Advisory Opinion No. 95-64

Re: The Honorable Paul V. Sherlock

A. QUESTION PRESENTED

Whether the Vice Chair of the House Finance Committee--who is currently vested in the state employee's retirement system but has not paid into said retirement system since 1967 when he was offered and accepted the option to transfer all post-1967 pension benefits to a national teacher's retirement plan--may participate in discussions and vote on matters relating to pension benefits to state workers and teachers.

B. SUMMARY

It is the opinion of the Rhode Island Ethics Commission that the Vice Chair of the House Committee on Finance, who is simultaneously vested in the state employee's retirement system but has not paid into the state retirement system since 1967 when he was offered and accepted the option to transfer to a national teacher's retirement plan, may participate in discussions and vote on matters relating to pension benefits to state workers and teachers if the issue under discussion or the issue to be voted on affects him to no greater extent than any other similarly situated member of a significant and definable class of persons. The Commission bases its conclusion on the petitioner's representations that (a) his contributions to the pension system are confined to the thirteen year period between 1954-1967, and his pension will be based exclusively on the thirteen years of contributions, and (b) the only pension benefit proposal affecting him pertains to the Cost of Living Adjustment (COLA).

C. DISCUSSION

1. Facts

State Rep. Paul V. Sherlock, Vice Chair of the House Finance Committee, advises that he is an "inactive member" of the State Employee's Retirement System, by which he means that although he is vested in the system, he does not currently pay into the system and has not done so since 1967. The petitioner advises that from 1954 through 1967, he paid into the state employee's retirement system in his capacity as a college professor employed by a public institution of higher learning. In 1967, he was offered the option of entering a national pension plan designed for teachers and professors, the Teacher's Insurance Annuity Association (TIAA)--an annuity program which most colleges rely on as a pension system. The petitioner accepted this offer and, as of 1967, he no longer contributed to the state employee's retirement system. At retirement, he will receive a State pension based on the 13 years of contributions between 1954 and 1967.

Rep. Sherlock advises that the only issue in budget discussions affecting his status as a future pension recipient is the Cost of Living Adjustment (COLA).

The petitioner states that he is not directly involved in the budget negotiations currently taking place. However, as a member of the House Finance Committee, he is approached for input by the Chair of said Committee. In addition, he advises that he participated in the July 6, 1995 Committee hearing--his only official activity to date pertaining to the proposed legislation.

2. Analysis

At issue in this advisory opinion request is whether the Vice Chair of the House Committee on Finance, who is currently vested in the state retirement system but has not paid into the state retirement system since 1967 when he was offered and accepted the option to transfer to a national teacher's retirement plan, may participate and vote on matters relating to pension benefits to state workers and teachers. A person subject to the Code of Ethics is prohibited from using his or her public position or confidential information received through holding any public office to obtain financial gain, other than that provided by law, pursuant to R.I. Gen. Laws § 36-14-5(d). The Code of Ethics also provides that a public official has an interest in substantial conflict with the proper discharge of his or her duties or employment in the public interest and of his or her responsibilities as prescribed in the laws of this state, if he or she has reason to believe that he or she, any person within his or her family, any business associate, or any business by which the person is employed or which the person represents will derive a direct monetary gain by reason of his or her official activity, pursuant to R.I. Gen. Laws § 36-14-7(a). An exception is created to the law by R.I. Gen. Laws § 36-14-7(b) in that it allows a public official, who is also a member of a business, profession, occupation, or group, to take public action when he or she is impacted by said public action as a member of a significant and definable class that benefits to no greater extent than any other similarly situated member of said class.

In past decisions, this Commission has endeavored to clarify the distinction between (a) an official act by a public official which benefits said official as an individual, and (b) an official act by a public official that benefits a significant and definable class of individuals such as a business sector, a profession, an occupation or other group with which the official is associated and from which the public official benefits to no greater extent than other similarly situated individuals. While the Commission recognizes that legislators are drawn from various occupational backgrounds and professions and bring valuable expertise to the Legislature based on their occupations and professional affiliations, it is imperative that legislators' decisions are guided by the public interest, and not by a particular legislator's self-interest. See General Commission Advisory Opinion No. 13. Accordingly, R.I. Gen. Laws § 36-14-7(b) provides that a public official does not violate the Code of Ethics when an official act impacts said public official as a member of a significant and definable class of persons to no greater or lesser extent than any other similarly situated member of that class.

