Advisory Opinion No. 2006-27 Advisory Opinion No. 2006-27 Re: Gary King QUESTION PRESENTED The petitioner, a member of the Glocester School Committee, a municipal elected position, and a member and Co-Chair of the Foster-Glocester Regional School Committee, requests an advisory opinion as to whether he may participate in the Foster-Glocester Regional School Committee’s solicitation of energy savings proposals involving representatives of Chevron Energy Solutions, Inc. or Automatic Temperature Control, Inc., given that Automatic Temperature Control, Inc. provides his company with subcontracting work. In addition, the petitioner requests an advisory opinion as to whether his company may receive subcontracting work from Automatic Temperature Control, Inc. if Chevron Energy Solutions, Inc. is awarded the energy savings programs. RESPONSE It is the opinion of the Rhode Island Ethics Commission that the petitioner, a member of the Glocester School Committee, a municipal elected position, and a member and Co-Chair of the Foster-Glocester Regional School Committee, must recuse himself from all matters before either school committee involving the energy savings programs if it is reasonably foreseeable that his company or his business associate Automatic Temperature Control, Inc. will be financially impacted by his official actions. The petitioner must also recuse himself from any appearances made by Automatic Temperature Control, Inc. before either school committee. Based upon the petitioner’s representations that he will recuse himself from any matters before the school committees regarding energy saving bids involving Chevron Inc. or Automatic Inc., the Code of Ethics does not prohibit the petitioner from accepting private subcontracting work from Automatic Temperature Control, Inc. The petitioner represents that he is a member of the Glocester School Committee. He informs that the Glocester School Committee works in conjunction with the Foster-Glocester Regional School District and that members of the Glocester School Committee automatically serve as members of the Foster-Glocester Regional School Committee. He represents that he is a member of the Foster-Glocester Regional School Committee and that he was appointed to be its Co-Chair. In addition, the petitioner informs that he is a welder and an equipment operator and that since 1989 he has been employed by David M. King & Son, Inc. (“King Inc.”), a Rhode Island General Contractor. He represents that is the 100% owner of King Inc. and is its President and Treasurer. He informs that since 2001 his company has obtained a significant amount of subcontracting work from Automatic Temperature Control, Inc. (“Automatic Inc.”), a Rhode Island corporation. He represents that this subcontracting work regards welding and excavation on various private, state, and municipal projects. The petitioner informs that the Foster-Glocester Regional School Committee’s Building Subcommittee is soliciting proposals on energy savings programs for the Ponagansett high school and middle school. The petitioner represents that he is not on the Building Subcommittee of either the Foster-Glocester Regional School District or the Glocester School Committee. He represents that Chevron Inc., an energy savings company commonly referred to as an “esco,” is one of approximately four esco-type companies which have been authorized, recognized, and/or sanctioned by the State of Rhode Island to engage in energy savings projects for various municipalities. He represents that Chevron Inc. will likely be solicited to submit energy savings proposals. He informs that if Chevron Inc.’s bid is successful it is reasonably foreseeable that Automatic Inc. will receive subcontracting work from Chevron Inc. regarding these programs as Automatic Inc. has recently become a subcontractor to Chevron Inc. Additionally, he informs that if Chevron Inc.’s bid is successful it is reasonably foreseeable that the bid will include welding work and that his company will receive such subcontracting work from Automatic Inc. He represents that his company has obtained a significant amount of subcontracting work from Automatic Inc. since approximately 2001. The petitioner represents that he will recuse from any matters before the school committees regarding energy saving bids involving Chevron Inc. or Automatic Inc. should said companies bid on work for the Foster-Glocester Regional School Committee or the Glocester School Committee. The Code of Ethics provides that a public official may not use his public office to obtain financial gain, other than that provided by law, for himself or for any business associate. R.I. Gen. Laws § 36-14-5(d). A public official also shall not have any interest that 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 will have an interest in substantial conflict if it is reasonably foreseeable that a “direct monetary gain” or a “direct monetary loss” will accrue, by reason of his official activity, to the official, a business associate, an employer, or any business which the public official represents. R.I. Gen. Laws § 36-14-7(a). A financial impact is “reasonably foreseeable” if “the probability is greater than ‘conceivably,’” although it need not be certain to occur. Regulation 36-14-7001. The Code of Ethics requires a public official to recuse himself from matters in which his employer, his business associate, or their interests appear before his agency. Regulation 5002(2), and (3); R.I. Gen. Laws § 36-14-5(f). Pursuant to section 5(b), a public official is also prohibited from accepting employment that will either impair his independence of judgment as to his official duties or require him to disclose confidential information acquired by him in the course of his official duties. Furthermore, a public official may not accept any reward or promise of future employment in return for or based on any understanding or expectation that his vote, official action, or judgment will be influenced. R.I. Gen. Laws § 36-14-5(g). Here, the petitioner must recuse himself from participating in matters before either the Glocester School Committee or Foster-Glocester Regional School Committee if it is reasonably foreseeable that his company will derive a direct financial benefit or loss by reason of his official activity. The petitioner must also recuse himself from matters if it is reasonably foreseeable that his business associate will be directly financially impacted by his official action. 