Advisory Opinion No. 2002-72

Re: George S. Farrell

QUESTION PRESENTED

The petitioner, a Commissioner of the Fire Safety Code Board of Appeal and Review (Board of Appeal), a state appointed position, and the Deputy Fire Marshal of the Providence Fire Department, a municipal employee position, requests an advisory opinion as to whether he may participate as a Commissioner of the Board of Appeal in appeals involving subordinates and superiors representing the Providence Fire Marshal’s Office.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the Code of Ethics does not prohibit the petitioner, a Commissioner of the Fire Safety Code Board of Appeal and Review (Board of Appeal), a state appointed position, and the Deputy Fire Marshal, a municipal employee position, from participating, as a Commissioner of the Board of Appeal, in appeals involving subordinates and superiors representing the Providence Fire Marshal’s Office.

The petitioner is a Commissioner and Chairman of both the Fire Safety Code Board of Appeal & Review and the Rehabilitation Building and Fire Code Board for Existing Buildings and Structures. As a Commissioner, the petitioner is responsible for participating in final decisions regarding appeals of exceptions and exclusions from the fire safety code and related laws. Additionally, he is employed as the Deputy Fire Marshal of the Providence Fire Department. He advises that he recently resigned as the President of the International Association of Fire Fighters Local 799 and is now completely disaffiliated with Local Union 799, the Executive Board of the City of Providence Central Labor Council and the Providence Firefighters Reality Corporation.

Under the Code of Ethics, a public official may not participate in any matter in which he has an interest, financial or otherwise, that is in substantial conflict with the proper discharge of his duties or employment in the public interest. See R.I. Gen. Laws § 36-14-5(a). An official will have an interest in substantial conflict with his official duties if it is reasonably foreseeable 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. R.I. Gen. Laws § 36-14-7(a); Commission Regulation 36-14-6001. Section 5(f) of the Code requires the Petitioner to recuse himself 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).

The Code defines “business associate” as a “person joined together with another person to achieve a common financial objective[.]” R.I. Gen. Laws § 36-14-2(2) (emphasis added). The term “person” is defined in the Code as “an individual or business entity[.]” R.I. Gen. Laws § 36-14-2(7). The Code does not provide a definition of “individual.” However, Blacks Law Dictionary defines an “individual” as “a single person as distinguished from a group or class.” Clearly, the City of Providence would not fall under the definition of “individual.”

Under § 36-14-2(3), the Code defines the term “business” as a “sole proprietorship, partnership, firm, corporation, holding company, joint stock company, receivership, trust or any other entity recognized in law through which business for profit or not for profit is conducted.” The City of Providence was incorporated in 1832. As a result, the legislature adopted its Town Charter and recognized the Town as a municipal corporation. Municipal corporations are distinguishable from corporations. A municipal corporation is a legal institution formed by charter from state power for the purpose and with the authority of subordinate self-government and improvement and local administration of affairs of state. Conversely, a corporation is an artificial person or legal entity created by statute. Municipal corporations are uniquely established, each having its own distinct structure. Additionally, Title 7 of Rhode Island General Laws relating to Corporations, Associations, and Partnerships governs all Business Regulation and is regulated by the Office of the Secretary of State. Municipal corporations are not included within Title 7 and are not subject to normal business regulation.

Furthermore, the Code extends the definition of “business” to include “any other entity recognized in law through which business for profit or not for profit is conducted.” Under no provisions of the Rhode Island General Laws does the definition of “business” include municipal corporations. Rather, it is consistent with the definition provided in the Code of Ethics. The most expansive definition of “business” is found in R.I. Gen. Laws §17-25-3(1), which states that a “business entity” means “any corporation, whether for profit or not for profit, domestic corporation or foreign corporation . . . financial institution, cooperative association, receivership, trust, holding company, firm, joint stock company, public utility, sole proprietorship, partnership, limited partnership . . . .” Municipal corporations are not included in this laundry list of entities that constitute a business. Therefore, the City of Providence is not a business as defined under Rhode Island General Laws.

In the present set of facts, the petitioner’s subordinates and superiors seek to appear before the Fire Safety Code Board of Appeal & Review regarding their actions taken in their capacity as representatives of the City of Providence. In a recent advisory opinion, the Commission opined that an Alternate Building Official for the Town of Richmond may appear before a state board of appeal, of which he is a member, since he was acting in his capacity as the Alternate Building Official and was representing the Town of Richmond. See A.O. 2002-55.

Section 5(f) of the Code of Ethics provides, inter alia, that no business associate of any person subject to the Code of Ethics may represent him or herself before an agency of which the subject person is a member unless 1) the business associate discloses the nature of his relationship with the member of the agency, and 2) the member of the agency with whom he/she is a business associate recuses from participating in the matter at issue. Here, again, while the Code of Ethics prohibits the petitioner’s associates from appearing before his board absent disclosure and recusal, representatives of the City of Providence Fire Marshal’s Office are not the petitioner’s business associates. The petitioner’s subordinates and superiors are representing the City of Providence in their official capacity as representatives of the Fire Department. As discussed supra, the City of Providence is not a “business.” Therefore, the petitioner’s subordinates and superiors would not be representing a business by which the petitioner is employed or which he represents when they appear before the Board of Appeal and Review.

Therefore, the Code of Ethics does not prohibit the petitioner from participating as a Commissioner of the Board of Appeal in appeals involving subordinates and superiors representing the Providence Fire Marshal’s Office.

Additionally, the petitioner seeks guidance as to whether his recent disaffiliation with Local 799 alters a past advisory opinion issued to the petitioner. In Advisory Opinion 98-44, the Commission required that the petitioner recuse on all matters involving Local 799 and its members. However, that opinion was based on the fact that the petitioner was the President of Local 799. In the past, the 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 him 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. 96-75 and A.O. 95-59. However, the Commission has permitted public officials to participate in matters involving a former business associate if it is clear that the business relationship has terminated and that the parties do not anticipate any future business dealings. See A.O. 96-30; A.O. 96-62 and A.O. 96-68. Here, since the petitioner has resigned as President of Local 799 and represents that he is no longer affiliated with Local 799, the Executive Board of the City of Providence Central Labor Council or the Providence Firefighters Reality Corporation, he is no longer a “business associate” of those entities. Therefore the petitioner may participate in appeals involving property owned by Local 799 or members of Local 799.

Code Citations:

36-14-2(2)
36-14-2(3)
36-14-2(7)
36-14-5(a)
36-14-5(f)
36-14-7(a)
36-14-6001

Related Advisory Opinions:

2002-63
2002-55
98-44
98-18
97-92
97-91
97-17
96-75
96-68
96-62
96-30
95-59

Keywords:

Business Associate