Advisory Opinion No. 96-5

Re: John P. O'Connor, Director

A. QUESTION PRESENTED

The newly appointed members of the Underground Storage Tank Review Board request an advisory opinion as to whether they may serve on the Board given that (a) the Board has jurisdiction to promulgate and implement regulations relating to underground storage tank removal and (b) some of the members have private business interests relating to the petroleum industry.

B. SUMMARY

It is the opinion of the Rhode Island Ethics Commission that there is a public need for individuals possessing relevant expertise to serve on governmental boards and agencies. Therefore, service on the Underground Storage Tank Review Board by those individuals who have interests in the petroleum industry, in and of itself, does not violate the Code of Ethics. The Commission recognizes, however, that a clear potential for conflicts of interest exist because of the industry involvement and advises that at all times the activities by members of the Board in the public interest must not conflict with their private business activities; they must participate and vote on matters without regard to their private business interests. In the event a particular matter arises which may have a significant financial impact upon a Board member's private business interests, that individual is advised to seek further guidance from this Commission.

C. DISCUSSION

1. FACTS

Pursuant to a letter and enclosures of January 25, 1996 from John P. O'Connor, Director of Legislative Council, addressed to Martin Healey, Executive Director, Rhode Island Ethics Commission:

  1. During the 1994 legislative session, the Rhode Island General Assembly enacted P.L. 94-144, the "Rhode Island Underground Storage Tank Financial Responsibility Act".
  2. The Act established the Rhode Island Underground Storage Tank Financial Responsibility Board pursuant to the provisions of R.I. Gen. Laws § 47-12.9-8. The members of the board have been selected.
  3. Some of the individuals who have been appointed to the Underground Storage Tank Review Board include a representative of the Rhode Island Petroleum Association, a representative of the Independent Oil Marketers Association of New England, a designee of the Rhode Island Department of Environmental Management, a representative of the Independent Petroleum Dealers Association of Rhode Island, a representative of the Rhode Island Marine Trade Association, and a representative of the Oil Heat Institute of Rhode Island.
  4. The Rhode Island Underground Storage Tank Financial Responsibility Review Board is given statutory jurisdiction to promulgate, implement, and amend regulations providing for the submission of claims and the timely disbursement of monies from the fund relating to underground storage tank removal. That jurisdiction includes the review of submissions and claims from eligible parties and the approval, modification or denial of disbursements to eligible parties. The Review Board consists of thirteen members representing individuals from state government, private industry, and the public.

2. ANALYSIS

The individuals who have requested this advisory opinion have private business interests relating to the petroleum industry. Those business interests would clearly be affected by decisions made by these individuals in connection with their responsibilities under the Rhode Island Underground Storage Tank Financial Responsibility Act. These responsibilities include the assessment and collection of monies and the processing of claims relating to disbursements, all in connection with underground storage tank removal within the state.

This advisory opinion request provides an opportunity to revisit a recurrent circumstance in which individuals who possess particular expertise in an area are statutorily mandated to serve on governmental committees. Unless these individuals have retired from private business, to the extent they continue in private business activities, these individuals clearly undoubtedly will confront situations in which their business responsibilities intersect with their governmental responsibilities.

The statutory scheme structured by the General Assembly clearly contemplates that individuals with an interest in the industry will serve in a public capacity. The expertise which they possess, in this case relating to deciding when and how monies should be spent for the removal of underground storage tanks, is important and cannot be ignored or disregarded. On the other hand, these individuals should be acutely aware of the fact that their duality of status puts them in a difficult position relating to conflicts of interest.

Pursuant to the law, the Rhode Island Storage Tank Financial Responsibility Board is comprised of individuals in oil related business, legislators,(1) members of environmental organizations, and members of the general public. Mr. O'Connor requests advice as to whether individuals who have private business interests and who simultaneously serve as members of the Financial Responsibility Review Board may do so under the Rhode Island Code of Ethics.

The Ethics Commission is aware of the fact that certain governmental activities require the input and advice from individuals who possess expertise in certain areas. In this case the legislature has chosen to provide that certain members of the oil and fuel industry should serve on the Review Board relating to the Underground Storage Tank Financial Responsibility Act. These individuals will be making decisions relating to the assessment of charges and the expenditure of public funds as to removal of underground storage tanks in the state of Rhode Island.

While we recognize the need for these individuals' expertise, we remind these individuals that the Code of Ethics mandates, pursuant to R.I. Gen. Laws § 36-14-5(a) that "no person subject to this Code of Ethics shall have any interest, financial or otherwise, direct or indirect, or engage in any interest, employment, transaction or professional activity, or incur any obligation of any nature, which is 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, ...". We therefore remind those individuals that any public service which they perform must be done without regard to private business interests.

Accordingly, because of the need for individuals possessing such expertise to serve on governmental boards and agencies, we conclude that service by those individuals who have interests in the petroleum industry, in and of itself, does not violate the Rhode Island Code of Ethics. However, we recognize the significant potential conflict for those individuals to participate or vote on matters which may affect their business interests.

We therefore advise those individuals that at all times their activities in the public interest must not conflict with their private business activities. We expect those individuals to participate and vote on matters without regard to their private business interests. We urge any individual member of the Rhode Island Underground Storage Tank Financial Responsibility Review Board to return to the Ethics Commission to seek a further advisory opinion in the event a particular matter before that individual may have a significant financial impact upon his or her private business interests. In such event the member must (a) advise the board of the nature of his or her interests in the matter at issue and (b) recuse from voting or otherwise participating in the board's consideration and disposition of the matter at issue. Any notices indicating participation or recusal should be filed with the board, and, copies should also be filed with the Ethics Commission pursuant to R.I. Gen. Laws § 36-14-6.

Footnote

(1)In this advisory opinion we do not address the issue of a member of the legislature serving on a commission which performs executive functions, and whether said service is proper under the Code of Ethics, as we understand that issue is to be considered in connection with the new Code of Ethics presently under consideration.

Keywords

Financial Disclosure