ADVISORY OPINION NO. 129
The question is whether there could be a conflict of interest between an employee's duties as a legislative aide [aide] to a member of the City Council [Council] and his partnership in an import/export business [business].
Based on his responses to the questions posed by the Ethics Commissioners [Commissioners], the Commission is of the opinion that any conflict of interest between his public duties and the aide's business is remote. However, as an aide, he could breach standards of conduct which are not based on whether he has possessed or acquired financial or business interests.
The Commission thanks the aide for filing his disclosure stating that he has a business. As provided in Section 11-103, Revised Charter of Honolulu 1973 (1983 Ed.) [RCH], his appointing authority submitted his disclosure to the Commission for its review. Pursuant to such review, the Commission has issued this advisory opinion. Please be informed that an advisory opinion relates to what could happen rather than what has happened.
Before going into the application of a specific standard of conduct and the related discussion, the Commission submits the following definition of a conflict of interest:
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. [73 Michigan Law Review 758 (1975)] [Emphasis added]
Based on the foregoing definition, the Commission has developed a diagram of the aide's situation which would indicate whether or not his public duties and his business mayor may not result in a conflict of interest. This diagram is shown in Appendix A, which is attached hereto for examination. There are three blocks. Block #1 is labeled "Partner in Import/Export Business", while Block #2 is labeled "Legislative Aide". Block #3 is labeled "Import/Export Commodities". Note that Blocks #1 and #2 are linked by a solid line. This indicates that as an employee, he also has a private business. However, this diagram does not reflect the classic conflict of interest situation where solid lines link all three blocks. In this case, a solid line extends from Block #2 to Block #3, but there is no solid line extending from Block #1 to Block #3. The absence of a solid line linking Block #1 and Block #3 indicates that his duties as an aide do not extend over import/export commodities. Moreover, any jurisdiction which he could have exercised over import/export commodities, as a legislative aide, would have been derived from the power of the Council to exercise its jurisdiction over import/export commodities. An examination of State statutes, the City Charter, and ordinance provisions will support the foregoing statement. However, there can be exceptions. For example, one of the exceptions is fireworks. Although the Council has no authority to restrict or affect the import of fireworks, it can affect the use of fireworks, if it finds that such use would be detrimental to the health, safety, or welfare of the residents of the City and County of Honolulu.
In view of the foregoing, the Commission concludes that any
conflict of interest between the aide's duties and his business
activity is remote because he would not be in a position which
would prevent or appear to prevent him from making an unbiased
decision in favor of the public.
Based on the foregoing analysis of the aide's situation and before discussing any standards of conduct which could or could not apply in this case, the Commission sets forth the pertinent facts which could result in the application of the appropriate standards of conduct. Based on his responses to the questions posed by the Commissioners, the Commission submits that the following facts are relevant in this case:
1. The aide was appointed on (date) to serve Councilmember X.
2. His primary duty as an aide is to carry out any assignments given to him by Councilmember X. Such assignments include, but are not limited to, doing research, reviewing proposed bills, submitting summary reports thereon, handling constituents' complaints, contacting executive agencies to obtain information for Councilmember X, and coordinating activities of Councilmember X in conjunction with other members of the Council, including Council and committee meetings.
3. He is a general partner in an import/export business. His primary imports are commodities from (country). His exports are primarily local products.
4. He intends to carryon his business activity after office hours and during weekends. His business partners in operating the business are members of his family.
5. His business is located on property zoned for business. Accordingly, there would be no need for Council action to upzone his property in order to operate his business.
At the outset, there is a standard of conduct which would apply in the aide's case because he has a business. See Appendix B, attached hereto for information, for a definition of "business interest." However, whether such business is incompatible with the proper discharge of his duties or may tend to impair the independence of his judgment is questionable. As stated hereinbefore, as an aide, his duties do not involve his business interests. As such, his business would not be incompatible with the proper discharge of his duties as an aide. For the same reason, his business would not impair the independence of his judgment as an aide. The Commission therefore concludes that Section 11-102.3, RCH, would not apply in this case. See Appendix B, for full text of Section 11-102.3, RCH.
Although the Commission has concluded that Section 11-102.3, RCH, could not apply in this case, it could be breached if he uses City time, equipment, or material for his business purposes. This restriction is not expressly provided for in Section 11-102.3, RCH, but it is implied. That is, if he uses City time, equipment, or material for his business purposes, then his business would be incompatible with the proper discharge of his duties, or his business has impaired the independence of his judgment as a City employee. Consequently, the Commission cautions him not to reach for a telephone during City time to contact his business.
Another standard of conduct which, at the outset, could apply because of the aide's business is Section 6-1.2(2), Revised Ordinances of Honolulu 1978 [ROH]. On the other hand, whether such business would come before him for official action is remote because, as aide, his duties do not include monitoring import and export commodities. See Appendix B for full text of Section 6-1.2(2), ROH.
