Advisory Opinion No. 96-6

Re: Louis J. Luzzi

A. QUESTION PRESENTED

An elected member of the Westerly Town Council requests an advisory opinion as to whether he may participate in matters that come before the Council when a customer of the bank that employs the councilor is an interested party.

B. SUMMARY

The Rhode Island Code of Ethics prohibits public officials, including municipal elected officials, from participating in or taking any official action (a) which is in substantial conflict with their duties or employment in the public interest, (b) for which their independence of judgment may have been impaired or (c) which would constitute the use of the officials' public office for private financial gain. (See R.I. Gen. Laws § 36-14-5(a), (b) and (d).) The mere fact that a matter before the Westerly Town Council may involve, as an interested party, a customer at a bank that employs a Council member does not in an of itself trigger the prohibitions of the Code of Ethics. Absent some direct or current involvement between the Town Councilor and the bank customer, the participation of the Councilor in a decision of the bank that directly affects the customer, or the involvement of a customer whose business substantially impacts the economic fortunes of the bank, it is the opinion of the Rhode Island Ethics Commission that the Code of Ethics does not bar the Councilor's participation in matters before the Council where the customer is an interested party.

C. DISCUSSION

1. Facts

Louis J. Luzzi is an elected member of the Westerly Town Council. In his private employment he is a vice-president and treasurer of the Washington Trust Company, a banking institution with offices in Westerly. In that employment his primary responsibilities involve consumer and commercial lending, including membership on the bank's internal credit committee where potential credits are reviewed for approval. The bank has more than 25,000 customers, most of whom are not known to Mr. Luzzi. He advises that in the 30 years he has been employed by the bank a small number of those customers have received loans that were originated by him. He further advises that he has no financial interest in any borrower, nor is his compensation tied to any borrowing decisions.

2. Analysis

The Rhode Island Code of Ethics prohibits public officials, including municipal elected officials, from participating in or taking any official action a) which is in substantial conflict with their duties or employment in the public interest, b) for which their independence of judgment may have been impaired, or c) which would constitute the use of the officials' public office for private financial gain. R.I. Gen. Laws 36-14-5(a), (b) and (d). The prohibitions are designed to prevent private financial or familial interests from affecting public decisions.

As part of his advisory opinion request Mr. Luzzi acknowledges the potential for the interests of his private employment to touch upon matters that come before the Westerly Town Council. He has advised the Commission that he has and will continue to recuse from voting or other participation on any matter presented to the Council by his employer. He further advises that if he has present involvement in a loan request, or is in control of a loan request which is related to a party appearing or having an interest in a matter before the Council, he will recuse from voting or other participation on the matter. Both of those actions are necessary and appropriate under the Code of Ethics.

Conversely, the mere fact that an interested party in a matter that comes before the Westerly Town Council may be a customer at a bank that employs Mr. Luzzi does not in and of itself trigger the prohibitions of the Code of Ethics. Because an interested party is a customer at the bank does not translate into a direct nexus between Mr. Luzzi and that party, particularly in light of the fact that the bank has more than 25,000 customers. Clearly Mr. Luzzi's status and fortunes as an employee of the bank are not materially affected by actions relating to each and every individual customer of the bank. As a result, the connection between official actions being taken by Mr. Luzzi as a member of the Council and an interested party to those actions who also happens to be a customer at the bank that employs him is, at best, far too remote to preclude his participation in those matters. Therefore, absent some direct and current involvement between Mr. Luzzi and a customer of the bank or with a decision of the bank that directly effects the particular customer, or the involvement of a customer whose business substantially impacts the economic fortunes of the bank, we conclude that the Code of Ethics does not bar participation by Mr. Luzzi in matters that come before the Council for which the customer is an interested party.

Code Citations:

36-14-5(a)

36-14-5(b)

36-14-5(d)

Keywords:

Private Employment

customer