Advisory Opinion No. 97-103 Re: Brian H. McCuin A. QUESTION PRESENTED The Petitioner, Westerly Town Councilor, a municipal elected position, requests an advisory opinion as to whether he may participate in discussion, deliberations and voting on an ordinance regulating the Bed and Breakfast industry given his business relationship with an opponent of the ordinance. B. SUMMARY It is the opinion of the Rhode Island Ethics Commission that the Petitioner, Westerly Town Councilor, a municipal elected position, may not participate in discussion, deliberations and voting on an ordinance regulating the Bed and Breakfast industry. This opinion is based on the Petitioner's close and dependent business relationship with a loan officer who has been vocal about the issue together with the financial impact that such an ordinance may have on the loan officer. Given the business relationship with the loan officer and potential financial impact of the ordinance on the loan officer, the Petitioner, were he to participate, would have a substantial conflict of interest with his duties as a member of Town Council. We remind the Petitioner to complete and file a recusal statement with the Town Council and with the Ethics Commission before any discussion on the ordinance takes place in accordance with R.I. Gen. Laws §36-14-6. C. DISCUSSION 1. Facts The Petitioner is a member of the Westerly Town Council. He is also a self-employed builder/real estate developer. The Petitioner represents that virtually all of the financing for his ongoing business activities are obtained through a single commercial loan officer at a local bank. The Petitioner represents that he necessarily has a close and dependent business relationship with the loan officer. This loan officer resides adjacent to an existing bed and breakfast establishment and is pursuing litigation with regard to its right to exist at that location. The Petitioner represents that an ordinance is pending regarding the regulation of the bed and breakfast industry and will either allow the bed and breakfast to continue in existence or prohibit its future operation. He asks for an advisory opinion as to whether he may participate in the discussion, deliberations and voting on this ordinance. 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 or transaction which is in substantial conflict with the proper discharge of her 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 his official activity. R.I. Gen. Laws §§ 36-14-5(a), 7(a). The Commission has previously held that public officials cannot participate in ordinance or subdivision decisions where they may have a financial impact on themselves, family members, or clients. In A.O. 97-63, the Commission held that an Exeter Planning Board Member could not participate and vote on a subdivision plan, given that he resided within a close proximity of the proposed development since the decision on whether and how to subdivide property will likely have a financial impact on his property valuation and, as such, result in a substantial conflict of interest under the Code of Ethics. See also A.O. 84-40 (Commission's predecessor Conflict of Interest Commission held that a Newport City Councilor could not participate in changes to zoning ordinances given that the amendments would have either adverse or beneficial effects on the business of his clients); A.O. 97-76 (finding that a Coventry Planning Commission member could not participate in decisions regarding a proposed subdivision in the Town given that her brother owns land abutting the project); A.O. 90-38 (finding that a Town Solicitor could not draft an ordinance dealing with power lines given that it may indirectly affect the value of the real estate of all abutters along the right of way including the Solicitor). Additionally, the Commission has found that ongoing business relationships require a public official to recuse on matters before him or her. In A.O. 94-60, the Commission found 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. See also A.O. 97-30 (concluding that the Westerly Town Councilor must recuse from participation in the appointment of Housing Authority members given his financial interest, providing rental units to tenants under a program administered by the Housing Authority); A.O. 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); A.O. 89-8 (requiring recusal in appointment process given the Town Council member's employment as a foster parent liaison and the candidate's position as a foster parent). 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 A.O. 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 A.O. 96-62 , 96-68, and 97-7. After considering this request, the relevant provisions of the Code, and past advisory opinions addressing the scope of a business relationship and ordinance decisions, we conclude that the Petitioner should not participate in discussions, deliberations and voting on an ordinance regulating the Bed and Breakfast industry. The Petitioner's association with the loan officer involves obtaining loans to operate his business. Not only has the Petitioner obtained loans in the past, he presently has a relationship and expects that they will continue to do business with this loan officer in the future. Additionally, this ongoing business relationship is close and dependent and is more involved than, for example, that of a bank customer with a checking account. Additionally, the ordinance will likely impact the loan officer given the proximity of his residence to the local establishment. Given this relationship and the financial impact on the loan officer, the Petitioner, were he to participate, would have a substantial conflict of interest with his duties as a member of Town Council. As such, the Petitioner must recuse himself pursuant to R.I. Gen. Laws § 36-14-6. Code Citations: 36-14-5(a) 36-14-6 36-14-7(a) Related Advisory Opinions: 97-76 97-63 97-30 97-7 96-100 96-68 96-62 96-30 94-60 90-38 89-8 84-40 Keywords: Business interest