Advisory Opinion No. 2014-8 Rhode Island Ethics Commission Advisory Opinion No. 2014-8 Approved: March 25, 2014 Re: Naomi Neville QUESTION PRESENTED: The Petitioner, a member of the Newport City Council, a municipal elected position, requests an advisory opinion regarding whether the Code of Ethics prohibits her participation in City Council matters involving the Newport Preservation Society, given that a book that she co-authored is sold at the Newport Preservation Society’s gift shop. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Newport City Council, a municipal elected position, is not prohibited by the Code of Ethics from participating in City Council matters involving the Newport Preservation Society, notwithstanding that a book she co-authored is sold at the Newport Preservation Society’s gift shop. The Petitioner is a member and vice-chairperson of the Newport City Council (“City Council”). In her private capacity, she is an architect and maintains offices in Newport. She represents that she co-authored a book with E. Ashley Rooney entitled, Gracious Living: Home Design for Your Future (“Gracious Living”), a coffee table book on architectural renovations.[ 1] She states that Gracious Living is currently for sale on Amazon, in bookstores around the country and in a few local stores, including the Newport Preservation Society’s (“NPS”) Newport Mansions Store in Newport. The Petitioner represents that NPS is a private, non-profit organization whose mission is to protect, preserve, and present a collection of house museums and landscapes, such as the Breakers, Marble House, the Elms and Rosecliff.[2] She informs that NPS occasionally appears before the City Council in order to apply for special event licenses and victualing licenses for its various properties. Most recently, she states that NPS, along with a caterer, applied for annual victualing licenses for the Elms Carriage House and the Tea House at the Marble House. She represents that the City Council is scheduled to consider these applications on March 26, 2014. The Petitioner states that after a book talk on Gracious Living, she was approached by a staff member of NPS who expressed interest in having NPS’ store offer the book for sale, given that the shop focuses on history, preservation and architecture. She represents that she did not facilitate NPS’ acquisition of Gracious Living for their shop; rather, NPS contacted her publisher, Schiffer Publishing, Ltd. (“Schiffer”), directly. She further states that she has no direct involvement in the sale of her book, which is exclusively handled by the publisher. She adds that she receives royalty payments twice a year, which she shares with her co-author. She informs that the proceeds to date from all sales have amounted to $100 and that the individual sales are not itemized in the royalty payments. Finally, she states that she has no other association with NPS. Given the above representations, the Petitioner seeks advice as to whether she can participate in NPS matters that come before the City Council. Under the Code of Ethics, a public official must recuse herself from participation when her business associate or a person authorized by her business associate, appears or presents evidence or arguments before her state or municipal agency. Commission Regulation 36-14-5002 (“Regulation 5002”); R.I. Gen. Laws § 36-14-5(f). The Code of Ethics also prohibits a public official from using her public office or confidential information received through her public office to obtain financial gain for herself, her family, her business associate, or any person by which she is employed or whom she represents. Section 36-14-5(d). Additionally, a public official may not participate in any matter in which she has an interest, financial or otherwise, or engage in any business, employment, transaction or professional activity that is in substantial conflict with the proper discharge of her duties or employment in the public interest. Section 36-14-5(a). A substantial conflict of interest exists if an official has reason to believe or expect that she, any person within her family, a business associate or an employer will derive a direct monetary gain or suffer a direct monetary loss by reason of her 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). A person is defined as “an individual or a business entity.” Section 36-14-2(7). In determining whether a relationship between two parties constitutes an ongoing business association as defined in the Code of Ethics, the Ethics Commission examines the nature of the association and the scope of the business dealings between the parties and looks to, among other things, whether the parties are conducting ongoing business transactions, have outstanding accounts, or there exists an anticipated future relationship. See A.O. 2010-16 (opining that an East Greenwich Planning Board member, who in his private capacity was the publisher of a local news and information website, was required to recuse when a business associate appeared before the Planning Board, specifically, if the business associate currently advertised on the petitioner’s website, had outstanding accounts, or when there was an anticipated future relationship between the parties). In the present matter, the Petitioner was not involved in the acquisition of Gracious Living from the publisher for sale in NPS’ Newport Mansions Store. The Petitioner has a contractual relationship with Schiffer in which she receives royalties from the number of books sold. The Petitioner states that Schiffer contracts with book stores and other retailers to sell her book, as it has with NPS. Thus, the Petitioner is not in contractual privity with NPS and she has no direct financial connection to NPS and its Newport Mansions Store. See A.O. 2011-25 (opining, inter alia, that R.T. Nunes & Sons construction and paving company, owned by member of the House of Representatives, was not prohibited by the Code of Ethics from subcontracting with a general contractor to perform work on a state agency project because the company was not in contractual privity with the state as it was paid directly by the general contractor). Furthermore, the Petitioner states that any royalties she receives are lumped together from all sales and are not traceable to particular sellers. Given the absence of a direct financial nexus between the Petitioner and NPS, there is no “business associate” relationship between the Petitioner and NPS. Accordingly, it is the opinion of the Ethics Commission that the Petitioner is not prohibited by the Code of Ethics from participating in City Council matters involving NPS. This Advisory Opinion is strictly limited to the facts stated herein and relates only to the application of the Rhode Island Code of Ethics. Under the Code of Ethics, advisory opinions are based on the representations made by, or on behalf of, a public official or employee and are not adversarial or investigative proceedings. Finally, this Commission offers no opinion on the effect that any other statute, regulation, ordinance, constitutional provision, charter provision, or canon of professional ethics may have on this situation. 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 36-14-5002 Related Advisory Opinions: A.O. 2011-25 A.O. 2010-16 Keywords: Business Associate