Advisory Opinion No. 2007-37 Advisory Opinion No. 2007-37 Re: David M. Sullivan QUESTION PRESENTED The petitioner, the Tax Administrator for the State of Rhode Island, a state employee position, who is also the President-Elect of the North Eastern States Tax Officials Association (“NESTOA”), a private not-for-profit organization, requests an advisory opinion to help eliminate any potential conflicts of interest in NESTOA’s solicitation of annual conference sponsorships from private companies in Rhode Island. RESPONSE It is the opinion of the Ethics Commission that the procedures outlined by the petitioner, which involve NESTOA contracting with a private firm to solicit and administer the sponsorship portion of its annual conference, comply with the requirements of the Code of Ethics. The petitioner is the Tax Administrator for the State of Rhode Island. He represents that he currently serves on the Board of the North Eastern States Tax Officials Association (“NESTOA”), a private not-for-profit organization, and is its President-Elect. He states that as President, he will be responsible for hosting NESTOA’s 2008 annual conference in Newport, Rhode Island. He further states that NESTOA has traditionally sought and accepted sponsorships from private companies to offset expenses for specific events at such conferences. NESTOA’s solicitation of such sponsorships has been conducted in two different ways. In some years, the NESTOA conference host state has solicited and administered all contributions by conference sponsors. In other years, the host state has contracted with a private firm to solicit and administer the sponsorship contributions. The petitioner asks whether, as host of NESTOA’s 2008 conference, he may utilize either of these options to solicit contributions given that many of the businesses to be solicited will be Rhode Island taxpayers with interests that may be impacted by his decision-making as the Tax Administrator. As an initial matter, we note that NESTOA is a private, professional organization. It is not a public entity that is subject to the Code of Ethics. Accordingly, the Ethics Commission cannot regulate NESTOA’s interaction, as an entity, with businesses that pay Rhode Island taxes or may be interested in decisions of the state’s Tax Administrator. On the other hand, the Code of Ethics does regulate the conduct of state employees and officials who happen to be members of NESTOA, particularly where such conduct involves solicitation of businesses with existing financial interests before such employees or officials. The Code of Ethics prohibits a public official or employee from using his or her public office, or confidential information received through holding public office, to obtain financial gain, other than that provided by law, for him/herself or any person within his/her family, any business associate or any business by which he/she is employed or represents. R.I. Gen. Laws § 36-14-5(d). A public official or employee is also prohibited from soliciting or accepting a gift or certain contributions with the understanding that the official’s vote, official action, or judgment would be influenced thereby. See R.I. Gen. Laws § 36-14-5(g). Commission Regulation 36-14-5009, entitled “Prohibited Activities – Gifts,” prohibits public officials and employees from accepting or receiving any gifts of cash, or any goods or services valued at more than twenty-five dollars ($25), from an “interested person.” Regulation 5009. An “interested person” is defined as a person or business “that has a direct financial interest in a decision that the person subject to the Code of Ethics is authorized to make, or to participate in the making of, as part of his or her official duties.” Regulation 5009(c). Commission Regulation 36-14-5011, entitled "Transactions with Subordinates," generally prohibits persons subject to the Code of Ethics from engaging in financial transactions with subordinates. It reads, in pertinent part: No person subject to the Code of Ethics shall engage in a financial transaction . . . with a subordinate or person or business for which, in the official's or employee's official duties and responsibilities, he or she exercises supervisory responsibilities, unless (1) the financial transaction is in the normal course of a regular commercial business or occupation, (2) the subordinate or person or business described above offers or initiates the financial transaction,or (3) the financial transaction involves a charitable event or fundraising activity which is the subject of general sponsorship by a state or municipal agency through official action by a governing body or the highest official of state or municipal government. Regulation 36-14-5011(a). Given the general facts represented, and without knowing the identity of every business to be solicited along with the particular interest each such business may have before the Rhode Island Division of Taxation, the Ethics Commission is unable to provide specific guidance and application of the above provisions of the Code of Ethics to the petitioner’s own solicitation of individual sponsorship contributions. However, we do find that the second option NESTOA has sometimes utilized, that of NESTOA contracting with a private, third-party firm to solicit and administer the sponsorship contributions, would be consistent with the requirements of the Code of Ethics. See A.O. 2006-10 (while the Rhode Island Association of School Business Officials (RIASBO), a private, not-for-profit professional organization, may solicit school vendors to subsidize annual meeting costs, individual RIASBO members should not solicit vendors having business interests that are subject to such members’ supervision as school business officials). Our opinion draws a distinction between a private organization’s solicitation of contributions from Rhode Island businesses through a procedure that avoids the direct involvement of any Rhode Island officials or employees, versus the Rhode Island Tax Administrator’s solicitation of contributions from Rhode Island taxpayers to benefit a private group for which he serves as an officer. The latter situation may run afoul of the aforedescribed provisions of the Code of Ethics and creates, at a minimum, an appearance of impropriety that should be avoided if at all possible. See R.I. Const., art. III, sec. 7.[1] To summarize, our opinion is that the Code of Ethics does not prohibit NESTOA, a private, non-profit organization which is not subject to the Code of Ethics, from soliciting and accepting contributions from businesses that pay Rhode Island taxes. That is not to say that we endorse such interaction. Indeed, we specifically advise the petitioner and any other employees or officials of the state who are NESTOA members to exercise extreme caution in relation to NESTOA’s solicitations, and to seek further and more specific guidance from the Commission if needed. Code Citations: 36-14-5(d) 36-14-5(g) Regulation 36-14-5009 Regulation 36-14-5011 Related Advisory Opinions: 2006-11 Keywords : Solicitation Transactions with subordinates Gifts [1] "The people of the State of Rhode Island believe that public officials and employees must adhere to the highest standards of ethical conduct, respect the public trust and rights of all persons, be open, accountable and responsive, avoid the appearance of impropriety, and not use their position for private gain or advantage. Such persons shall hold their positions during good behavior." R.I. Const., art. III, sec. 7.