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). The term “person” is defined in the Code as “an individual or business entity.” R.I. Gen. Laws § 36-14-2(7). The Commission has previously opined that when a public official is a principal of a company, that company’s various business relationships are imputed to the individual public official. See, e.g., A.O. 2000-73 (opining that a Jamestown Planning Commission member, the principal of an engineering company, is a business associate of a marina with which the company continues to provide consulting services). Here, the petitioner informs that he is the owner of King Inc. and that his company has an ongoing business relationship with Automatic, Inc., for whom his company provides subcontracting work. Consequently, the petitioner is a business associate of Automatic Inc. Based upon the petitioner’s representation that it is reasonably foreseeable that Automatic Inc. will be directly financially impacted if Chevron Inc. is the successful bidder, the petitioner must recuse himself from any matters before the Foster-Glocester Regional School Committee or Glocester School Committee regarding the energy savings programs. See, e.g., 2005-64 (opining that a member of the Burrillville Redevelopment Agency may not participate in discussions or votes on matters regarding a nonprofit developer’s request given that the petitioner is a partner in an accounting firm that provides accounting services to this developer on a continuing basis). Pursuant to section 5(f) and Regulation 5002(3), the petitioner must also recuse himself from any matter before the Foster-Glocester Regional School Committee or Glocester School Committee in which his business associate Automatic Inc. appears, including the school committees’ consideration of energy savings programs. The petitioner represents that he will recuse himself from any matters before the school committees regarding energy saving bids involving Automatic Inc. With regard to Chevron Inc., however, the Commission has previously concluded that a petitioner is not automatically a business associate of any company with which his business associate has a business association. See, e.g., A.O. 2002-76 (opining the Town Solicitor is not a business associate of his client’s business associate because the petitioner’s relationship to them are not that of business associate and their relationship is too remote). Here, the petitioner informs that Automatic Inc. receives subcontracting work from Chevron Inc., but that neither he nor his company has a business relationship with Chevron Inc. directly and that any work his company may receive regarding the energy savings programs will be subcontracting work from Automatic Inc. Based upon the petitioner’s representations, neither he nor his company has a present business association with Chevron Inc. Nonetheless, the petitioner must recuse himself from matters before the school committees involving Chevron Inc. if his participation would financially impact his company or his business associate Automatic Inc. Moreover, if a business association should form between Chevron Inc. and the petitioner’s company, the petitioner would be required to recuse himself from any matters that would financially impact Chevron Inc. and from any appearances made by Chevron Inc. before either school committee. The petitioner represents that he will recuse himself from any matters before the school committees regarding energy saving bids involving Chevron Inc. All recusals must be made in accordance with R.I. Gen. Laws § 36-14-6. Finally, pursuant to sections 5(b) and 5(g) of the Code of Ethics, the petitioner may not solicit or accept future employment from Automatic Inc. or Chevron Inc. based upon an understanding that his official actions will be influenced thereby or if the employment will impair his independence of judgment as to his official duties. Based upon the petitioner’s representations that he will recuse from any matters before the school committees regarding energy saving bids involving Chevron Inc. or Automatic Inc., the Code of Ethics does not prohibit the petitioner from accepting private subcontracting work from Automatic Temperature Control, Inc. Accordingly, the Code of Ethics requires the petitioner to recuse from all matters before either the Foster-Glocester Regional School Committee or the Glocester School Committee involving the energy savings programs that will financially impact his company or his business associate. The petitioner must also recuse himself from any appearances made by Automatic Inc. before either school committee. Based upon the petitioner’s representations, the Code of Ethics does not prohibit the petitioner from accepting private subcontracting work from Automatic Inc. if Chevron Inc. is awarded the programs. Code Citations: 36-14-2(3) & (7) 36-14-5(a) 36-14-5(b) 36-14-5(d) 36-14-5(f) 36-14-5(g) 36-14-6 36-14-7(a) Regulation 36-14-5002(2) & (3) Regulation 36-14-7001 Related Advisory Opinions: 2000-73 2002-76 2005-64 Keywords: Business associate Recusal