Advisory Opinion No. 2011-46 Advisory Opinion No. 2011-46 Re: Samuel D. Zurier, Esq. QUESTION PRESENTED The Petitioner, a member of the Providence City Council, a municipal elected position, requests an advisory opinion regarding whether his business associate may serve as a hearing officer for the Providence School Department, and also whether the Petitioner may participate in the City Council’s review and vote on the School Department’s budget after his business associate has been engaged by the School Department. RESPONSE It is the opinion of the Rhode Island Ethics Commission that a business associate of the Petitioner may serve as a hearing officer for the Providence School Department and further, that the Petitioner is not prohibited by the Code of Ethics from participating in the City Council’s review and vote on the School Department’s budget, notwithstanding the fact that his business associate will be serving as a hearing officer for the School Department. The Petitioner is a member of the Providence City Council (“City Council”), having been elected in January 2010. He serves as a member of the City Council’s Finance Committee. In his private capacity, the Petitioner is “of counsel” to the law firm of Oliverio & Marcaccio, LLP. The Petitioner represents that while he shares expenses with the other attorneys of the firm, he does not share income or profits. He informs that occasionally he will work with the other attorneys on certain cases, in which instance the consulting attorney’s time and expenses are incorporated into the originating attorney’s invoice. The Petitioner represents that Raymond Marcaccio, a partner at Oliverio & Marcaccio, has been asked to serve as a hearing officer in disciplinary proceedings for the Providence School Department (“School Department”). He informs that the School Department generally relies upon the Providence Law Department (“Law Department”) staff attorneys for legal advice and representation. He advises, however, that Law Department attorneys will be participating in other roles at the disciplinary proceedings, making it necessary to seek outside counsel to serve as a hearing officer. He states that the Law Department has engaged Mr. Marcaccio over the past six years for legal work in a number of areas, but not previously for the School Department. He represents that Mr. Marcaccio’s assistance in the disciplinary proceedings would be before the School Board, with any appeals considered first by the Rhode Island Department of Education, and then ultimately by the courts. He states that the City Council does not review or participate in School Department disciplinary proceedings. The Petitioner informs that the School Department allocates its own funds for the expense of using outside legal counsel to serve as hearing officers. He states that this expense is a type of contingency for which there is not a specific budget line item within the School Department’s budget. The School Department budget amounts to approximately $325 million per year. He represents that the City Council has not completed its review of the School Department’s budget for the current year. He advises that the City Council’s Finance Committee, of which he is a member, reviews the School Department budget before the City Council votes to approve or deny it. Based upon the above representations, the Petitioner seeks advice regarding whether Mr. Marcaccio’s engagement by the School Department presents a conflict of interest for the Petitioner in his role as a member of the City Council, and if not, whether the Petitioner may participate in the Finance Committee’s review of the School Department’s budget after Mr. Marcaccio has been engaged by the School Department. 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). More generally, the Code 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). Additionally, a public official must recuse himself from participating in his agency’s consideration of a matter if his business associate represents himself or any other person, or acts as an expert witness. Section 36-14-5(f). 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). According to the facts represented above, the Petitioner is a business associate of Mr. Marcaccio. However, section 5(f) is not implicated here because Mr. Marcaccio will not be appearing before the Petitioner or the City Council, and the City Council has no involvement in any part of the School Department’s disciplinary hearings. With respect to whether the Petitioner can participate in the Finance Committee’s review of the School Department’s budget, it is significant that there is no specific line item in the budget for the payment of outside legal counsel. In a somewhat analogous advisory opinion, a Scituate Town Council member sought advice regarding whether he could participate in Town Council and Budget Committee hearings and meetings relative to the school department budget, given that his spouse was employed as a teacher in the Scituate school system. A.O. 2009-4. There, the role of both the Town Council and the Budget Committee was to approve or reject the entire budget as a whole, with no discussion of particular line items. Id. As the result of the Town Council and Budget Committee only reviewing the budget as a whole, the petitioner’s spouse was not singled out individually and would be impacted by the decisions to no greater or lesser extent than any other similarly situated school employee. Id. The Commission found that to the extent that such decision-making would affect his spouse, it was an indirect impact shared by all school department employees. Id. See also Commission Regulation 36-14-5004(b)(3) (prohibiting participation in budgetary line items affecting the employment, compensation or benefits of a public official’s family member, but permitting the public official to vote on the budget as a whole). In the present matter, there is no specific line item that will be used to pay Mr. Marcaccio for his services as a hearing officer for the School Department. The Petitioner represents that with this type of contingency School Department management, most likely the Superintendent, will exercise discretion to allocate funds from an unspecified source. Therefore, the Petitioner’s participation in the Finance Committee’s review of and the City Council’s vote on the School Department’s budget will neither involve discussion or decision-making relative specifically to the employment of Mr. Marcaccio, nor even more generally to the employment or compensation of anyone hired as outside legal counsel. Accordingly, it is the opinion of the Ethics Commission that Mr. Marcaccio’s service as a hearing officer for the School Department does not conflict with the Petitioner’s duties as a member of the City Council and that the Petitioner may participate in the Finance Committee’s review of and the City Council’s vote on the School Department’s budget because, to the extent that such decision-making affects Mr. Marcaccio, it is an indirect impact shared by all school department employees. Code Citations: § 36-14-2(3) § 36-14-2(7) § 36-14-5(a) § 36-14-5(d) § 36-14-5(f) § 36-14-7(a) Commission Regulation 36-14-5004(b)(3) Related Advisory Opinions: A.O. 2011-26 A.O. 2010-31 A.O. 2009-12 A.O. 2009-4 A.O. 2007-30 Keywords: Business Associate Budgets