Advisory Opinion No. 2021-33 Rhode Island Ethics Commission Advisory Opinion No. 2021-33 Approved: April 27, 2021 Re: The Honorable Charles A. Lombardi QUESTION PRESENTED: The Petitioner, the Mayor of the Town of North Providence, a municipal elected official, requests an advisory opinion regarding whether the Code of Ethics prohibits him from renting a building that he personally owns to Tri-County Community Action Agency, a private non-profit entity which seeks to provide social services to North Providence residents who are in need. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, the Mayor of the Town of North Providence, a municipal elected official, is not prohibited by the Code of Ethics from renting a building that he personally owns to Tri-County Community Action Agency, a private non-profit entity which seeks to provide social services to North Providence residents who are in need. The Petitioner is the Mayor of the Town of North Providence (“Town” or “North Providence”). He represents that he has been asked by the President and CEO of Tri-County Community Action Agency (“Tri-County”) whether he would rent to Tri-County a building that he privately owns. Tri-County is a private non-profit entity which “provides a highly diverse and comprehensive range of services to ameliorate poverty and assist individuals and families to achieve personal, social and economic self-sufficiency.”[1] The Petitioner represents that Tri-County operates with an annual budget of over 25 million dollars and does not receive any funds from the Town’s municipal budget for the services it provides to the community. He adds that Tri-County currently has no contracts with the Town and that he does not expect Tri-County to enter into any contracts with the Town. The Petitioner states that Tri-County has been intensively searching for a suitable building for food distribution in the Marieville area in the Town which, according to the President and CEO of Tri-County, is an area that has been long underserved and has a demonstrated need due to lack of social services to address the increasingly high number of children and families who experience food insecurities due to COVID-19. The Petitioner represents that, after an exhaustive search, Tri-County found a suitable building which is owned by the Petitioner. As a result, the Petitioner states that the President and CEO of Tri-County approached him and asked whether Tri-County could rent the building. Given this set of facts, the Petitioner seeks guidance from the Ethics Commission regarding whether he can rent the building to Tri-County. Under the Code of Ethics, a public official shall not have any interest, financial or otherwise, or engage in any business, employment, transaction or professional activity, or incur any obligation of any nature, which 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). Additionally, a public official is prohibited 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 person by whom he is employed or whom he represents. Section 36-14-5(d). Further, 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). Here, under the specific circumstances as represented by the Petitioner, there is nothing in the Code of Ethics that prohibits the Petitioner from entering into a rental agreement with Tri-County in his private capacity. However, the Ethics Commission has previously determined that a landlord and tenant are considered business associates under the Code of Ethics. See A.O. 2002-70 (opining that a member of North Kingstown Town Council was business associate of the person from whom she rented retail space and, therefore, could not participate in Town Council matters that would financially impact her landlord). Therefore, the Petitioner should remain aware that, because of the business associate relationship that will attach to him and Tri-County by virtue of their respective roles as landlord and tenant, the manner and extent to which the Petitioner, in his public capacity as Mayor, may interact with Tri-County will be regulated by the Code of Ethics. Upon entering into a landlord/tenant relationship, the Petitioner will be generally required to recuse from taking official action, including discussions and/or decision-making, on any matter that is likely to result in a direct financial benefit or detriment to Tri-County, or in which Tri-County appears or presents evidence or arguments before him. Recusal shall be consistent with section 36-14-6. Given that the Ethics Commission cannot anticipate any and all, if any, future interactions of the Petitioner in his capacity as Mayor and Tri-County, the Petitioner is strongly encouraged to seek further advice from the Ethics Commission whether recusal is required in specific instances. 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. 2002-70 Keywords: Business Associate Recusal