Advisory Opinion No. 2019-42 Rhode Island Ethics Commission Advisory Opinion No. 2019-42 Approved: July 16, 2019 Re: Michael Zarrella QUESTION PRESENTED: The Petitioner, a member of the East Greenwich Town Council, a municipal elected position, requests an advisory opinion regarding whether the Code of Ethics prohibits him from participating in Town Council matters relative to a grievance matter filed by an East Greenwich firefighter who was formerly represented by the Petitioner’s business associate. RESPONSE: It is the opinion of the Ethics Commission that the Petitioner, a member of the East Greenwich Town Council, a municipal elected position, is not prohibited by the Code of Ethics from participating in Town Council matters relative to a grievance matter filed by an East Greenwich firefighter who was formerly represented by the Petitioner’s business associate. The Petitioner is a member of the East Greenwich Town Council (“Town Council”). He represents that before the Town Council for review is a settlement agreement relative to a grievance arbitration involving an East Greenwich firefighter whose employment with the Town of East Greenwich (“Town”) was terminated in June of 2018. The Petitioner explains that in early November of 2018, the firefighter was charged with a crime related to the offense for which he was terminated. The Petitioner further explains that the firefighter retained the services of Murphy & Fay, LLP (“Murphy & Fay” or “law firm”) to represent him in the criminal matter. The Petitioner states that the firefighter retained separate counsel through the union, not affiliated with Murphy & Fay, to represent him in the grievance matter (“grievance”). The Petitioner represents that, upon information and belief, the firefighter paid a one-time fee to Murphy & Fay for the legal representation in the criminal matter, adding that the criminal matter has been fully resolved, the firefighter has no outstanding balance, no longer engages the services of Murphy & Fay, has no further plans to engage the law firm in the near future, and that Murphy & Fay will not appear before the Town Council relative to the grievance. In his private capacity, the Petitioner is an attorney who rents office space from Murphy & Fay. The Petitioner represents that, thus far, out of an abundance of caution he has recused from participating in the Town Council’s discussions and decision-making relative to the grievance. However, the Petitioner represents that on June 10, 2019, a settlement agreement relative to the grievance was reviewed by the Town Council and the votes were evenly split, thus, precluding the Town Council from making a final decision. Thus, given this set of facts, the Petitioner is seeking the guidance of the Ethics Commission regarding whether the Code of Ethics prohibits him from participating in the Town Council’s discussions and decision-making relative to the grievance. 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 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 any business by which he is employed or which he represents 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 of Ethics 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 member, his business associate, or any business by which he is employed or which he represents. Section 36-14-5(d). Additionally, a public official must recuse from participation when his business associate appears or presents evidence or arguments before his state or municipal agency. Commission Regulation 520-RICR-00-00-1.2.1(A)(2) Additional Circumstances Warranting Recusal (36-14-5002); section 36-14-5(f). The Code of Ethics defines business associates as individuals or entities joined together to “achieve a common financial objective.” Section 36-14-2(3). In determining whether a relationship between two parties constitutes an ongoing business association, the Ethics Commission examines the nature of the association and the scope of the business dealings between the parties and looks to, among other things, whether the parties are conducting ongoing business transactions, have outstanding accounts, or there exists an anticipated future relationship. See, e.g., A.O. 2015-12 (opining that ongoing handyman work for a private individual, which was reasonably foreseeable to continue, constituted a business associate relationship). The Commission has consistently determined that attorney-client and landlord-tenant relationships constitute “business associate” relationships as that term is defined in the Code of Ethics. See, e.g., A.O. 2010-47; A.O. 2010-33; A.O. 2009-23; A.O. 2006-9; and A.O. 2002-70. However, an attorney-client relationship ceases to constitute a business association, and, thus, no conflict of interest exists, once the attorney no longer represents the client in an ongoing matter, bills for prior representation have been paid, and there are no plans for specific representation in the near future. See A.O. 2002-61 (opining that a Westerly Town Councilor could participate in matters involving Lewiss Law Associates, provided that there was no ongoing attorney-client relationship between the petitioner and the law firm and there were no specific plans for representation in the near future). As an initial matter, the Petitioner is considered a business associate of Murphy & Fay due to the fact that he is currently renting office space from the law firm. Thus, although, Murphy & Fay is not expected to appear before the Town Council on any matter relative to the grievance, the Petitioner will be required by the Code of Ethics to recuse, pursuant to section 36-14-6, from participation in any matter, including the grievance, if his business associate is to appear or be financially impacted. Here, the Petitioner states that the firefighter is being represented before the Town Council by his union-affiliated attorney. Furthermore, the Petitioner represents that Murphy & Fay only represented the firefighter in the criminal matter which has been resolved, all bills have been paid, and the firefighter has no further intention to retain Murphy & Fay in the near future. Thus, the attorney-client relationship between the firefighter and Murphy & Fay has concluded. Even assuming, arguendo, that the firefighter was a current business associate of Murphy & Fay, this business association alone would not, per se, make the Petitioner a business associate of Murphy & Fay’s business associate, the firefighter. See A.O. 2002-76 (opining that the mere fact that the Narragansett Town Solicitor was a business associate of one entity does not automatically make him a business associate of any of that entity’s other business associates). Accordingly, based on the Petitioner’s representations, the application of the Code of Ethics, and a review of prior advisory opinions, it is the opinion of the Ethics Commission that the Petitioner is not prohibited by the Code of Ethics from participating in Town Council discussions and decision-making relative to the grievance. However, the Petitioner is advised to recuse if, for any reason, Murphy & Fay appears before the Town Council on such matters or would be financially impacted. Under such circumstances, notice of recusal shall be filed with the Ethics Commission in accordance with 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, regulation, ordinance, constitutional provision, charter provision, or canon of professional ethics may have on this situation. Code Citations: 36-14-2(3) § 36-14-5(a) § 36-14-5(d) 36-14-5(f) § 36-14-6 § 36-14-7(a) 520-RICR-00-00-1.2.1 Additional Circumstances Warranting Recusal (36-14-5002) Related Advisory Opinions: A.O. 2015-12 A.O. 2010-47 A.O. 2010-33 A.O. 2009-23 A.O. 2006-9 A.O. 2002-76 A.O. 2002-70 A.O. 2002-61 Keywords: Business Associate