CHAPTER 417

FORMERLY

HOUSE BILL NO. 762

AS AMENDED BY HOUSE AMENDMENT NO. 1

AN ACT TO AMEND CHAPTER 58, TITLE 29, DELAWARE CODE RELATING TO A CODE OF CONDUCT FOR STATE EMPLOYEES, STATE OFFICIALS AND CERTAIN LOCAL GOVERNMENTAL OFFICIALS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. State Employees, Officers and Officials' Code of Conduct. Amend Subchapter I, Chapter 58, Title 29, Delaware Code, by striking Subchapter I in its entirety and substituting in lieu thereof the following:

"Subchapter I. State Employees, Officers and Officials' Code of Conduct.

§5801. Short Title.

This Subchapter shall be known and may be cited as the State Employees, Officers and Officials' Code of Conduct.

§5802. Legislative Findings and Statement of Policy. The General Assembly finds and declares:

(1) In our democratic form of government, the conduct of officers and employees of the State must hold the respect and confidence of the people. 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.

(2) To ensure propriety and to preserve public confidence, officers and State must have the benefit of specific standards to guide their conduct employees some disciplinary mechanisms to guarantee uniform maintenance of those standards. Some standards of this type are so vital to government that violation thereof should subject the violator to criminal penalties.

(3) In our democratic form of government, it is both necessary and desirable that all citizens should be encouraged to assume public office and employment, and that, therefore, the activities of officers and employees of the State should not be unduly circumscribed.

§5803. Construction.

This subchapter shall be construed to promote high standards of ethical conduct in state government.

§5804. Definitions.

For the purposes of this subchapter:

"Close relative" means a person's parents, spouse, children (natural or adopted) and siblings of the whole and half-blood.

"Commission" or "Ethics Commission" means the State Ethics Commission established by this subchapter.

"Compensation" means any money, thing of value or any other economic benefit of any kind or nature whatsoever conferred on or received by any person in return for services rendered or to be rendered by himself or another.

A person has a "financial interest" in a private enterprise if (i) he has a legal or equitable ownership interest in the enterprise of more than 10% (1% or more in the case of a corporation whose stock is regularly traded on an established securities market) (ii) he is associated with the enterprise and received from the enterprise during the last calendar year or might reasonably be expected to receive from the enterprise during the current or the next calendar year income in excess of $5,000 for services as an employee, officer, director, trustee or independent contractor; or (iii) he is a creditor of a private enterprise in an amount equal to 10% or more of the debt of that enterprise (1% or more in the case of a corporation whose securities are regularly traded on an established securities market).

"Matter" means any application, petition, request, business dealing or transaction of any sort.

"Person" means an individual, partnership, corporation, trust, joint venture and any other association of individuals or entities.

"Private enterprise" means any activity conducted by any person, whether conducted for profit or not for profit and includes the ownership of real or personal property; provided that private enterprise does not include any activity of the State or of any political subdivision or of any agency, authority or instrumentality thereof.

"State" means the State of Delaware and includes any state agency.

"State agency" means any office, department, board, commission, committee, court, school district, board of education and all public bodies existing by virtue of an act of the General Assembly or of the Constitution of the State, excepting only political subdivisions of the State, their agencies and other public agencies not specifically included in this definition which exist by virtue of state law, and whose jurisdiction (I) is limited to a political subdivision of the State or to a portion thereof, or (ii) extends beyond the boundaries of the State.

"State employee" means any person (A) who receives compensation as an employee of a state agency or (B) who serves as an appointed member, trustee, director or the like of any state agency and who receives or reasonably expects to receive more than $5,000 in compensation for such service in a calendar year (not including any reimbursement for expenses); provided that "state employee" does not include ()) members of the General Assembly; (it) the Chief Justice and Associate Justices of the Supreme Court, (iii) the Chancellor and Vice-Chancellors of the Court of Chancery, (iv) the President Judge and Associate Judges of Superior Court, (v) the Chief Judge and Associate Judges of Family Court, (v1) the Chief Judge and Resident Judges of the Court of Common Pleas, (vii) the Chief Judge and Associate Judges of Municipal Court, (viii) the Chief Magistrate and Justices of the Peace, (ix) state officers, or (x) honorary state officials.

"State officer" means any person who is required by Subchapter II of this Chapter to file a financial disclosure statement but does not Include (I) members of the General Assembly, (ii) the Chief Justice and Associate Justices of the Supreme Court, (iii) the Chancellor and Vice-Chancellors of the Court of Chancery, (iv) the President Judge and Associate Judges of Superior Court, (v) the Chief Judge and Associate Judges of Family Court, (v1) the Chief Judge and Resident Judges of the Court of Common Pleas, (vii) the Chief Judge and Associate Judges of Municipal Court or (v111) the Chief Magistrate and Justices of the Peace.

