Advisory Opinion No. 2018-29 Rhode Island Ethics Commission Advisory Opinion No. 2018-29 Approved: May 15, 2018 Re: The Honorable Jeremiah O’Grady QUESTION PRESENTED: The Petitioner, a legislator serving in the Rhode Island House of Representatives, a state elected position, requests an advisory opinion regarding whether he may participate in the House of Representative’s discussions and voting relative to the FY2019 State Budget, given his employment with a non-profit corporation that may be financially impacted by certain line-item budget appropriations. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a legislator serving in the Rhode Island House of Representatives, a state elected position, may participate in the House of Representative’s discussions and voting relative to the FY2019 State Budget as a whole, but he must recuse from participating in any discussions or voting on particular budget amendments or line-items that impact, or specifically address, his employer’s contracts or finances. The Petitioner is a member of the Rhode Island House of Representatives. In his private capacity he is employed as a “Program Officer, Lending” with the Rhode Island office of the Local Initiatives Support Corporation (LISC), which he describes as a national non-profit and financing intermediary established by the Ford Foundation. The Petitioner represents that, since 1991, LISC has invested approximately $345 million in local initiatives across Rhode Island. The Petitioner states that, at LISC, he is responsible for sourcing, underwriting and closing loans to for-profit and non-profit borrowers. The Petitioner notes that LISC’s lending and business activities are often supported by programs established by state agencies, such as the Rhode Island Department of Human Services and Rhode Island Department of Health, and quasi-public state agencies such as Rhode Island Housing and Rhode Island Commerce Corporation, all of which receive funding through the State Budget. For example, the Petitioner notes that LISC is involved in providing financing for affordable housing developments and in syndicating Low Income Housing Tax Credits, and it often has a financial interest in affordable housing developments that are supported by resources controlled by Rhode Island Housing. LISC also provides bridge financing to developers who will receive allocations of tax credits through Rebuild Rhode Island, a program established within State Budget articles relating to the Rhode Island Commerce Corporation. Additionally, LISC is a party to two separate contracts with the Rhode Island Department of Human Services, both of which are funded by line-item appropriations within the State Budget. Finally, LISC is the lead participant in a Health Equity Zone program that receives some line-item funding in the State Budget appropriated to the Rhode Island Department of Health. Although each of the above matters is referenced or impacted by individual line-items in the State Budget, the Petitioner notes that most line-items are never discussed or voted upon individually on the House floor. For that to occur, an amendment to one of the budget articles, targeting the line-item, must be offered. After all amendments to each budget article are discussed and voted upon, the full article is voted up or down as a whole. The Petitioner represents that, to date, he has not participated in any House of Representatives review or discussions of the specific appropriations discussed above that may financially impact his employer, but he seeks guidance going forward as to any limitations the Code of Ethics places on his participation on the House floor as it pertains to discussions and voting on the FY2019 State Budget. Under the Code of Ethics, a public official shall not have any interest, financial or otherwise, or engage in any business, employment, transaction or professional activity, or incur any obligation of any nature, which 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). Furthermore, a public official shall not accept other employment that will impair his independence of judgment as to his official duties or employment. Section 36-14-5(b). Also, a public official shall not use his public office or confidential information received through his public office to obtain financial gain personally or for a business by which he is employed. Section 36-14-5(d). The Ethics Commission considered a similar question presented in Advisory Opinion 2007-26. There, a member of the Rhode Island Senate who served on the Senate Finance Committee asked whether she was permitted to participate in committee and floor discussions and voting relative to passing the FY2008 State Budget, given that it included funding for certain state agencies to enter into contracts with the Senator’s private employer, United Way of Rhode Island. The Ethics Commission opined that the Senator could participate in discussions and voting in committee and on the Senate floor relative to passing the budget as a whole, provided that she did not participate in amendments or line-items that particularly related to her employer or its contracts with state agencies. See also A.O. 2007-25 (State Representative who served as a consultant to a nonprofit entity that received funding from a community service grant in the State Budget was permitted to vote on budget as a whole, but was required to recuse from any discussions or voting that singled out her employer’s grant for discussion); A.O. 96-75 (Opining that three State Senators who sat on different hospital boards of directors could participate in votes as to the State Budget as a whole but must recuse from any discussions and voting relative to budget line-items relating to hospital licensing fees, admission costs and Certificates of Need). Similarly, in the instant matter, although the Code of Ethics prohibits the Petitioner from taking any official action in the House of Representatives that would financially benefit his private employer, the Petitioner is not prohibited from participating in a vote on the State Budget as a whole or as to its budget articles generally. In the event that the House of Representatives considers a specific budget amendment or line-item that addresses or impacts his employer’s contracts or finances, he is required to recuse from participating in such discussions and voting and must file a notice of recusal with the Ethics Commission and the House of Representatives. 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, rule, 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) § 36-14-6 § 36-14-7(a) Related Advisory Opinions: A.O. 2007-26 A.O. 2007-25 A.O. 96-75 Keywords: Private employment Budgets