Advisory Opinion No. 2013-33 Re: Scott R. Schmitt QUESTION PRESENTED The Petitioner, a member of the Cumberland Town Council, a municipal elected position, requests an advisory opinion regarding whether he is prohibited by the Code of Ethics from participating when an attorney, who is his spouse’s business associate, represents another person before the Town Council. RESPONSE It is the opinion of the Rhode Island Ethics Commission that that Petitioner, a member of the Cumberland Town Council, a municipal elected position, is not prohibited by the Code of Ethics from participating when an attorney, who is his spouse’s business associate, represents another person before the Town Council. The Petitioner is a member of the Cumberland Town Council (“Town Council”), having been elected to his first term in November 2012. In his private capacity, he is the owner and operator of Adam VIII Inc., d/b/a The Clothesline Laundry Services, a small chain of self-service laundromats located in Woonsocket, Rhode Island and Blackstone, Massachusetts. He states that he also has ownership interests in numerous other businesses. On February 19, 2013, the Commission issued Advisory Opinion 2013-10 to this Petitioner. There, the Petitioner represented that he and his spouse jointly owned ARS Holdings, LLC (“ARS”). He informed that ARS owned and operated four (4) commercial properties in Cumberland. With respect to ARS, he stated that he was not involved in the day to day operations, had not been involved in any material aspect of running the business, and was not involved in negotiating any leases with any current or prospective tenants. He represented that his spouse, through her property management company, managed all the operations of ARS. The Petitioner sought advice from the Commission because one of the tenants of ARS was Bigos & Partington, Ltd., a Cumberland based law firm. He informed that Scott Partington, Esq., a principal of Bigos & Partington, occasionally represented clients before the Town Council and had a matter pending before the Town Council. Based on those facts, particularly the Petitioner’s ownership interest in ARS, the Commission concluded that the Petitioner and Mr. Partington had a landlord/tenant relationship, which constituted a business associate relationship as that term is defined by the Code of Ethics. Accordingly, the Commission opined that the Petitioner was required to recuse from participating in any Town Council matters in which Mr. Partington appeared on behalf of himself or another. At this time, the Petitioner seeks further advice from the Commission based on a change in circumstances. The Petitioner states that he no longer owns any interest in ARS, having recently transferred all of his interest in the business to his spouse. He represents that his spouse is now the sole owner and manager of ARS, running the day to day operations. He informs that ARS continues to own and operate the building in which Bigos & Partington is a tenant. He states that he does not participate in any aspect of ARS and does not anticipate reacquiring an interest in ARS while he is serving on the Town Council. The Petitioner represents that he divested his interest in ARS because he found that his business association with Mr. Partington prevented him from fulfilling his duties as a Town Council member. He states that since Advisory Opinion 2013-10 was issued, he has recused approximately four (4) times from matters in which Mr. Partington appeared on behalf of a client. He represents that, notwithstanding his former business association with Mr. Partington and his wife’s continued business association with Mr. Partington, he believes that he can participate in any matter in which Mr. Partington appears before the Town Council in a fair and objective manner. Given this change in circumstances, the Petitioner seeks advice as to whether he is still required to recuse from Town Council matters in which Mr. Partingon represents himself or another person. The Code of Ethics requires the Petitioner to recuse himself if his business associate appears to present evidence or arguments, on behalf of himself or another, before his municipal agency. Commission Regulation 36-14-5002(a) (“Regulation 5002”); R.I. Gen. Laws § 36-14-5(f). A person will represent another person before a state or municipal agency if he is authorized by that other person to act, and does in fact act, as the other person’s attorney in the presentation of evidence or argument before that agency for the purpose of influencing the judgment of the agency in favor of that other person. Section § 36-14-2(13); Commission Regulation 36-14-5016(b)(1). A “business associate” is defined as any individual or business entity joined together with a public official “to achieve a common financial objective.” Section 36-14-2(3), (7). The Commission has previously opined that a landlord/tenant relationship constitutes a “business associate” relationship under the Code. See e.g. A.O. 2013-10; A.O. 2012-22; A.O. 2011-44; A.O. 2011-36. In the present matter, the Petitioner is no longer a business associate of Mr. Partington as a result of the divestiture of his ownership in ARS. While the business associate relationship between the Petitioner’s spouse and Mr. Partington remains intact, by virtue of their ongoing landlord/tenant relationship, the Code of Ethics does not prohibit the Petitioner from taking an official action that impacts his spouse’s business associate unless that action is likely to have corresponding financial impact upon his spouse. See A.O. 99-85 (opining that a Little Compton Town Council member could participate in a matter involving the Sakonnet Preservation Association (“SPA”), notwithstanding that her spouse was a business associate of the SPA). See also A.O. 2013-25; A.O. 2009-29; A.O. 2005-14; A.O. 2002-41. Here, there is no indication that the Petitioner’s official actions involving matters in which Mr. Partington represents a client before the Town Council will have any financial impact upon the Petitioner’s spouse. 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 Town Council matters in which his spouse’s business associate represents himself or another, as long as the Petitioner’s participation does not result in a corresponding financial impact upon his spouse. Code Citations: § 36-14-2(3) § 36-14-2(7) § 36-14-2(13) § 36-14-5(f) Commission Regulation 36-14-5002 Commission Regulation 36-14-5016 Related Advisory Opinions: A.O. 2013-25 A.O. 2013-10 A.O. 2012-22 A.O. 2011-44 A.O. 2011-36 A.O. 2009-29 A.O. 2005-14 A.O. 2002-41 A.O. 99-85 Keywords: Business Associate Family: Business Interest