"Honorary state official" means a person who serves as an appointed member, trustee, director or the like of any state agency and who receives or reasonably expects to receive not more than $5,000 in compensation for such service in a calendar year (not including any reimbursement for expenses).

§5805. Prohibitions Relating To Conflicts Of Interest.

(a) Restrictions on exercise of official authority.

(i) No state employee, state officer or honorary state official may participate on behalf of the State in the review or disposition of any matter pending before the State in which he has a personal or private interest provided that, upon request from any person with official responsibility with respect to the matter, any such person who has such a personal or private interest may nevertheless respond to questions concerning any such matter. A personal or private interest in a matter is an interest which tends to impair a person's independence of judgment in the performance of his duties with respect to that matter.

(ii) A person has an Interest which tends to impair his independence of judgment in the performance of his duties with respect to any matter when:

(a) any action or inaction with respect to the matter would result in a financial benefit or detriment to accrue to the person or a close relative to a greater extent than such benefit or detriment would accrue to others who are members of the same class or group of persons, or

(b) the person or a close relative has a financial interest in a private enterprise which enterprise or Interest would be affected by any action or inaction on a matter to a lesser or greater extent than like enterprises or other Interests In the same enterprise.

(iii) In any case where a person has a statutory responsibility with respect to action or non-action on any matter where he has a personal or private interest and there is no provision for the delegation of such responsibility to another person, the person may exercise responsibility with respect to such matter provided that, promptly after becoming aware of such conflict of interest, he files a written statement with the Ethics Commission fully disclosing the personal or private interest and explaining why it is not possible to delegate responsibility for the matter to another person.

(b) Restrictions On Representing Another's Interest Before the State.

(i) No state employee, state officer or honorary state official may represent or otherwise assist any private enterprise with respect to any matter before the state agency with which the employee, officer or official is associated by employment or appointment.

(ii) No state officer may represent or otherwise assist any private enterprise with respect to any matter before the State.

(iii) This subsection shall not preclude any state employee, state officer or honorary state official from appearing before the State or otherwise assisting enterprise with respect to any matter in the exercise of his official duties.

(c) Restrictions On Contracting With The State. No state employee, no state officer and no private enterprise in which a state employee or state officer has a legal or equitable ownership of more than 10% (more than 1% in the case of a corporation whose stock is regularly traded on an established securities market) shall enter into any contract with the State (other than an employment contract) unless such contract was made or let after public notice and competitive bidding; provided that such notice and bidding requirements shall not apply to contracts not involving more than $2,000 per year if the terms of such contract reflect arms' length negotiations. For the period of July 1, 1990 through June 30, 1991; nothing in this Subsection shall prohibit a state employee, a state officer, or a private enterprise in which a state employee or a state officer has a legal or equitable ownership of more than 10% (more than 1% In the case of a corporation whose stock is regularly traded on an established securities market) from contracting with a public school district and/or the State Board of Education for the transportation of school children without public notice and competitive bidding as is permitted under §6916 of this Title."

(d) Post Employment Restrictions. No person who has served as a state employee, state officer or honorary state official shall represent or otherwise assist any private enterprise on any matter involving the State, for a period of two years after termination of his employment or appointed status with the State, if he gave an opinion, conducted an investigation or otherwise was directly and materially responsible for such matter in the course of his official duties as a state employee, officer or official.

(e) Unauthorized Disclosure Of Confidential Information. No person shall disclose any information required to be maintained confidential by the Commission under Sections 5806(d), 5807(b) or (d) or 5810(h).

(f) Criminal Sanctions.

(i) Any person who knowingly or willfully violates any provision of this Section shall be guilty of a misdemeanor, punishable for each such violation by imprisonment of not more than one year and by a fine not to exceed $10,000.

(ii) A prosecution for a violation of this Section shall be subject to the time limitations of Title 11 Delaware Code Section 205.

(iii) The Superior Court shall have exclusive jurisdiction over prosecution for all criminal violations of this Section.

(g) Contracts Voidable By Court Action. In addition to any other penalty provided by law, any contract entered into by any state agency in violation of this subchapter shall be voidable by the state agency; provided that in determining whether any court action should be taken to void such a contract pursuant to this subsection, the state agency shall consider the interests of innocent third parties who may be damaged thereby. Any court action to void any transaction must be initiated within 30 days after the state agency involved has, or should have, knowledge of such violation.

