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Financial Investments
ISSSUE: WHETHER OR NOT EMPLOYEE FINANCIAL INTERESTS IN COMPANIES OBTAINED IN THE FORM OF STOCKS, SHARES, AND OR OTHER MUTUAL FUNDS CONSTITUTES A CONFLICT OF INTEREST?
Opinion: As these sections of the Code make clear, no conflict of interest is posed by ownership of stock unless the ownership level reaches a threshold of one tenth of one percent. The Board notes that this process is the same as found in the Count's previous Code of Ethics and this has been the County rule since 1972.
The Board also notes that ownership of mutual funds poses an extremely remote possibility of conflict of interest. To meet the conditions of the code, an individual would have to own one tenth of one percent of all shares of the mutual fund. Additionally, the mutual fund would have to own one tenth of one percent of all the shares of the company.
In the case in which an employer does cross the threshold and possess a financial interest in a person doing business or seeking to do business, the person must disclose this in their financial disclosure forms.
The Board further notes that if an individual possesses a financial interest in a person doing business or seeking to do business with King County and if that individual substantially participates in or influences decisions in the area where the person seeks to do business it would constitute a conflict of interest. The individual should report this conflict of interest or his or her supervisor as required y the code and take appropriate action.
Statement of Circumstances: A King County employee in the Assessor's Office who serves as an assessments auditor has inquired whether ownership of stocks in companies which do business with King County constitutes a conflict of interest.
He has also asked whether ownership of shares in a mutual fund which possesses shares in a company which does business with King County constitutes a conflict of interest.
Analysis:
AUTHORITY RELIED UPON
3.04.030 Conflict of interest. No county employee shall engage in any act which is in conflict with the performance of official duties. A county employee shall be deemed to have a conflict of interest if the employee directly or indirectly:
- E. Participates in, influences, or attempts to influence, directly or indirectly, the selection of, or the conduct of business or a transaction with a person doing or seeking to do business with the county if the employee has a financial interest in or with said person;
M. Directly or indirectly possesses a substantial or controlling interest in any person which does or seeks to do business with the county, without disclosing such interest as provided by this chapter. A substantial interest is an interest that exceeds one-tenth of one percent of the outstanding securities of the person; or, if the interest is in an unincorporated business concern, exceeds one percent of the net worth of such concern; or the financial interest of a person exceeds five percent of the net worth of the employee and his or her immediate family;
S. The provisions of subsections B, E, and N of this section are violated by the possession by an employee of a financial interest in a person or other intity which is not a substantial interest as defined by subsection M herein. (ord. 9704 S 4, 1990 ; ORD. 1308 S 4, 1972).
ISSUED ON THE ____________ day of ______________, 1991.
Signed for the Board: Dr. J. Patrick Dobel, Chair
Members:
- Timothy Edwards, Esq
Dr. Judith Woods
Dr. J. Patrick Dobel, Chair
cc:
- Tim Hill, King County Executive
King County Councilmembers
Bob Stier, Deputy Prosecuting Attorney
Rella Foley, Ombudsman, Office of Citizen Complaints
Ruth Ridder, King County Assessor
Ken Morse, Manager, Personal Property Division, King County Assessor's Office
Mari Slabaugh, Manager, Support Section, King County Assessor's Office