Advisory Opinion No. 2009-45 Rhode Island Ethics Commission Advisory Opinion No. 2009-45 Re: James V. Isherwood QUESTION PRESENTED The Petitioner, Chairman of the Lime Rock Fire District Commission, a municipal elected position, requests an advisory opinion asking what restrictions the Code of Ethics places on him in carrying out his duties as a member of that entity, given that his son is a firefighter employed by the Lime Rock Fire District. RESPONSE It is the opinion of the Ethics Commission that the Code of Ethics does place certain restrictions on the Petitioner, Chairman of the Lime Rock Fire District Commission, a municipal elected position, in carrying out his duties as a member of that entity, given that his son is a firefighter employed by the Lime Rock Fire District. The Petitioner is the Chairman of the Lime Rock Board of Fire Commissioners (“the Board”) and has served as a member of that Board since 2004. He states that the Board consists of five members who determine the policy and philosophy of the Fire District, while the day to day operations are governed, managed and controlled by the fire chief and his staff. He states that there are currently 20 full-time and 10 part-time firefighters in the Fire District and that his son is one of the full-time firefighters. He further states that while the firefighters are not unionized and, thus, are not subject to collective bargaining, they do work under individualized employment contracts, the terms of which are determined by the Board. Given this set of facts, the Petitioner asks for an advisory opinion as to whether he must recuse from participating in a number of official duties he has as a Fire District Commissioner, including: 1) whether he may participate in discussion and vote on a proposed fire district tax rate, given that the Petitioner is a resident of the Fire District subject to the tax; 2) whether he may vote, as a citizen of the Fire District, on the proposed tax rate at the Annual Fire District Financial Meeting; 3) whether he may participate in discussion and vote regarding the Fire District budget; 4) whether he may vote, as a citizen of the Fire District, on the annual Fire District Budget at the Annual Fire District Financial Meeting; 5) whether he may participate in discussion and vote regarding salary and benefits of the Lime Rock firefighters; and 6) whether he may participate in discussion and vote regarding the employment contract of the Lime Rock firefighters. Under the Code of Ethics, a public official may not participate in any matter in which he has an interest, financial or otherwise, that is in substantial conflict with the proper discharge of his duties or employment in the public interest. See R.I. Gen. Laws § 36-14-5(a). An official will have an interest in substantial conflict with his official duties if it is reasonably foreseeable that a "direct monetary gain" or a "direct monetary loss" will accrue, by virtue of the public official's activity, to the official, a family member, a business associate, an employer, or any business which the public official represents. See R.I. Gen. Laws § 36-14-7(a); Commission Regulation 36-14-7001. Section 36-14-5(d) further prohibits an official from using his position or confidential information received though his position to obtain financial gain, other than that provided by law, for himself, business associate(s), or any person within his family. Section 36-14-7(b) of the Code, sometimes referred to as the "class exception," states that a public official will not have an interest which is in substantial conflict with his or her official duties if any benefit or detriment accrues to him or her “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 extent than any other similarly situated member of the business, profession, occupation or group, or of the significant and definable class of persons within the business, profession, occupation or group.” R.I. Gen. Laws 36-14-7(b). The Commission will determine whether a public official belongs to a group or to a sufficiently "significant and definable" class within that group, so as to justify an exception to what is otherwise a clear prohibition, by considering the totality of the circumstances. See, e.g., A.O. 2008-16. Among the important factors considered are: 1) the description of the class; 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 id. It is the opinion of this Commission that the circumstances of this Petitioner’s first question are precisely those to which the class exception was intended to apply: the Petitioner is required, as part of his official duties, to participate in discussion and vote on a proposed Fire District tax rate that will similarly impact all ratepayers of the Fire District, including himself and his son. This proposed tax rate is then voted on by the qualified electorate of the Fire District at the Annual Fire District Financial Meeting. Accordingly, the Petitioner is not prohibited from participating, as part of his official duties, in discussion and vote regarding a proposed Fire District tax rate, pursuant to R.I. Gen. Laws § 36-14-7(b). Additionally, nothing in the Code of Ethics limits a duly registered member of the Rhode Island electorate from properly voting, pursuant to R.I. Const. art II, sec.1, on any matter submitted to the electors. Accordingly, the Petitioner is not prohibited by the Code of Ethics from participating and voting as an elector in the Annual Fire District Financial Meeting on any matters put to the electorate at that meeting, including the Fire District tax rate and the overall budget for the Fire District. Commission Regulation 36-14-5004(b)(3), regarding participation in budgets, specifically addresses the question raised by the Petitioner about the prohibitions placed upon him by the Code of Ethics in the Board’s discussion and vote on the Fire District’s budget. It reads: (A) General Prohibition. No person subject to the Code of Ethics shall participate in discussion or decision-making relative to a budgetary line item that would address or affect the employment, compensation or benefits of any person within his or her family or a household member. (B) Specific Line Items. Notwithstanding the prohibition set forth in subsection 3(A), a person subject to the Code of Ethics may, only in accordance with particular instructions and advice received from the Ethics Commission in a written advisory opinion, participate in discussion or decision-making relative to a budgetary line item that addresses or affects the employment, compensation or benefits of any person within his or her family or a household member as a member of a significant and definable class of persons, and not individually or to any greater extent than any other similarly situated member of the class. (C) Vote on Entire Budget. Notwithstanding the prohibition set forth in subsection 3(A), a person subject to the Code of Ethics may participate in discussion or decision-making relative to approving or rejecting the entire budget as a whole, provided that the person within his or her family or household member is impacted by the entire budget as a member of a significant and definable class of persons, and not individually or to any greater extent than any other similarly situated member of the class. Commission Regulation 36-14-5004(b)(3). Pursuant to this provision, the Petitioner is prohibited from participating in any Board discussion or vote on line items in the Fire District budget that would impact the employment, compensation or benefits of firefighters in the District, given that his son is a firefighter in the district. However, the Petitioner is permitted to participate in the Fire District’s discussion and decision-making relative to other budgetary line items and in regard to approving or rejecting the entire budget as a whole. The basis for allowing such participation is an assumption that that a vote on an overall budget is sufficiently remote from most particular line items so as not to constitute a substantial conflict of interest in violation of the Code. See A.O. 2007-30 (opining that a member of the East Providence School Committee was prohibited by the Code of Ethics from participating in any budgetary line item relative to bus monitors, given that he had a family member who was employed as a bus monitor, but that he may vote on the budget as a whole). Although the Petitioner is permitted to participate in the overall vote to approve or reject the Fire District budget, the Commission is aware that a general discussion can quickly devolve into a more narrow review of specific items. The Petitioner must be vigilant to identify such instances where a general conversation begins to focus on issues that are likely to financially impact his son. In such circumstances, the Petitioner must recuse from further participation in accordance with R.I. Gen. Laws § 36-14-6 or, if possible, seek further guidance from the Ethics Commission. To the extent, if any, that discussion and vote regarding the Firefighters’ compensation, benefits, or overall employment contract takes place outside of the general discussion and vote regarding the overall Fire District budget, the Petitioner would similarly be prohibited from participating, pursuant to Commission Regulation 36-14-5004(b)(1). Code Citations: § 36-14-5(a) § 36-14-5(d) § 36-14-6 § 36-14-7(a) § 36-14-7(b) Commission Regulation 5004 Commission Regulation 36-14-7001 Other Law Cited: R.I. Const. art II, sec.1 Related Advisory Opinions: A.O. 2008-16 A.O. 2007-30 Keywords: Class Exception Nepotism