Advisory Opinion No. 97-7 Joseph W. Frisella In response to your letter dated December 11, 1996, requesting an Advisory Opinion, and pursuant to Code of Ethics § 36-l4-11, the Rhode Island Ethics Commission rendered an opinion at its meeting on February 5, 1997. The Commission voted as follows: A. QUESTION PRESENTED The Petitioner, a member of the Individual Sewage Disposal System Technical Review Committee, a state appointed position, requests an advisory opinion as to whether he may participate in the review of a) an application submitted by the Eljen Corporation (Eljen) where he has served as a consultant for Eljen in the past and anticipates providing similar services in the future; and b) applications involving innovative-alternative denitrification systems given that he is a representative for the Ruck Denitrification Pretreatment Individual Sewage Disposal System. B. SUMMARY It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Individual Sewage Disposal System Technical Review Committee, a state appointed position, a) must recuse himself from participation in consideration of an application submitted by Eljen given that he has an ongoing business relationship with Eljen thereby triggering the prohibitions set forth in R.I. Gen. Laws § 36-14-5(a) and 5(d), which prohibit a public official from acting where he has an interest in substantial conflict with his public duties and using his public position to benefit a business associate; b) must recuse himself from the Committee's review of other applications for innovative-alternative denitrification systems where he, as a competitor of the applicants, has a direct interest in such applications, except in instances where his involvement is limited to specific technical findings rather than participating in the decision whether to recommend approval of the application. C. DISCUSSION 1. Facts The Petitioner, Joseph W. Frisella, is a member of the Individual Sewage Disposal System Technical Review Committee, a Committee established by recent amendments to the Department of Environmental Management's (DEM's) rules and regulations which establish minimum standards for the location, design, construction and maintenance of Individual Sewage Disposal Systems (ISDS). The Committee, which is comprised of individuals with particular technical or scientific knowledge of ISDS, is responsible for providing technical advice and recommendations to the Director of DEM. (From a review of the relevant regulations, it appears that members of this Committee are appointed by the Director of DEM. Given questions concerning the appointing authority and the advisory nature of the Committee's review, it is questionable whether, under the present definition of appointed officials set forth in the Code (R.I. Gen. Laws § 36-14-2(2) and 36-14-2(3)), the Petitioner falls within the Code's jurisdiction. This uncertainty underscores the need for the Commission to further clarify which officials are covered under the Code.) Recently, Eljen submitted an application to the Committee for the technical review of an In-Drain Leaching System. The Petitioner acknowledges that he has served as a consultant for Eljen for a number of projects and anticipates being hired in the future for similar projects. The Petitioner seeks guidance as to whether he may participate in the Technical Review Committee's consideration of this application. In his submissions, the Petitioner also acknowledges that he serves as a representative for the Ruck Denitrification Pretreatment Individual Sewage Disposal System. (According to the Petitioner, he has paid a fee to Dr. Rein Laak for the privilege of being the only Professional Engineer in Rhode Island entitled to design systems utilizing the Ruck Denitrification Pretreatment Individual Sewage Disposal System.) The Petitioner seeks guidance as to whether he may participate in the Technical Review Committee's consideration of applications involving innovative-alterative denitrification systems, systems which could, if approved, compete with the Ruck Denitrification Pretreatment Individual Sewage Disposal System. (During a phone conversation, the Petitioner indicated that, although applicants submitting such alternative denitrification systems could be potential competitors (given his interest in the Ruck System), his review typically is limited to specific technical findings.) 2. Analysis Under the Code of Ethics, the Petitioner, as a member of the Technical Review Committee, may not participate in any matter in which he has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of his duties in the public interest. See R.I. Gen. Laws §§ 36-14-5(a), 36-14-7(a). An official will have an interest in substantial conflict with his or her official duties if it is likely that a "direct monetary gain" or a "direct monetary loss" will accrue, by virtue of the public official's activity, to the official, 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). Also, pursuant to R.I. Gen. Laws § 36-14-5(d), the Petitioner is prohibited from using his public position or confidential information received through his position to obtain financial gain, other than that provided by law, for himself, a business associate, or any business by which he is employed or represents. (A "business associate" is defined as any individual or entity joined with a public official "to achieve a common financial objective." See R.I. Gen. Laws § 36-14-2(8).) Section 5(b) of the Code prohibits the Petitioner from accepting other employment which would impair his independence of judgment or require him to disclose confidential information acquired by him in the course of his official duties. Finally, section 5(f) of the Code requires the Petitioner to recuse himself from voting or participating in consideration and disposition of a matter involving a business associate. Here, the Petitioner first seeks guidance as to whether he may participate in the review of an Application Report submitted by Eljen given that he has worked as a consultant