Advisory Opinion No. 2010-33 Rhode Island Ethics Commission Advisory Opinion No. 2010-33 Re: Brandon Ruotolo QUESTION PRESENTED The Petitioner, the Deputy Zoning Official for the Town of Smithfield, a municipal appointed position, who is also an attorney in private practice, requests an advisory opinion regarding what limitations the Code of Ethics places on him if he shares office space and utilities with a real estate developer who interacts with him in his position as Deputy Zoning Official. RESPONSE It is the opinion of the Ethics Commission that if the Petitioner shares office space and utilities with a real estate developer, that individual would become his business associate and the Petitioner would need to recuse from taking any official action in which it is reasonably foreseeable that his business associate will be financially impacted. The Petitioner is the Deputy Zoning Official in Smithfield. He states that, in that capacity, he interprets and enforces the Smithfield Zoning Ordinance and the Rhode Island Minimum Housing Code. He also issues zoning certificates, manages zoning applications, drafts staff reports and serves as the Zoning Board’s Administrative Clerk. The Petitioner states that, in his private capacity, he operates a part-time solo law practice focusing on land use, permitting and zoning. He represents that he does not accept any real estate related matters in the Town of Smithfield. He states that he currently operates out of a home office, but would like to move his practice into commercial office space. In this regard, he states that a real estate developer who works out of a Smithfield based office recently offered him an opportunity to share office space with him, at market rate, in his Smithfield based office. The Petitioner states that he would pay the developer an all inclusive flat fee for the office space and utilities. The Petitioner states that this specific developer owns property in Smithfield and interacts with the Petitioner in his capacity as Deputy Zoning Official. He states that the developer would like the Petitioner to handle some of his real estate development matters in other communities. Given this set of facts, the Petitioner requests an advisory opinion regarding whether he may share office space with a developer who interacts with him in his capacity as Deputy Zoning Official. 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). A person subject to the Code 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). Also, an official may not participate in a matter concerning or presented by a business associate, and must recuse 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). First, we note that the Petitioner has asked a number of questions related to his practice of law that fall outside of the jurisdiction of the Ethics Commission. Accordingly, we will not address those questions in this opinion, other than to state that nothing in the Code of Ethics inherently prohibits the Petitioner from working as an attorney in private practice in Smithfield while employed as the Deputy Zoning Official in that community. Rather, we address the question of what limitations the Code of Ethics places on the Petitioner while serving as Deputy Zoning Official in his interactions with individuals coming before him in that capacity who are his current “business associates” as that term is defined by R.I. Gen. Laws § 36-14-2(3). In regard to the Petitioner’s question about sharing office space with a real estate developer with whom he interacts as Deputy Zoning Official, we note that this Commission has previously determined that co-tenants of a common space who share some expenses, such as utilities, are business associates under the Code. See A.O. 2008-43 (opining that two persons who shared common expenses such as utilities, maintenance and dumpster fees, one of whom occupied approximately 30% of the floor space within the other’s business, were business associates for purposes of the Code); A.O. 2007-6 (opining that two attorneys who did not share letterhead, profits, or work on legal matters together, but did share office space and expenses, were business associates for purposes of the Code). Accordingly, it is the opinion of the Ethics Commission that if the Petitioner shares office space and utilities with a real estate developer, that individual will become his business associate and all of the prohibitions in the Code pertinent to business associates would then apply for the duration of time in which they share rental space and utilities. Specifically, if the Petitioner’s duties as Deputy Zoning Official require him to take action that could result in a financial impact to his business associate, or if his business associate represents himself before the Office of the Zoning Official, the Petitioner must refrain from taking action in accordance with R.I. Gen. Laws § 36-14-6 and notify his supervisor, the Zoning Official. Additionally, in prior advisory opinions, the Commission has found that the attorney-client relationship creates a business association for purposes of the Code. See 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). 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). Accordingly, when the Petitioner enters into an attorney-client relationship with anyone, including the real estate developer in question, regardless of whether they are co-tenants in office space or share utilities, he will become that individual’s business associate. 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. 2008-67 (opining that a member of CRMC, who is also an attorney in private practice, need not recuse from matters involving the Crown Plaza Hotel and the Holiday Inn Express, given his relationships with those entities are past “business associations” as he is not currently representing them, 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). Thus, while this Petitioner is currently representing a client or unpaid balances remain between the Petitioner and a client or there are specific plans for future representation or transactions, all the prohibitions in the Code pertinent to business associates would apply. Additionally, the Petitioner is cautioned that transactions with potential or actual clients may not be done during his regular working hours as Deputy Zoning Official, and he may not use public resources, nor use his position with the Town, to solicit clients, pursuant to R.I. Gen. Laws § 36-14-5(d). Finally, we note that this opinion solely addresses the prohibitions placed on the Petitioner in his interactions with current business associates when carrying out his official duties as Deputy Zoning Official. This opinion does not, and cannot, address whether the Rules of Professional Conduct or any other statute, charter, ordinance, ruling or policy prohibit such conduct. The Ethics Commission does not exercise jurisdiction over those other provisions of law and, therefore, is not empowered to issue advisory opinions addressing or interpreting their effect. 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. 2008-67 A.O. 2008-43 A.O. 2007-6 A.O. 2007-5 A.O. 2003-17 A.O. 2002-61 A.O. 2002-15 Keywords: Business Associate