Advisory Opinion No. 2005-57 Re: James W. Farley QUESTION PRESENTED: The petitioner, Chairman and member of the Bristol Planning Board, a municipal elected position, requests an advisory opinion as to whether he may pursue purchasing a unit in the Stone Harbor Condominiums, given that this development previously came before the Bristol Planning Board for planning approval. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the petitioner, Chairman and member of the Bristol Planning Board, a municipal elected position, may pursue purchasing a unit in the Stone Harbor Condominiums, despite the fact that this development previously came before the Bristol Planning Board for planning approval. The petitioner represents that he has been a member of the Bristol Planning Board (the “Board”) for approximately thirty years. He informs that a development project named Stone Harbor Condominiums previously came before his Board for planning approval. He informs that the Board granted final approval for this project in April of 2003 and that a minor modification for it was approved in July of 2004. He states that he was actively involved in the planning and approval of the project and that it received all of its approvals and is currently under construction. He states that two of the three buildings to be constructed are now near completion. The petitioner states that he has had no further contact with the developers once the project received all of its approvals. Currently, the petitioner informs that he is in the process of looking to downsize from his present residence. He represents that he has searched in various locations (including outside of Bristol) and that he has found a location that may suit his needs. He states that this location is the Stone Harbor Condominiums. He informs that approximately one month ago he was invited to view the project first hand. He represents that this invitation was extended to other town officials and individuals interested in the progress of the development. Thereafter, the petitioner states that he and his wife toured the Stone Harbor Condominium facilities and placed a small, refundable deposit on one of the units to reserve it. Before he pursues this unit further, the petitioner requests the Ethics Commission’s advice to insure that he will not violate the Code of Ethics by further pursuing this unit. Under the Code of Ethics, a public official may not participate in any matter in which he has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of his duties in the public interest. R.I. Gen. Laws § 36-14-5(a). An official has 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, his family member, his business associate, his employer or any business by which he is employed or which he represents. R.I. Gen. Laws § 36-14-7(a); Regulation 36-14-7001. In addition, a public official may not use his public office or confidential information received through his office to obtain financial gain, other than that provided by law, for himself, his family member, his business associate, his employer or any business he represents. R.I. Gen. Laws § 36-14-5(d). Furthermore, section 5(f) of the Code requires the petitioner to recuse himself from voting or participating in consideration and disposition of a matter involving a business associate. Under the Code of Ethics, a business associate is defined as an individual or business entity joined with a public official to achieve a common financial objective. See R.I. Gen. Laws §§ 36-14-2(3) and 2(7). In past advisory opinions, the Commission has held that the buyer and seller in a real estate transaction are considered “business associates” under the Code of Ethics. See, e.g., A.O. 2005-5 (opining that the petitioner, Vice Chairman of the Tiverton Planning Board, may not participate and vote in the Planning Board’s determination of a major land development request made by New England Development given the fact that the petitioner and New England Development have an existing purchase option agreement concerning property owned by petitioner and are considered business associates under the Code of Ethics). In the instant matter, the petitioner and the Stone Harbor Condominiums will become similarly joined to achieve a common financial objective during the process of purchasing a unit. This business association will continue until the rights and obligations of the parties flowing therefrom are satisfied. Therefore, the petitioner should be aware that during this business association he will need to recuse himself from any matters that come before the Board that will financially impact his business associate, and that notice of such recusals must be filed in compliance with R.I. Gen. Laws § 36-14-6. Based on the petitioner’s representations that he did not have an interest in the project while it was being reviewed by his Board and that he did not and will not use his position to obtain any special considerations by the Stone Harbor Condominiums that are not available to the public (such as discounts or special options to reserve or buy a unit), the Commission opines that the petitioner’s purchase of a unit at the Stone Harbor Condominiums will not be in violation of the Code of Ethics notwithstanding the fact that he previously participated in the planning and approval of this project. The petitioner is advised that this opinion solely addresses whether the Code of Ethics prohibits him from purchasing a unit in the Stone Harbor Condominiums. This opinion does not, and cannot, address whether any municipal ordinances, Town Charter, or policies prohibit such conduct. Code Citations: 36-14-2(3) 36-14-2(7) 36-14-5(a) 36-14-5(d) 36-14-5(f) 36-14-6 36-14-7(a) Regulation 36-14-7001 Related Advisory Opinions: 2005-5 2002-63 2002-56 2002-30 2002-16 2001-19 2001-4 2000-90 99-148 99-99 98-92 98-66 98-56 98-35 98-19 98-18 97-76 97-63