Advisory Opinion No. 2020-31 Rhode Island Ethics Commission Advisory Opinion No. 2020-31 Approved: August 18, 2020 Re: The Honorable Ryan Pearson 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 he may participate in Senate discussions and voting relative to the FY2021 State Budget, given his private employment with a lending institution that could be financially impacted by certain line item budget appropriations. 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, may participate in Senate discussions and voting relative to the FY2021 State Budget, but he must recuse from participating in any discussions or voting on particular line items or budget amendments that could financially impact his private employer. The Petitioner was first elected to the Rhode Island Senate in 2013 and has served in that capacity continuously since. He also serves as a member of the Senate Finance Committee. In his private capacity, the Petitioner is employed by Citizens Bank (“Citizens”) as a Vice President of Consumer Lending. He identifies among his responsibilities the origination and management of consumer lending products such as mortgage, student, and auto loans. The Petitioner states that, on February 11, 2020, S- 2337 (“legislation”) was introduced relative to a joint venture between International Game Technology PLC (“IGT”) and Twin River Casino Hotel (“Twin River”) which proposes an extension of both entities’ lottery contracts with the State of Rhode Island. He further states that an amended version of the legislation, S-2337-Sub-A (“amended legislation”) was later introduced which contains a provision that would allow Twin River to extend its debt leverage ratio limits. The amended legislation was referred to the Senate Finance Committee and scheduled for hearing on March 12, 2020 (“March hearing”). The Petitioner explains that, prior to the March hearing, he was made aware by Government Relations personnel from Citizens that Twin River, a commercial banking client of Citizens, had requested that a representative from Citizens provide independent expert testimony at said hearing. Specifically, Twin River sought independent expert testimony that the proposed extension of Twin River’s debt leverage ratio limits contained in the amended legislation were consistent with industry standards.[1] The Petitioner states that the amended legislation was the sole item on the March hearing agenda. He explains that, because testimony was to be offered by a Citizens representative, he simply chose not to attend rather than appear and recuse from the only matter scheduled. The Petitioner adds that he also did not attend the Senate Finance Committee hearing on July 14, 2020, at which the amended legislation was again reviewed. The Petitioner represents that the proposed FY2021 State Budget may include provisions for the State Lottery Division of the Department of Revenue to enter into the extensions of its contracts with both IGT and Twin River upon the terms and conditions as proposed in the amended legislation. He further represents that, once the State Budget has been approved by the House of Representatives, it will next be considered by the Senate Finance Committee and, once approved there, will go before the entire Senate. The Petitioner explains that, when the State Budget is before both the Senate Finance Committee and the full Senate, it is possible that amendments and/or line items could be addressed. He states that, in light of his having refrained from participation in the Senate Finance Committee’s discussions and vote on the amended legislation in March when his employer presented independent expert testimony, and then again in July, he will recuse from any discussions and voting on any proposed State Budget amendments or line items which pertain to the amended legislation. It is in the context of these facts that the Petitioner seeks guidance from the Ethics Commission regarding whether he may participate in committee and Senate floor discussions and voting relative to the FY2021 State Budget as a whole. 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 a public 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). Furthermore, a public official shall not use his public office or confidential information received through his public office to obtain financial gain personally or for a business by which he is employed. Section 36-14-5(d). Additionally, a public official must recuse from participation when his business associate or employer appears or presents evidence or arguments before his state agency. Commission Regulation 520-RICR-00-00-1.2.1(A)(2) Additional Circumstances Warranting Recusal (36-14-5002). The Ethics Commission considered a similar question presented in Advisory Opinion 2018-29, when a member of the Rhode Island House of Representatives asked whether he was permitted to participate in floor discussions and voting relative to passing the FY2019 State Budget, given his private employment with the Rhode Island office of the Local Initiatives Support Corporation (“LISC”). The LISC was a national non-profit and financing intermediary whose lending and business activities were often supported by programs established by state agencies, all of which received funding through the State Budget. The Ethics Commission opined that the petitioner could participate in discussions and voting relative to passing the budget as a whole, provided that he recuses from participation in any discussions or voting on particular budget amendments or line items that impacted, or specifically addressed, his employer’s contracts or finances. See also A.O. 2007-26 (opining that a State Senator, who also sat as the Vice Chair of the Senate Finance Committee, was permitted to participate in discussions and voting in committee and on the Senate floor relative to passing the budget as a whole, but was required to recuse from any discussions or voting relative to amendments or line items that particularly related to her private employer, United Way of Rhode Island); A.O. 2007-25 (opining that a State Representative who served as a consultant to a nonprofit entity that received funding from a community service grant in the State Budget was permitted to vote on the budget as a whole, but was required to recuse from any discussions or voting that singled out her employer’s grant for discussion). Similarly, in the instant matter, although the Code of Ethics prohibits the Petitioner from taking any official action as a member of the Senate Finance Committee or on the Senate floor that would financially impact his private employer, the Petitioner is not prohibited from participating in discussions and a vote on the State Budget as a whole. In the event that a specific budget amendment or line item that addresses or impacts his employer is the subject of discussions and voting, by either the Senate Finance Committee or the Senate, the Petitioner is required to recuse from participating in such discussions and voting and must file a notice of recusal with the Senate and the Ethics Commission, consistent 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: § 36-14-5(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. 2018-29 A.O. 2007-26 A.O. 2007-25 Keywords: Private Employment Budgets