The test presented by R.I. Gen. Laws § 36-14-7(b), relying as it does on the existence of a significant and definable class and that the public official in question be affected to no greater or lesser extent than others similarly situated, has been utilized in various Commission decisions: allowing a member of the General Assembly, simultaneously employed as a social worker, to participate and vote on legislation that would narrow the scope of individuals allowed to identify themselves as social workers (Advisory Opinion 94-25); allowing a retired Bristol school teacher, serving on a negotiating subcommittee of the Bristol School Committee, to participate in the Collective Bargaining Agreement while her emancipated son serves as a school teacher for the Bristol School Department (Advisory Opinion 89-38); allowing a member of the Rhode Island Marine Fisheries Council, who owns and operates a commercial fishing business, to participate and vote on a regulation related to winter flounder (Advisory Opinion 92-10); allowing the Coventry Town Solicitor, also representing the School Committee and married to a teacher in the Coventry School Department, to continue to advise the Coventry School Committee (Advisory Opinion 91-27); allowing the Chair of the Newport School Committee to participate in the renewal of a collective bargaining contract with a union of which his son is a member (Advisory Opinion 91-39); allowing a State Senator, employed as a tenured high school teacher in the Lincoln Public School system, to participate and vote on matters concerning contract disputes by public school teachers (Advisory Opinion 93-55).

At this juncture, this Commission wishes to provide further guidance in the interpretation of R.I. Gen. Laws § 36-14-7(b) so that this exception is utilized in a manner consistent with the spirit of the law. The petitioner, who serves as the Vice Chair of the House Finance Committee and who is already fully vested in the retirement system but no longer contributes to said system, requests an advisory opinion as to whether he may participate and vote on matters related to pension benefits to state workers and teachers. Given the nature of the legislative process--involving as it does negotiations between the Governor's Office and the General Assembly, with likely input from other interested parties, as to the form the legislation will ultimately take--this Commission finds that involvement in said process, be it direct or indirect involvement, raises two concerns. First, during this negotiation period, the "significant and definable class" which triggers the R.I. Gen. Laws § 36-14-7(b) exception may not be evident due to the shifting definitions of groups which may or may not be affected by proposed legislation. Second, the petitioner's indirect participation in the discussions of the pension benefits legislation may place him in a position in which he may influence which groups are to be affected by the pension legislation and the extent of this impact. The Commission notes the petitioner's representations that the only issue affecting him as a future pension recipient is the Cost of Living Adjustment (COLA), and that his contributions to the pension system are confined to the thirteen year period between 1954-1967.

Based on the petitioner's representations, it is the opinion of the Rhode Island Ethics Commission that the Code of Ethics will permit Rep. Sherlock, Vice Chair of the House Committee on Finance and a professor who is vested in but no longer contributes to the state employee's retirement system, to continue to indirectly participate in negotiations pertaining to pension benefits to state workers and teachers. However, this Commission cautions the petitioner that in the event any issues arise which (a) would affect him particularly given his status as an "inactive member" of the state employee's retirement system, and (b) would affect as a member of a group which is neither significant or definable, he should exercise notice and recusal pursuant to R.I. Gen. Laws § 36-14-6.

Also, Rep. Sherlock may vote on said legislation in its final form if he finds that, in his capacity as a college professor approaching eligibility for retirement, he benefits to no greater extent than any other similarly situated member of a significant and definable class of persons within the pension or teaching profession. In this case, if legislation concerning pension benefits to state workers and teachers affects all pensioners and prospective pensioners in like manner, Rep. Sherlock clearly may vote without violating the Code of Ethics given the enormous size of that class of persons. We therefore advise the petitioner that, should the ultimate pension legislation include him within such a significant and definable class, he should prepare a conflict of interest statement as required under R.I. Gen. Laws § 36-14-6, and file that statement with the House of Representatives and the Rhode Island Ethics Commission prior to voting in connection with this legislation. If, however, the legislation treats different classes and/or categories of pensioners and proposed pensioners differently, relying on the exception presented in R.I. Gen. Laws § 36-14-7(b) would no longer be appropriate.

We further caution and advise the petitioner that in the event any matter appears before him in his capacity as a member of the General Assembly which affects him specifically and individually as a member of a small segment of future pensioners, or in the event his duality of status should ever impair his independence of judgement as to his official duties or require him to disclose confidential information prohibited by R.I. Gen. Laws § 36-15-5(d), he should: (a) notify the Speaker of the House, in writing, of the nature of his interest in the matter at issue; (b) refrain from any participation and/or voting in connection with said matter. Notice of any recusal should also be filed with the Rhode Island Ethics Commission in accordance with R.I. Gen. Laws § 36-14-6.

Finally, Rep. Sherlock is reminded that he may publicly express his own viewpoint in a public forum on matters of general public interest--in legislative committees holding public hearings on such legislation, for example--or on a matter which directly affects him pursuant to R.I. Gen. Laws § 36-14-7003 ("the public forum exception").

Keywords

Pension Benefit

Budgets

Negotiations

Class Exception