Advisory Opinion No. 2009-48 Rhode Island Ethics Commission Advisory Opinion No. 2009-48 Re: Judith Hetherman, CPA QUESTION PRESENTED The Petitioner, a member of the Coventry School-Related Personnel Pension Committee, a municipal appointed position, requests an advisory opinion concerning whether the Code of Ethics limits her service on the Committee due to the fact that the Petitioner's sister-in-law is employed by Angell Pension Group, a third-party consultant which is under contact to help administer the pension plan. RESPONSE It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Coventry School-Related Personnel Pension Committee, a municipal appointed position, is not prohibited from continuing to serve on the Pension Committee or from participating in matters that financially impact the Angell Pension Group, provided that the Petitioner's sister-in-law is neither impacted by, nor a party to, any Pension Board actions. The Petitioner is a member of the Coventry School-Related Personnel Pension Committee ("Pension Committee"), appointed by the Coventry School Committee in August of 2009. She states that the Pension Committee manages the pension plan for school-related personnel in the Coventry School Department. To help administer the pension plan, for a number of years the Pension Committee has contracted with Nationwide Investment Services Corporation ("Nationwide") and with The Angell Pension Group ("Angell"). The Petitioner states that her sister-in-law is a long-time employee of Angell, but is currently residing in New Hampshire in semi-retirement. Her sister-in-law's sole remaining employment with Angell involves acting as a liaison for a single, large client. The Petitioner states that if this client were to leave Angell, her sister-in-law's employment would end. She represents that her sister-in-law has no ownership interest in Angell, whatsoever, and accordingly is not impacted by Angell's contracts with other clients such as the Pension Committee. Given these facts, the Petitioner asks whether the Code of Ethics limits her ability to participate fully in Pension Committee decision-making, particularly those decisions that may impact Angell. Under the Code of Ethics, a public official may not participate in any matter as part of her public duties if she has reason to believe or expect that any person within her family is a party to or a participant in such matter, or will derive a direct monetary gain or suffer a direct monetary loss, or obtain an employment advantage, as the case may be. Commission Regulation 36-14-5004(b)(1). See also R.I. Gen. Laws §§ 36-14-5(a), 5(d), and 7(a). In several recent and highly analogous advisory opinions, the Ethics Commission has opined that a public official is not required to recuse from matters that may cause a financial impact upon his or her family member's employer, as long as there is no corresponding financial impact upon the family member. For example, in Advisory Opinion 2008-69, the Commission advised a member of the Woonsocket Zoning Board of Review that he was permitted to participate in discussion and voting on a petition for a variance brought by CVS, notwithstanding the fact that the Petitioner’s sister was employed as an accounting analyst with CVS. In reaching this opinion, the Commission relied upon the facts as represented by the Zoning Board member that there was nothing to indicate that it was reasonably foreseeable that the outcome of the variance application before the Zoning Board would have a financial impact upon his sister as an employee of CVS. See also A.O. 2008-60 (opining that a member of the Woonsocket Zoning Board of Review may participate in discussion and voting on a petition for a variance brought by CVS, notwithstanding the fact that the Petitioner’s son and nephew were employed in the shipping department of CVS); A.O. 2007-16 (opining that a member of the Johnston School Committee may participate in the Committee's review of bills submitted by The Providence Center, a provider of special education services that employs the Petitioner's mother as an office assistant); A.O. 2002-41 (opining that a Westerly Town Council member may participate in the consideration of matters involving an individual with whom his father had business dealings in a real estate broker/client relationship, as the Petitioner's relationship with the individual was too remote to trigger the prohibitions set forth in the Code of Ethics). Consistent with the above-cited advisory opinions, in the facts as represented by this Petitioner there is nothing to indicate that the Petitioner’s official involvement in Pension Committee matters, including decisions relative to its contract with Angell, will have a financial impact upon the Petitioner's sister-in-law as an Angell employee. The Petitioner's sister-in-law is not a party to or participant to any matters before the Pension Committee, is not involved in any way with Angell's provision of services to the Pension Committee, and does not stand to obtain any sort of financial or employment advantage as a result of the Pension Committee's actions. Thus, barring any other relationship that would implicate provisions of the Code of Ethics, this Petitioner is not prohibited from serving on the Pension Committee or participating in matters pertaining to Angell. However, if any circumstances should change such that it is reasonably foreseeable that the Petitioner's participation in matters involving Angell may result in a financial impact upon her sister-in-law, then the Petitioner should seek further guidance from this Commission and/or recuse from participation in accordance with R.I. Gen. Laws § 36-14-6. Code Citations: 36-14-5(a) 36-14-5(d) 36-14-5(f) 36-14-6 36-14-7(a) Regulation 5004 Related Advisory Opinions: 2008-69 2008-60 2007-16 2002-41 99-28 Keywords: Nepotism