Annual Report: Advisory Opinion No. 99-51
February 2, 2000
Louann Vari, Esq.
Department of Justice
32 W. Loockerman St., Suite 106
Dover, DE 19901
Re: Advisory Opinion No. 99-51 - Personal or Private Interest (Future Employment)
Hearing and Decision by John E. Burris, Chair; Commissioners Paul E. Ellis,
Clifton Hubbard, Mary Jane Willis
Recused: Arthur G. Connolly, Jr.
Dear Ms. Vari:
As you know, the State Public Integrity Commission concluded that Mr. David Blowman's participation as a hearing officer in the below referenced matter was inappropriate under the particular facts. However, based on the facts, and pursuant to our authority, we grant a waiver for him to continue participating in the matter.
- Facts
Under the Code of Delaware Regulations (CDR), the Delaware State Secondary Athletic Association (DSSAA) is the Secretary of Education's official designee to implement the Department of Education's (DOE's) rules and regulations on interscholastic athletics, including a student's eligibility to participate in such sports. Disputes over interscholastic athletics rules and regulations are subject to final review by the State Board of Education (the Board). CDR 72-000-003 (1999), Chapter 3 ¶ 6. The Board, pursuant to it statutory authority, 14 Del. C. § 122, and the Administrative Procedures Act, has established procedures for such proceedings. The procedures include time-lines, such as 20 days to respond to notice of hearings, etc. CDR 72-000-003 (1999). The New Castle County Technical School District (hereinafter "District") submitted
an application to DSSAA's Director, seeking a waiver of DSSAA's eligibility requirements so one of its students could participate in interscholastic athletics. DSSAA twice denied the waiver, and an appeal was filed with the Board. The named parties to the appeal are the student and DSSAA. The District is not a named party. Basketball, one of the sports the student wants to play, is already underway. If the normal procedural time-line for Board proceedings were adhered to, the final decision might not be obtained until after the season is over. The parties asked the Board to expedite the hearing, and they waived their rights to the time-lines established in the Board's procedures.
The Board appointed David Blowman, Executive Assistant to the Secretary of Education, as the hearing officer. After the hearing, he was to decide if a waiver should be granted and issue an order with his findings of facts and ruling, which would be a recommendation to the Board. Ten days before he was appointed as the hearing officer, he applied for a job with the District. Two days before the hearing, he interviewed for the job with the District's Board of Education, its Superintendent, and its Deputy Superintendent. According to Blowman, they did not discuss the pending hearing at the interview.
The hearing was held as scheduled and "during the course of the hearing," Blowman "realized for the first time the potential conflict between my role as hearing officer and my application to the school district attended by the student in the appeal..." While recognizing a "potential conflict," he proceeded with the hearing. Immediately afterwards, he spoke with Deputy Attorney General (DAG), Louann Vari, expressing his concern about a possible conflict. At that time, he also said he intended to rule in the student's favor. Within an hour after the hearing, he learned that he did not get the District job. This Commission's office was contacted and it was decided that he would seek an advisory opinion. That same day, he notified the parties of the employment situation; asked if they would object if he continued as the hearing officer; and advised that he was requesting an advisory opinion from this Commission. Subsequently, the parties notified him that they did not object.
At the time of this Commission's meeting, January 12, 2000, he had not issued his order to the parties or the Board. He did not believe his job application impaired his neutrality, and did not believe that the denial of the job would impair his judgment. He asks if his conduct violated the Code of Conduct, and if so sought a waiver.
The basis for a waiver is that the parties specifically asked the Board for expedited proceedings. The next Board meeting was set for January 20, 1999. If a new hearing officer must be appointed to re-hear the appeal, it could preclude a Board ruling in January. A delay would mean additional time and costs to reargue the appeal, and could negate the decision to expedite the hearing.
- Applicable Law
The State Code of Conduct restricts State employees from reviewing or disposing of matters if they have a personal or private interest which tends to impair their independent judgment in performing official duties. 29 Del. C. § 5805(a).
Delaware Courts, in interpreting 29 Del. C. § 5805(a), have held that whether the personal or private interest is sufficient to require a State employee to recuse himself from participating in a matter is an issue of fact. Prison Health Services, Inc. v. State of Delaware, Del. Ch., C.A. No. 13,010, V.C. Hartnett, III (June 29, 1993).
ISSUE 1: Is Blowman's "interest" sufficient to require him to recuse himself?
