Advisory Opinion No. 96-89

Re: Michael C. Cerullo

A. QUESTION PRESENTED

The Petitioner, a Candidate for State Senate, requests an advisory opinion as to what restrictions are necessary in his participation in the Senate and on its various committees given that he is also employed by a not-for-profit human services agency which contracts through three agencies of the State as well as various school departments.

B. SUMMARY

We conclude that the Petitioner, a Candidate for State Senate, cannot sponsor or participate in the development of or voting on legislation directly affecting his employer. This includes those matters affecting his employer through the responsibilities or budget of the state agencies that contract with Spurwink. This opinion is based on potential violations of R.I. Gen. Laws § 36-14-5(a), (d) & (7)(a) as the Petitioner can reasonably expect that his employer will derive a financial gain or suffer a financial loss by reason of the Petitioner's participation in such matters. In the event that any matter directly affecting his employer should come before him in the Senate, the Petitioner should utilize the notice and recusal sections provided in R.I. Gen. Laws § 36-14-6. This does not preclude the Petitioner from voting on the budget as a whole. Additionally, the Petitioner may participate in matters affecting the human services industry so long as they do not directly affect the Petitioner's employer, consistent with the exemption set out in R.I. Gen. Laws § 36-14-7(b) applies to the particular matter. Also, to the extent permitted under Commission Regulation 36-14-7003 which permits any person subject to the Code of Ethics to publicly express his own viewpoint in a public forum on any matter of general public interest or on any matter which directly affects the individual, the Petitioner may participate in any public discourse about the matters. Under the public forum exemption, the Petitioner may testify before any subcommittee or confer with colleagues in any open and public forum, provided that he does not actively sponsor or vote on legislation affecting his employer. As to the Petitioner's fundraising activities, we caution the Petitioner to maintain a separation of his private function and any activities undertaken as a candidate or public official so as to avoid potential violations of Section 5(d) of the Code regarding use of office.

C. DISCUSSION

1. Facts

The Petitioner has recently declared his candidacy for the State Senate in District 28 (Johnston). He is currently employed as a fundraiser by the Spurwink Institute, a not-for-profit human services agency, which provides services through contracts with through three agencies of the State, Department of Children, Youth and Family Services (DCYF), Department of Mental Health, Retardation & Hospitals (MHRH), and the Medicaid Section of the Department of Human Services as well as various school departments. The Petitioner represents that he receives 100% of his income for this employment.

The Petitioner requests an advisory opinion as to under what circumstances he must recuse himself from participation in voting or participating on various committees, task forces, or work groups that develop or sponsor legislation involving the services his employer provides.

2. Analysis

The Code of Ethics provides that the Petitioner shall not have any interest, financial or otherwise, direct or indirect, or engage in any employment, transaction which is in substantial conflict with the proper discharge of his duties in the public interest. A substantial conflict of interest occurs if the Petitioner has reason to believe or expect that he or any family member or business associate, or any business by which he is employed will derive a direct monetary gain or suffer a direct monetary loss by reason of her official activity. R.I. Gen. Laws §§ 36-14-5(a), 7(a). Additionally, the Code provides that the Petitioner shall not use in any was his public office or confidential information received through his holding any public office to obtain financial gain, other than that provided by law, for himself or business associate or any business by which the Petitioner is employed. R.I. Gen. Laws § 36-14-5(d). General Advisory No. 13 also provides guidance to legislators who are generally otherwise employed or associated with outside business interests.

The Commission also has found that Legislators may not participate in matters which result in a financial gain to themselves or their business associates. A number of advisory opinions concern the private employment of legislators. In general, the Commission has concluded that a legislator cannot participate in matters directly affecting his/her employer. In A.O. 95-25, the Commission found that a State Legislator who was also an employee of a non-profit community based organization that receives funding from the legislature could not participate in matters specifically relating to her employer. See also A.O. 92-28 (State Representative who was also a physician for a Massachusetts Company that has offices in Rhode Island could not sponsor or vote on legislation relating to the budget for public and private health care expenditures, reform of the R.I. medical malpractice laws and health care restructuring relating to overhead costs to R.I. hospitals and doctors); A.O. 91-16 (Legislator who was employed as a commercial recycling representative, but neither shareholder nor officer of his employer, could not participate in discussions and voting on legislation concerning recycling or solid waste matters); A.O. 95-20 (Legislator could not participate or vote in matters specifically relating to private employment at a non-profit organization but could vote on budget generally); A.O. 90-25 (State Representative could not participate in legislation that would impact his insurance client). See also A.O. 95-48 (Legislator whose private employment was in substance abuse area, could vote on budget generally, but restricted by Section 7(b) if substance abuse issues were voted on separately).

The Commission has not reached the question of the class exemption under Section 7(b) in the above opinions where direct impact was found on the legislators' business associates. However, the Commission held that legislators may vote on particular issues if they meet the Section 7(b) exemption. See A.O. 95-20 (above). That question, however, must be addressed on a case-by-case basis.

After considering the Code of Ethics and previous advisory opinions, the Commission concludes that the Petitioner cannot sponsor or participate in the development of or voting on legislation directly affecting his employer. This includes those matters affecting his employer through the responsibilities or budget of the state agencies that Spurwink contracts with. This opinion is based on potential violations of R.I. Gen. Laws § 36-14-5(a), (d) & (7)(a) as the Petitioner can reasonably expect that his employer will derive a financial gain or suffer a financial loss by reason of the Petitioner's participation in such matters. In the event that any matter directly affecting his employer should come before him in the Senate, the Petitioner should utilize the notice and recusal sections provided in R.I. Gen. Laws § 36-14-6. This does not preclude the Petitioner from voting on the budget as a whole. Additionally, the Petitioner may participate in matters affecting the human services industry so long as they do not directly affect the Petitioner's employer. If and when a particular matter will have a direct effect on the petitioner's employer he should either recuse from participation or return to this Commission to inquire as to whether the matter falls within the 7(b) exemption. Additionally, to the extent permitted under Commission Regulation 36-14-7003 which permits any person subject to the Code of Ethics to publicly express his own viewpoint in a public forum on any matter of general public interest or on any matter which directly affects the individual, the Petitioner may participate in any public discourse about the matters. Under the public forum exemption, the Petitioner may testify before any subcommittee, or confer with colleagues in any open and public forum, provided that he does not actively sponsor, or vote on legislation affecting his employer. As to the Petitioner's fundraising activities, we caution the Petitioner to maintain a separation of his private function and any activities undertaken as a candidate or public official so as to avoid potential violations of Section 5(d) of the Code regarding use of office.

Code Citations:

36-14-5(a)

36-14-5(d)

36-14-6

36-14-7(a)

36-14-7(b)

36-14-7003

Related Advisory Opinions:

GCA-13

95-48

95-25

95-20

92-28

90-25

91-16

Keywords:

candidate

private employment

contracts

budgets