Advisory Opinion No. 2002-33

Re: Raymond Dettore, Jr., Esq.

QUESTION PRESENTED

The petitioner, the Providence Deputy City Solicitor, a municipal appointed position, requests an advisory opinion as to whether he may engage in a private real estate transaction in which the prospective buyer may finance part of the purchase through grant/loan funds from programs offered through the Providence Department of Planning & Development.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the Code of Ethics does not prohibit the petitioner, the Providence Deputy City Solicitor, a municipal appointed position, from engaging in a private real estate transaction in which the prospective buyer may finance part of the purchase through grant/loan funds from programs offered through the Providence Department of Planning & Development.

The petitioner advises that he and his business partner entered into a purchase and sales agreement with a private party to purchase a building located in the City of Providence. He indicates that their original intent was to lease the building to a tenant. However, the Hispanic American Chamber of Commerce, a private non-profit entity, has approached them and communicated an interest in purchasing the building from them. The petitioner represents that the Chamber would finance most of the purchase through bank funds, but has applied for grant/loan funds from programs within the Providence Department of Planning & Development.

The Department works to retain business and to attract new businesses to Providence. This is achieved through a series of programs designed to assist businesses to locate and expand in the city and through marketing the city to attract new and expanding businesses to Providence. The petitioner states that he serves as counsel to one agency within the Department, the Providence Redevelopment Agency (PRA). He further advises that the buyer would not be seeking funds from the PRA.

Under the Code of Ethics, a public official may not participate in any matter in which he has an interest, financial or otherwise, 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 he has a reason to believe or expect that a "direct monetary gain" or a "direct monetary loss" will accrue, by virtue of his activity, to the official, a family member, a business associate, an employer, or any business which he represents. See R.I. Gen. Laws § 36-14-7(a). He also is prohibited from using his public position or confidential information received through his position to obtain financial gain, other than that provided by law, for himself, a business associate or any person within his family. See R.I. Gen. Laws § 36-14-5(d).

In an analogous context, the Commission previously has permitted public officials to apply for a loan while simultaneously serving in a public capacity in the same municipality. See A.O. 89-22 (permitting a member of the Pawtucket City Council to apply for a home improvement loan from a program administered by the Pawtucket Planning and Development Commission); A.O. 95-96 (finding that a Warwick Affirmative Action Commission member may continue to serve while he simultaneously repays a home improvement loan to the City); A.O. 2000-28 (concluding that a West Warwick Town Councilor may participate in a CDBG Business Assistance Loan program administered by the Town, provided that he may not receive a loan allocated from grant funds upon which he voted).

Based upon the facts presented by the petitioner, the Commission concludes that he and his business partner may engage in a private real estate transaction with the Hispanic American Chamber of Commerce, despite the fact that it may obtain grant/loan funds from programs offered through the Providence Department of Planning & Development. The petitioner and his partner do not yet own the subject property and have no control over the sources from which a prospective buyer may obtain funding. The fact that a buyer may obtain funds through City of Providence programs does not create an interest that is in substantial conflict with the petitioner's duties as Deputy City Solicitor.

The petitioner represents that within the Department he serves as counsel to the PRA alone. As such, he would not participate in a review of the buyer’s grant/loan application. Therefore, there exists no potential for official action that might in any way implicate provisions of the Code of Ethics. In the event that a matter involving the buyer comes before him in his capacity as Deputy City Solicitor while the real estate transaction is pending, the petitioner is required to recuse from participation and vote. Notice of recusal should be filed with the Ethics Commission in accordance with R.I. Gen. Laws § 36-14-6.

Code Citations:

36-14-5(a)
36-14-5(d)
36-14-6
36-14-7(a)

Related Advisory Opinions:

2001-57
2001-5
2000-28
96-83
95-98
95-96

Keywords:

Financial interest
Property interest
Grants