Advisory Opinion No. 2017-3 Rhode Island Ethics Commission Advisory Opinion No. 2017-3 Approved: January 10, 2017 Re: Edgar N. Ladouceur QUESTION PRESENTED : The Petitioner, a member of the Warwick City Council, a municipal elected position, who in his private capacity is the owner and p resident of a private home improvement company, requests an advisory opinion regarding the application of the Code of Ethics in light of his business relationship with the Central Rhode Island Chamber of Commerce. RESPONSE : It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Warwick City Council, a municipal elected position, who in his private capacity is the owner and p resident of a private home improvement company, may contract with the Central Rhode Island Chamber of Commerce to renovate its headquarters while serving on the Warwick City Council. However, the Petitioner must recuse from any matters before the Warwick City Council that involve or financially impact the Central Rhode Island Chamber of Commerce until such time as no business relationship exists between the parties and there is no expectation of any business dealings between the parties in the near future. The Petitioner has been a member of the Warwick City Council (“City Council”) since 2013. In his private capacity, the Petitioner represents that he is the owner and president of StormTite Company , Inc. (“Storm Tite”) , a private entity in the business of providing home improvement services. The Petitioner explains that , in 2006, the Central Rhode Island Chamber of Commerce (“the Chamber”) began planning a restoration of its headquarter s. To establish a budget for its restoration project, the Chamber solicited bids from vendors for various portions of the project. The Petitioner represents that he was approached by the President/CEO of the Chamber to submit a bid for the installation of vinyl siding and windows. Unfortunately, financing for the project became a significant challenge for the Chamber so none of the bids were accepted and the project was put on hold. In 2009, in an effort to reevaluate the restoration budget, the Chamber asked the vendors to resubmit their bids. The Petitioner represents that the Chamber determined the funding to still be a challenge , did not accept any of the bids, and put the project on hold once again. In 2010 , the Chamber sought and was approved for a Twenty Thousand ($20,000.00) Dollar grant from the City ’s facade improvement program , supported through the Community Development Block Grant ( “ CDBG ” ) program and administered by the City of Warwick Department of Housing & Community Development and the Apponaug Area Improvement Association ( “ AAIA ” ). The CDBG funding was approved specifically for repairs to the Chamber headquarters’ front steps, handicapped railing and ramp. According to the President of the Chamber, this grant did not require or receive City Council approval. In 2016, after a new bidding process, the Petitioner was offered the vinyl siding and window installation portion of the project, provided that no conflict of interest existed under the Code of Ethics. The Petitioner expressly represents that the vinyl siding and window installation portion of the project is funded solely by membership donations and the Chamber’s general operation revenues and not by any funds received from the City. The Petitioner states that, in his official capacity as a member of the City Council , he has never participated in any discussion or decision-making relative to the funding of the Chamber’s restoration project. Furthermore , the Petitioner represents that since his election to the City Council, the Chamber has never appeared before the City Council . Given this set of facts, the Petitioner asks whether the Code of Ethics prohibits or regulates his ability to contract with the Chamber relative to its restoration project . Under the Code of Ethics, 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. R.I. Gen. Laws § 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). The Code 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 person by which he is employed or whom he represents. Section 36-14-5(d). Furthermore , the Code of Ethics provides that a public official shall not accept other employment that would impair his independence of judgment as to his official duties or require or induce him to disclose confidential information acquired by him in the course of his official duties. Section 36-14-5(b). Additionally, a public official must recuse himself from any matter in which his business associate appears before the municipal agency of which he is a member . Section 36-14-5(f); Commission Regulation 36-14-5002(a)(1). While the Code of Ethics generally allows public officials to enter into most private business associations, once such associations are formed the Code of Ethics acts to limit the public official’s ability to use his public office to benefit or impact such business associates . This is accomplished by requiring the public official to recuse from participating in matters that are likely to involve or financially impact his business associate or employer. See A.O. 2016-29 (finding that a member and Chairman of the West Warwick Arctic Village Redevelopment Agency must recuse from any matters before his agency that involve or financially impact himself or his current business associates); A.O. 2012-32 (opining that the Acting Director of the Department of Planning and Development for the City of Providence was not prohibited by the Code of Ethics from teaching a course at Brown University; however, he was required to recuse from any matters involving Brown University, his business associate, that could come before him in his capacity as Acting Director) . In past advisory opinions, the Commission has required public officials to recuse themselves from a matter if the official has an ongoing or anticipated business relationship with an individual or entity appearing before his public body. See A.O. 2003-23 (opining that a West Warwick Development Commission member may not participate in consideration of any mat t er impacting his prospective employer); A.O. 98-117 (concluding that an Exeter Town Councilor may not participate in a zoning matter where she has had and will likely have an employment relationship with an attorney appearing before her on a zoning matter) . The Code of Ethics requires the Petitioner’ s recusal until such time as no business relationship exists between the parties and there is no expectation of any business dealings between the parties in the near future. See A.O. 2004-11 (opining that a Town of Lincoln School Building Commission member, who also owned a carpentry business, was a business associate of any person or entity with which he was engaged as a subcontractor and that the business associate relationship existed while the services were provided and until such time as the petitioner was paid and no further subcontracting work was anticipated). Accordingly, after considering all of the representations herein, and consistent with prior advisory opinions, it is the opinion o f the Ethics Commission that the Code of Ethics does not prohibit the Petitioner from contracting in his private capacity with the Chamber for the renovation of its headquarters while serving on the City Council. However, the Petitioner must recuse from any matters before the City Council that involve or financially impact himself or the Chamber, his business associate. The Petitioner ’ s recusal is required until such time as no business relationship exists between the parties and there is no expectation of any business dealings between the parties in the near future. Notice of recusal must be filed with the Ethics Commission pursuant to R.I. Gen. Laws § 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(b) § 36-14-5(d) § 36-14-5(f) § 36-14-6 § 36-14-7(a) Commission Regulation 36-14-5002(a)(1). Related Advisory Opinions: A.O. 2016-29 A.O. 2012-32 A.O. 2004-11 A.O. 2003-23 A.O. 98-117 Keywords: Business Associate Recusal