Advisory Opinion No. 2015-12 Approved: March 10, 2015 Re: Joseph R. Sousa QUESTION PRESENTED: The Petitioner, a member of the Tiverton Town Council, a municipal elected position, requests an advisory opinion regarding whether the Code of Ethics prohibits him from participating in the Town Council’s consideration of litigation matters involving the son of one of his business associates. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Tiverton Town Council, a municipal elected position, is not prohibited by the Code of Ethics from participating in the Town Council’s consideration of litigation matters involving the son of one of his business associates, provided that his business associate is not involved in the litigation and will not be financially impacted. The Petitioner is a member of the Tiverton Town Council (“Town Council”), having been elected in November 2014. He states that the Town of Tiverton (“Town”) is involved in various litigation matters with a local business, Tiger Tree Landscaping, Inc. (“Tiger Tree”). He represents that the Town Council is reviewing the facts of these matters and is considering litigation strategies to resolve these cases. In his private capacity, the Petitioner is retired but performs handyman work for a few clients in Town. He states that one of his clients is Barbara Pelletier, whose son James Pelletier owns Tiger Tree. The Petitioner represents that he has worked for Barbara Pelletier several times doing small jobs, and it is reasonably foreseeable that he will work for her again. However, he informs that Barbara Pelletier has no financial or managerial connection with her son’s business, Tiger Tree, or any involvement in the litigation matters between the Town and Tiger Tree. The Petitioner furthers states that he has no business relationships with Tiger Tree or James Pelletier. Cognizant of the Code of Ethics, the Petitioner seeks guidance as to whether his business relationship with Barbara Pelletier prevents him from participating in the Town Council’s consideration of litigation matters involving Barbara Pelletier’s son’s company, Tiger Tree. Under the Code of Ethics, a public official must recuse himself from participation when his business associate or employer, or a person authorized by his business associate or employer, appears or presents evidence or arguments before his state or municipal agency. Commission Regulation 36-14-5002(a)(2) (“Regulation 5002”); R.I. Gen. Laws § 36-14-5(f). The Code of Ethics also 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 business by which he is employed or which he represents. Section 36-14-5(d). Additionally, 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. Section 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). 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, 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. A.O. 2011-45 (opining that an ongoing accountant-client and landlord-tenant relationship between a North Smithfield Town Council member and an architect constituted a business associate relationship). In the present matter, based upon the Petitioner’s representations, we find that the Petitioner and Barbara Pelletier are business associates. However, the Petitioner represents that Barbara Pelletier has no involvement or financial interest in Tiger Tree, her son James Pelletier’s business, and has no involvement with the litigation matters between the Town and Tiger Tree. The Petitioner further represents that he has no business relationship with James Pelletier or Tiger Tree. Accordingly, absent an independent financial nexus between the Petitioner and James Pelletier/Tiger Tree, the connection of the Petitioner to James Pelletier/Tiger Tree is too attenuated to trigger the above prohibitions of the Code of Ethics. See A.O. 2014-22 (opining that a Providence Zoning Board of Review member was not a business associate of a third entity with which his private employer had a business association); A.O. 2011-45 (opining that a North Smithfield Town Council member was not automatically the business associate of his tenant’s business associates, absent an independent financial nexus between the petitioner and that third party). For all of these reasons, it is the opinion of the Ethics Commission that the Petitioner is not prohibited by the Code of Ethics from participating in the Town Council’s consideration of litigation matters involving James Pelletier and Tiger Tree Landscaping, provided that his business associate Barbara Pelletier is not involved in the litigation and will not be financially impacted. 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. 2014-22 A.O. 2011-45 Keywords: Business Associate