Advisory Opinion 94-9-1105
OFM/Banking Benefits Plan

ISSUE: WHETHER IT WOULD BE A CONFLICT OF INTEREST FOR COUNTY EMPLOYEES TO PARTICIPATE IN AN EMPLOYEE BENEFIT PACKAGE OFFERED BY A BUSINESS WHICH CONTRACTS WITH THE COUNTY?

Opinion: In this instance, the offer of an Employee Banking Benefits Package does not meet the criteria of an acceptable discount plan under the Code of Ethics. Although the package is a standard business practice, because terms in the package are linked to the duration of a contract with King County, it could appear that the package was offered with the intent to influence a County action.

Statement of Circumstances: The County's Finance Division has recently completed an Invitation to Bid process for the County's banking services. Included in the bid that eventually secured the contract was the offer of an Employee Banking Benefits Package. This package offers a variety of account and financial services at reduced or no cost to County employees. The Finance Division has asked the Board of Ethics to determine whether participation in this plan would violate the Code of Ethics.

Analysis: The Board of Ethics has deliberated on the issue of whether County employees may take advantage of discount plans in two contexts. In Advisory Opinion 1077, the Board decided that cellular phone plans would not violate the Code if they were a standard business practice, and if they were not linked to the existence of a contractual relationship with the County. In considering a second request on discount plans in Advisory Opinion 1101, the Board established two criteria in evaluating whether discount plans were in violation of subsection 3.04.030(D) of the Code of Ethics which states:

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.

These criteria are whether the discount or special terms are available to a group or class of employees generally, notwithstanding the existence of a contract, and whether the terms of a discount are linked to a contractual relationship with the County. If a discount or special terms are offered generally, e.g., are a common business practice, then participation or acceptance would not be a conflict under the Code. However, if the terms are linked to a contractual relationship with the County, i.e., the offer is contingent upon a contract, or has provisions linked to the duration of a contract with the County, then the offer would violate the Code because a reasonable person might conclude that the offer is for the purpose of obtaining special consideration or to influence County action, i.e., a future contractual relationship.

The offer from Key Bank meets the first criterion in that the terms of the Employee Banking Benefits Package is a standard business package offered to Key Bank's corporate and business accounts. However, there is an appearance that the package is linked to the existence of a contract with the County. Although declared not to be a consideration in the bid award, which the Board accepts, the inclusion of a benefit package with a bid could be perceived as an attempt to influence the contractual process. In addition, several of the provisions of the contract are directly linked to the duration of the contract with King County, and although County employees would not lose their banking services with Key Bank if the contract is not renewed, some of the "free" provisions would have costs associated with them in that event. Based on these considerations, the Board of Ethics does not believe that the Employee Benefits Package meets the test of a discount offer and would be in violation of the Code of Ethics.

Whenever a discount offer is either not generally available or results from a contractual relationship, the offer could be perceived as a gift with intent to influence and should be declined.

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

ISSUED THIS ___________ DAY OF ___________________, 199__.

Signed for the Board: Timothy G. Edwards, 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
Maureen Morrise, Chief Financial Officer, Office of Financial Management
D. Lee Dedrick, Finance Manager, Finance Division
Scott Matheson, Cash Management Supervisor, Finance Division