Code of Ethics.

Analysis: In its request for this Advisory Opinion, the Computer and Communications Services (CCS) Division argued that the pager discount plan being offered by Telepage Northwest was similar to cellular discount plans offered by Cellular One and U.S. West. When the Board of Ethics considered those plans in Advisory Opinion 1077, it found that the U.S. West plan was to be based on a plan authorized for state employees with rates based on a state contract. The Cellular One Plan would be based on the company's current business plan for any organization which had 20 or more cellular phones. In both plans, cellular phones could be purchased from any source, and the plan would not be tied to a contractual relationship to the County. Based on these considerations, the Board decided that the cellular plans would not violate the Code of Ethics if they were a standard business practice, and if they were not linked to a contractual relationship with the County.

The pager discount plan differs from the cellular plans considered in Advisory Opinion 1077 in two major respects. Whereas competitors contract with the County for cellular services, Telepage Northwest is a sole vendor for pagers in the County. The fact that Telepage offers certain technological advantages to the County at this time would not preclude other competitors from offering the same advantages in the future. Telepage's offer is also based on the existence of a contractual relationship, with Telepage having the only access to County employees.

Subsection 3.04.030(D) of the Code of Ethics states that a County employee shall be deemed to have a conflict of interest if the employee directly or indirectly accepts:

any gift, favor, loan, retainer, entertainment, travel expense, compensation, or other thing of value from any person doing business or seeking to do business with the county when such acceptance may conflict with the performance of an employee's official duties.

A conflict shall be deemed to exist where a reasonable and prudent person would believe that the gift, compensation, thing of value, or more favorable terms was given for the purpose of obtaining special consideration or to influence county action.

The Board has concluded that discount plans clearly constitute a "thing of value" within the context of the Code of Ethics. Acceptance of a thing of value to obtain special consideration or to influence County action, i.e., a future contractual relationship, would violate the Code of Ethics.

A reasonable standard to use in evaluating whether offers of employee discounts could violate the Code is whether the discount or special terms are available to a group or class of employees generally, notwithstanding the existence of a contractual relationship. An example of such a discount or special offer would be Costco. However, if the terms would not otherwise be available to all employees generally, and result solely from a contractual relationship with the County, then the discount or group offer could be considered a gift with the intent to influence County action and would violate the Code of Ethics. County employees who participate in the negotiation and awarding of a contract are precluded from participating in any discount offers.

In this instance, the Telepage offer is extended to all County employees, but the offer is linked to the existence of a contractual relationship with the County. Therefore, acceptance of a discount would violate the Code of Ethics.

References: King County Code of Ethics, sections 3.04.030 (D).

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

JPD/mag

cc:

Gary Locke, King County Executive
Metropolitan King County Council Members
Susan Baugh, Director-Ombudsman, Office of Citizen Complaints
Robert I. Stier, Senior Deputy Prosecuting Attorney and Counsel to the Board of Ethics
Clif Burwell, Manager, CCS
Rose Dembo, Telecommunications Manager, CCS