Advisory Opinion No. 2008-67 Rhode Island Ethics Commission Advisory Opinion No. 2008-67 Re: K. Joseph Shekarchi, Esq. QUESTION PRESENTED The Petitioner, a member of the Coastal Resources Management Council (“CRMC”), a state appointed position, who is also an attorney licensed to practice law in Rhode Island, requests an advisory opinion as to whether he must recuse when NI Ltd. appears before CRMC, given that one of the officer and shareholders of that corporation is also an officer and shareholder of several other entities with which the Petitioner has done business in the past. RESPONSE It is the opinion of the Ethics Commission that the Petitioner, a member of the Coastal Resources Management Council (“CRMC”), a state appointed position, who is also an attorney licensed to practice law in Rhode Island, need not recuse when NI Ltd. appears before CRMC, notwithstanding the fact that one of the officer and shareholders of that corporation is an officer and shareholder of several other entities with which the Petitioner has done business in the past. The Petitioner is a member of CRMC. In his private capacity, he is an attorney licensed to practice law in Rhode Island. He states that one of his primary practice areas is zoning law and that he regularly represents a number of entities before various zoning boards on a variety of matters. He states that, currently, an entity known as NI Ltd. has an application pending before CRMC. He further states that the individual who is bringing the application on behalf of NI Ltd., Alfred Carpionato, who is an officer and shareholder of NI Ltd., is also a officer and shareholder in a number of other entities that the petitioner has represented in the past, including the Crown Plaza Hotel, the Holiday Inn Express, and 511 LLC3. The Petitioner states that while he has represented each of these entities a number of times in the past on various matters, he is not currently representing any of them at this time, nor do any of them have outstanding accounts with him, nor does he have any plan or expectation for specific future representation with any of the three. Furthermore, the Petitioner states that he has never represented NI Ltd., or Mr. Carpionato, who is bringing the application on behalf of that entity, on any matter ever. Thus, in this set of factual circumstances, the Petitioner asks whether he must recuse when matters concerning NI Ltd. come before CRMC, given that an individual who is an officer and shareholder of that entity is also an officer and shareholder of the three above enumerated entities, which the Petitioner has represented in the past. A person subject to the Code of Ethics shall not participate in any matter in which he has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of his duties in the public interest. See R.I. Gen. Laws § 36-14-5(a). The petitioner will have an interest in substantial conflict with his official duties if he has reason to believe or expect that a "direct monetary gain" or a "direct monetary loss" will accrue, by virtue of his official activity, to himself, a family member, a business associate, an employer, or any business which he represents. See R.I. Gen. Laws § 36-14-7(a). He is also prohibited from using his public position or confidential information received through his position to obtain financial gain for himself or any business associate, other than that provided by law. See R.I. Gen. Laws § 36-14-5(d). Additionally, no business associate of any person subject to the Code shall represent himself before the municipal agency of which the person is a member unless the agency is advised of the nature of the relationship and the official recuses himself from voting or otherwise participating in his agency's consideration of the matter at issue. See R.I. Gen. Laws § 36-14-5(f). A business associate is defined as “a person joined together with another person to achieve a common financial objective.” R.I. Gen. Laws § 36-14-2(3). In prior advisory opinions, the Commission has found that the attorney-client relationship creates a business association for purposes of the Code. See, e.g., A.O. 2007-5 (stating that “[t]he Commission has long held that an attorney and his or her clients are considered to be business associates as that term is defined in the Code of Ethics”); A.O. 2003-17 (opining that attorney’s representation of petitioner’s company created a business association). It is worth noting that an attorney-client relationship ceases being a business association for purposes of the Code of Ethics once the attorney no longer represents the client “in an ongoing matter, bills for prior representation have been paid and there are no plans for specific representation in the near future . . .” Id. See also A.O. 2002-61 (concluding that a Westerly Town Councilor may participate in matters involving Lewiss Law Associates provided that there is no ongoing attorney client relationship between the petitioner and the law firm and there are no specific plans for representation in the near future). In the facts as described by this Petitioner, while his relationships with the Crown Plaza Hotel, the Holiday Inn Express, and 511 LLC3 could all be described as past “business associations” as defined by the Code, he is not currently representing any of the three entities, nor do they have outstanding balances with him, nor does he have plans for specific representation of any of the three in the near future; as such, he is not a current business associate of any of the three entities at this time. The Commission consistently has found that no conflict of interest exists when a prior business relationship between a public official and a private party has ended and there is no ongoing or anticipated future relationship between the parties. In such instances, a public official may participate in matters involving his or her former business associate, assuming no other conflicts are present. See A.O. 2004-3 (opining that the Code of Ethics does not bar the City of Cranston from awarding a property management contract to an individual with whom the petitioner, the Mayor of the City of Cranston, had prior business associations); A.O. 2002-15 (opining that the Westerly Assistant Town Solicitor was not prohibited from serving as legal counsel to the Westerly Zoning Board in an appeal of a decision in which he advised the Planning Board, despite his prior representation of one of the parties); A.O. 98-25 (opining that a Bristol Planning Board member may participate in a matter in which an attorney represents an applicant before that Board, despite the fact said attorney previously represented the member on an unrelated matter); A.O. 97-112 (finding that North Providence Town Councilors may consider an application for Town Solicitor from an attorney who had represented them privately in complaint proceedings before the Ethics Commission, provided that the attorney/client relationship had ended). Furthermore, even assuming, arguendo, that the Petitioner was a current business associate of the Crown Plaza Hotel, the Holiday Inn Express, and 511 LLC3, those business associations alone would not, per se, make him a business associate of those entities’ business associates. See A.O. 2002-76 (opining that the mere fact that the Narragansett Town Solicitor was a business associate of one entity does not automatically make him a business associate of any of that entity's other business associates). In this instance, the Petitioner states that he has never represented NI Ltd. or the individual officer bringing the application on behalf of that entity before CRMC, Alfred Carpionato, on any matter; thus, because the Petitioner is not joined together with either NI Ltd. or Mr. Carpionato to achieve a common financial objective, the Code of Ethics does not consider the Petitioner to be a business associate of either. Accordingly, barring any other set of circumstances that would implicate provisions found in the Code, it is the opinion of the Ethics Commission that the Petitioner need not recuse when NI Ltd. appears before CRMC. Code Citations : § 36-14-2(3) § 36-14-5(a) § 36-14-5(d) § 36-14-5(f) § 36-14-7(a) Related Advisory Opinions : A.O. 2007-5 A.O. 2004-3 A.O. 2003-17 A.O. 2002-76 A.O. 2002-61 A.O. 2002-15 A.O. 98-25 A.O. 97-112 Keywords : Business Associate Business Interest