Advisory Opinion No. 2016-38 Rhode Island Ethics Commission Advisory Opinion No. 2016-38 Approved: November 15, 2016 Re: Ellen R. Balasco, Esq. QUESTION PRESENTED: The Petitioner, Deputy Chief of Legal Services for the Rhode Island Department of Business Regulation and legal counsel to the Rhode Island Board of Real Estate Appraisers, a state employee position, requests an advisory opinion regarding whether the Code of Ethics prohibits her from completing real estate appraiser pre-licensing education and obtaining a real estate appraiser license, given that the Department of Business Regulation has licensing jurisdiction over real estate appraisers. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, Deputy Chief of Legal Services for the Rhode Island Department of Business Regulation and legal counsel to the Rhode Island Board of Real Estate Appraisers, a state employee position, is not prohibited by the Code of Ethics from completing real estate appraiser pre-licensing education and obtaining a real estate appraiser license. The Petitioner is the Deputy Chief of Legal Services for the Rhode Island Department of Business Regulation (“DBR”). The Petitioner states that DBR has licensing jurisdiction over real estate appraisers including, but not limited to, approval and disapproval of applications for certification and licensing. See R.I. Gen. Laws § 5-20.7-6. As part of her duties, the Petitioner is legal counsel to the Rhode Island Board of Real Estate Appraisers (“Board”) as well as a number of other state boards and commissions. The Petitioner represents that the Board is comprised of ten real estate appraisers appointed by the Governor and has a primarily advisory role in the DBR’s policy-making relative to the licensure and discipline of real estate appraisers. See sections 5-20.7-4, 5. The Petitioner explains that her duties with respect to the Board are limited to providing legal advice when needed and attending Board meetings. The Petitioner states that upon retirement from state service she would like to work as a real estate appraiser. The Petitioner informs that in order to become a licensed real estate appraiser an applicant must successfully complete 75 creditable hours of qualified education offered online.[1] The Petitioner represents that upon completion of the education requirement an applicant becomes a trainee appraiser and, as such, is required to work under the direct supervision of a Certified Appraiser and complete two thousand (2,000) hours of field experience, followed by a proctored examination. The Petitioner states that the exam is performed by an independent online testing company, a score of seventy-five percent (75) or higher is required to pass, and examination results are forwarded to DBR. The Petitioner represents that she will complete her education and field experience as a trainee appraiser on nights and weekends outside of her normal work hours. The Petitioner further explains that she does not have any decision-making authority relative to the approval of the real estate appraiser applications or in the establishment of real estate appraiser licensing or certification criteria, as they are federally mandated. The Petitioner states that when reviewing a real estate appraiser application, DBR performs primarily ministerial functions by confirming compliance with all the eligibility requirements. The Petitioner further represents that if a disciplinary matter involving Petitioner’s supervisory appraiser is to come before the Board, the Petitioner will recuse and another DBR attorney will be assigned to review the matter. The Petitioner also expressly states that she will not work as a licensed real estate appraiser as long as she is employed by DBR and legal counsel to the Board. Given this set of facts and considering the lengthy process of becoming a licensed real estate appraiser, the Petitioner requests an advisory opinion as to whether the Code of Ethics prohibits her from obtaining her real estate appraiser license and completing the pre-licensing education. Under the Code of Ethics, no public official or employee shall have any interest, financial or otherwise, direct or indirect, which is in substantial conflict with the proper discharge of her duties in the public interest. R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest exists if she has reason to believe or expect that she or any family member or business associate, or any business by which she is employed or represents will derive a direct monetary gain or suffer a direct monetary loss by reason of her official activity. Section 36-14-7(a). She is also 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 represents. Section 36-14-5(d). Finally, no person subject to the Code of Ethics shall represent herself, or any other person or entity, before any state agency of which she is a member or by which she is employed. Section 36-14-5(e). This prohibition applies while the public official is employed by the agency and for one year thereafter. Section 36-14-5(e)(4). The Ethics Commission