Advisory Opinion No. 2019-58 Rhode Island Ethics Commission Advisory Opinion No. 2019-58 Approved: October 8, 2019 Re: The Honorable Samuel W. Bell QUESTION PRESENTED: The Petitioner, a legislator serving as a member of the Rhode Island Senate, a state elected position, requests an advisory opinion regarding whether the Code of Ethics prohibits him from participating in Senate discussions and decision-making concerning legislation that would extend an existing state lottery contract, and/or amended legislation that would allow for open bidding on a new lottery contract, given that his spouse is employed by a company that has a business association with another company that is expected to bid on the lottery contract if open bidding is allowed. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a legislator serving as a member of the Rhode Island Senate, a state elected position, is not prohibited by the Code of Ethics from participating in Senate discussions and decision-making concerning legislation that would extend an existing state lottery contract, and/or amended legislation that would allow for open bidding on a new lottery contract, notwithstanding that his spouse is employed by a company that has a business association with another company that is expected to bid on the lottery contract if open bidding is allowed. The Petitioner is an elected member of the Rhode Island Senate. He states that currently pending before the Senate is Senate Bill 1031(“legislation”) that would enable the State of Rhode Island (“State”) to enter into an extension of its present lottery contract with IGT Global Solutions Corporation (“IGT”). He further states that the legislation could be amended to allow open bidding on a new lottery contract (“lottery contract”), in which case the process would almost certainly be overseen by the executive branch. However, he adds that it is plausible that any contract awarded might require some sort of legislative ratification, enabling legislation, or other legislative action. The Petitioner states that if the legislation is amended to allow open bidding on a lottery contract, Scientific Games Corporation (“Scientific Games”) would be expected to bid. He adds that Scientific Games has a licensing agreement with Hasbro, Inc. and Hasbro International, Inc. (collectively, “Hasbro”) for the exclusive use of more than fifteen game brands, including Monopoly. The Petitioner explains that his spouse is employed by Hasbro as a product designer whose role is limited to creating new versions of the board game Monopoly. He further explains that neither he nor his spouse knows, or has reason to know, whether Scientific Games would use the Monopoly brand in any games that it might produce relative to a state lottery contract, or whether the award of a state lottery contract to Scientific Games would affect its licensing agreement with Hasbro. He adds that, in any event, his spouse does not perform product design work specific to the licensing agreement between Scientific Games and Hasbro. The Petitioner represents that his spouse is a salaried employee and that the award of a lottery contract to Scientific Games would have no direct impact upon her employment or salary. He further represents that his spouse occasionally receives bonus compensation from Hasbro for her work, which is determined by her personal performance, franchise brand performance (including Monopoly), and overall company performance. He adds that bonus compensation decisions are made by upper management at Hasbro, and neither he nor his spouse is in a position to fully ascertain the details of that process. The Petitioner offers that it is his understanding that any bonus his spouse might receive from Hasbro would in no way directly depend on whether Scientific Games is awarded a state lottery contract. He explains that, while he does not know whether there would be any financial implications for Hasbro were Scientific Games to be awarded a state lottery contract, any effect on his spouse’s bonus compensation from Hasbro under those circumstances would most likely be negligible. He reiterates that neither he nor his spouse can speak to the subject of bonus compensation with any certainty, given their unfamiliarity with the decision-making process, the details of which they believe to be confidential. It is in the context of these facts and representations that the Petitioner asks whether the Code of Ethics prohibits him from participating in Senate discussions and decision-making concerning the legislation that would extend the existing state lottery contract, and/or amended legislation that would allow for open bidding on a new lottery contract. The Code of Ethics provides that a public official shall not have any interest, financial or otherwise, direct or indirect, or engage in any business, employment, transaction or professional activity 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 public official has an interest which is in substantial conflict with the proper discharge of his duties in the public interest if he has reason to believe or expect that he or any person within his family, his business associate, or any business by which he is employed or represents will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. Section 36-14-7(a). A