§5806. Code of Conduct.

(a) Each state employee, state officer and honorary state official shall endeavor to pursue a course of conduct which will not raise suspicion among the public that he is engaging in acts which are in violation of his public trust and which will not reflect unfavorably upon the State and its government.

(b) No State employee, state officer or honorary state official shall have any interest in any private enterprise nor shall he incur any obligation of any nature which is in substantial conflict with the proper performance of his duties in the public Interest. No state employee, state officer or honorary state official shall accept other employment, any compensation, gift, payment of expenses or any other thing of monetary value under circumstances in which such acceptance may result in any of the following:

(1) impairment of independence of judgment in the exercise of official duties;

(ii) an undertaking to give preferential treatment to any person;

(iii) the making of a governmental decision outside official channels; or

(iv) any adverse effect on the confidence of the public in the integrity of the government of the State.

(c) No state employee, state officer, or honorary state official shall acquire a financial interest in any private enterprise which he has reason to believe may be directly involved in decisions to be made by him in an official capacity on behalf of the State.

(d) Any state employee or state officer who has a financial interest in any private enterprise which is subject to the regulatory jurisdiction of, or does business with, any state agency (and any honorary state official who has a financial interest in any private enterprise which is subject to the regulatory jurisdiction of, or does business with, the state agency on which he serves as an appointee) shall file with the Ethics Commission a written statement fully disclosing the same. Such disclosure shall be confidential and the Ethics Commission shall not release such disclosed information, except as may be necessary for the enforcement of this subchapter. The filing of such disclosure statement shall be a condition of commencing and continuing employment or appointed status with the State.

(e) No state employee, state officer or honorary state official shall use his public office to secure unwarranted privileges, private advancement or gain.

(f) No state employee, state officer or honorary state official shall engage in any activity beyond the scope of his public position which might reasonably be expected to require or induce him to disclose confidential information acquired by him by reason of his public position.

(g) No state employee, state officer or honorary state official shall, beyond the scope of his public position, disclose confidential information gained by reason of his public position nor shall he otherwise use such Information for personal gain or benefit.

(h) No state employee, state officer or honorary state official, in the course of his public responsibilities, shall use the granting of sexual favors as a condition, either explicit or implicit, for an individual's favorable treatment by that person or a state agency.

§5807. Waivers of Restrictions and Advisory Opinions.

(a) Notwithstanding the provisions of Sections 5805 and 5806 of this Title, upon the written request of any State agency or of any individual who is or was a state employee, state officer or honorary state official, the Ethics Commission may grant a waiver to the specific prohibitions contained therein if the Ethics Commission determines that the literal application of such prohibition in a particular case is not necessary to achieve the public purposes of this chapter or would result In an undue hardship on any employee, officer, official or state agency. Any such waiver may be granted only by written decision of the Ethics Commission. Any person who acts in good faith reliance upon any such waiver decision shall not be subject to discipline or other sanction hereunder with respect to the matters covered by the waiver decision provided there was a full disclosure to the Ethics Commission of all material facts necessary for the waiver decision.

(b) Any application for a waiver, any proceedings and any decision with respect thereto shall be maintained confidential by the Commission provided that (i) public disclosure shall be made by the Commission upon the written request of the applicant, (ii) the Commission may make such public disclosure as it determines is required in connection with the prosecution of any violation of this subchapter (iii) the Commission shall report to appropriate federal and State authorities substantial evidence of any criminal violation which may come to its attention, and (iv) in the event that a waiver Is granted, the waiver decision and the record of all proceedings relating thereto shall be open to public inspection.

(c) Upon the written request of any state employee, state officer, honorary state official or state agency, the Commission may issue an advisory opinion as to the applicability of this subchapter to any particular fact situation. Any person who acts in good faith reliance upon any such advisory opinion shall not be subject to discipline or other sanction hereunder with respect to the matters covered by the advisory opinion provided there was a full disclosure to the Ethics Commission of all material facts necessary for the advisory opinion.

(d) Any application for an advisory opinion, any proceedings and any decision with respect thereto shall be maintained confidential by the Commission provided that (i) public disclosure shall be made by the Commission upon the written request of the applicant, (ii) the Commission may make such public disclosure as it determines is required in connection with the prosecution of any violation of this subchapter and (iii) the Commission shall report to appropriate federal and state authorities Substantial evidence of any criminal violation which may come to its attention.

§5808. State Ethics Commission; Establishment, Membership, Offices.

