Advisory Opinion No. 2012-26 Advisory Opinion No. 2012-26 Re: John X. Donahue QUESTION PRESENTED The Petitioner, a member of the Health Services Council, a state appointed position, requests an advisory opinion regarding whether he is prohibited by the Code of Ethics from participating in the Health Services Council’s consideration of a certificate of need application filed by Westerly Hospital, given that he formerly worked for Butler Hospital as an independent consultant regarding a different certificate of need application previously filed by Westerly Hospital. RESPONSE It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Health Services Council, a state appointed position, is not prohibited by the Code of Ethics from participating in the Health Services Council’s consideration of a certificate of need application filed by Westerly Hospital, notwithstanding that he formerly worked for Butler Hospital as an independent consultant regarding a different certificate of need application previously filed by Westerly Hospital. The Petitioner is a member of the Health Services Council (“HSC”), having been appointed in August 2009. The HSC is a statutorily created board composed of twenty-four members appointed by the Governor and legislative leaders (R.I. Gen. Laws § 23-17-13), serving in a strictly advisory capacity to the Rhode Island Department of Health regarding: (1) applications for initial licensure or licensure in the case of a proposed change in the owner, operator, or lessee of any licensed health care facility; (2) rules, regulations, and standards under the Licensing of Health Care Facilities Act (§ 23-17-1 to -59); (3) the Health Care Certificate of Need Act of Rhode Island (R.I. Gen. Laws § 23-15-1 to -11); and (4) the Health Facilities Construction Act (R.I. Gen. Laws § 23-16-1 to -8). The Petitioner retired from state employment in 2004 and currently works part-time, outside of the health care field. He states that from 2005 to early 2008 he worked as a consultant in the health care field. One of his consulting contracts was with Butler Hospital (“Butler”) in the summer of 2006, regarding a certificate of need application (“2006 CON application”) filed by Westerly Hospital for a fifteen bed geriatric/psychiatric service. Butler, a psychiatric hospital and potential competitor of Westerly Hospital with respect to this application, engaged the Petitioner to review Westerly Hospital’s application materials, attend public meetings of the HSC and suggest strategies regarding the impact of this potential service to Butler. He represents that he did not appear before the HSC or communicate with any members of the HSC regarding that matter. He informs that Westerly Hospital withdrew its 2006 CON application in the fall of 2006. Shortly thereafter, his consulting services for Butler concluded and he was paid in full for all services rendered. He states that his business relationship with Butler terminated in early 2007. In addition, he represents that he has not sought or accepted any health care related consulting services since early 2008. He further states that he will not seek or accept any health care related consulting contracts for the duration of his tenure on the HSC. The Petitioner informs that presently before the HSC is a new certificate of need application (“2012 CON application”) from the Westerly Hospital to establish a 15-bed geriatric psychiatric unit and an outpatient program. He states that expeditious review of the 2012 CON application commenced on August 30, 2012 and will be concurrently conducted by the Department of Health (“DOH”) and the HSC. He informs that a standing subcommittee of the HSC will review the 2012 CON application and then make a recommendation to the full HSC. The full HSC will review the subcommittee’s recommendation and issue a final recommendation to the Director of DOH. The Petitioner also informs that Westerly Hospital’s 2012 CON application may be assigned to his subcommittee. He states that, if permitted to participate, he could fairly and objectively consider the 2012 CON application. Given the above representations, the Petitioner seeks guidance as to whether he can participate in the HSC’s review of the 2012 CON application, both as part of a subcommittee and full council, given his previous business relationship with Butler regarding Westerly Hospital’s 2006 CON application. 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). A business associate is defined as “a person joined together with another person to achieve a common financial objective.” Section 36-14-2(3). This Commission has consistently found that no potential for a conflict of interest exists when a prior business relationship between a public official and a private party has ended and there is no ongoing or anticipated future relationship between the parties. In such instances, a public official may participate in matters involving his or her former employer or business associate, assuming no other conflicts are present. See A.O. 2011-9 (opining that the petitioner, an East Providence City Council member, was not prohibited from participating in and voting on City Council matters in which her former employer was an interested party, given that the employment had ended and there was no ongoing or anticipated future working relationship); A.O. 2008-7 (opining that the petitioner’s former general membership in the yacht club, where there was no ongoing or anticipated future relationship between the parties, did not constitute a potential conflict of interest); A.O. 2004-3 (opining that no business association existed between the petitioner and a bidder for a city contract, given that all work had been completed, there were no outstanding bills for services rendered and the parties did not anticipate the performance of specific additional work in the near future). In the present matter, the Petitioner’s representations demonstrate that his business association with Butler terminated in early 2007. Additionally, he states that he has not sought or accepted any consulting contracts since he has been a member of the HSC and informs that he will not perform any health care related consulting services for the duration of his tenure on the HSC. Therefore, it is not reasonably foreseeable that the Petitioner would work for Butler or any other heath care facility while he is still a member of the HSC. Accordingly, the Petitioner is not prohibited by the Code of Ethics from participating in the HSC’s review of Westerly Hospital’s 2012 CON application, notwithstanding his previous work for Butler relative to Westerly Hospital’s 2006 CON application. Code Citations: § 36-14-2(3) § 36-14-5(a) § 36-14-7(a) Related Advisory Opinions: A.O. 2011-9 A.O. 2008-7 A.O. 2004-3 Keywords: Business Associate Private Employment