Advisory Opinion No. 2012-22

Re: George McKinnon

QUESTION PRESENTED

The Petitioner, a member of the Smithfield Zoning Board of Review, a municipal appointed position, requests an advisory opinion regarding whether the Code of Ethics prohibits him from participating in the Zoning Board’s consideration of a special use permit application involving a coffee shop that is his employer’s tenant’s competitor.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Smithfield Zoning Board of Review, a municipal appointed position, is not prohibited by the Code of Ethics from participating in the Zoning Board’s consideration of a special use permit application involving a coffee shop that is his employer’s tenant’s competitor.

The Petitioner is the chairman of the Smithfield Zoning Board of Review (“Zoning Board”), having served in that capacity for the past eighteen (18) years. He represents

that he is privately employed by Colbea Enterprises LLC (“Colbea”), which owns 125 Shell gas stations/ convenience stores in Massachusetts and Rhode Island. He informs that he works as a buyer/merchandiser for all of Colbea’s forty-five (45) corporately run convenience stores. He states that approximately thirty-seven (37) of the corporately run stores lease convenience store space to Dunkin Donuts, Honeydew Donuts or Mary Lou’s Coffee shops.

The Petitioner represents that Linear Retail Smithfield #1, LLC (“Linear”) has applied to the Zoning Board for a special use permit in order to operate a Starbucks with a drive-thru at 400 Putnam Pike. He states that Linear seeks to develop a portion of the former Rite Aid pharmacy building into a Starbucks, with another company developing the remainder of the property into a restaurant. He informs that one of Colbea’s Shell station/convenience stores, in which Mary Lou’s Coffee is a tenant, is located on Putnam Pike approximately three tenths (³/₁₀) of a mile from Linear’s proposed Starbucks location. He represents that, although the coffee shops are located inside the convenience stores, his duties only relate to convenience store sales and that he does not have any interaction, oversight or control over any of Colbea’s coffee shop tenants. He informs that his employment with Colbea is not impacted by the success or failure of the coffee shop tenants. For example, he states that he was not impacted by the recent closing of some Tim Horton’s locations in Colbea convenience stores and, thus, he does not anticipate that his employment will be affected if Linear is permitted to open a Starbucks drive-thru down the street from the Putnam Pike location of Mary Lou’s Coffee. He further states that he has no personal interest or any independent business relationship with Mary Lou’s Coffee.

Cognizant of the Code of Ethics, the Petitioner seeks guidance as to whether he may participate in a Zoning Board matter regarding his employer’s tenant’s competitor.

Under the Code of Ethics, the Petitioner may not participate in any matter in which he has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of his duties and employment in the public interest. R.I. Gen. Laws § 36-14-5(a). The Petitioner will have an interest in substantial conflict with his official duties if he has a reason to believe or expect that a “direct monetary gain” or a “direct monetary loss” will accrue, by virtue of his official activity, to himself, a family member, a business associate, an employer, or any business which he represents. Section 36-14-7(a). He is also prohibited from using his public position or confidential information received through his position to obtain financial gain, for himself or his family or business associates, other than that provided by law. Section 36-14-5(d). A business associate is defined as “a person joined together with another person to achieve a common financial objective.” Section 36-14-2(3).

The Commission has not previously considered the precise issue of whether a public official is required to recuse from matters involving his employer’s tenant’s competitor. However, with respect to a competitor’s business, the Commission has opined that a public official is required to recuse himself from participation and/or vote on any matter in which he has a business or financial interest, or which involves the financial interests of a direct competitor that is in reasonably close proximity to the official’s own business. A.O. 2005-59. Additionally, with respect to business associations of an official’s family member, the Commission has opined that a public official is not required to recuse from matters that may cause a financial impact upon his family member’s employer, as long as there is no corresponding financial impact upon the family member. A.O. 2008-69 (opining that a Woonsocket Zoning Board member could participate in discussion and voting on a petition for a variance brought by CVS, notwithstanding the fact that the petitioner’s sister was employed as an accounting analyst with CVS, because there was nothing to indicate that it was reasonably foreseeable that the outcome of the variance application before the Zoning Board would have a financial impact upon his sister as an employee of CVS). See also A.O. 2009-30; A.O. 2008-60.

Here, it is reasonable to assume that Starbucks and Mary Lou’s are competitors in the coffee business. It is also clear that Colbea and Mary Lou’s Coffee have a landlord tenant relationship, which, as the Commission has previously opined, constitutes a business associate relationship under the Code. A.O. 2011-36. However, the Petitioner is not automatically the business associate of Mary Lou’s Coffee simply because his employer, Colbea, is Mary Lou’s landlord. See A.O. 2011-36 (opining that that a Providence City Plan Commission member was not a business associate of his tenant’s client absent an independent financial nexus between the petitioner and the individual client). Based upon the Petitioner’s representations, his work does not involve any interaction, oversight or control over any of Colbea’s coffee shop tenants. Moreover, he states that his employment does not depend on the success or failure of Mary Lou’s Coffee as Colbea’s tenant. Absent an independent financial nexus between the Petitioner and Mary Lou’s Coffee, the relationship between the Petitioner and his employer’s tenant is too attenuated to trigger the prohibitions contained in the Code of Ethics with respect to the Zoning Board’s consideration of Linear’s special use permit application involving Starbucks, one of Mary Lou’s competitors.

Accordingly, it is the opinion of the Ethics Commission that the Petitioner, a member of the Smithfield Zoning Board of Review, a municipal appointed position, is not prohibited by the Code of Ethics from participating in the Zoning Board’s consideration of a special use permit application involving a coffee shop that is his employer’s tenant’s competitor.

Code Citations:

§ 36-14-2(3)

§ 36-14-5(a)

§ 36-14-5(d)

§ 36-14-7(a)

Related Advisory Opinions:

A.O. 2011-36

A.O. 2009-30

A.O. 2008-69

A.O. 2008-60

A.O. 2005-59

Keywords:

Competitor

Private Employment