Advisory Opinion No. 2021-26

Rhode Island Ethics Commission

Advisory Opinion No. 2021-26

Approved: April 6, 2021

Re: Edward J. Quinlan

QUESTION PRESENTED:

The Petitioner, a member of the Health Services Council, a state appointed position, requests an advisory opinion regarding whether he is prohibited by the Code of Ethics from participating in discussions and voting on Health Service Council matters involving Prospect Medical, given that Prospect Medical owns Charter Care Medical Associates, for which the Petitioner formerly served as a member of the Board of Trustees.

RESPONSE:

It is the opinion of the Ethics Commission that the Petitioner, a member of the Health Services Council, a state appointed position, is not prohibited by the Code of Ethics from participating in discussions and voting on Health Service Council matters involving Prospect Medical, notwithstanding that Prospect Medical owns Charter Care Medical, for which the Petitioner formerly served as a member of the Board of Trustees.

The Petitioner is a member of the Health Services Council, having been appointed to that position by the President of the Rhode Island Senate in November of 2019.  The mission of the Health Services Council is to consult and advise the Department of Health regarding healthcare facility licensing reviews, matters of policy, and in the development of rules, regulations, and standards for healthcare facilities.  In his private capacity, the Petitioner spent more than nineteen years as the President of the Hospital Association of Rhode Island (“HARI”).  The Petitioner states that, prior to his retirement in 2014, he represented hospitals in matters before various state and federal government organizations including, but not limited to, the Rhode Island Department of Health, the Office of Attorney General, and various departments within the Executive Office of Health and Human Services.  The Petitioner further states that, in his capacity as the President of the HARI, he would often attend, and occasionally testify  during, Health Service Council meetings.  The Petitioner represents that, approximately one month after his retirement from the HARI, he was appointed to the Board of Trustees of Charter Care Medical Associates (“Charter Board”), a two-hospital system (“the system”) owned by Prospect Medical and consisting of Roger Williams Medical Center and Fatima Hospital, by the Charter Board’s Chairman and the President of the system.  He further represents that, as a member of the Charter Board, his responsibilities included advising the system’s administration and Prospect Medical on matters concerning operations, new programs, and capital expenditures requiring government approval.  The Petitioner further states that the Charter Board was disbanded in July of 2020, thereby concluding his association with it.[1]

The Petitioner represents that, sometime after the purchase of the system by Prospect in 2012, litigation was filed in the Rhode Island Superior Court by United Nurses and Allied Professionals against Prospect and others relative to pension issues.  The Petitioner further represents that, in January of 2021, he was deposed during the course of that litigation in his capacity as a former member of the Charter Board.  The Petitioner states that he will not be financially impacted by the outcome of the litigation, from which Prospect has since been released, nor would he have been financially impacted by the outcome of the litigation had Prospect not been released.

The Petitioner anticipates that the Health Services Council will likely soon consider an application from Prospect relative to a change in its effective control, and that such application could be the first of several applications and/or appearances by Prospect before the Health Services Council.  It is in the context of these facts that the Petitioner seeks guidance from the Ethics Commission regarding whether, given his prior membership on the Charter Board, he is prohibited from participating in Health Services Council discussions and voting on matters relating to Prospect.

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.  Section 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).  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, any person within his family, his business associate, or any business by which he is employed or which she represents.  Section 36-14-5(d).  Additionally, under the Code of Ethics, 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 state agency.  Commission Regulation 520-RICR-00-00-1.2.1(A)(2)&(3) Additional Circumstances Warranting Recusal (36-14-5002).  A business associate is defined as “a person joined together with another person to achieve a common financial objective.”  R.I. Gen. Laws § 36-14-2(3).      

In prior advisory opinions, the Ethics Commission has concluded that public officials are “business associates” of entities for which they serve either as officers or members of the Board of Directors or in some other leadership position that permits them to affect the financial objectives of the organization.  See, e.g., A.O. 2012-28 (opining that a Tiverton Planning Board member, who was also a member of the Board of Directors of the Tiverton Yacht Club (“TYC”), was a business associate of the TYC and, therefore, was required to recuse from participating in the Planning Board’s consideration of a proposed amendment to the Tiverton Zoning Ordinance that was requested by the TYC); A.O. 2000-74 (opining that a majority of members of the Westerly Housing Authority Commissioners, who were also members of the Westerly Housing Association Board of Directors, were prohibited from participating in the Housing Authority’s consideration of the Housing Association’s funding request because, as members of the Board of Directors of the Housing Association, those Commissioners had a business association with it).

While the Code of Ethics clearly prohibits the Petitioner from participating in matters directly affecting his current business associates, the recusal provisions of the Code of Ethics do not apply to matters that involve or impact the Petitioner’s former business associates, provided that the business relationship between the Petitioner and the other party has ended and there is no specific future business relationship anticipated between the parties.  See, e.g., A.O. 2016-29 (opining that the 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 prior 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 had been paid in full; and there was no reasonable likelihood of reestablishing an attorney/client relationship in the foreseeable future). 

Here, the Petitioner’s personal association with Prospect, vis-ὰ-vis his former membership on the Charter Board until its disbandment in July of 2020, has terminated.  As such, his past business association with Prospect and the Charter Board has ended.  Accordingly, it is the opinion of the Ethics Commission that, based on the facts as represented, an analysis of the relevant provisions of the Code of Ethics, and previous advisory opinions issued, and barring any other relationship with Prospect not otherwise described herein, the Petitioner is not prohibited from participating in discussions and voting on Health Service Council matters involving Prospect Medical.

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)   
§ 36-14-7(a)   
520-RICR-00-00-1.2.1 Additional Circumstances Warranting Recusal (36-14-5002)         

Related Advisory Opinions:              
A.O. 2016-29 
A.O. 2013-21 
A.O. 2012-28             
A.O. 2000-74             

Keywords:      
Business Associate    

[1] The Petitioner informs that when the Charter Board was disbanded in July of 2020, the only hospitals among the 20-22 hospitals owned by Prospect Medical throughout the country to have a Board of Trustees were those which comprised the system in Rhode Island.  He adds that the establishment of the Charter Board was a condition imposed  by Rhode Island’s Attorney General when the system was sold to Prospect in 2012.