Advisory Opinion No. 2002-6

Re: Steven T. Hartford, Esq.

QUESTION PRESENTED

The Westerly Town Solicitor requests an advisory opinion on behalf of members of the Westerly Town Council, municipal elected positions, as to whether they may participate in the Council’s consideration of a matter involving the Greater Westerly-Pawcatuck Chamber of Commerce, given that several Councilors are employed by or own businesses that are members of the Chamber of Commerce.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that Westerly Town Councilors, municipal elected positions, who are employed by or own businesses that are members of the Greater Westerly-Pawcatuck Chamber of Commerce may participate in the Council’s consideration of a matter involving the Chamber of Commerce. However, Councilors who serve as directors/officers of that entity must recuse from participation and/or vote in any matters involving the Chamber of Commerce.

Under the Code of Ethics, a public official may not participate in any matter in which he or she an interest in substantial conflict with the proper discharge of his or her 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 or her official duties if he or she has a reason to believe or expect 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). Also, Section 5(f) of the Code requires a public official to recuse himself or herself from voting or otherwise participating in the consideration and/or disposition of a matter involving a business associate. See R.I. Gen. Laws § 36-14-5(f). A "business associate" is defined as any individual or entity joined with a public official "to achieve a common financial objective." See R.I. Gen. Laws § 36-14-2(3).

The Greater Westerly-Pawcatuck area Chamber of Commerce is seeking a property tax exemption from the Westerly Town Council based upon its status as a non-profit public service organization. The petitioner advises that several, if not all, members of the Town Council are either employed by or own businesses that are members of the Greater Westerly-Pawcatuk area Chamber of Commerce. He represents that over 750 local businesses belong to the Chamber of Commerce.

Previously, this Commission has concluded that public officials are "business associates," as the term is defined in R.I. Gen. Laws § 36-14-2(3), of entities for which they serve either as members of the Board of Directors or in other leadership positions that permit them to affect the financial objectives of the organization. If an official has such a leadership position, the Commission has required the official to recuse himself or herself if the interests of the organization would be affected by an action to be taken by his or her public agency. See A.O. 98-44 (opining that a Commissioner of Fire Safety Code Board of Appeal and Review could not participate in appeals involving property owned by the International Association of Firefighters (Local 799) and the Providence Firefighters Realty Corporation since the petitioner, who held a position with both entities that would permit him to affect the financial objectives of the organization, had a business association relationship with the organizations that triggered the prohibitions set forth in R.I. Gen. Laws § 36-14-5(a)); A.O. 96-75 (advising three members of the General Assembly who also served as members of the Board of Directors of local hospitals to recuse themselves from hospital issues since they had a business association with the local hospitals); A.O. 95-59 (advising a member of the Smithfield School Committee to recuse himself from a vote concerning a community organization if the official's association with the organization allowed him to affect the financial objectives of the organization).

Here, members of the Westerly Town Council are members of the Greater Westerly-Pawcatuck Chamber of Commerce, or employees of its members. The Council’s granting of a tax exemption would clearly constitute a direct monetary gain for the Chamber of Commerce. However, mere membership in the Chamber of Commerce does not rise to the level of a business association that would trigger the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a) and 5(f). See A.O.98-89 (concluding that a Narragansett Town Councilor may participate and/or vote on whether to provide Town funding to the Narragansett Chamber of Commerce, where the real estate rental company he and his spouse operate is a member organization of the Chamber).

Accordingly, no conflict of interest would occur if Councilors who are employed by or own business that are merely members of the Chamber of Commerce were to participate and vote on the Chamber’s application for a property tax exemption.

However, where a Councilor serves as an officer or director of the Chamber of Commerce, such a relationship would constitute a business association that triggers the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a) and 5(f). See A.O. 98-93; A.O. 98-76 (opining that a Narragansett Town Councilor who serves on the Board of Directors of the Narragansett Chamber of Commerce must recuse from the Council’s consideration of any matters involving the Chamber). Therefore, Westerly Town Councilors who hold such positions within the Chamber of Commerce must recuse from participation and/or vote on the Chamber’s tax exemption application. Notice of recusal should be filed both with the Ethics Commission and the Westerly Town Council in accordance with R.I. Gen. Laws § 36-14-6.

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)

Related Advisory Opinions:

99-33
99-32
98-93
98-89
98-76

Keywords:

Business associate
Membership