Advisory Opinion No. 2006-54

Advisory Opinion No. 2006-54

Re:  Ronald A. Loparto


The petitioner, a member of the Lincoln Town Council, a municipal elected position, requests an advisory opinion regarding whether, in conjunction with his purchase of a restaurant, he may seek and obtain approval from the Lincoln Town Council to accept the transfer of the restaurant's liquor license.


It is the opinion of the Rhode Island Ethics Commission that the petitioner, a member of the Lincoln Town Council, may seek and obtain approval from the Lincoln Town Council to accept the transfer a liquor license in conjunction with his purchase of a restaurant.  This opinion is premised upon the Commission's finding of circumstances justifying a hardship exception to section 5(e) of the Code of Ethics, and is further subject to certain requirements to minimize the appearance of impropriety.

The petitioner is a member of the Lincoln Town Council.  He did not seek reelection to this position, and his term expires on December 31, 2006.  The petitioner represents that he, through a wholly owned corporation, entered into a contract on September 18, 2006 to purchase a restaurant in the Town of Lincoln known as "Brooksies."  The continued operation of Brooksies will require a transfer of its liquor license to the petitioner and, therefore, the purchase is contingent upon the Lincoln Town Council's approval of the transfer.

The petitioner states that he is aware that Section 5(e) of the Code of Ethics regulates his ability to represent himself before the Lincoln Town Council.  Through his request for an advisory opinion, he seeks the Commission's authorization to proceed pursuant to a finding of hardship.  As recounted below, he presents circumstances tending to favor such a finding.  Furthermore, the petitioner represents that he will recuse from any Council consideration of the transfer, neither contact any member of the Council concerning his application nor appear at any Council hearing on the matter, and that he will retain an attorney to represent him before the Council.  Also, as noted above, the Council hearing on the transfer will take place approximately one month prior to his termination of office.  The petitioner asks whether these steps, along with his representations as to his circumstances, justify a finding of hardship under section 5(e).

Under the Code of Ethics, a public official may not have an interest or engage in any employment or professional activity that is in substantial conflict with the proper discharge of his duties in the public interest.  See R.I. Gen. Laws § 36-14-5(a).  He may not use his public position or confidential information received through his position to obtain financial gain, other than that provided by law.  See R.I. Gen. Laws § 36-14-5(d).

Most relevant to the instant question is section 5(e) of the Code, which prohibits a public official from representing himself or any other person before any state or municipal agency of which he is a member or by which he is employed.  R.I. Gen. Laws § 36-14-5(e)(1).  A recent amendment to the Code of Ethics clarifies that the prohibition on representing oneself also includes authorizing or directing another person to participate in the presentation of evidence or arguments for the purpose of influencing the judgment of one's own agency.  See Regulation 36-14-5016.  Absent an express finding of hardship by the Commission, section 5(e)'s prohibition continues while the official remains in office, and for a period of one year thereafter.  R.I. Gen. Laws § 36-14-5(e)(1) and (e)(4).

Section 5(e)’s prohibitions are stricter than virtually any other provisions in the Code.  In most instances under the Code, public officials and employees may address potential conflicts of interest by declining to participate in related discussions and votes.  This is not the case with section 5(e).  Absent an express finding by the Commission that a hardship exists, the prohibitions in that section are absolute.

As an initial matter, the petitioner's proposed conduct falls squarely within section 5(e)'s prohibition on representing oneself before a municipal agency of which one is a member.  The petitioner wishes to obtain Town Council approval for the transfer of a liquor license while he is serving on the Council.  Although the petitioner asserts that he will hire an attorney to represent his interests rather than personally appear before the Council, the Commission's regulations clearly set forth that such an arrangement falls within section 5(e)'s prohibitions, absent a finding of hardship.  See Commission Regulation 36-14-5016.

Having determined that section 5(e) prohibits the petitioner's application to the Town Council, the Commission will next consider whether the circumstances justify a finding of hardship that will allow the petitioner to proceed before the Council with certain restrictions.  In considering questions of hardship on a case by case basis, the Commission will look at the totality of the circumstances.  Such circumstances in past opinions have included, but are not limited to the following:  Whether the subject property involves the official’s principal residence or principal place of business, whether the official’s interest in the property is pre-existing or recently acquired, whether the relief sought involves a primarily commercial venture, and whether the relief sought is substantial and highly discretionary versus relief that is minor or largely ministerial.  The Commission may consider other factors, and no single factor is determinative.

The petitioner has set forth several circumstances to support a finding of hardship.  He represents that he has been in the restaurant and hotel business, owning a small seasonal hotel on Cape Cod and a restaurant in Warwick, RI, prior to his election to the Town Council.  The petitioner relates that neither business is doing well and that, in particular, he has suffered large losses on the hotel.  He describes his financial situation as precarious.

The petitioner informs that he is married to a Lincoln school teacher and has three children.  He states that he is the primary caretaker for the children, and is currently required to be home for much of the day to care for one of the children who attends school for only two-and-a-half hours a day.