has reviewed a somewhat similar question in Advisory Opinion 95-76. There, the Ethics Commission determined that an employee of the Rhode Island Department of Substance Abuse (“DSA”), who was responsible for monitoring a federal grant funded by the Center for Substance Abuse Prevention, was not prohibited by the Code of Ethics from petitioning the DSA for a license to open an out-patient substance abuse facility. Essential for the Ethics Commission’s determination was the fact that the employee did not participate in the decision-making process concerning whether to issue the license and used neither his position with DSA nor confidential information received through his position to benefit his business venture. Also, in Advisory Opinion 2001-48, the Ethics Commission determined that a Providence Neighborhood Housing Corporation (PNHC) employee could participate in the City’s low-interest loan program administered by PNHC where he met all loan eligibility criteria, provided that he 1) did not participate in establishing Program eligibility criteria; and 2) recused from participation in all PNHC matters involving his application and loan. Furthermore, the Ethics Commission pointed out that the petitioner’s submission of an application for loan funds through his employer, the PNHS, was not an appearance before the governmental entity by which he was employed, which would have been prohibited by section 36-14-5(e). See also A.O. 98-22 (finding that a Providence Plan Housing Corporation (“PPHC”) employee may submit an application for HOME funds to the PPHC, given that she does not possess discretionary authority regarding the HOME funding program in her employment with PPHC, nor is she in any way involved with the application or approval process for the HOME program). Contra A.O. 2016-32 (finding that a member of the East Providence Economic Development Commission (“EDC”) is prohibited by the Code of Ethics from applying for a commercial loan through a low interest loan program administered by his Commission given that the Petitioner had been involved in the EDC’s decision-making relative to loan requests that would either deplete or preserve the revolving loan fund balance and that his decision-making relative to other loan applications would have an impact on whether there is sufficient capital remaining to fund his loan). Here, the Petitioner states that as legal counsel to DBR and the Board she does not participate in any way in the decision-making relative to approval or disapproval of a real estate appraiser application. The standards and required qualifications for trainee and licensed real estate appraisers are federally mandated. Furthermore, the examination required to upgrade from a trainee to a licensed appraiser is administered and graded by an independent online testing company and the results are forwarded to DBR, negating the risk of favoritism by DBR or the Board. Additionally, the Petitioner’s submission of a real estate appraiser application does not amount to the type of self-representation before her own agency which is prohibited by section 36-14-5(e). For all of the above reasons, it is the opinion of the Rhode Island Ethics Commission that the Code of Ethics does not prohibit the Petitioner from completing real estate appraiser pre-licensing education and obtaining a real estate appraiser license, provided that all her education and training is performed on her own time, she does not use public resources or confidential information obtained as part of her employment with DBR or the Board, and she does not list her public position as part of any advertisement of her work as a real estate trainee appraiser or licensed real estate appraiser. The Petitioner is reminded that she cannot solicit clients for her work as a trainee real estate appraiser or a licensed real estate appraiser during the hours of her public employment or from any person who has a financial interest in her public duties. The Petitioner is also advised to either recuse herself or seek further guidance from the Commission if matters relating to her pre-licensing education, her real estate appraiser license application or a disciplinary matter involving Petitioner’s supervisory real estate appraiser come before her in her public position. Any notice of recusal must be filed with the Ethics Commission in accordance with section 36-14-6. 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 § 36-14-5(a) § 36-14-5(d) § 36-14-5(e) § 36-14-6 § 36-14-7(a) Related Advisory Opinions A.O. 95-76 A.O. 98-22 A.O. 2001-48 A.O. 2016-32 Other Related Authority § 5-20.7-4 § 5-20.7-5 § 5-20.7-6 Trainee Appraiser Requirements/Application, http://www.dbr.state.ri.us/documents/divisions/commlicensing/realestateappraisers/Trainee InstructionsAndApplication.pdf (last accessed on 10/25/16) Keywords Financial Interest Licensing [1] See Trainee Appraiser Requirements/Application, http://www.dbr.state.ri.us/documents/divisions/commlicensing/realestateappraisers/TraineeInstructionsAnd Application.pdf (last accessed on 10/25/16).