Advisory Opinion No. 2009-44 Rhode Island Ethics Commission Advisory Opinion No. 2009-44 Re: The Honorable John J. Tassoni, Jr. QUESTION PRESENTED The Petitioner, a legislator serving in the Rhode Island Senate, a state elected position, requests an advisory opinion concerning whether he may enter into and accept a master price agreement with the State of Rhode Island, Department of Administration, Division of Purchasing, to provide mediation services to entities other than state agencies. RESPONSE It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a legislator serving in the Rhode Island Senate, a state elected position, is prohibited by the Code of Ethics from providing arbitration and mediation services to state agencies. However, because the master price agreement and qualified provider list maintained by the Division of Purchasing is regularly utilized by municipalities and other non-state entities, the Petitioner may enter into the master price agreement and remain on the list of qualified providers, subject to the limitations discussed below. The Petitioner is a member of the Rhode Island Senate. In his private capacity he is the owner and principal of a recently-established business consulting firm, The Sentinel Group. The Petitioner informs that the primary focus of The Sentinel Group is public relations, integrated marketing, business development and dispute resolution. The Petitioner states that in August of 2009, he applied to the Rhode Island Department of Administration, Division of Purchasing, in response to that entity's continuous recruitment of individuals to perform arbitration and mediation services between labor and management.[1]The Division of Purchasing maintains a list of arbitrators and mediators who are qualified to assist in dispute resolution between labor and management, subject to a master price agreement. State agencies in need of such services are able to access the list of qualified mediators and arbitrators, select one of the providers, and requisition payment through the state's accounting system. The Division of Purchasing files a Form 1099-MISC to report payments made to providers under the master price agreement, and considers such providers to be independent contractors with the state. The Petitioner concurs that he would act as an independent contractor when and if he provides mediation or arbitration services. The Division of Purchasing informs that, in addition to state entities, non-state entities such as municipalities regularly utilize this list to select qualified mediators and arbitrators, although the cities and towns are neither subject to, nor part of, the master price agreement. The Division of Purchasing maintains this list, in part, as a service to the municipalities. The Petitioner has clarified that he is not seeking to provide any services to state agencies. Instead, he wishes to remain subject to the master price agreement and continue to be listed by the Division of Purchasing so that he can be considered by municipalities and other non-state entities which refer to the list to obtain the name of a qualified mediator. Additionally, the Petitioner has informed the Commission that he will voluntarily refrain from providing services to the municipalities within his Senate district (Smithfield and North Smithfield). In late August of 2009, the Petitioner was deemed by the Division of Purchasing to be qualified to provide both services, and was included in the master price agreement with listed fees of $125 per hour or $1,000 per day. The Petitioner has requested the instant advisory opinion to determine whether he is permitted to remain as a qualified provider under the state's master price agreement, with the express understanding that he will not seek or accept work from any state agency. The Rhode Island Code of Ethics contains several "revolving door" provisions that regulate the ability of public officials to be employed by, or contract with, government entities. For example, persons subject to the Code of Ethics are generally not permitted to enter into a contract with any state or municipal entity unless the contract has been awarded through an open and public process. See R.I. Gen. Laws § 36-14-5(h). A public official or employee cannot represent himself or others, or act as an expert witness, before his own state or municipal agency. See R.I. Gen. Laws § 36-14-5(e). Most relevant to the instant question are the revolving door provisions contained in Code of Ethics section 36-14-5(n) and Regulation 36-14-5007, both of which prohibit any state elected official from seeking or accepting work from the state as an employee, independent contractor or consultant, unless such position was held at the time of the member's election. Regulation 36-14-5007 reads: No member of the General Assembly shall seek or accept state employment, not held at the time of the member's election, while serving in the General Assembly and for a period of one (1) year after leaving legislative office. For purposes of this regulation, "employment" shall include service as defined in R.I. Gen. Laws § 36-14-2(4) and shall also include service as an independent contractor or consultant to the state or any state agency, whether as an individual or a principal of an entity performing such service. Regulation 36-14-5007 (emphasis added). Similarly, the Commission has clarified that section 36-14-5(n)'s ban on state employment "shall also include service as an independent contractor or consultant to the state or any state agency, whether as an individual or a principal of an entity performing such service." Regulation 36-14-5017. The Rhode Island Supreme Court reviewed the Code of Ethics' revolving door provisions, including Regulation 5007, in In re Advisory from the Governor, 633 A.2d 664 (R.I. 1993), writing that the Code of Ethics' regulation of revolving door issues "rests on a rational predicate and promotes integrity and public confidence in government. Id. at 671. The Court expounded on this point: The legislative aim of the revolving-door provisions is to ensure that public officials adhere to the highest standards of conduct, avoid the appearance of impropriety, and do not use their positions for private gain or advantage. See R.I. Const., art. 3, sec. 7. The integrity of our government officials is quintessential to our system of representation. In general the purpose of revolving-door provisions is to prevent “government employees from unfairly profiting from or otherwise trading upon the contacts, associations and special knowledge that they acquired . . . .” Id.(citations omitted) The Ethics Commission has applied the Code's revolving door provisions to legislators in the past. For example, in A.O. 2006-25, it was determined that Commission Regulation 36-14-5007 would apply to prohibit a member of the House of Representatives from providing insurance brokerage services (a consulting relationship) to a quasi-public state agency. In A.O. 2001-6, the Commission opined that both section 5(n) and Regulation 36-14-5007 prohibited a member of the House of Representatives from accepting work as a part-time instructor at Rhode Island College. Consistent with the analysis utilized in the above-cited advisory opinions, the Petitioner would be prohibited from providing arbitration or mediation services to any state agency. However, the Code of Ethics does not prohibit a state elected official from providing such services to municipalities or other non-state entities. Provided that the Petitioner does not seek or accept any work from state agencies, and given that the master price agreement and list of qualified providers is also intended to be utilized by non-state entities, the Code of Ethics does not prohibit the Petitioner from continuing to be listed as part of the master price agreement. Code Citations: 36-14-2(4) 36-14-5(e) 36-14-5(h) 36-14-5(n) Regulation 36-14-5007 Regulation 36-14-5017 Related Advisory Opinions and Caselaw In re Advisory from the Governor, 633 A.2d 664 (R.I. 1993) A.O. 2006-25 A.O. 2001-6 Keywords: Revolving door Prospective employment [1] In preparing its draft advisory opinion, the Ethics Commission staff relied upon information provided by the Petitioner in his written request, and upon representations the Petitioner made in subsequent telephone conversations and at an initial hearing before the Ethics Commission on November 10, 2009. Furthermore, at the Petitioner's suggestion and in order to better understand the master price agreement and its referenced mediation and arbitration services, the Commission staff had conversations with representatives of the Division of Purchasing.