for this corporation and assisted in the preparation of the Eljen In-Drain Design and Installation Manual for Residential Repairs. In past advisory opinions, this Commission has required public officials to recuse themselves from a matter if the official has an ongoing or anticipated business relationship with the applicant. See 96-100 (requiring a member of the State Board of Registration for Professional Engineers to recuse himself from the consideration of a licensing matter where the member previously had been hired by the applicant to perform engineering services and was awaiting payment for such services); 94-60 (concluding that a member of the North Kingstown Planning Commission could not participate in a subdivisions proposal submitted by an engineer where the member planned to engage in business projects within the immediate future with the interested engineer). However, this Commission has permitted public officials to participate in matters involving a former associate if it is clear that the business relationship has terminated and that the parties did not anticipate any future business dealings. See 96-30 (concluding that a City Councilor could participate in a matter involving an individual he represented more than five years ago as an attorney given that there was neither an ongoing relationship with the individual nor any specific plans to represent the party in the future). See also 96-62 and 96-68. After considering this request, the relevant provisions of the Code, and past advisory opinions addressing the scope of a business associate relationship, we conclude that the Petitioner, a member of the Technical Review Committee, may not participate in the Technical Review Committee's review of the application submitted by Eljen. As a consultant for the Corporation, the Petitioner has an ongoing business relationship thereby triggering the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a), 5(d). As such, the Petitioner must recuse himself pursuant to R.I. Gen. Laws § 36-14-5(f). As to the Petitioner's second question, whether he may participate in the review of applications seeking approval of denitrification systems where he is the sole representative of the Ruck Denitrification Pretreatment Individual Disposal System, we must decide whether the Petitioner has a substantial conflict with such applications thereby necessitating recusal. In past advisory opinion requests, we have found such conflicts if the matter before the public official either involves a direct competitor or would otherwise directly affect the official's business interest. See A.O. 96-24 (opining that an Alternate Member of the Newport Zoning Board of Review, who was also part owner and operator of a hotel and landlord to a restaurant and dance club, could not participate in matters in which he had a direct interest or the bed and breakfast, dance club or restaurant use is within 500 feet of the Petitioner's business); A.O. 94-24 (concluding that the Mayor, as a member of the Board of Licenses Commission and as a part-owner of a business holding a liquor license, could not participate in decisions involving his family's competitors); A.O. 91-41 (recommending that a Bristol Town Councilor who was also a liquor sales person could not participate in matters concerning liquor licensing given that the Councilor's employer would likely suffer a direct monetary gain or direct monetary loss by reason of his official activity); A.O. 90-57 (concluding that a Town Councilor, who operated a day care business, could not participate in matters relating to new zoning regulations of the day care industry since the consideration of such matters created a substantial conflict with his public duties). Here, the Petitioner, as a member of the Technical Review Committee, is asked to consider applications involving other denitrification systems. The Petitioner acknowledges that the potential acceptance of other denitrification systems will impact his business interest as the sole representative of the Ruck System. The Petitioner believes, however, that he should be permitted to review such applications if his review is limited to technical fact-finding. After considering the relevant provisions of the Code, past advisory opinions, and the role of the Technical Review Committee, it is our opinion that, if the Petitioner's review is limited to technical fact-finding, the Petitioner's participation would be considered ministerial and, therefore, not in violation of Code provisions. However, his participation may not proceed beyond making such technical findings, for if it does it would no longer be ministerial and would likely affect his business competitors' ability to participate and compete for market share in the disposal system arena. Accordingly, given the Petitioner's interest in applications involving other denitrification systems, in order to avoid potential violations of R.I. Gen. Laws §§ 36-14-5(a), 5(b), and 5(d), the Petitioner should recuse himself from the Technical Review Committee's consideration of such applications, except in instances where his involvement is limited to specific technical findings rather than participating in the decision whether to recommend approval of the application. This opinion is strictly limited to the facts stated herein and relates only to the application of the Rhode Island Code of Ethics. This Commission offers no opinion on the effect which any other statute, ordinance, constitutional or charter provision or canons of professional ethics may have on your situation. Under the Code of Ethics advisory opinions are based on the representations made by, or on behalf of, an official and are not adversary, or investigative proceedings. Code Citations: 36-14-2(2) 36-14-2(8) 36-14-5(a) 36-14-5(b) 36-14-5(d) 36-14-5(f) 36-14-7(a) Related Advisory Opinions: 96-100 96-68 96-62 96-30 96-24 94-60 94-24 91-41 90-57 Keywords: advisory body business associate business interest code jurisdiction competitors financial interest private employment recusal