Advisory Opinion No. 2007-20 Advisory Opinion No. 2007-20 Re: Anne McCarver QUESTION PRESENTED The petitioner, a member of the City of Newport Trust and Investment Commission, a municipal appointed position, requests an advisory opinion as to whether the Code of Ethics prohibits or limits her participation on the Commission given her employment with AG Edwards & Sons. RESPONSE It is the opinion of the Rhode Island Ethics Commission that the petitioner, a member of the City of Newport Trust and Investment Commission, a municipal appointed position, may continue in that position notwithstanding her employment with AG Edwards & Sons. The petitioner is, however, required to recuse from matters, if any, involving the City’s use of products or services of her employer. The petitioner is a member of the City of Newport Trust and Investment Commission ("Investment Commission"). She states that the role of the Investment Commission is to oversee the investments of the City's pension and retiree medical plans, and its scholarship and trust funds. The Investment Commission hires and terminates investment managers for these plans and trusts, and monitors their performance. The petitioner is employed by AG Edwards & Sons, a national full-service brokerage firm, as a Vice-President of Investments. In that capacity she is the branch manager for the firm's Newport office, and she acts as a certified financial planner ("CFP") for retail (individual and small business) clients. The petitioner states that neither she nor her employer are currently doing business with the City, although it is possible that in the future her firm may seek to help in the underwriting of municipal bonds for the City. She states that her employer does not manage any of the funds or plans reviewed by the Investment Commission, and has no present intention of seeking to do so. Furthermore, although the petitioner works closely with certain investment managers as a CFP, she has no relationship with any of the current investment managers for the City's funds and plans. She represents that in the unlikely event that any matters came before the Investment Commission involving an investment manager she deals with in her private employment, she will recuse from participation in that matter. Under the Code of Ethics, a public official or employee may not use her position, other than as provided by law, to benefit herself, and may not participate in any matter in which she has an interest in substantial conflict with her public duties. See R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest exists if, for example, an official has reason to believe or expect that she or an employer will derive a direct monetary gain or loss by reason of her official activity. See R.I. Gen. Laws § 36-14-7(a). Additionally, R.I. Gen. Laws § 36-14-5(d) provides that a public official cannot use her office for pecuniary gain, other than provided by law, for herself, family, employer, business associate, or a business that she represents. Finally, R.I. Gen. Laws § 36-14-5(b) prohibits a public official from accepting other employment which will either impair her independence of judgment as to her official duties, or induce her to disclose confidential information acquired by her in the course of her official duties. In A.O. 2002-25, the Commission opined that the Chairman of the West Warwick Pension Board, who had recently accepted private employment with UBS Paine Webber, could continue sitting on the Board but would be required to recuse from any Pension Board discussion involving the Town’s use of products or services of his employer. The instant request for an advisory opinion presents similar facts, and our reasoning in that matter is equally applicable here. Based on the facts as presented by the petitioner, the mere fact that the petitioner is an employee of AG Edwards & Sons does not prohibit her from serving on the Investment Commission, or from participating in discussions, votes or other matters in which do not involve her private employer, her business associates or their interests. If, however, any matters arise involving the City’s use of products or services of AG Edwards & Sons, then the financial interests of the petitioner’s employer are implicated and she is required to recuse from participation and voting. Similarly, the petitioner may not participate in setting the criteria for any requests for bids or contracts if it is reasonably foreseeable that her employer will be among those bidding. Finally, to the extent that the petitioner obtains any confidential information through her membership on the Trust and Investment Commission, she is prohibited from disclosing or using such information to benefit herself or her employer. Notices of recusal, when appropriate, must be filed with the Ethics Commission in accordance with R.I. Gen. Laws § 36-14-6. Code Citations: 36-14-5(a) 36-14-5(b) 36-14-5(d) 36-14-6 36-14-7(a) Related Advisory Opinions: 2002-25 99-84 97-93 96-58 Keywords: Private employment