Advisory Opinion No. 2018-36 Rhode Island Ethics Commission Advisory Opinion No. 2018-36 Approved: June 19, 2018 Re: The Honorable Adam J. Satchell QUESTION PRESENTED: The Petitioner, a legislator serving in the Rhode Island Senate, a state elected position, requests an advisory opinion regarding whether he may participate in the Senate’s discussions and voting relative to legislation that would provide for a stipend to be paid to all retired teachers or their beneficiaries during years where no cost of living adjustments are applied to teachers’ retirement benefits, given that he is a public school teacher who is vested in the Employees’ Retirement System of Rhode Island. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a legislator serving in the Rhode Island Senate, a state elected position, may participate in the Senate’s discussions and voting relative to legislation that would provide for a stipend to be paid to all retired teachers or their beneficiaries during years where no cost of living adjustments are applied to teachers’ retirement benefits, notwithstanding that he is a public school teacher who is vested in the Employees’ Retirement System of Rhode Island. This is based on application of the Code of Ethics’ class exception. The Petitioner is a member of the Rhode Island Senate. He is also a teacher for West Warwick Public Schools and is a vested participant in the Employees’ Retirement System of Rhode Island (“ERSRI”). Under existing law, ERSRI retirees do not receive a cost of living adjustment (“COLA”) to their retirement benefits every year. The Petitioner states that legislation has been introduced in the Senate that would provide for a stipend of not more than four hundred fifty dollars ($450)[1] for retired teachers or their beneficiaries in years where no COLA is applied. See Senate Bill 2018 S-2820. The Petitioner notes that he expects to receive retirement benefits in the future as a result of his service as a public school teacher, and that he could therefore be financially impacted by this legislation to the same extent as all other teachers who are part of the ERSRI, a number he estimates to be in the tens-of-thousands. Given these facts, the Petitioner seeks guidance as to whether the Code of Ethics permits his participation in the Senate’s deliberations and voting relative to the bill. Under the Code of Ethics, a public official may not participate in any matter in which he has an interest, financial or otherwise, 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 occurs if the public official has reason to believe or expect that he or any family member or business associate, or any business by which he is employed, will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. Section 36-14-7(a). Additionally, a public official may not use his public office for pecuniary gain, other than as provided by law, for himself, a family member, employer, business associate, or a business that he represents. Section 36-14-5(d). Here, given that the Petitioner is public school teacher who is vested in the ERSRI, it is reasonably foreseeable that the passage of the referenced legislation may, on a future date, result in a financial impact to the Petitioner. However, because the legislation applies to all retired teachers, we will consider the application of the Code of Ethics’ class exception to this particular set of circumstances. Section 36-14-7(b) of the Code of Ethics, referred to as the “class exception,” states: A person subject to this Code of Ethics does not have an interest which is in substantial conflict with the proper discharge of his or her duties in the public interest and of his or her responsibilities as prescribed by the laws of this state, if any benefit or detriment accrues to him or her or any person within his or her family or any business associate, or any business by which the person is employed or which the person represents, as a member of a business, profession, occupation or group, or of any significant and definable class of persons within the business, profession, occupation or group, to no greater extent than any other similarly situated member of the business, profession, occupation or group, or of the significant and definable class of persons within the business, profession, occupation or group. When determining whether any particular circumstance justifies the application of the class exception, the Commission considers the totality of the circumstances including, where appropriate: 1) the description of the class; 2) the size of the class; 3) the function or official action being contemplated by the public official; and 4) the nature and degree of foreseeable impact upon the class and its individual members as a result of the official action. It is also worthwhile to consider the Commission’s past opinions and analysis in similar cases. The Ethics Commission considered a very similar question in Advisory Opinion 2003-57, in which a state senator was permitted to participate in the Rhode Island Senate’s consideration of legislation concerning the state pension plan, of which he was a member, given that the legislation would affect all state employees and all teachers in the state. See also A.O. 2016-21 (member of Westerly Town Council could participate in discussions and voting relative to the Town’s police pension fund, notwithstanding that he was a retired Town police officer and pension recipient, because changes to the pension fund would not impact him to any greater or lesser extent than other similarly situated pension participants); A.O. 2008-16 (opining that the Director of Administration for Providence, who had a vested interest in the municipal employees’ pension plan administered by the state, could serve on a special House Commission to study the state retirement system, given that the petitioner would be financially impacted to no greater or lesser extent than any other similarly situated participants in the state and municipal employees’ pension plan). In the present matter, the class of persons affected by the legislation includes all teachers who are currently retired and receiving retirement benefits, as well as those who will retire and receive retirement benefits after January 1, 2019, the effective date of the legislation. The Petitioner has not provided an exact figure representing the size of this class, but he estimates it to be in the tens-of-thousands. Members of the class would receive a stipend of up to $450 each in years where no cost of living adjustment is scheduled to apply to benefits. The Petitioner, upon his retirement, would be eligible for this stipend to no greater or lesser extent than any other similarly situated member of the class. It is therefore the opinion of the Ethics Commission that the specific facts of this case justify the application of the class exception as set forth in section 36-14-7(b) of the Code of Ethics. The Petitioner may participate and vote on the subject legislation. 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) 36-14-7(b) Related Advisory Opinions: A.O. 2016-21 A.O. 2008-16 A.O. 2003-57 Keywords: Class Exception [1] The stipend is calculated as 3% of the first $15,000 of pension benefits, to a maximum of $450. See Senate Bill 2018 S-2820.