Advisory Opinion No. 182
This advisory opinion is in response to a request on a CC-8 disclosure form of a senior advisor to a member of the City Council [Council] for the Ethics Commission [Commission] to determine whether the advisor's outside interests are proper under the City's standards of conduct.
Generally, the Commission believes that the advisor's outside interests as 1) coordinator of a botanical project for one nonprofit organization; 2) a director of a second nonprofit organization; and 3) a director of a third nonprofit organization are compatible with the advisor's official City duties.
The Commission understands the facts to be as follows: Mr. X is a senior advisor to Councilmember Z. In this capacity, his official duties include advising Councilmember Z on all matters before the City Council and having access to confidential City information. Mr. X also has three outside interests. He is a director of two nonprofit organizations, ABC and DEF. He is also the paid coordinator of a botanical project for ABC [the Project], a nonprofit organization associated with a church. His duties as such include directing the Project's activities on land leased from the church and informing the board of directors of the Project regarding these activities. None of the three outside interests have applications or other matters before the City.
Given these facts, the question presented is whether the activities listed above are compatible with the duties of a senior aide to a member of the City Council.
The general rule appears in Section 11-102.3, Revised Charter of the City & County of Honolulu 1973 (1984 Ed.), which states: No elected or appointed officer or employee shall ... [e]ngage in any business transaction or activity or have a financial interest, direct or indirect, which is incompatible with the proper discharge of such person's official duties or which may tend to impair the independence of judgment in the performance of such person's official duties.
"Business" includes a nonprofit organizations. "Financial interest" includes an employment for compensation. Also, the appearance of a conflict of interest is sufficient to warrant Commission advice to cease outside activities.
Under the facts at hand and the general rule, Mr. X has financial interests in ABC and DEF because he is a member of their boards of directors. He is also engaging in a business activity because he is the coordinator of the Project's activities. He has a financial interest in the Project because he is a paid employee. However, neither the business activity nor the financial interest in the Project is incompatible with his official duties as a senior aide to a councilmember because there is no connection between the Project and Mr. X's duties with the City as a senior aide.
In conclusion, Mr. X is a senior aide to Councilmember Z. He is also has financial interests in three nonprofit corporations. None of these interests creates a real or apparent conflict of interest with his official duties because the organizations are unrelated to City business. If a relationship arises, Mr. X should so advise his appointing authority, the chair of the Council, and file an E-2 disclosure form with the Commission, which will transmit a copy to the City Clerk as a public disclosure.
Dated: January 25, 1988
JANE B. FELLMETH, Chair, Ethics Commission
1. "Business" includes (A) a corporation; (B) a partnership; (C) a sole proprietorship; (D) institutions; (E) trusts; (F) foundations; or (G) any other individual or organization carrying on a business, whether or not operated for profit. Section 6-1.1(2), Revised Ordinances of Honolulu 1978 (1983 Ed.) [ROH].
2. "Financial interest" means an interest held by an individual, the individual's spouse, or minor children which is: (A) an ownership interest in a business; (B) a creditor interest in an insolvent business; (C) an employment, or prospective employment for which negotiations have begun; (D) an ownership interest in real or personal property; (E) a loan or debtor interest; or (F) a directorship of officership in a business. Section 6-1.1(6), ROH.
3. Section 11-101, RCH, states: Elected and appointed officers and employees shall demonstrate by their example the highest standards of ethical conduct, to the end that the public may justifiably have trust and confidence in the integrity of government. They, as agents of public purpose, shall hold their offices or positions for the benefit of the public, shall recognize that the public interest is their primary concern, and shall faithfully discharge the duties of their offices regardless of personal considerations.
The Commission interprets this standard of conduct to require City personnel to avoid even the appearance of impropriety or conflict of interest.