Advisory Opinion No. 2013-25 Re: The Honorable Henry F. Winthrop QUESTION PRESENTED The Petitioner, a member of the Newport City Council, a municipal elected position, requests an advisory opinion regarding whether the Code of Ethics prohibits him from participating in City Council matters involving the Newport Yacht Club, given that his sister and brother-in-law are members of the Newport Yacht Club. RESPONSE It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Newport City Council, a municipal elected position, is not prohibited by the Code of Ethics from participating in City Council matters involving the Newport Yacht Club, notwithstanding that his sister and brother-in-law are members of the Newport Yacht Club, provided that there are no other facts or circumstances that would otherwise create a conflict of interest. The Petitioner is a member of the Newport City Council (“City Council”). He also serves as Mayor,[1] having been elected to that position by the City Council in January 2013. He states that a resolution came before the City Council on July 24, 2013, regarding the Newport Yacht Club’s (“Yacht Club”) lease of municipal property. He informs that the City Council instructed City staff to research the terms of the current lease and the nature of the property improvements made by the Yacht Club for discussion at a future City Council meeting. He represents that the Yacht Club has been leasing land from the City of Newport (“City”) since at least 1963. He states that the Yacht Club consists of a clubhouse, a restaurant and sailing facilities, and it provides dockage and mooring services to its members and offers sailing lessons to its members and the public. The Petitioner represents that he recused from participating in the City Council’s consideration of this matter because his sister and brother-in-law are members of the Yacht Club and pay annual dues to the Yacht Club. He further states that his brother-in-law served as the Yacht Club’s Commodore, which is the Chair of the Board of Directors, from 2011 to 2012. At this time, however, he states that his brother-in-law no longer holds any leadership positions in the Yacht Club. He informs that his sister does not hold any leadership position at the Yacht Club. He represents that he infrequently goes to the Yacht Club and has most recently been there in his official capacity as Mayor, in a ceremonial role, to hand out trophies to the winners of races and regattas. Given the above representations, the Petitioner seeks advice as to whether he can participate in upcoming City Council matters related to the Yacht Club’s municipal lease. He states that he expects the matter to be placed on the agenda some time in the fall after the staff has had time to gather the requested information. Under the Code of Ethics, a public official may not participate in any matter in which he has an interest, financial or otherwise, that is in substantial conflict with the proper discharge of his duties or employment in the public interest. R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest exists if an official has reason to believe or expect that he, any person within his family, a business associate or an employer will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. Section 36-14-7(a). The Code also prohibits a public official from using his public office or confidential information received through his public office to obtain financial gain for himself, his family, his business associate, or any person by which he is employed or whom he represents. Section 36-14-5(d). Under the Code of Ethics, a business associate is defined as “a person joined together with another person to achieve a common financial objective.” Section 36-14-2(3). A person is defined as “an individual or a business entity.” Section 36-14-2(7). The Commission has previously stated that persons are “business associates” of the entities for which they serve as either officers or members of the Board of Directors, or in some other leadership position that permits them to affect the financial objectives of the organization. See e.g. A.O. 2012-28 (opining that a Tiverton Planning Board member, who was also a member of the Board of Directors of the Tiverton Yacht Club (“TYC”), was a business associate of the TYC and, therefore, was required to recuse from participating in the Planning Board’s consideration of a proposed amendment to the Tiverton Zoning Ordinance as requested by the TYC). In contrast, however, the Commission has generally held that mere membership in an organization, as opposed to the holding of a position as a director, officer, or other position of leadership, does not create a business association requiring recusal. See A.O. 2009-39 (opining that the Barrington Town Planner’s general membership in the Bayside Family YMCA (“YMCA”), where he did not serve in any leadership position, did not constitute a business associate relationship with the YMCA and, thus, he was permitted to participate in Barrington’s review of the YMCA development proposal and plans). The Commission considered an analogous fact pattern in Advisory Opinion 2010-25, in which a Tiverton Town Council member asked if the Code of Ethics prohibited him from participating in Town Council matters involving the Tiverton Yacht Club (“TYC”), given that his daughter and son-in-law were members of the TYC. In that case, the Commission concluded that neither the petitioner’s daughter nor his son-in-law were business associates of the TYC because neither held leadership positions there and, thus, he was not required to recuse from TYC matters before the Town Council. The Commission further opined that even if the petitioner’s daughter and son-in-law were business associates of the TYC, the petitioner was not required to recuse from matters that caused a financial impact solely upon his family member’s employer or business associate, as long as there was no corresponding impact upon the family member. See also A.O. 2009-30 (opining that a Woonsocket Planning Board member was not required to recuse from matters involving CVS because there was nothing to indicate that his official involvement in CVS’s proposals before the Planning Board would have a financial impact upon his daughter as an employee of Rite Aid, a CVS competitor). In the present matter, the Petitioner is not a member of the Yacht Club and has most recently been there in his official capacity as Mayor in a ceremonial role to hand out trophies. He represents that his sister and brother-in-law are members of the Yacht Club and neither holds a position of leadership in the Yacht Club. Therefore, similar to Advisory Opinion 2010-25, the Petitioner’s sister and brother-in-law are not business associates of the Yacht Club as that term is defined in the Code of Ethics. However, even if the Petitioner’s sister and brother-in-law were business associates of the Yacht Club, his family member’s business relationship would not trigger his recusal unless his official actions would result in a corresponding financial impact upon his family member. For all of these reasons, it is the opinion of the Ethics Commission that the Petitioner is not prohibited by the Code of Ethics from participating in City Council matters involving the Newport Yacht Club, notwithstanding that his sister and brother-in-law are members of the Newport Yacht Club Code Citations: § 36-14-2(3) § 36-14-2(7) § 36-14-5(a) § 36-14-5(d) § 36-14-7(a) Related Advisory Opinions: A.O. 2012-28 A.O. 2010-25 A.O. 2009-39 A.O. 2009-30 Keywords: Business Associate Family Memberships [1] According to the Charter of the City of Newport, the Chairman of the City Council receives the title of “Mayor” and is recognized as the official head of the City for all ceremonial purposes. Newport City Charter (“Charter”) § 2-5. The City operates pursuant to a “Council-Manager” form of government, in which a City Manager acts as the chief administrative officer of the City. Charter § 5-3.