The petitioner advises that earlier this year his family home in Massachusetts was sold and that his share of the proceeds from the sale was approximately $200,000, all of which is taxable as a capital gain.  He represents that unless he is able to purchase another property in a "like-kind-exchange" under § 1031 of the Internal Revenue Code within six months of the closing of the home sale, he will be required to pay some $40,000 in capital gains taxes.

The petitioner asserts that this tax issue, along with his precarious financial situation and his family responsibilities, has led him to search for a restaurant to purchase close to home in northern Rhode Island.  After conducting what the petitioner describes as a strenuous search for a restaurant that matches his needs, he states that he was approached by the owner of Brooksies with an offer to sell.  A contract for the purchase of Brooksies was signed on September 18, 2006, contingent upon the petitioner obtaining the Lincoln Town Council's approval for the transfer of the liquor license to the petitioner's corporation. 

The petitioner states that he owns other liquor licenses in Rhode Island and Massachusetts which have always been renewed without difficulty and have never been suspended.  He states that he has no reason to believe that the instant transfer (from one Lincoln resident to another for an existing restaurant) would not be granted pro forma.

The Commission has considered similar requests for a finding of hardship under section 5(e) relative to commercial ventures.  Recently, in A.O. 2006-34, we determined that a hardship existed to allow Narragansett Town Council member T. Brien Handrigan to seek and obtain design and site plan review from the Narragansett Planning Board and Zoning Board for the development for property owned by the petitioner.  Factors considered by the Commission included that the relief sought by Handrigan was limited to site plan review of a permitted use in an already appropriately zoned area, and that the circumstances required Handrigan to purchase the subject property in order to protect his preexisting use.  Furthermore, Handrigan agreed to not personally appear before the boards, or to participate in any appointments thereto until after subsequent elections.

The Commission also found a hardship to exist in A.O. 2005-32, where a member of the Westerly Planning Board wished to appear before his board to seek a zone change for property he was purchasing to relocate his retail ice cream business.  The Commission's finding of a hardship was largely premised upon the petitioner's representations regarding the imminent termination of his current lease and the necessity of finding a new location in the same area that would preserve his customer base and associated goodwill.  See also A.O. 2004-33 (Member of Exeter Town Council may appear before Exeter Planning Board to request special use permit to allow petitioner to provide mental health counseling out of a home office).

Instances in which the Commission has declined to grant a hardship exception frequently involve plans to develop real estate.  In A.O. 2006-43, the Commission held that a member of the Barrington Planning Board, Marc Zawatsky, was prohibited from seeking Planning Board approval for a Comprehensive Permit to construct an affordable housing development.  Factors tending to disfavor a finding of hardship included that Zawatsky's interest in the subject property was newly acquired and that his proposed development was a purely commercial venture not involving a primary residence or place of business. 

Similarly, the Commission declined to grant a hardship exception in A.O. 2003-49.  There, the Assistant Solicitor for the Town of Lincoln wished to represent himself before the Lincoln Town Council, Zoning Board and Planning Board regarding the development of two parcels of real estate he owned in the Town.  The factors disfavoring application of the exception were that the petitioner's ownership of the lots did not predate his appointment as Assistant Solicitor, and the petitioner's uncertainty as to whether either lot would be used as the his primary residence or simply resold in commercial transactions after development.  See also A.O. 97-146 (concluding that a North Kingstown Zoning Board member could not appear before that board to seek approval for certain variances relating to a residential subdivision for which he was the developer).

In the instant case, the Commission is of the opinion that the totality of the circumstances justify making an exception to section 5(e)'s prohibitions.  Although the petitioner's legal interest in Brooksies does not predate his election to the Town Council, it appears that the petitioner's purchase of the restaurant was necessitated by his "personal financial crisis" and family commitments.  Furthermore, the relief sought by the petitioner before the Town Council is not for issuance of a liquor license to a new establishment.  It is for the transfer of a license incidental to the sale of a current licensee to the petitioner, a Lincoln resident who operates another licensed restaurant.  While such a transfer may not be pro forma as described by the petitioner, we agree that it is not likely to generate substantial debate.

Accordingly, it is the opinion of the Rhode Island Ethics Commission that the petitioner, through counsel, may seek the transfer of ownership of the subject liquor license through the Lincoln Town Council since the circumstances justify a finding of hardship under R.I. Gen. Laws § 36-14-5(e)(1).  To help mitigate any appearance of impropriety, the petitioner states that he will recuse from the Town Council's consideration of the subject transfer and that he will hire someone else to represent him before the Council.  This finding of hardship is expressly conditioned upon the petitioner taking these actions, and a notice of recusal must be filed with the Council and the Ethics Commission pursuant to R.I. Gen. Laws § 36-14-6.

Code Citations :






Regulation 5016

Advisory Opinions :








Keywords :


Property Interest