Outside Employment in Real Estate
Advisory Opinion 93-01-1055
Real Property/Outside Employment
ISSUE: WHETHER THE EXTERNAL ACTIVITIES AND OUTSIDE EMPLOYMENT OF A KING COUNTY EMPLOYEE PRESENT A CONFLICT OF INTEREST UNDER THE CODE OF ETHICS?
Opinion: Based on this analysis and the information given to the Board of Ethics, the Board finds no conflict of interest provided that:
It is the opinion of the Board that the employee's external activities and outside employment do not create a conflict with the employee's official duties if the above conditions are met. However, if any of the above provisions are violated, a conflict of interest would rise.
- The employee's official duties are exclusively limited to unincorporated King County.
- The employee's business activities are limited to incorporated King County and do not overlap into unincorporated King County.
- The employee restricts business activities to jurisdictions where the Building and Land Development Division has not contracted as a regulatory agency.
- The employee does not receive any financial benefit or accept gratuities stemming from real estate agency activities within unincorporated King County.
- The employee discloses and "substantial" or "controlling" interest doing business with King County.
Statement of Circumstances: A King County employee in the Real Property Division asks whether external activities and outside employment create a conflict of interest under the Code of Ethics. The employee is also a president of a property investment corporation, an owner of rental properties, an instructor at a community college, and an associate broker of a real estate agency.
Analysis: When deciding whether a conflict of interest existed in his case, the Board examined a number of key factors, including the employee's official duties and the scope of his responsibilities in each area of outside employment. The employee works as a Right-of-Way Agent for King County. As such, he is responsible for securing legal conveyances of lands and right-of-ways through direct negotiation with property owners. In addition, he may negotiate and document the use of King County property via leases, rental agreements, concession contracts, and the sale of property in excess of county needs.
In view of the employee's official duties, the Board focused on three areas of outside employment which represented the greatest potential for a conflict of interest. These were the employee's activities as the president of a property investment corporation, as an owner of rental properties, and as an associate broker for a real estate agency. As president of an investment company, the Board was concerned that the employee may have a "substantial" or "controlling" financial interest. If this is the case, the interest must be disclosed (Section 3.04.03). As an owner of rental properties, there is potential that these properties may at some future date become the object of County interest and that the employee could profit financially from business with the County. As a real estate broker the potential for conflict is significant, because it is standard practice for the County to negotiate the acquisition of properties with real estate brokers. Although the employee has signed an independent broker's contract, the Board believes the employee will be unable to remove himself from financial benefits which could stem from his agency's involvement in the sale of properties to the County.
References: King County Cod of Ethics, sections 3.014.030 and 3.04.037.
ISSUED THIS ____________________ DAY OF ____________________, 1992.
Signed for the Board: Dr. J. Patrick Dobel, Chair
Dr. J. Patrick Dobel, ChairJPD/mag
Rev. Paul Pruitt
Timothy Edwards, Esq.
Tim Hill, King County Executive
King County Councilmembers
Quentin Yerxa, Deputy Prosecuting Attorney and Counsel to the Board of Ethics
Rella Foley, Director-Ombudsman, Office of Citizen Complaints
Pearl McElheran, Manager, Real Property Division