Advisory Opinion 1079
Human Services/Employee as Consultant

ISSUE: WHETHER A COUNTY DIVISION MAY EMPLOY A CURRENT TEMPORARY EMPLOYEE AS A CONSULTANT IF THE EMPLOYEE IS TERMINATED PRIOR TO COMMENCING ANY COMPENSABLE WORK UNDER CONTRACT WITHOUT INCURRING A CONFLICT OF INTEREST UNDER THE CODE OF ETHICS?

Opinion: Based on the circumstances in this particular case, the Board of Ethics Finds no conflict of interest. The employee in question did not participate in negotiating or developing specifications of the terms of the Mental Health Division contract.

Statement of Circumstances: In February 1993 the County's Mental Health Division hired an individual to prepare a preliminary recommendation regarding the King County Regional Support Network's (KCRSN) participation as a Primary Health Provider for outpatient mental health services to the King County Mental Health Board, King County Executive, and the King County Council. The scope of the individual's responsibility included setting the stage for implementation planning, and providing review, analysis and consultation on methods to limit financial liability of the County; actuarial payment data, cost and service data and other information provided by state, RSN, and agencies; Primary Health Provider contract language with emphasis on limiting financial risk and establishing reimbursement mechanisms and reporting requirements; reimbursement methodology, billing/payment systems, and reporting requirements for agency contracts; and the transition plan and timetable necessary to foster minimum chaos during the changeover period.

In June 1993, the Department of Human Services decided that the interests of the Mental Health division would best be served if the employee were to be hired on as an independent consultant rather than as an employee and decided to contract with the employee's company, of which the employee is president and his wife the vice president. The Department requested and gained approval for sole source waivers from Minority/Women's Business requirements and the Purchasing Agency to allow the individual to continue his services to the Mental Health Division under a technical/professional services contract. The basis for the sole source request was to permit the Mental Health Division to immediately negotiate with its proposed consultants in preparing a detailed plan for the division to become a Primary Health Provider (PHP) for mental health services under a recently approved waiver of the State's Medicaid Program. The Department informed the employee that his employment with the County would be terminated prior to performing any compensable work under the contract.

The Department of Human Services has asked the Board of Ethics to determine whether the execution of a consultant contract in this instance would be a conflict of interest under the Code of Ethics?

Analysis: In Advisory Opinion 1019, the Board of Ethics considered whether interns and temporary employees were considered as County employees as defined by the Code of Ethics and also what the definition of "responsible" is as used in the Code of Ethics. On the first issue, the Board decided that both interns and temporary employees were subject to the Code of Ethics and therefore could not be exempted from its provisions. On the second issue, the Board considered that "responsibility" under the Code of Ethics is not primarily a function of job title, but of work activity. In establishing its criteria for whether or not an employee fits the definition of "responsible" under the Code, the Board affirmed that the following factors were important:

• whether the employee was held accountable for his or her decisions either formally or informally;
• whether the employee exercises discretion with regard to actions or decision-making or whether his or her involvement is primarily ministerial;
• and, whether the employee has the ability to control or affect processes or decisions because of his or her influence or because his or her recommendations are given substantial weight by the formal decision makers?

In Advisory Opinion 1039, the Board broadened this concept of responsibility and concluded that the definition of "participate" closely paralleled those of "responsible" and "decision maker." Thus, if an employee is substantially participating in an action or decision, he or she is also responsible for making decisions concerning the subject or activity. In this instance, the employee can be considered responsible as defined by the scope of his work activity.

Although the employee is responsible under the Code of Ethics, he did not appear to directly participate in, influence, or attempt to influence the selection of his company as a contractor with the County and was therefore not a participant in a County action. Section 3.04.017(J) of the Code of Ethics defines participation as

to be involved in a county action personally and substantially as a county employee either directly, or through others through approval, disapproval, decision, recommendation, the rendering of advice, investigation, or otherwise.

Both the employee and his company were selected by the Mental Health Division and the Department of Human Services based on possession of a level of expertise that was critical to the success of the division's plan to become a Primary Health Provider (PHP) for mental health services under the State's Medicaid Program. The employee took no part in decision-making regarding the award of a contract, nor did he negotiate any part of the subsequent contract.

References: King County Code of Ethics, sections 3.04.017(C and J) and 3.04.030 (C, E, and H).

ISSUED THIS ___________ DAY OF ___________________, 199__.

Signed for the Board: Dr. J. Patrick Dobel, Chair

Members:

Dr. J. Patrick Dobel, Chair
Timothy Edwards, Esq.
Rev. Paul Pruitt

JPD/mag

cc:

Tim Hill, King County Executive
King County Council Members
Susan Baugh, Director-Ombudsman, Office of Citizen Complaints
Quentin Yerxa, Deputy Prosecuting Attorney and Counsel to the Board of Ethics
Robert I. Stier, Senior Deputy Prosecuting Attorney, Civil Division
Barbara J. Gletne, Director, Department of Human Services
Lynn Davison, Manager, Mental Health Division
George Northcroft, Director, Department of Executive Administration
Mike Emby, Coordinator, Fiscal Management