ADVISORY OPINION NO. 127
The question is whether a conflict or an appearance of a conflict of interest might exist between the duties of an advisor to a City Council committee concerned with land use issues [Committee] and his outside interest as a consultant and lecturer in the same field.
The Ethics Commission [Commission] is of the opinion that certain standards of conduct in the RCH and ROH could apply in this case if there were appropriate and additional facts which would cause the application of the specific standards of conduct.
The Commission appreciates the advisor's awareness and concern regarding the ethical ramifications of his after-hours activities as a consultant and lecturer. As stated in Section 11-101, RCH, the Commission's main objective is to increase and retain the public's confidence in City government. This advisory opinion sets out what could happen rather than what has happened. The Commission focuses attention upon the basic elements which constitute a conflict of interest which is defined in 73 Michigan Law Review 758 (1975) thus:
A 'conflict of interest' may be defined as any circumstance in which the personal interest of a public official in a matter before him in his official capacity may prevent or appear to prevent him from making an unbiased decision with respect to the matter. [Emphasis added]
Based on the foregoing definition, the Commission has developed a diagram reflecting this situation. See Appendix A, attached hereto. Note there are three blocks. One block is labeled "Advisor to the Committee"; the second is labeled "Consultant and Lecturer"; the last block is labeled "Land on Oahu." The two blocks labeled "Advisor" and "Consultant and Lecturer" represent the public position and the after-hours activities, respectively. They are linked by a solid line to show that these separate activities are carried on by a single individual. Note that there are solid lines extending from the two top blocks to the third, or subject, block labeled "Land on Oahu." When such solid lines converge on the subject block, this signifies there could be a conflict or an appearance of a conflict of interest between the private activities and public duties. On the other hand, if there is no link between the public duties block and the subject block, there is generally no conflict or appearance of a conflict of interest. If the advisor does not accept any consulting work on land which will require Council action to maximize its economic value, the probability of a conflict or an appearance of a conflict of interest between the duties as an advisor and the off-duty activities as a consultant will be minimized. On the other hand, if, for example, land for which the advisor is the consultant comes before the Committee and the Council for their consideration, the presumption would be that his consultant's interest may prevent or appear to prevent him from making an unbiased decision regarding any study and report relative to the same land, which he was requested to submit to the Committee or Council. Based on the foregoing discussion, the Commission hereinafter shows when and how a specific standard of conduct could apply based on facts relevant to this case. The relevant facts in this case were obtained by the Commission at a preliminary hearing. The relevant facts are:
1. The subject was appointed on (date) by the Chair to be the advisor to a committee. His primary duty as the advisor to the committee is to review proposed land use ordinances or amendments thereto or other land use applications and to submit his findings to the committee.
2. The committee is one of the standing committees of the Council. The Council's role is to accept or reject recommendations made by the Committee.
3. The subject intends to continue to offer his services as a consultant. Such services will be done after hours and on weekends.
4. He also plans to continue as a lecturer on land use topics.
Inasmuch as he continues to do business as a consultant and a lecturer, the two standards of conduct which would apply in this case are Sections 11-102.3, RCH, and 6-1.2(2), ROH. Section 11-102.3, RCH, states that no officer or employee shall:
Engage in any business transaction or activity or have a financial interest, direct or indirect, which is incompatible with the proper discharge of his official duties or which may tend to impair his independence of judgment in the performance of his official duties.
Section 6-1.2(2), ROH, provides that no officer or employee shall:
Acquire financial interest in business enterprises which he has reason to believe may be directly involved in official action to be taken by him.
At the outset, his business as a consultant falls within the definition of "business," found in Section 6-1.1(2), ROH. Also, since he is employed as a lecturer, this activity falls within the definition of financial interest found in Section 6-1.1(6), ROH. However, for the cited standards of conduct to actually apply in this case, additional facts would be required.
The facts which the Commission would have to find are whether his business as a consultant and his employment as a lecturer are interests which are incompatible with the proper discharge of his official duties as an advisor or if they might impair his independence of judgment as an advisor. Such facts, for example, would be his retention as a consultant by a client whose real property will eventually come before the Committee and Council for their action. Should his private interests as a consultant prevent or appear to prevent him from making an unbiased decision as an advisor or impair his independence of judgment as an advisor, then, his consulting business could be deemed incompatible with the proper discharge of his duties as an advisor. He testified that he will concentrate his consulting work primarily with government-owned real property. But that does not necessarily remove the possibility of applicability of the standards of conduct. Some development of land by the State is subject to the approval of the legislative bodies of the counties. For example, should he be retained as a consultant to the Hawaii Housing Authority for the development of its real property pursuant to Chapter 356, HRS, any deviation from zoning ordinances of the City and County of Honolulu are subject to the approval of the Council.
On the other hand, as a lecturer, he is not directly involved with land which will come before the Committee or the Council for their approval. Consequently, the possibility of any of his lecture material coming before the Committee or the Council for their action is remote. Accordingly, his work as a lecturer would not cause the application of Sections 11-102.3, RCH, and 6-1.1(2), ROH.
His activities as a consultant or a lecturer would become incompatible with the proper discharge of his duties as an advisor, or impair the independence of his judgment as an advisor, if he used City time, equipment, or material while acting in his capacity as a consultant or lecturer. Although these restrictions are not expressly stated in Section 11-102.3, RCH, they are implied. Moreover, the use of City time, equipment, or material is generally done inadvertently by an officer or employee who has personal business interests or off-duty employment. For example, he could inadvertently use a City telephone during City working hours to make or receive a call relevant to his consultant's or lecturer's position. He might be able to think of other examples in which the use of City time, equipment, or material for business purposes might easily materialize.