The "personal or private interest" was his pending employment in the same District which requested a waiver for its student. He interviewed with the District two days before the hearing. Government decisions are to be based on a "fair and unadulterated examination of the merits" and "any conduct giving the appearance that impropriety is involved therein should be studiously avoided." See, Kulesza v. Star Services Inc., Del. Super., C.A. No. 93A-01-002, n. 8, J. Toliver (December 20, 1993)(Court expressed concern for any deviation from the administrative process as provided by law or participating in ex parte communications between one party and those charged with reviewing the merits for the State agency).
In the specific context of restrictions against public officers or employees participating in decisions when employment is being negotiated, ethics laws have noted that the rationale is to avoid putting the official in a position where his public office could be exploited for private gain; and preferential treatment or an unfair advantage for a prospective employer. See, e.g., Comment, Delaware Lawyers' Rules of Professional Conduct, Rule 1.11(c)(2). (1)
There is no Delaware case, interpreting 29 Del. C. § 5805(a)(1), directly on point where employment was pending. However, there are Delaware cases interpreting that provision where State officials, who participated in administrative proceedings, had an indirect interest as a result of existing outside employment. In both cases, it was held that they should not have participated, even though their participation was limited; they did not vote on the matter; and no facts indicated that they personally benefitted from their limited participation.
In the first case, a State official, Glen Davis, was one of five appointees to a State Council which reviewed applications submitted by hospitals regarding their facilities. Beebe Medical Center v. Certificate of Need Appeals Board, Del. Super., C.A. No. 94A-01-004, Terry, J. (June 30, 1995), aff'd, Del. Supr., No. 304, Veasey, J. (January 29, 1996). The Council did not make the final decision, but made recommendations to the State agency on whether applications should be granted. Davis' outside employment was as a Milford Hospital administrator. The named parties to the administrative proceeding were Beebe Medical Center and Nanticoke Hospital. Milford Hospital was not a named party. At the hearing, Davis said he might have a conflict, but reserved declaring a conflict until later. When the applications were discussed, Davis make what the Court called "neutral comments." At the end of the meeting, Davis said he had a conflict, and did not vote. Beebe's application was denied and Nanticoke's was granted. Fourteen days after a final decision was made, Milford and Nanticoke Hospitals announced an alliance. Beebe appealed, alleging that Davis had a personal or private interest which tended to impair his judgment, and should have recused himself under 29 Del. C. § 5805(a)(1). Beebe alleged that Davis' conflict, among other things, resulted in an unfair hearing and violated Beebe's due process rights.
One fact looked at by the Beebe Court was the timing of the hearing and when the discussions regarding an alliance occurred. The Court found that the record did not clearly establish bias because the record was not clear about when the concept of the alliance between the two hospitals was first discussed-whether before or after the favorable decision.
Here, the "concept of the alliance" (Blowman's employment by the District) was discussed in his interview with the District's Board of Education, its superintendent, and deputy superintendent two days before the hearing. At that time, Blowman knew he would be hearing the case.
Here, the District was not a party, just as Milford Hospital was not a party in Beebe. However, the District submitted the application to DSSAA for its student. If the student prevailed, the District would have the benefit of her participation in its interscholastic sports.
In Beebe, the Court noted that Delaware law holds that bias can be imputed and that since Davis ultimately declared a conflict, the court would assume he was biased and therefore did have a conflict "which should have been declared at the outset." It also noted that Davis' comments were "extremely limited and neutral;" that he did not vote; and that the Council's decision was a recommendation, not the final decision on the application. While it found that his conduct did not rise to the level of a due process violation, it said that "since Davis admittedly had a conflict he should have recused himself from participation in this matter at the outset."
Here, Blowman, during the proceedings, like Davis, thought there might be a conflict. He proceeded to participate. Unlike the Beebe situation, where other State officials who were Council members made the decision to recommend approval of the application, Blowman was the sole hearing officer on whether to recommend approval on the eligibility waiver application, and wants to continue participating. Thus, his participation is not as "limited" or "neutral" as in Beebe.
