Advisory Opinion 95-10-1131
Finance Division/Acceptance of Gifts

ISSUE: WHETHER A FINANCE DIVISION EMPLOYEE MAY ACCEPT PAYMENT OF TRAVEL, LODGING, AND MEAL EXPENSES FROM AN INVESTMENT SECURITIES DEALER?

Opinion: It would be a conflict of interest under K.C.C. 3.04.030 for a county investment officer to accept travel expenses and meal reimbursement from an investment securities dealer, because acceptance could impair standards of independent judgement in the performance of official duties, and could be construed to be for the purpose of obtaining special consideration or to influence a county action.

Whenever county employees accept gifts or other things of value from persons who do business, or seek to do business, with the county, a conflict of interest occurs and standards of impartial and independent judgement are impaired.

Statement of Circumstances: An investment officer for the King County Finance Division has been invited to speak at an employee training session for an investment securities dealer. The purpose of the presentation is to enhance the knowledge of institutional fixed income group salespeople in areas such as service and communication, and to provide a general understanding of their institutional clientele. In return for the presentation, the investment securities dealer offered to pay directly for travel and lodging, and to reimburse the investment officer for meals.

The investment officer declined this invitation pending an advisory opinion from the Board of Ethics as to whether the Ethics Code would allow acceptance of expenses from the securities firm.

Analysis: In Advisory Opinion 1117, February 1995, the Board of Ethics considered an analogous situation whereby a county employee asked if he could accept payment of travel expenses from a manufacturing company for the purposes of conducting an on-site inspection in the Midwest. The Board determined that acceptance would violate the Code of Ethics, because independent judgement and impartiality in decision-making may be called into question whenever county employees accept anything of value from persons who do business with the county.

The Board has similar concerns in this instance. Subsection 3.04.030(C) of the Code of Ethics provides in relevant part that a county employee shall be deemed to have a conflict of interest if the employee directly or indirectly:

Accepts or seeks for others, directly or indirectly, any employment, travel expense, service, information, compensation, gift or thing of value on more favorable terms that those granted to other county employees or the public generally, from any person, doing business, or seeking to do business with the county for which the responsibility or with regard to which he or she may participate, …

while subsection 3.04.030(D) provides that a conflict would exist if an a county employee:

Accepts, directly or indirectly, 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 the 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. (subsection D)

Because King County does business with the investment securities dealer who extended this offer, it could appear that acceptance not only conflicts with the performance of official duties, but that the dealer might receive special consideration from the investment officer.

While participation by the investment officer may provide a valuable service to the investment securities dealer, the more important issue in this question is how to maintain standards of independent and impartial judgement? Such standards could appear to be compromised whenever public employees accept gifts or other things of value from persons who do business, or seek to do business, with public government. The question we would ask is whether participation by the investment officer provides a valuable service to county government? If so, the only way to avoid a conflict is for the county to pay the travel expenses of the investment officer.

References: King County Code of Ethics, sections 3.04.030 (C) and (D); Advisory Opinion 1117.

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
David Krull, Director-Ombudsman, Office of Citizen Complaints
Robert I. Stier, Senior Deputy Prosecuting Attorney and Counsel to the Board of Ethics
Jean Baker, Director, Office of Financial Management
D. Lee Dedrick, Manager, Finance Division