With respect to Section 6-1.1(2), ROH, it could apply based on the following scenario:
The real property owned by the advisor's client is the subject of a proposed land use bill which requires Committee and Council action. As an advisor, he may be assigned to analyze a proposed land use bill and submit his recommendation thereon. If the foregoing scenario should become a reality, there would be no doubt that he would have acquired a financial interest in a business enterprise which might come before him for official action. Even if his client's real property is not assigned to him for his study and report, an appearance of an official action by him could be justified. Thus, he may have to curtail the scope of his consulting services.
Other standards of conduct which could apply in his case are Section 11-102.2, RCH, relating to disclosure of confidential information, Section 11-104, RCH, relating to fair and equal treatment and Section 11-102.5, relating to representation against interests of the City .
Section 11-102.2, RCH, could apply in the advisor's case because he has access to privileged information between the Chair and the members of the Committee. From his standpoint, it is privileged information because of his relationship with the Chair and members of the Committee. However, from the standpoint of Section 11-102.2, RCH, such privileged information could be characterized as confidential information. For example, the Council refers to the Committee a proposed amendment to the Development Plan. Then, the Chair of the Committee asks the advisor to submit a report on proposed land use changes to the Development Plan. Any findings and recommendations he submits are confidential information, until such report is made a public record with the filing of same with the Committee. Should he disclose the contents of his report to someone who has an interest in a proposed bill before it is a public record, such disclosure would be contrary to Section 11-102.2, RCH.
As to Section 11-104, RCH, regarding fair and equal treatment, there is no need for any interpretation or to set forth examples because the language is clear as to its meaning and application. Moreover, infraction of this standard of conduct is not easy to observe in the case of a person in his position. It would not be easy because he would be dealing with persons who have a variety of interests in a proposed land bill. For example, there may be property or property owners who have an economic interest in the passage of a bill, land developers or their representatives who have development rights in the property, abutting property, or property owners who are against the proposed bill, representatives of special interest groups such as The Housing Coalitions, building contractors and construction unions, the League of Women Voters, Common Cause, Life of the Land, and constituents of members of the Council.
Also, as a consultant, the advisor may run afoul of Section 11-102.5, RCH, which provides that no officer or employee shall:
Represent private interests in any action or proceeding against the interests of the city or appear in behalf of private interests before any agency, except as otherwise provided by law.
For example, this section could apply if the advisor were retained as a consultant by a property owner seeking a permit for cluster development from the Department of Land Utilization. If he appeared before the Director of Land Utilization on behalf of his client, he would be representing his client in a proceeding or legal action in which the City has an interest. A section similar to Section 11-102.5, RCH, is Section 6-1.2(3), ROH. That section provides that no office or employee shall:
Appear in behalf of private interests before any agency other than a court of law, nor shall he represent private interests in any action or proceeding against the interests of the City in any litigation to which the City is a party; provided, however, that a member of any board, commission or committee, whose board, commission or committee does not exercise either quasi-judicial or quasi-legislative power, may appear for compensation in behalf of private interests before agencies other than the one on which he serves and other than those agencies that have the power to review the actions of the agency on which he serves, or to act on the same subject matter as the agency on which he serves; provided further that no officer or employee shall be denied the right to appear before any agency to petition for redress of grievances caused by any official act or action affecting his personal rights, privileges or property, including real property.
Inasmuch as the language in this section is clear, there is no necessity to clarify how and when it could apply.
In summary, the Commission concludes that the consulting business of the advisor could conflict or appear to conflict with his duties as advisor to the Committee because his private interests and public duties could be dealing with the same subject matter, which is land situated in the City and County of Honolulu and which is affected by City land use ordinances. The standards of conduct which could apply under the foregoing circumstances are Sections 11-102.3, RCH; 6-1.2(2), ROH; 11-102.2, RCH; 11-104, RCH; 11-102.5, RCH; and Section 6-1.2(3), ROH. Section 11-102, RCH, could apply to him as a consultant if he were to be retained as a consultant by a client whose real property requires committee and Council action before economic development. If so, his consulting activities would be a business activity which is incompatible with the proper discharge of his duties as an advisor or which may impair the independence of his judgment as an advisor, because he is in a position to make, or appear to make, a biased decision in favor of his client. His consulting activities could be deemed a business interest which may come before him for official action if the same scenario as in Section 11-102.3, RCH, is applied to Section 6-1.2(2), ROH. Although Sections 11-102.2, RCH, and 11-104, RCH, do not refer to business or financial interests, they could apply if the same scenario as described above is applied to those sections. Section 11-102.5, RCH, and 6-1.2(3), ROH, could apply if he were retained as a consultant and as a witness by a client whose real property is involved in litigation with the City. These sections also could apply if he would have to appear on behalf of a client before a City agency to obtain its approval for further economic development.
The Commission is of the opinion that the possibility of conflict of interest between his duties as an advisor and a lecturer is remote. Accordingly, the possibility of any standard of conduct applying in such situation is also remote.
In view of the foregoing, the Commission recommends that the advisor not accept any work as a consultant for land situated in the City and County of Honolulu which may come before the Committee and Council for their action and which require approval of the Department of Land Utilization and General Planning and the Zoning Board of Appeals. Such curtailment should insulate the Chair, members of the committee, and the advisor from any conflict of interest allegations because, as the advisor, he would not be making, or appear to be making, a biased decision in favor of his client. Moreover, such curtailment would minimize the application of the pertinent standards of conduct which are discussed herein. Also, even an appearance of a conflict of interest would be avoided by observing such restrictions.
Date: November 8,1983
MAZEPPA K. COSTA
[DIAGRAM OF CONFLICT OF INTEREST]
CONFLICT OF INTEREST