Advisory Opinion No. 2016-44 Rhode Island Ethics Commission Advisory Opinion No. 2016-44 Approved: December 6, 2016 Re: James Lathrop , CPA QUESTION PRESENTED : The Petitioner, the Town Manager for the Town of New Shoreham, a municipal appointed position, requests an advisory opinion as to the application of the Code of Ethics’ nepotism provision s if his wife were to seek or accept employment with the Town of New Shoreham. RESPONSE : It is the opinion of the Rhode Island Ethics Commission that the nepotism provisions of the Code of Ethics may be triggered by the Petitioner’s wife’s potential employment with the Town, depending upon the particular position sought and the existence, or lack , of an alternative chain of command to insulate the Petitioner from decision-making that may financially impact his wife. The Petitioner is the newly appointed Town Manager for the Town of New Shoreham , better known as Block Island ( “the Town” or “Block Island” ). The Petitioner informs that , pursuant to the Town Charter, the Town Manager is appointed by the Town Council and is empowered to approve the hiring and termination of most municipal employees. The Petitioner represents that as part of his employment he is required to reside on Block Island and , due to his family ’s relocation , his wife is now looking for y ear- round employment there . The Petitioner represents that there are currently two part-time positions available with the Town to which his wife wishes to apply, a position of “ tax collector assistant ” within the Finance Department and a position of “clerk” in the Water Department. Regarding the tax collector assistant position , the Petitioner states that this position is within the Town’s Finance Department and is physically located within the Town Hall. The Petitioner states that the hiring process for this position is handled primarily by the Town’s Tax Collector who reviews submitted applications and , along with the Town’s Finance Director, conducts interviews. The Tax Collector and Finance Director then select a finalist and forward their recommendation to the Town Manager, their immediate supervisor, for final approval. The Petitioner notes that the day-to- day supervision of the tax collector assistant position is performed b y the Tax Collector; however, the Petitioner , as Town Manager , is ultimately responsible for decisions relative to personnel discipline and termination . The Petitioner further represents that there is no alter native chain of command available for these duties. Regarding the clerk position with the Water Department, the Petitioner represents that the Direct or of the Water Department ( “ the Director”) is responsible for reviewing applications, conducting interviews and selecting a candidate to present to the Water District Commission, a municipal appointed body, for final approval . The Petitioner states that his existing duties and responsibilities do not include the hiring, supervision, evaluation, appointment, classification, promotion, transfer or discipline of any of the clerks employed by the Water Department. The Petitioner explains that such responsibilities are performed by the Director subject to the approval of the Water District Commission. Notably, the m embers of the Water District Commission are not subordinate to the Town Manager as they are appointed by the Town Council . The Petitioner further informs that the Water Department is not located in the Town Hall but , rather , is in a separate facility. Given the above representations, the Petitioner asks whether the nepotism provisions of the Code of Ethics would be implicated if his wife were to be offered , and accept s, either of the two positions available with the Town. The Code of Ethics provides that a public official or employee shall not have any interest, financial or otherwise, direct or indirect, or engage in any employment or transaction 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 exists if the official or employee has reason to believe or expect that he or any family member, among others, will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. Section 36-14-7(a). Also, a public official or employee may not use his public position to obtain financial gain, other than that provided by law, for himself or any member of his family. Section 36-14-5(d). Commission Regulation 36-14-5004 (“Regulation 5004”) contains specific regulations aimed at curbing nepotism. Pursuant to Regulation 5004’s general “catch-all” provision, a public official may not participate in any matter as part of h is public duties if “ any person within his or her family ” is a participant or party, or if there is reason to believe that a family member will be financially impacted or will obtain an employment advantage. Regulation 5004(b)(1). More specifically, Regulation 5004 prohibits a public official from participating in the supervision, evaluation, appointment, classification, promotion, transfer or discipline of any person within his family, or from delegating such tasks to a subordinate. Regulation 5004(b)(2)(A) & (B). The phrase “ any person