Advisory Opinion No. 2013-12 Advisory Opinion No. 2013-12 Re: James J. Lombardi, III, Esq./CPA QUESTION PRESENTED The Petitioner, the City Treasurer for the City of Providence, a municipal appointed position, requests an advisory opinion regarding whether the Code of Ethics prohibits him from receiving a Community Development Block Grant from the City. RESPONSE It is the opinion of the Rhode Island Ethics Commission that the Petitioner, the City Treasurer for the City of Providence, a municipal appointed position, is not prohibited by the Code of Ethics from receiving a Community Development Block Grant from the City. The Petitioner is the City Treasurer for the City of Providence (“City”) having been appointed by the Providence City Council. In his private capacity, the Petitioner is a sole practitioner attorney and a certified public accountant with an office located in the City of Cranston. He is also the Executive Director of Rhode Island Tax Clinic, Inc. (“RITC”), a non-profit tax clinic located in the City. The Petitioner informs that, while he is presently not compensated for his services as Executive Director at RITC, his wife is a paid employee of RITC. The Petitioner, on behalf of RITC, has applied to the City’s Community Block Development Grant (“CDBG”) program for a Twenty Five Thousand ($25,000) Dollar grant. The Petitioner states that should RITC be awarded a grant, the CDBG funds would be used for the payment of the rent and the salary of a staff attorney employed at RITC. The Petitioner further states that he is presently a volunteer RITC employee and that, although his wife is a paid employee, the CDBG funds would not be used to pay her salary or his, should he receive a salary in the future. The CDBG program is a federal program that provides the City with funding each year from the United States Department of Housing and Urban Development (“HUD”) to assist in the revitalization of local communities. The City passes these funds on to eligible organizations through an annual open and public competitive grant process. The Petitioner represents that applications for the CDBG program are submitted to and considered by the City Planning Department, which thereafter makes recommendations to the City Council for approval of the CDBG appropriations. The Petitioner further represents that, once grants are approved by the City Council, a request for disbursement of funds is made by the Planning Department to the City Controller’s Office. The Petitioner states that the City Treasurer does not exercise authority over the City Controller or over any City employees outside of the Treasurer’s Office. The Petitioner further states that all checks relative to the CDBG are issued by the City Controller bearing the Petitioner’s signature as City Treasurer; however, he does not have authority to produce or write checks on behalf of the City. The Treasurer’s office is responsible only for confirming the accuracy of the checks that were requested by the Planning Department and drawn by the City Controller relative to the CDBG program. More importantly, the Petitioner represents that, as City Treasurer, he has no substantive authority, control or involvement in the City’s administration of the CDBG program. Under the Code of Ethics, a public official may not have any interest, financial or otherwise, direct or indirect, which is in substantial conflict with the proper discharge of his duties in the public interest. R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest occurs if he has reason to believe or expect that he or any family member, or business associate, or any business by which he is employed or represents will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. 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, other than that provided by law, for himself, a family member, business associate, or any business by which he is employed or represents. Section § 36-14-5(d). Further, no person subject to the Code or any business associate of said person may enter into a contract with a municipal agency unless “the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded.” Section 36-14-5(h). The Commission has previously concluded that a public official may apply for and receive a loan from the same municipality in which he serves as a public official. See A.O. 2006-19 (opining that a South Kingstown Solicitor could participate in a low interest loan program where his role in the Town’s decision to participate in the Loan Program was limited to offering legal advice); A.O. 2001-57 (concluding that a Town Councilor could receive a loan administered by the planning department, provided that he received funds that were allocated prior to his election and recused from matters concerning the members of the planning board who processed and approved the loan applications); A.O. 2000-28 (finding that a Town Councilor could participate in a CDBG loan program administered by the Town, provided that any loan funds awarded to him would not be allocated from funds upon which he had voted). Here, the City’s CDBG program grants are awarded through an open and public process. The facts as represented also indicate that the Petitioner, in his official capacity, has no substantive involvement in the administration of the CDBG program and no control over City employees outside the Treasurer’s Office. His role as Treasurer relative to the CDBG program is limited to acting as signatory on the checks issued by the City Controller, with no authority to request or issue checks. Therefore, given these representations, the Petitioner, the City Treasurer for the City of Providence, is not prohibited by the Code of Ethics from receiving a Community Development Block Grant from the City. This advisory opinion only considers the application of the Code of Ethics and does not address the application of any municipal charter or ordinance, or any other policy, statute, rule or regulation. This opinion is strictly limited to the facts stated herein and relates only to the application of the Rhode Island Code of Ethics. This Commission offers no opinion on the effect which any other statute, regulation, ordinance, constitutional or charter provision or canons of professional ethics may have on your situation. Under the Code of Ethics advisory opinions are based on the representations made by, or on behalf of, an official and are not adversarial, or investigative proceedings. Code Citations: 36-14-5(a) 36-14-5(d) 36-14-5(h) 36-14-7(a) Related Advisory Opinions: 2006-19 2001-57 2000-18 Keywords: Financial Interest Grants