In Beebe, no facts indicated that Davis could personally benefit from a favorable decision for Nanticoke. Rather, a favorable decision would benefit Nanticoke, a party to the hearing. Because Davis' company was negotiating with Nanticoke, the indirect implication was that Davis' employer could indirectly benefit, or that a party to the proceedings would receive preferential treatment because of the official's outside employment interest. Similarly, in Blowman's case, a favorable decision for the student would indirectly benefit the District which submitted the application on her behalf, as it would result in her playing sports for the District. Since Blowman's employment was pending at the time of the hearing and when he told the DAG immediately afterwards that he intended to rule for the student, it could appear that a favorable decision for the District's student may be the result of preferential treatment, and/or may result in a personal benefit to Blowman, since at the crucial time he did not know that the District did not select him.
In Prison Health, supra, the Court held it was "improper" for a State official, Henry Risley, to be involved in matters related to a contract which was awarded to ARA where his wife was employed. The Court said the record showed that Risley was not a member of the five-member Evaluation Committee that recommended ARA for the contract. It found his activities were limited to:
"1) providing a list of Bureau of Prisons employees from which Larry Sussman-- the Department's Administrative Services Division employee who oversaw the award of the contract--could select a Bureau of Prisons representative, and 2) attending and asking three questions (but not voting) at the Department's Executive Committee's meeting that was comprised of the Department's four division chiefs when Sussman presented the selection committee's recommendation to Commissioner Watson, chief of the Department. The Court found no evidence that any of the members of the Evaluation Committee or the Executive Committee were not disinterested or not fully informed."
The Court found "his personal participation was not direct and substantial," but held that: "Undoubtedly Risley's conduct was inappropriate and he should have abstained from even this limited role in the procurement process because his wife is an employee (albeit a fairly low-level employee) of one of the bidders."
Thus, Beebe and Prison Health narrowly construe the permissible activities under 29 Del. C. § 5805(a)(1). In both cases, although the officials' participation was limited to comments during the proceedings; they did not vote; the decision was made by other officials; and their interest was indirect, the Court still concluded that they should not have participated even to that limited extent.
In Beebe, the Court said that officials were entitled to a "strong presumption of honesty and integrity." Thus, Blowman is entitled to that "strong presumption." He states that there was no discussion with the District regarding the case when he interviewed for the job and that his judgment or neutrality were not impaired. However, as noted in Beebe, even neutrality does not preclude the need for the official to recuse himself.
Based on Beebe and Prison Health, we conclude that even though Blowman's interest was indirect, and no facts indicate that he benefitted from the decision or gave preferential treatment, etc., he should have recused himself.
ISSUE 2: Does disclosure to the Parties permit Blowman's continued participation, if the parties did not object?
Blowman wants to continue participating and the parties do not object.
The plain language of the Code of Conduct does not have an exemption that permits a State official to proceed in the face of a conflict, even if the parties agree. This Commission is to be consistent in its opinions. 29 Del. C. § 5809(5). We have held that: where the legislature is silent, additional language will not be grafted onto the statute because such action would be creating law. Commission Op. No. 95-001 (citing Goldstein v. Municipal Court, Del. Super., C.A. No. 89A-AP-13, J. Gebelein (January 7, 1991)). The only exception permitted by the plain language is that if a State official has a statutory responsibility that cannot be delegated, then he may proceed if he files a full disclosure with this Commission explaining why the matter cannot be delegated. 29 Del. C. § 5805(a)(3). No facts indicate that Blowman has a statutory responsibility that cannot be delegated. Aside from the plain language, which does not include such an exception, the Delaware Supreme Court addressed a similar situation in In re: Ridgely, Del. Supr., 106 A.2d 527 (1954). A State employee, who was an attorney, also held outside employment. Because of a conflict of interest between his State job and his outside employment, he was alleged to have violated: (1) the Canons of Professional Ethics for lawyers; and (2) his duty as a public officer by placing himself in a position where "his personal interests were opposed to his duty to the public."
The Court noted that under the canons of ethics for lawyers, "in civil cases he may ordinarily choose between two clients whose interests conflict, with full disclosure when required." However, the Court said that it need not address his conduct under the lawyers' ethics, which would permit him to continue if the parties agreed, because as a public servant "his private interest must yield to the public one." Thus, Delaware Courts have frowned on merely disclosing the conflict to the parties as a remedy when the conflict arises in the context of a public servant and outside employment.