(a) There is hereby established the State Ethics Commission to administer and implement this subchapter. The Commission shall consist of seven members appointed by the Governor with the concurrence of the Senate. Not more than four members shall be registered with the same political party. No member shall hold any elected or appointed office under the government of the United States or the State or be a candidate for any such office. No member shall hold any political party office or an office in any political campaign. Members of the Commission may be removed by the Governor, with the concurrence of the Senate, for substantial neglect of duty, gross misconduct in office or violation of this law.

(b) A member of the Commission shall be appointed for a term of office of seven years and until his successor has been appointed and has qualified, except that the members first appointed shall be appointed for terms of office of one, two, three, four, five, six and seven years, respectively, and until their successors have been appointed and have qualified. No member shall serve for more than one full seven—year term. When a vacancy occurs in the membership of the Commission, it shall be filled by appointment for the unexpired portion of the term in the same manner as original appointments.

(c) The Commission shall elect a chairman from among its membership. Four members of the commission shall constitute a quorum and, if a quorum is present, a vacancy on the Commission shall not impair the right of the remaining members to exercise all the powers of the Commission. Disciplinary hearings may be conducted and sanctions may be imposed only by the affirmative action of at least four members. Otherwise the Commission may delegate authority to the chairman to act for the Commission between meetings.

(d) Each member of the Commission shall be compensated at the rate of $100.00 for each day devoted to the performance of his official duties. Each member of the Commission shall be reimbursed for reasonable and necessary expenses incurred in the performance of official duties.

(e) The Attorney General shall provide legal counsel to the Commission and shall be the legal representative of the Commission in connection with its duties hereunder.

(f) The Attorney General shall investigate complaints referred by the Commission and shall prosecute all complaints before the Commission. The investigatory and prosecutorial functions of the Attorney General shall be performed by personnel who are not serving as legal counsel to the Commission.

(g) The principal office of the Commission shall be in Dover but it may meet, and exercise its power, at any other place in the state.

§5809. State Ethics Commission; Power and Duties.

(a) The powers and duties of the Ethics Commission shall be as follows:

(1) To recommend to the General Assembly from time to time such rules of conduct for public employees and officials as it shall deem appropriate.

(2) To issue written advisory opinions upon the request of any state employee, state officer, honorary state official or state agency as to the applicability of this subchapter to any particular fact situation.

(3) To refer to the Attorney General to investigate any alleged violation of this subchapter and, after notice and hearing, to recommend by resolution, such disciplinary action as it may deem appropriate, to the state agency employing the state employee or state officer, the state agency with which the honorary state official is associated, the agency or official who appointed such officer or official, or other appropriate official or agency as the Commission shall determine. The Commission may also dismiss, without reference to the Attorney General, any complaint which the Commission determines is frivolous or fails to state a violation.

(4) To report to the appropriate federal or State authorities any substantial evidence of a violation of any criminal law which may come to its attention in connection with any proceeding whether advisory or disciplinary.

(5) To maintain a file of its proceedings, waiver decisions and advisory opinions with a view toward achieving consistency of opinions and recommendations subject to the confidentiality requirements of Sections 5807(6) and (d) and 5810(h).

(6) To follow the procedural rules specified in Section 5810 of this Title and to establish such other procedural rules as shall not be inconsistent with the rules prescribed therein.

(7) To subpoena witnesses, compel their attendance and testimony, administer oaths and affirmations, take evidence and require by subpoena the production of books, papers, records or other evidence needed for the performance of the Commission's duties or exercise of its powers.

(8) To prescribe forms for reports, statements, notices and other documents required by law.

(9) To prepare and publish manuals and guides explaining the duties of Individuals covered by this subchapter; and giving instructions and public Information materials to facilitate compliance with, and enforcement hereof.

(10) To provide assistance to state agencies, employees and officials in administering the provisions of this law.

(11) To prepare reports and studies to advance the purposes of this subchapter.

(12) To contract for any services which cannot satisfactorily be performed by the office of the Attorney General.

(13) To request appropriate state agencies to provide such professional assistance as it may require in the discharge of its duties.

§5810. State Ethics Commission; Complaints; Hearings; Dispositions.

(a) Upon the sworn complaint of any person or on its own initiative, the Commission may refer to the Attorney General for investigation any alleged violations of this subchapter. The Attorney General shall be the prosecuting attorney in all disciplinary proceedings before the Commission. In any such investigation or proceeding, a defendant shall be given an opportunity to be heard after notice, to be advised and assisted by legal counsel, to produce witnesses and offer evidence, and to cross examine witnesses. A transcript of any such proceeding shall be made and retained, subject to the confidentiality requirements of Section 5810(h).

