Advisory Opinion No. 2001-17 Re: Craig Amerigian QUESTION PRESENTED The petitioner, a Jamestown Town Councilor, a municipal elected official, requests an advisory opinion as to whether he may participate in the Council’s consideration of bids for design work on the Town’s sewerage treatment plant, given that a bid has been submitted by Siegmund Engineering, a firm that is owned by his neighbor and which previously has purchased equipment from his company. RESPONSE It is the opinion of the Rhode Island Ethics Commission that the Code of Ethics does not prohibit the petitioner, a Jamestown Town Councilor, a municipal elected position, from participating and/or voting in the Council’s consideration of a bid submitted by Siegmund Engineering since his relationship with that firm is not a business association that would trigger the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a) and 7(a). Under the Code of Ethics, the petitioner, as a member of the Jamestown Town Council, 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. See R.I. Gen. Laws §§ 36-14-5(a), 36-14-7(a). An official will have an interest in substantial conflict with his official duties if it is likely that a "direct monetary gain" or a "direct monetary loss" will accrue, by virtue of the public official's activity, to the official, a family member, a business associate, an employer, or any business which the public official represents. See R.I. Gen. Laws § 36-14-7(a). Business associates are defined as individuals or entities joined together to "achieve a common financial objective." R.I. Gen. Laws § 36-14-2(3). The petitioner advises that the Town Council has received five responses to its Request for Proposals for design work on the Town’s sewerage treatment plant. One of the bids submitted was from Siegmund Engineering, a firm owned by his neighbor. The petitioner is a 50% partner in ASC Scientific, a small company that distributes geological field and laboratory equipment. He indicates that ASC also has demonstration units available for rental. In May 1999, Siegmund Engineering rented a high precision GPS receiver from ASC, and the petitioner demonstrated its use in the field. The cost of the rental and demonstration was $500.00. Further, during the summer of 2000, Siegmund purchased a portable diamond core drill and several drill bits from ASC for approximately $1,000.00. After considering the relevant provisions of the Code of Ethics, the Commission concludes that the petitioner may participate in the Town Council's consideration of a bid submitted by Siegmund Engineering for design work on the Town’s sewerage treatment plant. Here, the petitioner’s company does not have existing contracts or a specific business relationship with Siegmund. ASC merely provides geological equipment to its customers in the ordinary course of business. Further, there is no evidence that ASC’s business would be financially affected by the Council's decisions on matters involving a past customer. Absent some direct and ongoing financial relationship, the normal commercial dealings between ASC and its customers do not rise to the level of business association as defined in R.I. Gen. Laws § 36-14-2(3). See A.O. 99-21 (finding that a Westerly Town Councilor may participate in the review and/or award of a contract, despite the fact that companies that purchase parts from his automobile parts store may respond to the RFP, since his relationship with such companies is not a business association); A.O. 93-21 (concluding that a West Warwick Town Councilor who is a regular customer of a restaurant could participate in the review of an application for a twenty-four hour victualling license for that restaurant absent a significant financial nexus). Compare A.O. 97-103 (concluding that a Westerly Town Councilor's close and dependent business relationship with a loan officer who had been vocal about an issue together with the financial impact that such an ordinance may have on the loan officer would result in a substantial conflict with his duties as a member of the Town Council); A.O. 96-6 (opining that a Westerly Town Councilor could participate in matters involving customers of his bank unless there was some direct or current involvement between the Councilor and the bank customer, the participation of the Councilor in a decision of the bank that directly affects the customer, or the involvement of a customer who substantially impacts the economic fortunes of the bank); A.O. 93-21 (concluding that a West Warwick Town Councilor who supplied food to a local restaurant that applied for a twenty-four hour victualling license should not participate in the review of the application since he would be directly financially affected by the decision). Accordingly, since there is no direct financial nexus between the petitioner’s business and potential Council actions involving its customers, he does not have an interest that would prohibit his participation in the Council’s consideration of a bid submitted by Siegmund Engineering. Finally, the fact that the petitioner’s neighbor owns Siegmund Engineering does not, absent some other factors, require his recusal under the Code of Ethics. Here, the matter under consideration by the Council does not involve his neighbor’s property. Also, action on the matter does not have the potential to impact financially the petitioner's own property. When enacting the Code of Ethics, the General Assembly included as one of its legislative purposes the elimination of appearances of impropriety. The legislature did not, however, make the appearance of impropriety a violation of the law. Therefore, if the petitioner believes his participating would create an appearance of impropriety, he may recuse, although he is not so required. Code Citations: 36-14-2(3) 36-14-5(a) 36-14-7(a) Related Advisory Opinions: 2001-7 99-90 99-21 98-157 97-103 96-6 93-21 Keywords: Code jurisdiction Business associate Business interest Financial interest