Advisory Opinion No. 2005-62 Re: Howard E. Walker QUESTION PRESENTED: The petitioner, a member of the of the Hopkinton Planning Board, a municipal appointed position, requests an advisory opinion as to whether he may participate in the Hopkinton Planning Board’s consideration of the Wood River Village application for a Comprehensive Permit to build 30 units of affordable housing on a parcel of land in Hopkinton, given that he is a member and Vice Chairman of the Board of Trustees of the South Shore Mental Health Center, Inc., an applicant proposing this application. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the petitioner, a member of the Hopkinton Planning Board, a municipal appointed position, may not participate in or vote on the Wood River Village application for a Comprehensive Permit to build 30 units of affordable housing on a parcel of land in Hopkinton, given that he is a member and Vice Chairman of the Board of Trustees of the South Shore Mental Health Center, Inc., an applicant proposing this application. The petitioner informs that he is a member of the Hopkinton Planning Board, which generally has jurisdiction and oversight over land development and subdivision within Hopkinton and also serves as advisor to the Hopkinton Zoning Board of Review on such matters as requests for special use permits. Additionally, he states that he is a member and Vice Chairman of the Board of Trustees of the South Shore Mental Health Center, Inc. (hereinafter “SSMHC”), which is a Rhode Island non-profit corporation that provides mental health services for residents of Washington County. He represents that SSMHC’s activities include owning and operating group homes that provide affordable housing for clients. He represents that his service on SSMHC is strictly as a volunteer and that he receives no compensation or other financial benefit from his service. With regard to the SSMHC’s application, the petitioner informs that SSMHC joined with two other non-profits as co-applicants on an application coming before the Hopkinton Planning Board. The application is for a Comprehensive Permit to build 30 units of affordable housing, named the “Wood River Village,” on a parcel of land in Hopkinton. He represents that the application requests relief from several requirements of the Hopkinton zoning and subdivision ordinances. He informs that without this relief, the Wood River Village would likely be unfeasible as proposed. The petitioner represents that pursuant to Rhode Island’s “affordable housing” laws, the Planning Board will have complete jurisdiction over this proposal, including requests for relief from zoning regulations. The petitioner represents that he would not be financially impacted directly or indirectly by any Planning Board action on the Wood River Village proposal. Furthermore, he informs that SSMHC’s financial investment in the project is minimal at this point, consisting only of a $1,000 “earnest money” deposit on land in Hopkinton and a HUD application fee of $3,500, which is not site-specific and would not be necessarily lost if the project does not go forward. The petitioner also states that SSMHC will not invest any further money in the project unless it is approved and goes forward. Accordingly, the petitioner contends that SSMHC will not derive any “material” financial gain or loss from any action of the Planning Board; however, the petitioner represents that the Planning Board’s approval or disapproval of the project will have some impact on the SSMHC’s ability to perform part of its charitable mission. Before review of the application begins, the petitioner seeks this request to determine whether it is appropriate for him to participate in the Planning Board’s consideration of the Wood River Village application. Under the Code of Ethics, the petitioner 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 and employment in the public interest. See R.I. Gen. Laws § 36-14-5(a). The petitioner 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 his official activity, to himself, a family member, a business associate, an employer, or any business which he represents. See R.I. Gen. Laws § 36-14-7(a). Furthermore, the petitioner 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 a family member. See R.I. Gen. Laws § 36-14-5(d). Section 5(f) of the Code prohibits a business associate of a public official from representing himself before the official’s agency unless (a) the business associate notifies the official’s agency of the nature of their relationship, and (b) the official recuses himself from voting on or otherwise participating in the agency's consideration of the matter at issue. R.I. Gen. Laws § 36-14-5(f). A “business associate” is defined as any individual or entity joined with a public official “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 A.O. 2002-6 (advising that members of the Westerly Town council who hold leadership positions in the Chamber of Commerce are prohibited from participating in matters involving the Chamber of Commerce since they are business associates). In the instant matter, based upon the representations made by the petitioner, the petitioner is a business associate of the SSMHC because he serves, albeit as a volunteer, as the Vice Chairman of the Board of Trustees of the SSMHC, which is a leadership position that would “permit him to affect the financial objective of the organization.” Furthermore, the petitioner indicates that the SSMHC may receive a financial gain or suffer a financial loss as a result of the petitioner’s vote on the application. Although the petitioner stresses that such financial impact is not “material,” a financial impact nonetheless exists triggering section 5(a) and 7(a) of the Code of Ethics. The Code of Ethics does not require that such financial impact be material or significant, rather the Code provides only that there be a direct financial impact to a business associate. Accordingly, the Code of Ethics prohibits the petitioner from participating in and voting on the SSMHC’s application before the Planning Board given that the SSMHC is his business associate and will be financially impacted by the Planning Board’s consideration of its application. Furthermore, the Commission opines that section 5(f) of the Code of Ethics requires the petitioner to recuse from the Planning Board’s consideration of this matter involving his business associate. Notice of recusal must be filed with the Planning Board and the Rhode Island 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) 36-14-5(f) 36-14-6 36-14-7(a) Related Advisory Opinions: 2002-6 Keywords: Business Associate Recusal