Advisory Opinion No. 96-46 Re: Tina Regan, Chair A. QUESTION PRESENTED Several appointed members of the Providence Historic District Commission (PHDC) request an advisory opinion as to whether they may participate in that body's reconsideration of its decision to deny a demolition application filed by Omni Development. Their request arises from the fact that six of the eleven members of the PHDC are employed by or may have business associations with entities that are associated with Omni Development or the subject property. "Member 1" is employed by the Providence Preservation Society Revolving Fund, which has been selected by Omni Development to serve as the project consultant; "Member 2" serves on the Board of Directors of the Providence Preservation Society Revolving Fund; "Member 3" serves on the Board of Directors of the Providence Preservation Society, the parent corporation of the Providence Preservation Society Revolving Fund, which is named in a pending lawsuit involving the subject property; "Member 4" is the Executive Director of the Elmwood Foundation, a neighborhood organization which in 1995 offered to purchase the subject property in partnership with the Providence Plan Housing Corporation and which is currently named in a lawsuit involving the subject property; "Member 5" serves on the Board of Directors of the Elmwood Foundation and is a partner in a law firm defending the Providence Preservation Society and another defendant in the lawsuit involving the subject property; and, "Member 6" is an ex-officio member of the Board of Directors of the Elmwood Foundation. B. SUMMARY It is the opinion of the Rhode Island Ethics Commission that certain members of the Providence Historic District Commission (PHDC) may not participate in that body's reconsideration of its decision to deny a demolition application filed by Omni Development. Ethics Code Regulation 5002 requires officials to recuse from participation when their business associates, employers, or other persons representing their business associates or the interests of their employers appear before their agencies. Therefore, members of the PHDC who are employed by or serve on the Board of Directors of the Providence Preservation Society Revolving Fund, selected by Omni Development to serve as its project consultant, or its corporate parent, the Providence Preservation Society, are prohibited from voting or otherwise participating in the PHDC's reconsideration of the Omni Development application (Members 1, 2, and 3). The PHDC member employed as the Executive Director of the Elmwood Foundation (Member 4) as well as two PHDC members who serve on the Board of Directors of the Elmwood Foundation (Member 5 and Member 6), including one who is also an attorney representing the Providence Preservation Society in a lawsuit initiated by the previous owner of the subject property, may participate: the Ethics Commission opines that their business associations are too remote from the current application to create a conflict of interest. C. DISCUSSION 1. Facts The Providence Historic District Commission (PHDC) is responsible for regulating the exterior buildings located in historic districts within the City of Providence. The PHDC is comprised of eleven members, who are appointed either by the Mayor (seven members), the City Council (two members), or the General Assembly (two members). The Zoning Ordinance for the City of Providence requires that the PHDC act on an application within 45 days of receipt. If the Commission fails to act within this time period, the application will be deemed to be automatically approved. To vote on an application, the PHDC must have a quorum, a majority of the duly appointed members. If the PHDC has a quorum, but some members wish to abstain from voting, the Commission must cast at least six affirmative or negative votes in order to take any action on an application. (An applicant has a right to appeal a decision of the PHDC to the Providence Zoning Board of Review.) In January 1996, Omni Development (Omni) filed an application with the PHDC to rehabilitate the Whitmarsh Apartment Building and demolish an adjacent garage located on Whitmarsh Street in the Elmwood neighborhood. On February 26, 1996, the PHDC approved Omni's plans to rehabilitate the project and denied the request to demolish the adjacent garage. (According to an official from the PHDC, Kathy Cavanaugh, members 1, 2, and 5 recused themselves from this vote. Members 3, 4 and 6 participated in this vote.) Omni has requested that the PHDC reconsider its decision denying the permit to demolish the garage. The PHDC is scheduled to reconsider Omni's demolition application at a meeting on May 20, 1996. As to Omni's application, the Petitioner advises that six of the members of PHDC may have potential conflicts. The members' circumstances are as follows: Member 1 is employed by the Providence Preservation Society Revolving Fund, (The Providence Society Revolving Fund, a non-profit entity, lends money to organizations to improve properties located in historic districts.) which has been selected by Omni to serve as the project consultant; Member 2 serves on the Board of Directors