Advisory Opinion No. 2019-60 Rhode Island Ethics Commission Advisory Opinion No. 2019-60 Approved: October 29, 2019 Re: Marc A. Tillson QUESTION PRESENTED: The Petitioner, the Building Official for the Town of New Shoreham, a municipal appointed position, who in his private capacity owns and operates a house watch service there, requests an advisory opinion regarding the application of the Code of Ethics to his participation in matters before his agency, given his business associations with persons who may be involved with, or impacted by, such matters. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, the Building Official for the Town of New Shoreham, a municipal appointed position, who in his private capacity owns and operates a house watch service there, must recuse from any matters before his agency that involve or financially impact his current business associates. The Petitioner is not required to recuse from matters that involve or financially impact his former business associates, provided that there is no specific future business relationship anticipated. The Petitioner currently serves as the Building Official for the Town of New Shoreham (“Block Island”), a municipal appointed position.[1] He identifies among his duties in that capacity the review of construction documents, issuance of building permits, inspection of approved work, and enforcement of zoning laws, adding that he works from 8:00 a.m. to 5:00 p.m., Monday through Friday. The Petitioner states that, in his private capacity, he owns and operates a house watch service for Block Island homeowners. He identifies the services he provides in that capacity as making weekly visits to privately owned homes to make sure that each house is secure and that its alarm is working, performing visual plumbing checks to look for signs of frozen pipes, leaks, or any readily visible damage, and reading the oil/propane tank gauge and ordering fuel as necessary. The Petitioner states that he reports any damage he discovers to the homeowner, adding that his involvement after discovering any damage to a house is limited to making a temporary repair, such as nailing plywood over a broken window. The Petitioner represents that he does not advertise his house watch and security service, and that all clients have been through word of mouth for the eight years that he has operated this business. He states that he performs this work on his own time, on Saturdays and Sundays, mostly during the fall, winter, and early spring seasons. The Petitioner states that when a client for whom he provides house watch services plans any work that will require the involvement of the Building Official, he notifies that client, in writing, that he is unable to continue to provide these services and cancels the agreement between them. He further states that he is usually made aware of a client’s intent to do work or have work done on his or her home months in advance of it actually happening. He adds that he has only had to terminate house watch services for about four clients in the last eight years. It is in the context of these facts that the Petitioner seeks guidance from the Ethics Commission as to the application of relevant provisions of the Code of Ethics. 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 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, his business associate or his employer 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 must recuse himself from participation in a matter when his business associate or employer, or a person authorized by his business associate or employer, appears or presents evidence or arguments before his municipal agency. Commission Regulation 502-RICR-00-00-1.2.1(A)(2)&(3) Additional Circumstances Warranting Recusal (36-14-5002). 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, his business associate, or any business by which he is employed or which he represents. Section 36-14-5(d). A business is defined as “a sole proprietorship, partnership, firm, corporation, holding company, joint stock company, receivership, trust or any other entity recognized in law through which business for profit or not for profit is conducted.” Section 36-14-2(2). A business associate is defined as “a person joined together with another person to achieve a common financial objective.” Section 36-14-2(3). A person is defined as “an individual or a business entity.” Section 36-14-2(7). In past advisory opinions, the Ethics Commission has required a public official to recuse from consideration of a matter if the official had an ongoing or anticipated business relationship with an individual or entity appearing before his or her public body. See A.O. 2016-45 (opining that a member of the Tiverton Planning Board was prohibited from participating in the Planning Board’s discussions and voting relative to a matter in which her business associate appeared as an expert witness, given that they had worked together professionally in the past on projects, often referred work and clients to each other, and would continue to refer work and clients to each other); A.O. 2005-64 (opining that a member of the Burrillville Redevelopment Agency could not participate in discussions or votes on matters coming before the Agency regarding a nonprofit developer’s request for approval of a project, given that the petitioner was a partner in an accounting firm that provided accounting services to this developer on a continuing basis). However, while the Code of Ethics clearly prohibits a public official from participating in matters directly affecting his or her current business associate, the Ethics Commission has permitted a public official to participate in matters involving or impacting a former business associate or employer, provided that the business relationship between the official and the other party had ended and there was no specific future business relationship anticipated between the parties. See A.O. 2016-29 (opining that a member and Chairman of the West Warwick Arctic Village Redevelopment Agency was required to recuse from any matters before his agency that involved or financially impacted his current business associates but was not required to recuse from matters that involved or impacted his former business associates, provided that there was no specific future business relationship anticipated); A.O. 2013-21 (opining that a member of the State Labor Relations Board, a private attorney, was not required to recuse from matters involving his former law client provided that the representation had concluded, that all outstanding legal fees were paid in full, and there was no reasonable likelihood of reestablishing an attorney/client relationship in the foreseeable future). 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. 2015-49 (opining that a Zoning Official who had done private electrical work for the Fort Adams Trust in the past, and who planned to bid on future work, was a business associate of the Trust). Here, the relationship between the Petitioner and a client for whom he has contracted to provide house watch services constitutes a business association. Accordingly, it is the opinion of the Ethics Commission that the Petitioner is required by the Code of Ethics to recuse, in accordance with section 36-14-6, from participating in all discussions, decision-making and other activity in his role as Building Official that would financially impact one of his private clients. However, the Petitioner would not be required to recuse from matters involving a former private client. This means that the Petitioner, or the client, would have severed the agreement for services between them prior to the Petitioner performing any function in his public capacity as Building Official, and that all home watch services have ceased and all outstanding fees due or refunds owed have been satisfied. Additionally, there could be no understanding or expectation that the business association between the Petitioner and the former client would resume once the Petitioner had completed his work as Building Official for that individual. 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(2) § 36-14-2(3) § 36-14-2(7) § 36-14-5(a) § 36-14-5(d) § 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. 2016-45 A.O. 2016-29 A.O. 2015-49 A.O. 2013-21 A.O. 2005-64 Keywords: Business Associate [1] The Petitioner states that he informed the Town Council and the Town Manager in September of 2018 of his intent to resign in December of 2019, but has agreed to continue to work until his replacement is appointed, which he expects will occur in the next six to eight months.