Advisory Opinion No. 2016-23 Rhode Island Ethics Commission Advisory Opinion No. 2016-23 Approved: July 19, 2016 Re: Lisette M. Gomes, Esq. QUESTION PRESENTED: The Petitioner, the Assistant City Solicitor for the City of Pawtucket, a municipal appointed position, requests an advisory opinion regarding whether she may continue to serve as the President of the Board of Directors of Cape Verdean American Community Development, a nonprofit organization that receives grants administered by the City, and whether she may continue to rent office space for her private law practice in a building owned by the organization. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Code of Ethics does not prohibit the Petitioner, the Assistant City Solicitor for the City of Pawtucket, a municipal appointed position, from continuing to serve as the President of the Board of Directors of Cape Verdean American Community Development, a nonprofit organization that receives grants administered by the City, nor from continuing to rent office space in a building owned by the organization. The Petitioner has served as the Assistant City Solicitor for the City of Pawtucket (“the City”) since November 16, 2015. She states that, as Assistant City Solicitor, she provides legal advice to the City’s Mayor, City Council, and to all of the City’s officers, departments, boards and commissions concerning matters arising in connection with the exercise of their official duties. In her private capacity, the Petitioner serves as the President of the Board of Directors of Cape Verdean American Community Development (“CACD”), which she describes as “a 501(c)(3) non-profit human service organization established to provide education services to immigrant populations.” The Petitioner represents that CACD operates its programs out of a building that it owns in the City, and that she rents office space from CACD in the same building, from which she operates her private law practice. The Petitioner states that CACD’s operations are funded primarily through fundraising activities and the receipt of grant proceeds. She notes that in 2014, before she began serving as Assistant City Solicitor and prior to her becoming CACD’s President, CACD applied for and obtained a U.S. Department of Housing and Urban Development Community Development Block Grant (“Block Grant”) administered by the City through its Department of Planning. The Petitioner represents that after becoming CACD’s President, but prior to becoming the Assistant City Solicitor, she signed and submitted a successful Block Grant application to the City for a new boiler and to support CACD’s after-school programs. Shortly after becoming the Assistant City Solicitor, CACD’s executive director signed and submitted another Block Grant application to the City on CACD’s behalf for a new fire alarm system and for more after-school programs; this application was not approved. The Petitioner represents that, as Assistant City Solicitor, she has never provided the City or the Planning Department with any advice regarding any of CACD’s grant proposals or relative to any other Block Grant applications. She states that CACD will continue to apply to the City for Block Grants in the future, although it will continue its practice of having its executive director, rather than the Petitioner as President of the Board of Directors, sign all applications. Given all of the above representations, the Petitioner asks whether the Code of Ethics prohibits her from continuing to serve on CACD’s Board of Directors or from renting office space from CACD. She also asks whether she is in compliance with the Code’s conflict of interest provisions by refraining from signing any CACD Block Grant applications in her capacity as President of CACD, and by recusing from any participation as Assistant City Solicitor in the City’s review of Block Grant applications. As an initial matter, we note that the Petitioner and CACD are “business associates” as that term is used in the Code of Ethics due to her position as the President of CACD’s Board of Directors. A business associate is defined as “a person joined together with another person to achieve a common financial objective.” R.I. Gen. Laws § 36-14-2(3). The Commission has previously opined that persons are “business associates” of the entities for which they serve as either officers or members of the Board of Directors, or in some other leadership position that permits them to affect the financial objectives of the organization. See, e.g., A.O. 2014-14 (public official who served on Board of Directors of Rhode Island Boy Scouts was a business associate of the Boy Scouts and was therefore required to recuse from participating in decisions that would financially impact the Boy Scouts, as well as from any matters in which a Boy Scout representative appeared to represent the organization’s interests); A.O. 2012-28 (Tiverton Planning Board member, who was also a member of the Board of Directors of the Tiverton Yacht Club (“TYC”), was a business associate of the TYC and, therefore, was required to recuse from participating in the Planning Board’s consideration of a proposal requested by the TYC). The Petitioner would also be considered a business associate of CACD due to the fact that she is currently renting office space from the organization. The Commission has consistently found that the landlord/tenant relationship constitutes a “business associate” relationship as that term is defined in the Code. See, e.g., A.O. 2013-10; A.O. 2012-22; A.O. 2011-44; A.O. 2011-36; A.O. 2006-9; A.O. 2005-49; A.O. 2002-70; A.O. 98-16. Just as the Code of Ethics does not prohibit the Petitioner from creating a business association by serving as the President of CACD’s Board of Directors, the Code similarly does not prohibit a business association based on a landlord/tenant relationship. However, as set forth below, the Petitioner is required to properly manage any conflicts of interest that may arise as a result of her business associations with CACD. Under the Code of Ethics, the Petitioner is prohibited from participating in any matter pending before the City in which she has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of her duties in the public interest. See section 36-14-5(a). An official will have an interest in substantial conflict with her official duties if it is likely that a “direct monetary gain” or a “direct monetary loss” will accrue, by virtue of her activity, to the official, a family member, a business associate, an employer, or any business which the public official represents. Section 36-14-7(a). A public official is also is prohibited from using her public position or confidential information received through her position to obtain financial gain, other than that provided by law, for herself, a family member, business associate, or any business by which she is employed or which she represents. Section 36-14-5(d). Based on these provisions of the Code of Ethics, the Petitioner must recuse from participating in any matters pending before the City that are likely to financially impact her business associate, CACD. This would include, but not be limited to, recusing from providing legal advice to the Planning Department or Mayor concerning any Block Grants for which CACD has applied or is likely to apply, or concerning any competing applications from other organizations. When recusing, the Petitioner must complete a statement of conflict of interest (“recusal form”) and forward it to the Ethics Commission in compliance with section 36-14-6. The Code of Ethics also prohibits the Petitioner from representing herself or any other person or organization before the public agency of which she is a member or by which she is employed. Section 36-14-5(e). Given the Petitioner’s broad description of her duties as the City’s Assistant Solicitor, we are of the opinion that section 5(e) of the Code prohibits her from representing CACD before the City on any matter, including Block Grant applications. This would include any form of advocacy on CACD’s behalf before any City official or body, as well as the act of signing and submitting CACD’s grant applications. The Petitioner states that, since becoming Assistant City Solicitor, CACD’s executive director has signed and submitted CACD’s applications and proposals. It is our opinion that this practice is consistent with section 5(e)’s requirements. In summary, it is the opinion of the Rhode Island Ethics Commission that the Code of Ethics does not prohibit the Petitioner from continuing to serve as the President of CACD’s Board of Directors, nor from continuing to rent office space from CACD. However, these interactions create business associations between the Petitioner and CACD that require the Petitioner’s recusal from some of her public duties as Assistant City Solicitor and require that the Petitioner refrain from representing CACD or advocating on its behalf before any City officials or departments. 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) 36-14-5(a) 36-14-5(d) 36-14-5(e) 36-14-6 36-14-7(a) Related Advisory Opinions: 2014-14 2013-10 2012-28 2012-22 2011-44 2011-36 2006-9 2005-49 2002-70 Keywords: Business Associate Recusal