within his or her family ” expressly includes “ spouse .” See Regulation 5004(a)(2). Through a long line of prior advisory opinions which dealt with nepotism-related conflicts of interest, the Ethics Commission has consistently held that public officials may not take official actions regarding the hiring , supervision, evaluation, appointment, classification, promotion, transfer, or discipline of family members, nor may they delegate such matters to any person subordinate to the public official in the chain of command. For example, in Advisory O pinion 2007-7, the City of Newport Police Chief sought to hire seven individuals who scored the highest on various tests administered to all applicants by the Police Department . O ne of those individuals was the City Manager’s son. Normally, the City Manager is responsible for signing off on appointments to the Police Department, and serves as the ultimate disciplinary authority in the City. T he Ethics Commission opined the City Manager’ s son could be hired by the Police Department provided that the Newport City Solicitor , who was appointed directly by the City Council and was not a subordinate to the City Manager, acted as the appointing authority in place of the City Manager and further provided t hat the City Manager wa s completely removed from all personnel decisions or matters that impacted his son. See also A.O. 2000-5 (opining that the Chief of the Office of Food Protection at the Department of Health was not prohibited from continuing to serve in that position notwithstanding his engagement to a lower-level employee in the same office , provided that an alternate chain-of-command was established with procedures to ensure that neither the Petitioner nor his subordinates took action on personnel matters that particularly affected his spouse financially); A.O. 96-109 (advising that the City of Cranston’s Director of Administration could accept appointment to that position where his spouse simultaneously served as the City ’ s Purchasing Agent , provided that he did not participate in the day-to-day supervision of his wife and all personnel issues affecting h er were handled by the Mayor or an official who did not report to the Petitioner as Director of Administration). However, t he Ethics Commission has concluded that a family member could not be hired by a public entity if there was no alternative chain of command that would insulate the public official or employee from personnel decisions affecting his family member. See A.O. 97-140 (opining that the nephew of the North Smithfield Police Chief could not serve as an officer in the North Smithfield Police Department while his uncle served as Chief since, given the structure of the Police Department, there was no alternative chain of command that would insulate the Chief completely from supervisory responsibilities regarding his nephew); A.O. 97-6 (concluding that the Mayor of North Providence could not hire his cousin to serve as his Director of Personnel, a position that reported directly to the Mayor). After considering the relevant provisions of the Code of Ethics and past advisory opinions, the Ethics Commission conclude s here that the Petitioner’s wife’s hiring and employment as the tax collector assistant in the Finance Department would likely result in the Petitioner’s violation of Regulation 5004. In reaching that conclusion the Ethics Commission relies on the representations of the Petitioner that no alternative chain of command is available to insulate the Petitioner from decision-making on personnel matters or matters that particularly affect his wife financially . Therefore, the Petitioner and his wife would be unable to simultaneously serve in those respective positions as currently structured without the former continually running afoul of the Code of Ethics. The facts represented by the Petitioner regarding his spouse’s application to, or potential employment by, the Water Department do not raise the same concerns . There, the Petitioner is not involved in the hiring, discipline or day-to-day supervision of the clerk. Instead, hiring and supervision duties fall to the Director of the Water Department and the Water District Commission. Furthermore, the Water Department is physically located outside of Town Hall in a different building altogether. Accordingly, based on the facts represented by the Petitioner, as to this position it is our opinion that the Petitioner will not be in violation of the Code of Ethics if his wife applies, and is selected, for a position as clerk in the Water Department. The Petitioner is cautioned, however, to remain vigilant in identifying and avoiding unforeseen conflicts of interest that may arise if his wife becomes a Town employee in the Water Department . The Petitioner is encouraged to seek further guidance from the Ethics Commission as needed. 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) § 36-14-7(a) Commission Regulation 36-14-5004 Related Advisory Opinions : A.O. 2007-7 A.O. 2000-5 A.O. 97-140 A.O. 97-6 A.O. 96-109 Keywords : Family: public employment Family: supervision Nepotism