Advisory Opinion No. 2000-67

Re: Kevin J. Rabbitt

QUESTION PRESENTED

The petitioner, Pawtucket Housing Authority Chairperson, a municipal appointed position, requests an advisory opinion as to potential conflicts of interest if he employs or rents an apartment to an individual who is employed by and related to a vendor who does business with the Housing Authority.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the Code of Ethics prohibits the petitioner, the Pawtucket Housing Authority (“Housing Authority”) Chairperson, a municipal appointed position, from employing or renting an apartment to an individual who is employed by a Housing Authority vendor unless he recuses from all participation in Housing Authority matters relating to Freeport General Contracting, his employee/tenant’s employer. Under Commission Regulation 5011, the petitioner may not engage in a financial transaction with a subordinate over whom he exercises supervisory responsibilities. Contractors are specifically included within the definition of subordinates. Therefore, the petitioner may not engage in personal financial transactions (with limited exceptions) with Housing Authority vendors. However, if the petitioner cedes his supervisory responsibility over the contractor, then the prohibition would not apply and he could engage the employee of the vendor as his manager and rent an apartment to him. In that circumstance, the petitioner must recuse on all Housing Authority matters relating to the vendor in accordance with Section 6 of the Code, filing a recusal form with the Housing Authority and sending a copy to the Ethics Commission.

Under the Code of Ethics, the petitioner may not participate in any matter in which he has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of his duties in the public interest. Substantial conflict is defined as a “direct monetary gain or a direct monetary loss” that accrues, by virtue of the public official’s activity, to that individual, a family member, a business associate, an employer, or any business which the public official represents. See R.I. Gen. Laws §§ 36-14-5(a), 7(a). Additionally, the Code provides that a public official or employee may not use his office to obtain financial gain for himself, his family, business associates, employer, or business that he represents other than as provided by law. See R.I. Gen. Laws § 36-14-5(d). Also, pursuant to R.I. Gen. Laws § 36-14-5(b), a public official may not accept other employment which will either impair his independence of judgment as to his official duties or require him, or induce him, to disclose confidential information acquired by him in the course of his official duties. And finally, Commission Regulation 5011 prohibits individuals subject to the Code from engaging in a financial transaction with subordinates over whom he or she exercises supervisory responsibilities in the course of his or her official duties. The regulation specifically provides that subordinates include contractors of the official’s agency. However, that prohibition does not apply where the subordinate initiates the transaction, it is part of a regular commercial business or occupation, or is a charitable or fund raising event under the general sponsorship of a municipality or state.

The petitioner advises that he is the owner of an apartment building and wishes to rent one of the units to an employee of a Housing Authority vendor. Additionally, the petitioner is considering employing the individual as a manager of the building. The proposed tenant/employee is also the son of the principal of the Housing Authority vendor. Given the nature of the Housing Authority’s relationship with Freeport General Contracting, he has requested an advisory opinion as to potential conflicts of interest should he rent the apartment and/or engage the individual as manager.

In prior advisory opinions, the Commission has concluded that public officials or employees with supervisory authority may not engage in financial transactions with a subordinate. See A.O. 99-44 (finding that individual members of RIHMFC may not solicit contributions from entities that do business with the agency except in situations where the Board members or staff who solicit contributions do not exercise supervisory responsibility or control over the entity(ies) being solicited, and where they are not acting on behalf of someone who exercises such responsibility); A.O. 99-139 (concluding that Board of Pharmacy member may not participate in soliciting donations from licensees (over whom he exercises supervisory responsibility and/or control) and further advising the petitioner to recuse if he is required to take supervisory action over a solicited individual/entity); and A.O. 98-143 (advising Cranston School Committee Chairperson/ Cranston mayoral candidate may solicit campaign contributions from Cranston School Department employees since he is not seeking re-election to the school committee and provided that he will not participate in any matters affecting school department employees during the remainder of his tenure on the School Committee).

In accordance with past advisory opinions, the Commission concludes that the petitioner may not both engage the vendor’s employee and maintain supervisory control over the vendor. The Housing Authority necessarily exercises supervisory responsibility over its vendors and therefore the prohibitions of Commission Regulation 5011 control. Additionally, it is clear that the proposed transactions here, the rental arrangement and the management of the facility, were not initiated entirely by the subordinate. Therefore, the petitioner must either recuse from participating in matters concerning Freeport General Contracting if he engages the vendor’s employee as manager and rents an apartment to him or he should refrain from hiring this individual to manage his facility. In the event that the petitioner engages the vendor’s employee and is required to take action regarding the vendor, the petitioner should exercise the Code’s recusal provision in accordance with R.I. Gen. Laws § 36-14-6.

Code Citations:

36-14-5(a)

36-14-5(d)

36-14-7(a)

36-14-5011

Related Advisory Opinions:

99-143

99-139

99-116

99-44

98-143

Keywords:

Transactions with Subordinates