of the Preservation Society Revolving Fund; Member 3 serves on the Board of Directors of the Providence Preservation Society, (The Providence Preservation Society is named in a pending lawsuit filed by the former owner of the subject property located on Whitmarsh Street. The Petitioner advises that this law suit does not involve the current owner of the property, the applicant, or the project under consideration by the PHDC.) the non-profit, city-wide historic advocacy group which is the "parent" of the Preservation Society Revolving Fund; Member 4 is employed by the Elmwood Foundation, a neighborhood organization named in the pending lawsuit; Member 5 is a partner in the law firm defending the Providence Preservation Society in a law suit unrelated to this project filed by the former owner of the property and another defendant in this suit, and is considering defending the Elmwood Foundation; (Member 5 also serves on the Board of Directors of the Elmwood Foundation.) and Member 6 is an ex-officio member of the Board of Directors of the Elmwood Foundation. The Petitioner requests an advisory opinion as to whether the Code of Ethics requires any of the six members to recuse themselves from the vote on Omni's application for reconsideration. 2. Analysis Under the Code of Ethics, the members of the PHDC may not participate in any matter in which they have an interest, financial or otherwise, which is in substantial conflict with the proper discharge of their duties in the public interest. See R.I. Gen. Laws §§ 36-14-5(a), 36-14-7(a). (Substantial conflict is defined as a "direct monetary gain" or a "direct monetary loss" that accrues, by virtue of the public official's activity, to that individual, a family member, a business associate, an employer, or any business which the public official represents. See R.I. Gen. Laws § 36-14-7(a).) Pursuant to R.I. Gen. Laws § 36-14-5(d), the members are also prohibited from using their public position or confidential information received through their position to obtain financial gain, other than that provided by law, for themselves, a business associate, or any business in which the member is employed or which the member represents. Also, Commission Regulation 36-14-5002 requires that a member of the PHDC recuse himself or herself from participation if a) his or her spouse or dependent child appears before the board/agency; b) his or her business associate, spouse or dependent child authorizes another person to act as an attorney and that individual appears before the PHDC representing the business associate, spouse, or dependent child; and c) his or her employer, or the interests of his or her employer appear before the PHDC. Here, the Commission is asked to consider whether six different members of the PHDC may participate in a request filed by an applicant to reconsider a decision denying a petition to demolish a garage on Whitmarsh Street. After considering the circumstances surrounding each member and the relevant provisions of the Code, we conclude that the Code of Ethics requires Member 1, Member 2 and Member 3 to recuse themselves from the vote to reconsider Omni's application because of their business relationship with the applicant and the Providence Preservation Society Revolving Fund, the project consultant that is likely to be directly involved with the applicant's project and request. (We also remind Member 1, Member 2 and Member 3 that they should follow the notice and recusal procedures set forth in R.I. Gen. Laws § 36-14-6.) It is our opinion that the relationship as employee of a project consultant (Member 1), a member of the Board of Directors of the Project consultant (Member 2), and a member of the Board of Directors of the parent corporation of the project consultant is a business association or relationship which triggers the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a), 36-14-5(d) and Commission Regulation 36-14-5002. As to the remaining three members, it is our opinion that the Code of Ethics does not prohibit them from voting on Omni's request for reconsideration since their relationship with the applicant and/or the Providence Preservation Society Revolving Fund is too remote to implicate the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a), 36-14-5(d) and Commission Regulation 36-14-5002. We note that the relationship of Member 4 (employee) and Member 6 (ex-officio member of the Board of Directors) with the Elmwood Foundation, an entity not a party or involved with the application before the PHDC although named in a lawsuit commenced by a prior owner of the subject property, is too remote to establish an impermissible interest. Similarly, Member 5 does not have an impermissible interest in the project since his attorney-client relationship with the parent corporation of the project consultant involves a law suit involving a prior owner of the subject property and not the project\application at issue. Member 5, therefore, does not have a financial interest in the application before the PHDC. Code Citations: 36-14-5(a) 36-14-5(d) 36-14-6 36-14-7(a) 36-14-5002 Keywords: business associate private employment client's interest non-profit boards