Advisory Opinion No. 2007-57 Re: Louis Neill Gray QUESTION PRESENTED: The petitioner, a member of the Newport Waterfront Commission (“NWC”), a municipal appointed position, requests an advisory opinion as to whether he is prohibited by the Code of Ethics from serving on the NWC, and further, whether he is prohibited from participating in discussions relating to moorings, given that he is a self-employed marine businessman, who owns and operates Newport Mooring Service LLC (“NMS”), which itself owns 18 commercial moorings. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Code of Ethics does not prohibit the petitioner from serving on the Newport Waterfront Commission (“NWC”), a municipal agency, notwithstanding the fact that he is a self-employed marine businessman, who owns and operates Newport Mooring Service LLC (“NMS”), and that his ability to participate in issues relating to moorings coming before the NWC requires a matter by matter analysis. The petitioner is a self-employed marine businessman who has served on the Newport Waterfront Commission since 1994 and on the Coastal Resources Management Council (“CRMC”) since 2000. The NWC is composed of nine members, who are appointed by the Newport City Council. The NWC is charged with making policy recommendations to the City Council in regards to the organization of the harbor and related marine affairs and is specifically mandated, amongst other things, to: make recommendations on harbor and marine matters when directed to do so by the City Council; prepare specific proposals on harbor and marine matters; advise the City Council on marine-related matters that would impact Newport Harbor; recommend areas to be designated for anchorages and moorings as well as suggested rules and regulations governing the placement and administration of assigned moorings; review of all applications to CRMC, as well as the Army Corps of Engineers, for permits to build or alter waterfront property in the city, and provide recommendations which shall be submitted to the City Council; provide advice on marine related issues to other boards and commissions; and, to hear appeals by “[a]ny person aggrieved by any decision of the harbor master . . . .” Codified Ordinances of the City of Newport §§ 2.88.030 & 12.28.130(J). The petitioner notes that by ordinance, the ratio of commercial to private moorings is maintained at 25% to 75%, and that, at this time, commercial moorings currently exceed the maximum ratio allowed. In this instance, the petitioner represents that he has previously recused from participation in matters coming before the NWC that pertain either to specific customers of his business, as for example, when one of his customers is appealing a decision of the harbormaster, or when the matter relates to mooring permit fees, due to the fact that his business, NMS, currently owns 18 commercial moorings. Based on the above-stated facts, the petitioner requests an advisory as to whether he is prohibited by the Code of Ethics from serving on the NWC, given the nature of his business and his ownership of NMS. The Code of Ethics provides, inter alia, that a public official may not participate in matters where he has a substantial conflict of interest, use his office for pecuniary gain, or accept employment that would impair his independence of judgment as to his official duties. See R.I. Gen. Laws §§ 36-14-5(a), (b), (d). A substantial conflict of interest exists if the public official has reason to believe or expect that he or she, or a business associate, or any business by which the official is employed or represents will derive a direct monetary gain or suffer a direct monetary loss by reason of his or her official activity. See R.I. Gen. Laws §§ 36-14-7(a). It is the opinion of the Ethics Commission that nothing in the Code of Ethics inherently bars the petitioner from simultaneously serving on the NWC and continuing with his private business and ownership of NMS. This opinion is consistent with past advisory opinions where we have found no inherent conflict between an official’s public duties and his private employment provided that: a) the employee’s official duties do not directly relate to his private employment; b) he complete the work before or after his normal working hours; and c) the employee does not appear before his own agency. See A.O. 2002-47 (finding that a Field Clerk in the Town of Burrillville Tax Assessor’s Office may accept assignments from his part-time employer to perform appraisals in the Town of Burrillville for lending and refinancing purposes, provided that he performs such work on his own time, without use of and/or special access to public resources and that he not use his position as Field Clerk to recruit potential clients); A.O. 2001-27 (opining that a Captain in the Cranston Fire Department may accept private employment with an architect to review plans for submission to another municipality for fire code compliance, provided that he perform such work on his own time and without the use of public resources and that he not use his position within the Fire Department to recruit potential clients); A.O. 2000-27 (opining that the Newport Tax Assessor may accept part-time employment with a local appraisal company and/or assist private parties with appeals of property valuations in other communities, provided that he performs such work on his own time and without the use of public resources and that he not use his position as Tax Assessor to recruit potential clients). The petitioner further inquires whether he must always recuse from participation in matters relating to moorings, given that NMS owns 18 commercial moorings, or, rather, if he should apply the specific prohibitions found in the Code to each individual topic raised. In his request for an advisory opinion, the petitioner inquires whether he would be prohibited from participating in the following matters that are pending before the NWC, each of which require making a recommendation to the Newport City Council: 1) a recommendation on a proposed amendment to an ordinance that currently allows unlimited inter-familial mooring transfers to instead allow for a one-time only transfer of a mooring within the immediate family; 2) a recommendation on the expansion of the definition of “immediate family” in regard to mooring transfers to include “domestic partner;” 3) a recommendation on the current requirement that one person must own 51% of a boat to qualify for a “private mooring” to be amended to be equal to or greater than 50% ownership for qualification; 4) a recommendation on whether the city can drop more moorings that the city could eventually rent out; and 5) a recommendation as to an increase in mooring permit fees. It is the opinion of the Ethics Commission that nothing in the Code of Ethics creates a per se prohibition against the petitioner participating in all matters coming before the NWC related to moorings, but rather, that the existence of a prohibited conflict of interest depends on a matter by matter analysis. As such, we now address the specific individual matters raised by the petitioner. 