public official has reason to believe or expect a conflict of interest exists when it is reasonably foreseeable, specifically, when the probability is greater than conceivably, but the conflict of interest need not be certain to occur. Commission Regulation 520-RICR-00-00-1.1.5 Reasonable Foreseeability (36-14-7001). A public official is further prohibited by the Code of Ethics from using his public office or position, or confidential information received through his position, to obtain financial gain, other than that provided by law, for himself, his business associate, his employer or his family member. Section 36-14-5(d). Additionally, a public official is required to recuse himself from participation when a business associate or any person within his family appears or presents evidence or arguments before his public agency. Commission Regulation 520-RICR-00-00-1.2.1(A)(1) Additional Circumstances Warranting Recusal (36-14-5002). The Code of Ethics also provides that a public official shall not participate in any matter as part of his public duties if he has reason to believe or expect that any person within his family is a party to or a participant in such matter or will derive a direct monetary gain or suffer a direct monetary loss, or obtain an employment advantage, as the case may be. Commission Regulation 520-RICR-00-00-1.3.1(B)(1) Prohibited Activities – Nepotism (36-14-5004). The Code of Ethics does not, however, generally require a public official to recuse from participating in matters that involve or financially impact a family member’s business associate or employer unless there is also a corresponding benefit flowing to that family member. See A.O. 2019-40 (opining that a member of the Smithfield School Committee who was also a member of the Smithfield School Building Committee was not prohibited by the Code of Ethics from participating in the review of a Request for Proposal for, and the selection of, a construction manager for an elementary school reconfiguration project, and from all other Building Committee matters concerning the selected construction manager, notwithstanding that his daughter was employed by a company that was expected to bid on the project, since his daughter would not financially impacted by the Building Committee’s decision); A.O. 2008-69 (opining that a member of the Woonsocket Zoning Board of Review was permitted to participate in discussions and voting on a petition for a variance brought by CVS, notwithstanding the fact that the petitioner’s sister was employed as an accounting analyst with CVS, since his sister would not be financially impacted by the Zoning Board of Review’s decision regarding the petition); A.O. 2007-16 (opining that a member of the Johnston School Committee could participate in the Committee’s review of bills submitted by The Providence Center, a provider of special education services that employed the petitioner’s mother as an office assistant). Here, the Petitioner’s spouse is an employee of Hasbro. Hasbro, not the Petitioner’s spouse, is a business associate of Scientific Games. By participating in the discussions and decision-making concerning the legislation that would enable the extension of the present state lottery contract with IGT, the Petitioner would not be taking official action that would financially impact his spouse or his spouse’s employer. Similarly, were the Petitioner to vote on amended legislation to allow open bidding on a state lottery contract, even with the reasonable expectation that Scientific Games would submit a bid, any financial impact upon the Petitioner’s spouse would be remote and speculative. Given the facts as represented, there is no way to anticipate whether Scientific Games will be awarded a state lottery contract; whether it would utilize the Monopoly brand it if is awarded a state lottery contract; whether the use of the Monopoly brand would impact the licensing agreement between Scientific Games and Hasbro; whether Hasbro would benefit financially; and whether any financial benefit to Hasbro would result in a corresponding benefit flowing to the Petitioner’s spouse. 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 from participating in Senate discussions and decision-making concerning legislation that would extend an existing state lottery contract, and/or amended legislation that would allow for open bidding on a new lottery contract, notwithstanding that his spouse is employed by a company that has a business association with another company that is expected to bid on a lottery contract if open bidding is allowed. However, if and when the Petitioner is positioned to participate in discussions and decision-making in which it is reasonably foreseeable that there will be a direct financial impact upon his spouse, the Petitioner is advised to recuse in accordance with section 36-14-6 or seek further guidance from the Ethics Commission. 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) § 36-14-6 § 36-14-7(a) 520-RICR-00-00-1.1.5 Reasonable Foreseeability (36-14-7001) 520-RICR-00-00-1.2.1 Additional Circumstances Warranting Recusal (36-14-5002) 520-RICR-00-00-1.3.1 Prohibited Activities – Nepotism (36-14-5004) Related Advisory Opinions: A.O. 2019-40 A.O. 2008-69 A.O. 2007-16 Keywords: Conflict of Interest Family Member Nepotism