Ridgely was decided before the Code of Conduct was enacted. Thus, it interpreted the common law restriction on public officials having a "personal interest." Again, this Commission is to be consistent in its opinions, and has held that:
"The concern under the common law restriction on public officials participating in decisions where they have a personal or private interest is the same as would arise under the State Code prohibition which restricts such officials from "reviewing and disposing of matters in which they have a personal or private interest that tends to impair independence of judgment." See, 29 Del. C. § 5805(a)(1). Moreover, conflict of interest statutes generally do not abrogate common law conflict of interest principles. 63C Am. Jur. 2d Public Officers and Employees § 253 (1997). Thus, the State Code is basically a codification of the common law restrictions." (Commission Op. Nos. 97-24 and 97-30).
Thus, we conclude that merely informing the parties of the conflict, without more, is not a remedy.
ISSUE 3: Should a Waiver be Granted?
The statutory remedy that is available, is this Commission's authority to grant a waiver if the literal application of the law is not necessary to achieve the public purpose or there is an undue hardship on the State employee or State agency. 29 Del. C. § 5807(a).
- Is the literal application of the law necessary to achieve the public purpose?
The public purpose of the Code of Conduct is so that the conduct of officers and employees of the State holds the respect and confidence of the public. 29 Del. C. § 5802(1). Thus, "they must, therefore, avoid conduct which is in violation of their public trust or which creates a justifiable impression among the public that such trust is being violated." Id. In the specific context of prospective employment, the concern is that the official may use his public position to obtain a private benefit; or may give preferential treatment that benefits the prospective employer. The law does not require that these events actually happen. Rather, it imposes on State employees that they not engage in conduct which "tends to impair their judgment"; or may result in impaired judgment or preferential treatment to any person; or which may raise suspicion among the public that the public trust is being violated. See, 29 Del. C. § 5805(a)(1); 29 Del. C. § 5806(a) and 29 Del. C. § 5806(b)(1),(2) and (4). Here, as in Beebe, participating in the decision "raised suspicion" in the official's own mind that he should not participate. Thus, it appears that the literal application is necessary to serve the public purpose.
- Undue Hardship
Regarding any "undue hardship," we have held that "undue" means "more than required" or is "excessive." See, e.g., Commission Op. No. 97-18. Here, the Board, pursuant to its statutory authority, has established procedural rights for the parties who seek an appeal. The parties specifically waived those rights so that the Board could expedite the hearing because the student is in her Senior year and wants to play basketball. The basketball season is already underway and will end in February or March. The parties want the Board final decision at its meeting on January 20, 2000, so that if an eligibility waiver is granted she can participate in the last part of the basketball season. If Blowman could not participate by issuing his findings of fact, conclusion of law, etc., the Board could take two possible actions: (1) appoint a new hearing officer to re-hear the case and give the Board a recommendation; or (2) the Board, rather than a hearing officer, could re-hear the case and make a final decision. If option (1) were exercised, the parties would have to re-argue their cases, costing additional time and money, and it is not clear if all of that could occur before January 20. If the Board exercises option (2), it is possible that it would not re-hear the case on January 20, 2000; rather, it would just take that occasion to schedule a hearing before the Board.
If no waiver were granted, in effect, we would be negating the Board's decision to let the parties expedite the proceedings. The time-lines established by the Board in its rules and regulations are to insure that the parties know of pending actions; have an opportunity to be heard; and know there is a foreseeable finality. The decision to waive the Board's time-lines was so that the "opportunity to be heard" could occur at a meaningful time. If a waiver is not granted, the "meaningful time" will have passed. Further, as we must base our opinions "on the particular facts" we note that the parties waived their rights to the Board's time-lines, and neither party objects to Blowman continuing. Moreover, when we grant a waiver the proceedings become a matter of public record, so that the public understands the basis for permitting the official proceed in the face of a conflict. Based on all those facts, we conclude that to, in effect, negate the Board's statutory authority to make rules and regulations regarding its hearings, including the authority to let the parties expedite the proceedings would be "excessive." Accordingly, we grant a waiver based on an undue hardship.
Sincerely,
John E. Burris, Chair
JEB:MYR
cc: Mr. David Blowman
1. While Blowman is not a lawyer, reference is made to the lawyers' rules of professional responsibility because it spells out the ethics concerns raised when a government employee is negotiating for a job, and aids in interpreting the ethics laws of the State Code of Conduct. See, Sutherland Stat. Constr. § 45.15, Vol. 2A (5th ed. 1992)(decision on statutory construction has relevance as precedent if language of one statute is incorporated in another or both statutes are such closely related subjects that consideration of one naturally brings to mind the other).