Despite the Commission's conclusion regarding the applicability of Section 11-102.3, RCH, and Section 6-1.2(2), ROH, there could be an example in which use of the imported or exported commodities may be the subject of Council legislation. Such an example is fireworks. If, in the opinion of the Council, the use of a certain commodity is injurious to the health, safety, or welfare of the residents of this City, the Council is authorized to control its use by appropriate legislation. Consequently, if the aide's business did import fireworks, there could be situations in which there would be a conflict of interest. For example, consider the fireworks-by-permit ordinance. While it was still a bill, the Councilmember may have assigned him to submit a study and report on the bill. Since his business imports fireworks, the public may perceive that his report could be biased so that the Councilmember would vote against the bill. The Commission trusts that this example will alert the aide to the possibilities which could arise, resulting in the application of Section 11-102.3, RCH, and Section 6-1.2(2), ROH.
There are two additional standards of conduct which the aide should bear in mind in carrying out his duties. These two sections 'are Section 11-102.2, RCH, relating to disclosure of confidential information, and Section 11-104, RCH, relating to fair and equal treatment of all persons by an officer or employee. See Appendix B for full texts of these sections.
The aide has opportunities to obtain privileged or confidential information about a specific proposed bill and the reactions of certain members of the Council regarding the specific bill. Using the fireworks bill as an example, he may have been informed that the proposed bill would fail. He may take advantage of such information by calling his business partner to increase his order for fireworks before the Council takes its action. In such case, other importers of fireworks would have been unable to take advantage of such information because they were unable to increase their orders with their exporters before the Council's action became a matter of public knowledge. Thus, he would have profited by such disclosure of confidential information. He would experience other situations in which would be privy to confidential information. At such times, he should seek counsel of individuals within the Council staff so that he will be able to distinguish between confidential and public information.
The prohibition mentioned in section 11-104, RCH, is clear and unambiguous. As such, the Commission will dispense with examples. Note that individuals representing various private, community, or public interests will attempt to gain the attention of a member of the Council. In the course of the aide's handling of such requests, he could be alleged to have favored one person over another, even though there is no basis for such allegation. However, such allegations can be detrimental to his Councilmember's political aspirations. Therefore, the Commission recommends that a written procedure be established and followed so that the aide can refute such allegations by referring to such procedure.
To summarize, the Commission concludes that the aide's business will not conflict or appear to conflict with his duties. The foregoing statement is based on the Commission's finding that neither he, as an aide, nor the Council may exercise any jurisdiction over his type of business or the import or export of commodities. As such, he would not be in a position to make or appear to make a biased decision in favor of his business while employed as an aide.
The standards of conduct discussed in this opinion include Section 11-102.3, RCH, relating to business or financial interests which are incompatible with the aide's duties, Section 6-1.2(2), ROH, relating to a business enterprise which may come before him for official action, Section 11-102.2, RCH, relating to disclosure of confidential information, and Section 11-104, RCH, relating to fair and equal treatment. The Commission stated at the outset that Section 11-102.3, RCH, and Section 6-1.2(2), ROH, could apply because he has a business. However, upon examination of the salient facts in this case, the Commission concludes that the aide's business would not be incompatible with his official duties or impair the exercise of his judgment as an aide or come before him for official action because his business, or the commodities it handles, do not fall within his jurisdiction as an aide. On the other hand, Section 11-102.3, RCH, could apply in his case if he uses City time, equipment, or material in transacting his business.
As to the applicability of Sections 11-102.2 and 11-104, RCH, they are remote because neither the aide's business nor the commodities it handles falls within the jurisdiction of his duties as an aide. Consequently, there will be no confidential information to disclose for his personal business interests. Neither would he, as an aide, be required to exercise special treatment over others to benefit his business. However, the Commission cautions that he may find himself in a situation which could result in a breach of these sections as stated in the examples hereinbefore relative to said sections.
In closing, the Commission recommends that if and when the aide enlarges the scope of his business operation to include the import of commodities which he believes may fall within the jurisdiction of the Council, he submit a written disclosure to the Commission. This same recommendation is made should additional duties be added to his present duties as an aide which could affect his existing business or the commodities he imports or exports, raising ethical considerations.
Dated: December 13, 1983
MAZEPPA K. COSTA
Chair, Ethics Commission
[INSERD DIAGRAM OF CONFLICT OF INTEREST
1. Definition of "business":
Section 6-1.1(2), ROH, relating to the definition of "business" states:
(2) "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 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.
3. Financial interests:
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.
4. Disclosure of Confidential Information:
Section 11-102.2 RCH, states that no officer or employee shall:
Disclose confidential information gained by reason of his office or position or use such information for the personal gain or benefit of anyone.
5. Unequal Treatment:
Section 11-104, RCH, provides that:
No elected or appointed officer or employee shall use his official position to secure or grant special consideration, treatment, advantage, privilege or exemption to himself or any person beyond that which is available to every other person.