(b) A member of the Commission shall be ineligible to participate, as a member of the Commission, in any commission proceeding relating to his or her conduct. A member of the Commission who has been found by the Commission to have violated this subchapter shall be ineligible to serve again as a member of the Commission.

(c) A member of the Commission may disqualify himself from participating in any investigation of the conduct of any person upon submission in writing and under oath of an affidavit of disqualification stating that he cannot render an impartial and unbiased decision in the case in which he seeks to disqualify himself.

(d) With respect to any violation with which a person has been charged and which the 'Commission has determined as proved, the Commission may take any one or more of the following actions:

(1) Issue a written reprimand or censure of that person's conduct.

(2) With respect to a state employee or state officer, other than an elected official, remove, suspend, demote or take other appropriate disciplinary action with respect to that person, without regard to any limits imposed by Chapter 59 of this Title but within the limits of the Constitution and other laws of the State.

(3) With respect to an honorary state official, recommend that appropriate action be taken to remove the official from office.

(e) In any proceeding before the Commission, upon the request of any person charged with a violation of this subchapter, such person shall be permitted to inspect, copy, or photograph books, papers, documents, photographs, or other tangible objects which will be used as evidence against that person in a disciplinary hearing and which are material to the preparation of his defense.

(f) In any proceeding before the Commission, if the Attorney General or the Commission at any time receives any exculpatory information respecting an alleged violation against any person, it shall forthwith make such information available to such person.

(g) Any person charged with a violation of this subchapter may apply to the Commission for the issuance of subpoenas for the appearance of witnesses and for the production of documents on his behalf. The application shall be granted upon a concise showing by such person that the proposed testimony or evidence is relevant (or is reasonably calculated to lead to the discovery of relevant evidence) and is not otherwise available. The application shall be denied if not made at a reasonable time or if the testimony or evidence would be merely cumulative.

(h) (i) All proceedings before the Commission relating to a violation of this subchapter by a state employee, including the disposition thereof, shall be maintained confidential by the Commission unless public disclosure is requested in writing by the state employee.

(ii) All proceedings before the Commission relating to a violation of this subchapter by a state officer shall be maintained confidential by the Commission unless public disclosure is requested in writing by the state officer or unless the Commission, based on a preliminary inquiry, determines that there is reason to believe that a violation has occurred, and serves upon the alleged violator a statement of the alleged facts of such violation. After the service of such a statement on such person, all proceedings relating thereto shall be open to the public and the statement and any other paper filed thereafter respecting such violation shall be made available for public inspection at reasonable hours.

(iii) All proceedings relating to a violation of this subchapter by an honorary state official shall be maintained confidential by the Commission unless public disclosure is requested in writing by the honorary state official or unless the Commission determines that a violation has occurred and so informs the official. At and after the time of so informing the official, the Commission shall make the .record of all proceedings relating thereto available for public inspection at reasonable hours and all subsequent proceedings relating thereto, if any, shall be open to the public.

(iv) Notwithstanding the confidentiality requirements of clauses (i)-(iii) above, the Commission shall make available for public inspection the record of all proceedings relating to any decision of the Commission which is appealed to Superior Court and the Commission shall report to appropriate federal or State authorities any substantial evidence of a violation of any criminal law which comes to its attention In connection with any proceeding under this subchapter.

(v) The Chairman of the Commission shall, with the approval of the Commission, establish such procedures as in the Chairman's judgment may be necessary to prevent the disclosure of any record of any proceedings or other information received by the Commission or its staff except as permitted by this subchapter.

§5811. Judicial Review. In the event that the Commission finds that any person has violated any provision of this subchapter, said person shall have a right of appeal to Superior Court of any such finding and of any sanctions imposed with respect thereto by filing a notice of appeal with the Superior Court within 30 days of the final action by the Commission in a particular case. The appeal shall be on the record without a trial de novo. If the Court determines that the record is insufficient for its review, it shall remand the case to the Commission for further proceedings on the record. The Court's review, in the absence of actual fraud, shall be limited to a determination of whether the Commission's decision was supported by substantial evidence on the record. The burden of proof in any such appeal shall be on the appellant.

Section 2. Code of Conduct Legislation for Local Government Officials. It is the desire of the General Assembly that all local governmental units adopt code of conduct legislation similar to this Act to apply to their public officials. Within two years after the effective date of this Act, the Ethics Commission established hereunder shall report to the General Assembly as to the existence of such legislation and shall make a recommendation to the General Assembly with respect to legislation to be adopted to cover such officials not then covered by legislation similar to this Act.

Section 3. Effective Date. This Act shall become effective six months after it is enacted in accordance with law.

Approved July 23, 1990.