Advisory Opinion No. 2019-36 Rhode Island Ethics Commission Advisory Opinion No. 2019-36 Approved: June 18, 2019 Re: The Honorable Anastasia P. Williams QUESTION PRESENTED: The Petitioner, a legislator serving in the House of Representatives, a state elected position, who is also employed as a Compliance Officer at First Source Providence, a municipal employee position, requests an advisory opinion regarding whether the Code of Ethics prohibits her from applying for and receiving a loan made available through the Providence Business Loan Fund. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a legislator serving in the House of Representatives, a state elected position, who is also employed as a Compliance Officer at First Source Providence, a municipal employee position, is not prohibited by the Code of Ethics from applying for and receiving a loan made available through the Providence Business Loan Fund. The Petitioner is a legislator serving in the House of Representatives. She is also employed as a Compliance Officer at First Source Providence, a City of Providence department, helping unemployed or underemployed Providence residents to find employment. The Petitioner explains that she was assigned the rights to purchase a commercial property located at 1007 Broad Street in Providence (“City”) by a person who had acquired the rights from the City at a foreclosure auction held in March 2019 but who was unable to secure funds to complete the purchase of the property. The Petitioner explains that she wishes to purchase and rehabilitate the property and, in order to do so, she would like to apply for a loan through the Providence Business Loan Fund (“PBLF”), a registered 501(c)(3) corporation, formerly known as the Providence Economic Development Partnership (“PEDP”), which was established to assist the City’s economic development by providing loans to individual owners, tenants, partnerships or corporations to acquire, construct or expand their business. The Petitioner represents that anyone who satisfies the PBLF’s loan requirements is eligible for funding. Furthermore, the Petitioner represents that neither she nor her department, First Source Providence, has any role with the administration of PBLF loan funds. The Petitioner further states that, in her capacity as a legislator, she has no fiscal or jurisdictional control over the PBLF. Given this set of facts, the Petitioner seeks the guidance of the Ethics Commission regarding whether she may apply for and receive a loan made available through the PBLF 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 previously considered various situations in which public employees were allowed to receive loans administered by their own state or municipal agencies or municipalities. For example, in 1998 the instant Petitioner requested and received Advisory Opinion 98-22, allowing her to submit an application for federal HOME program funds for home improvement projects, made available through the Providence Plan Housing Corporation (“PPHC”) by which she was then employed. The Ethic Commission based its opinion on the facts that the Petitioner did not possess discretionary authority regarding the HOME funding program as part of her employment with PPHC and that she was in no way involved with the application or approval process for the HOME program. See also A.O. 2006-19 (opining that a South Kingstown Solicitor could participate in a low interest loan program where his role in the Town’s decision to participate in the Loan Program was limited to offering legal advice); A.O. 2002-42 (opining that a housing authority employee could participate in his agency’s Section 8 housing program as a landlord, based upon his representation that he had no discretionary authority over who participated in the program and provided that he recused from participating in any housing authority matters involving his property); A.O. 2001-57 (concluding that a Town Councilor could receive a loan administered by the planning department, provided that he received funds that were allocated prior to his election and recused from matters concerning the members of the planning board who processed and approved the loan applications); A.O. 2001-48 (opining that legal counsel for the Providence Neighborhood Housing Corporation (“PNHC”) could participate in the City of Providence’s zero-interest loan program for municipal employees 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); and A.O. 2000-28 (finding that a Town Councilor could participate in a CDBG loan program administered by the Town, provided that any loan funds awarded to him would not be allocated from funds upon which he had voted). Contra A.O. 2016-32 (opining that a member of the East Providence Economic Development Commission (“EDC”) was 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 was sufficient capital remaining to fund his loan). Here, unlike in the Petitioner’s prior advisory opinion, she is not employed by the agency which funds the subject program. Furthermore, similar to the facts of her prior advisory opinion, the Petitioner does not participate in the decision-making relative to the approval of the loan applications or exercise any fiscal or jurisdictional control over the PBLF. Accordingly, based on the representations above and the Commission’s prior advisory opinions, it is the opinion of the Rhode Island Ethics Commission that the Petitioner is not prohibited by the Code of Ethics from applying for and receiving a loan made available through the Providence Business Loan Fund, notwithstanding her municipal employment. 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) § 36-14-7(a) Related Advisory Opinions: A.O. 2016-32 A.O. 2006-19 A.O. 2002-42 A.O. 2001-57 A.O. 2001-48 A.O. 2000-28 A.O. 98-22 Keywords: Government Loans