Advisory Opinion No. 2005-1 Re: Vincent McAloon QUESTION PRESENTED The petitioner, a recent appointee to the Town of New Shoreham Motor Vehicles for Hire Commission, a municipal appointed position, requests an advisory opinion regarding whether he may serve on the Commission while holding a taxi license. RESPONSE It is the opinion of the Rhode Island Ethics Commission that the petitioner, a recent appointee to the Town of New Shoreham Motor Vehicles for Hire Commission, a municipal appointed position, may serve on the Commission while holding a taxi license. However, the Code of Ethics will require that the petitioner recuse himself from participating in certain matters that are likely to result in a personal, financial impact. According to the petitioner, he is the owner of one of thirty-four licensed taxicabs on Block Island. Block Island taxicabs are regulated by the Town of New Shoreham Motor Vehicle for Hire Commission, a five-member board appointed by the Town Council. The Commission is unique in Rhode Island, as all taxis elsewhere in the state are regulated by the Rhode Island Public Utilities Commission. New Shoreham is exempt from PUC regulation pursuant to statute. See R.I. Gen. Laws § 39-14-23. The petitioner represents that a Town ordinance requires that two of the five Commission members be active taxi licensees. The Commission drafts regulations, decides on fares, keeps a list of license applicants and investigates complaints. The petitioner further states that the Commission is enabled to convene hearings to investigate licensee misconduct and to impose sanctions which can be appealed to the Town Council. The petitioner asks whether, in light of the above representations, the Code of Ethics allows his service as a Commission member while holding a license. 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. R.I. Gen. Laws § 36-14-5(a). A public official will have an interest in substantial conflict with his official duties if he has reason to believe or expect that a “direct monetary gain” or a “direct monetary loss” will accrue, by virtue of the official’s activity, to himself, a family member, a business associate, or any business by which the official is employed or represents. R.I. Gen. Laws § 36-14-7(a). The Code further prohibits an official from using his public office or confidential information received though his holding public office to obtain financial gain, other than that provided by law, for himself or any person within his family, any business associate or any business by which he is employed or represents. R.I. Gen. Laws § 36-14-5(d). A public official shall not accept employment that will impair his independence of judgment as to his official duties. R.I. Gen. Laws § 36-14-5(b). Sections 5(a), 5(b) and 5(d) of the Code of Ethics do not create an absolute bar to the petitioner's membership on the New Shoreham Motor Vehicle for Hire Commission by virtue of his holding a taxicab license in the Town. Rather, those provisions require a matter by matter evaluation and determination as to whether substantial conflicts of interest exist with respect to carrying out the petitioner's official duties in the public interest. In order for a substantial conflict of interest to exist, there must be some evidence of a financial nexus between his public position and his private financial interests. In A.O. 2004-38, the Commission stated that a member of the New Shoreham Board of License Commissioners who was employed by a liquor licensee was not generally prohibited from participating in liquor licensing matters. Rather, the petitioner was required to make a matter by matter evaluation and to recuse from participating in any liquor licensing matter that would financially impact his employer or his employer's direct competitors. This was based on a presumption that matters affecting the liquor license of those competing against the petitioner's employer would have a likely financial impact upon the employer. See also A.O. 2002-23 (CRMC member who is owner of Brown & Howard Wharf Marina on Newport Harbor may not participate in CRMC matters pertaining to Waites Wharf, a competitor within 1,500 feet of the petitioner's property); A.O. 2000-62 (concluding, inter alia, that Providence Tourism Council Deputy Director, also a minority stockholder in a Providence restaurant, may participate in matters involving the restaurant industry in Providence, or individual members of that industry, provided that such matters do not directly impact his restaurant and/or his personal financial interests); A.O. 99-9 (Narragansett Town Councilor who owns restaurant holding liquor license could not participate in matters directly affecting his business, and further advising that direct impact is presumed for any establishment within a close proximity to or otherwise in direct competition with his restaurant); A.O. 96-101 (Chief of Police for City of Pawtucket, who is also a part-owner of a Pawtucket establishment holding a Class B liquor license, must recuse on liquor enforcement activities affecting his own establishment and any of its direct competitors); A.O. 96-70 (requiring Newport City Councilor/Board of License Commissioner who owns a restaurant holding liquor license to recuse himself from zoning or licensing matters that concern competitors); A.O. 96-24 (recognizing that an Alternate Member of the Newport Zoning Board of Review who is part owner and operator of a hotel and landlord to a restaurant and dance club, may not participate in matters affecting other hotels or matters affecting restaurant, dance clubs, or bed and breakfasts that are located within 500 feet of the petitioner’s businesses). Following the reasoning of these prior advisory opinions, the petitioner is not prohibited from serving on the Motor Vehicle for Hire Commission. However, he is advised that he must recuse from participating in any Commission matters that are likely to result in a direct financial benefit or detriment to himself. Clearly, this would include any matters involving allegations of misconduct or imposition of sanctions against him. The petitioner must also recuse from participating in Commission matters that, although directed at one of the petitioner's direct competitors, will likely result in a direct financial benefit to the petitioner.(1) The petitioner must follow the procedures for recusal outlined in R.I. Gen. Laws § 36-14-6. The petitioner may, however, participate in general matters that apply to the entire class of taxicab license holders that will financially impact the petitioner to no greater extent than any other similarly situated licensee. See R.I. Gen. Laws § 36-14-7(b). The petitioner is encouraged to seek further clarification on the application of the class exception as specific matters arise. Code Citations: 36-14-5(a) 36-14-5(b) 36-14-5(d) 36-14-6 36-14-7(a) 36-14-7(b) 39-14-23 Related Advisory Opinions: 2004-38 2004-13 2002-30 2002-23 2001-57 2000-62 99-122 99-9 98-151 96-70 96-61 96-24 Keywords: Competitors Licensing (1) Based on the facts and representations currently before the Ethics Commission, we are unable to opine on what types of actions by the petitioner's board against another licensee would result in a financial impact to the petitioner. The petitioner should proceed cautiously when his Commission takes up issues relating to competing, individual license holders and is encouraged to seek further advice from the Ethics Commission as needed.