Advisory Opinion No. 98-114

Re: Veronica Harris, Esq.

A. QUESTION PRESENTED

The Petitioner, Associate Director for the Department of Transportation (DOT), asks for an advisory opinion on behalf of the Director and employees, a state appointed position and state employee positions, respectively, as to whether they may attend 1) Construction Industries of Rhode Island (“Construction Industries”) biannual meetings where the Director is speaking, 2) civic events, such as Chamber of Commerce, Rotary, or Knights of Columbus breakfasts, lunches or dinners; and 3) Rhode Island Public Expenditures Council (RIPEC) dinner meetings.

B. SUMMARY

It is the opinion of the Rhode Island Ethics Commission that the Director of the Department of Transportation ("Director") may attend meetings of the Construction Industries and accept food and beverage where he is speaking or answering questions as part of a program. See Commission Regulation 5009 (a)(1)(f). Likewise, DOT employees who have decision-making authority over matters concerning Construction Industries and its constituent members may attend such meetings and accept food and beverage if they are speaking at the event. If, however, the Director and/or other employees with decision-making authority are not participating in a meeting as described above, they may not accept food and beverage unless they pay consideration of equal or greater value since Construction Industries is an “interested person” under Regulation 5009. Additionally, the Director and DOT employees may attend events sponsored by civic organizations and accept breakfasts, lunches and dinners from these organizations provided they are not "interested persons" as defined in Commission Regulation 36-14-5009(b). The fact that some of an organization's members may be affected financially by a DOT action does not mean that the organization necessarily is an interested person under Regulation 5009. Rather, the specific nature of the organization and its functions and/or the collective profile of its members will be determinative. Based on the information presently available, it appears that the Rotary Club and Knights of Columbus clearly would not be “interested persons.” There is a strong likelihood, however, that a particular Chamber of Commerce would constitute an “interested person,” again depending upon the functions and/or collective profile of the organization’s members. Finally, the Director and Department of Transportation employees may attend Rhode Island Public Expenditure Council ("RIPEC") dinners provided that RIPEC is not promoting or seeking administrative action by the Department of Transportation, and/or through a particular decision maker in the Department, that demonstrably would have a direct financial effect on RIPEC or a significant segment of its constituent members.

C. DISCUSSION

1. Facts

The Petitioner is the Assistant Director for the Department of Transportation (“DOT”). She asks several questions pertaining to the new regulations on behalf of the Director and various employees in the Department. Construction Industries of Rhode Island (“Construction Industries”) is a trade association the members of which are construction companies that regularly compete for work through the DOT. Civic organizations such as the Chamber of Commerce, Rotary Club, or Knights of Columbus generally do not have matters pending with the DOT, but constituent members of those organizations may be affected by matters that fall within the decision-making purview of the Department. The Rhode Island Public Expenditures Council (RIPEC) is a non-profit public policy research and education organization dedicated to the advancement of effective, efficient and equitable government in Rhode Island.

The Director of the DOT frequently speaks at events sponsored by organizations such as those referenced above and also may be an honored guest at organization functions. Many of the events include food and beverage. Additionally, on occasion other DOT employees may be asked to participate and/or to accompany the Director to these events.

2. Analysis

Commission Regulation 36-14-5009, which became effective on July 1, 1998, provides that no person subject to the Code of Ethics shall accept a gift from an “interested person,” with only a few exceptions. The regulation defines “interested person” as an individual or business entity “that has a direct financial interest in a decision that the person subject to the Code of Ethics is authorized to make, or to participate in the making of, as part of his or her official duties.” One of the exceptions to this general prohibition is where a public official is invited to speak at a program or event.

Therefore, the Director or other employee in a decision-making capacity may accept food and beverage at functions such as dinners if he or she is a speaker at an event even if the provider is an interested person. If the public official or employee is not speaking at a program, the next consideration is whether the public official or employee takes part in the making of decisions regarding the provider. If not, the official, even if not speaking, may accept food and drink. If the official or employee is authorized to make decisions, however, and is not speaking at the dinner or event, he or she may not accept food or beverage from the sponsor(s) of a program if the sponsor is an interested person. The issue framed by this advisory opinion request is whether particular organizations are “interested persons” for purposes of Regulation 5009.

We conclude that the Construction Industries of Rhode Island is an “interested person” as defined in Regulation 5009 given that its membership is made up of construction companies and consultants with a direct financial interest in decisions that the Director of Transportation or others at the DOT are authorized to make, or participate in the making of, as part of their official duties. Because the Director will be speaking at the biannual meeting, consistent with the newly promulgated regulation, he may accept food and beverage at the meeting. However, if employees accompanying him do not speak at the program and do participate in the making of decisions regarding the members of the organization, they may not accept food and beverage or other items of value from the group.

Additionally, the Director and employees in the DOT may attend meetings of civic organizations such as the Rotary Club or Knights of Columbus where food and beverage are served. The Rotary Club and Knights of Columbus do not appear to be interested persons. Members of civic organizations such as these may or may not have a direct financial interest in decisions being made by the DOT and, if one or more members have a direct financial interest, that interest may or may not converge with the interests of other members of the organization. Unlike the Construction Industries, however, there is no commonality of financial interests inherent for members of these organizations. Absent some unifying thread they are not “interested persons” as defined in Regulation 5009.

Chambers of Commerce appear to present the sort of commonality of interests that was found lacking in the Rotary Club and the Knights of Columbus. A Chamber of Commerce likely is an interested person if, as an organization, it is participating in matters at the DOT that will have a direct financial interest on the organization or its membership. Situations where there was direct lobbying by a Chamber of Commerce with DOT officials clearly would trigger the prohibition. Also, a Chamber of Commerce likely would be an interested person where a significant portion of its membership has a direct financial interest in matters pending with the DOT. Because Chambers of Commerce differ markedly as to the nature and extent of their lobbying activities, as well as in the nature of their membership rolls, it is entirely possible that some Chambers will be “interested persons” while others will not. Making that determination will depend in large part on the factors discussed above. To the extent an organization does not clearly fall within or outside the definitional lines for “interested persons” detailed above, the Director and/or other DOT employees should request an additional advisory opinion from this Commission before accepting a gift from the organization. (This interpretation is less strict than one given by the Minnesota Ethical Practices Board interpreting somewhat similar provisions. In Advisory Opinion #193, the Ethical Practices Board concluded that an organization could not provide meals to officials without charge because one of its members was a lobbyist principal. Regulation 5009 provides greater latitude than does the Minnesota provision, however, by requiring a direct financial interest by the provider of the gift. As discussed in this advisory opinion, that direct financial interest is not satisfied unless there is some commonality of financial interest among members of an organization.)

Finally, based on a review of RIPEC’s organizational status, we conclude that RIPEC is not an “interested person” as defined in Regulation 5009. While RIPEC may undertake educational, informational or even lobbying activities in favor of or opposed to general or specific legislative or administrative proposals or initiatives, it does not do so having a direct financial interest in the legislative or administrative decisions to be made. The purpose of Regulation 5009 is not to stem the flow of information available to decision-makers. Rather, it is to prohibit “interested persons,” defined as those with a direct financial interest in the outcome of a decision, from providing the decision-makers with gifts. If, however, RIPEC finds itself in the position of promoting or seeking administrative action by the DOT that would have a direct financial impact on it, or on a significant segment of its constituent members, then it would be subject to the same limitations and prohibitions as any other interested person.

Code Citations:

36-14-5009

Keywords:

Gifts