Advisory Opinion No. 2005-10 Re: Krista J. Garrett QUESTION PRESENTED: The petitioner, a member of the Narragansett Town Council, a municipal elected position, requests an advisory opinion as to whether she may remain a member of the Board of Directors of the Narragansett Little League, given that the Little League may receive an annual appropriation in the Town’s budget that is adopted by the Town Council. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the petitioner, a member of the Narragansett Town Council, a municipal elected position, may serve as a member of the Board of Directors of the Narragansett Little League even though the Little League may receive an annual appropriation in the Town’s budget that is adopted by the Town Council. The petitioner informs that she has served as a member of the Board of Directors for the Narragansett Little League for the past 14 years. The petitioner points out that non-profit organizations, such as the Little League, can apply to the Town for funding each year. She advises that the Little League has applied for such funding from the Town for each of the last few years and will likely do so again. The petitioner represents that the Town’s Appropriations Committee, which is separate from the Town Council, reviews these applications. She informs that the funding for these applications comes from a certain sum of money set aside by the Town, which varies from year to year, to specifically fund such non-profit organizations. The petitioner represents that the Appropriations Committee determines how much of the available funding is appropriated, if any, to each organization and that these appropriations appear in the overall Town budget presented to the Town Council. The petitioner advises that she is neither involved with the Little League’s application for funding nor with the Appropriations Committee. The petitioner also represents that the Town Council does not individually approve or deny such appropriations, but instead accepts or rejects the Town budget as a whole. Under the Code of Ethics, a public official may not participate in any matter in which she has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of her duties in the public interest. R.I. Gen. Laws § 36-14-5(a). An official has an interest in substantial conflict with her 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, her family member, her business associate, her employer or any business she represents. R.I. Gen. Laws § 36-14-7(a). Furthermore, a public official may not use her public office or confidential information received through her office to obtain financial gain, other than that provided by law, for herself, her family member, her business associate, her employer or any business she represents. R.I. Gen. Laws § 36-14-5(d). A business associate relationship exists under the Code where two individuals are joined together “to achieve a common financial objective.” R.I. Gen. Laws § 36-14-2(3). Past advisory opinions have opined that public officials are business associates 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. See, e.g., A.O. 2003-66 (petitioner is a business associate of St. Joseph Health Services since he is its President and Chief Executive Officer); A.O. 2002-6 (petitioners are business associates of the Greater Westerly Pawcatuck Chamber of Commerce since they serves as its directors or officers); A.O. 98-139 (petitioner will be considered a business associate of the Center for Hispanic Policy and Advocacy once she is appointed to its Board of Directors). Accordingly, the petitioner is a business associate of the Little League because she serves on its Board of Directors. This relationship triggers the prohibitions set out in R.I. Gen. Laws §§ 36-14-5(a) and (d). The Commission opines that the Code does not prohibit the petitioner’s simultaneous service on the Narragansett Town Council and the Board of Directors for the Narragansett Little League. The Commission points out, however, that the Code regulates Town Council matters in which the petitioner may or may not participate given her service to these two entities. The Commission opines therefore that the petitioner may not participate in or vote on specific items that are likely to result in a direct financial benefit or detriment to the Little League. Based on the petitioner’s representations, however, the Town Council does not approve or deny specific line items when adopting the Town’s overall budget, rather it approves or rejects the budget as a whole. In similar circumstances, the Commission has opined that the Code of Ethics does not prohibit a vote to approve or reject an overall budget. A.O. 2003-25 (member of the Rhode Island State Council on the Arts could vote to approve the entire budget of the Council notwithstanding the fact that the budget included funding to a non-profit organization which employs his spouse). The Commission has reasoned that a vote on an overall budget is sufficiently remote from such items so as not to constitute a substantial conflict of interest in violation of the Code. See, e.g., A.O. 2002-44 (Warwick City Councilor, whose spouse is employed by the Warwick School Department, may participate in and/or vote on the Town budget even if it includes matters related to school budgets and school issues generally, provided that he does not participate in and/or vote on specific matters related to personnel issues affecting his spouse); A.O. 98-88 (North Providence Town Councilor, whose spouse is a Clerk to the Town’s School Committee, may vote to approve or reject the Town budget as a whole even if it includes school department matters affecting his spouse, provided that he does not participate in the consideration of matters particular to his spouse or her employment). Moreover, the petitioner here cannot add, cut, or change lines or items within the Town’s overall budget and has no involvement, whatsoever, with the appropriation at issue. Accordingly, by merely voting up or down on the overall Town budget, the petitioner will not violate the Code. The Commission therefore opines, given the petitioner’s representations, that she may vote to approve or reject the Town’s overall budget notwithstanding the fact that it may include an appropriation to the Little League. The Commission points out, however, that the petitioner should recuse herself from participating in and/or voting on specific matters regarding the Little League. See, e.g., A.O. 99-57 (opining the petitioner, an East Greenwich Town Councilor and business associate of the East Greenwich Free Public Library, may not vote on a line item for the Library). The Commission notes that notice of recusal, if required, should be filed with the Ethics Commission in accordance with R.I. Gen. Laws § 36-14-6. Code Citations: 36-14-2(3) 36-14-5(a) 36-14-5(d) 36-14-6 36-14-7(a) Related Advisory Opinions: 2003-66 2003-25 2002-6 2002-44 99-57 98-139 98-88 Keywords: Business Associates Memberships