1) According to § 12.28.130.D.2 of the Codified Ordinances of the City of Newport, “[n]o mooring permit shall be transferable, except within the immediate family. Immediate family shall include brother, sister, children, father, mother, and spouse.” The petitioner represents that this has previously been interpreted to allow for unlimited inter-familial mooring transfers, but that the NWC will be making a recommendation to the City Council as to whether the ordinance should be amended to limit transfers to a one-time only inter-familial transfer. The petitioner states that the recommendation may have the practical effect of eventually freeing up some private moorings, such that those on the waiting list for a private mooring may more quickly obtain one, but that there will be no practical effect upon those holding commercial moorings, such as the petitioner. Given these representations, it is the opinion of the Ethics Commission that the petitioner is not prohibited from participating in discussions and voting on a recommendation in this matter, as it is not reasonably foreseeable that the petitioner’s participation in this official action will cause him to experience a direct monetary gain or loss, as prohibited under §§ 5(a) and 7(a). 2) The petitioner represents that the City Council has recently requested a recommendation as to expanding the aforementioned definition of “immediate family” as found in § 12.28.130.D.2 of the Codified Ordinances of the City of Newport to include “domestic partner” in regard to interfamilial mooring transfers of private moorings. While it is reasonably foreseeable that a definitional change such as this may have an impact upon some number of individual private mooring holders, this action, like that proposed in 1), would only implicate the interests of private mooring holders, not commercial mooring holders such as the petitioner. As such, the petitioner is not prohibited by the Code of Ethics from participating in discussion and voting on this matter. 3) The petitioner states that the City Council has requested a recommendation on amending § 12.28.130 of the Codified Ordinances of the City of Newport. That section currently requires that a person own 51% of a boat in order to qualify for a private mooring; the Council wants a recommendation as to modifying the ordinance such that a person need only own 50% of a boat to qualify for a private mooring. The petitioner states that this ordinance was originally designed to prevent groups of individuals getting together in an attempt to circumvent the intent of private moorings, which is that they be reserved for individual mooring users. He states that the only likely impact of such an amendment would be to allow either spouse in a coequal ownership arrangement to qualify for private mooring status. Again, such an action would have no foreseeable impact on a commercial mooring holder such as the petitioner, and thus, he is not prohibited by the Code of Ethics from participating in discussion and voting on this matter. 4) The petitioner states that the City Council has asked for a recommendation as to whether there is existent space in the harbor such that the city could itself drop more moorings that the city might eventually be able to lease. The petitioner states that commercial entities cannot themselves drop additional moorings. While the petitioner concedes that this could eventually create competition between the city and commercial mooring operators such as himself, he represents that the issue currently before the NWC is merely whether there is even space in the harbor at all for any new moorings. Nonetheless, it is the opinion of the Ethics Commission that such an action could have a reasonably foreseeable direct financial impact upon the petitioner, given the potential for the creation of competition between the city and the petitioner’s business, NMS, which could be affected by the petitioner’s participation in this action. 5) The petitioner represents that he is currently recusing from participating in discussion and voting as to a recommendation to the City Council on a mooring permit fee increase. It is the opinion of the Ethics Commission that the petitioner must continue to recuse from discussion and voting on this matter. The petitioner owns 18 commercial moorings and any fee rate increase would be applicable to both private and commercial mooring holders; as such, it is reasonably foreseeable that the petitioner’s participation in this official action would result in a direct financial impact upon him. Thus, his participation is prohibited under §§ 5(a) and 7(a). Finally, the petitioner inquires as to the so-called “class exception” found at § 36-14-7(b) of the Code, which states that a public official will not have an interest which is in substantial conflict with his official duties if any benefit or detriment accrues to him “as a member of a business, profession occupation or group, or of any significant and definable class of persons within the business, profession, occupation or group, to no greater or lesser extent than any other similarly situated member of the business, profession, occupation or group, or the significant and definable class of persons within the business, profession, occupation or group.” Id. The Commission will determine whether a proposed class is sufficiently "significant and definable," so as to justify an exception to what is otherwise a clear prohibition, by considering the totality of the circumstances, including, among other things, the following factors: (1) the description of the class or subclass; (2) the size of the class; (3) the function or official action being contemplated by the public official; and (4) the nature and degree of foreseeable impact upon the class and its individual members as a result of the official action. See, e.g., A.O. 2005-22; A.O. 2004-16. As the petitioner merely inquires as to how many moorings would be the maximum number that his business could own in order for the class exception to apply, but has not presented a specific official action contemplated to which it may be applied, we cannot opine on such a hypothetical scenario, and opine rather, that if this issue becomes less hypothetical, the petitioner is encouraged to seek further advice from the Commission concerning his ability to participate in specific matters regarding moorings as they arise. Code Citations: § 36-14-5(a) § 36-14-5(b) § 36-14-5(d) § 36-14-7(a) § 36-14-7(b) Other Statutory Citations: Codified Ordinances of the City of Newport §§ 2.88.030, 12.28.130(J), 12.28.130.D.2 Related Advisory Opinions: A.O. 2002-47 A.O. 2001-27 A.O. 2000-27 Keywords: Business Associate Private Employment