Advisory Opinion No. 98-156 Re: John Maguire A. QUESTION PRESENTED The petitioner, a State Retirement Board of the Employees Retirement System (Retirement Board) member, a state elected position, requests an advisory opinion as to whether he may participate in a variety of matters concerning union members, relatives, and attorneys as a Retirement Board member given that he is also a teacher in the North Providence School System, President of the North Providence Federation of Teachers, Treasurer and Personnel Committee member of the Rhode Island Federation of Teachers and Health Professionals (RIFT), and an AFL-CIO Executive Board member. B. SUMMARY It is the opinion of the Rhode Island Ethics Commission that the Code of Ethics does not prohibit the petitioner, a State Retirement Board member, a state elected position, from serving as a Retirement Board member, provided that he does not participate in matters concerning members of the North Providence Federation of Teachers or Rhode Island Federation of Teachers and Health Professionals (RIFT). The petitioner holds leadership positions in these organizations. The Commission consistently has found that, while mere membership in an organization does not create a "business associate" relationship as defined in the Code of Ethics, such a relationship does exist for those in leadership positions since they direct the financial objectives of the organization. R.I. Gen. Laws §§ 36-14-5(a), 5(d), 5(f). The Code of Ethics also prohibits the petitioner's participation in matters where an applicant is the spouse or dependent child of his business associates/union members given that he could reasonably expect that he would be affecting the financial status of the applicant and consequently his business associate. Additionally, the petitioner must recuse on matters that come before him involving his attorney or his attorney's law firm based on his business associate relationship with them. However, nothing in the Code of Ethics prevents the petitioner from participating in matters regarding North Providence Administrators or School Committee members or other North Providence teachers who are not members of the union. Additionally, the Code of Ethics does not prohibit the petitioner from participating in matters concerning employees or relatives of employees of RIFT assuming no other relationship is present; i.e., membership in a union for which the petitioner holds a leadership position or a direct supervisory relationship. Finally, the Commission concludes that the petitioner may participate in matters concerning AFL-CIO members provided they are not members of its Executive Board, of which he is a member. This conclusion is based on the particular structure of the organization. The petitioner should follow the dictates of Section 6 of the Code of Ethics regarding recusal that requires the filing of a statement of conflict of interest with the Retirement Board and with the Ethics Commission. C. DISCUSSION 1. Facts Pursuant to R.I. Gen. Laws § 36-8-4, the teachers in the state retirement system elected the petitioner to serve as their representative on the Retirement Board. The State Retirement Board is comprised of fourteen members who are representatives of state employees, teachers, municipal employees, retired employees, public representatives and other officials. The petitioner also is a teacher in the North Providence School System, President of the North Providence Federation of Teachers, Treasurer and Personnel Committee member of the Rhode Island Federation of Teachers and Health Professionals (RIFT), and AFL-CIO Executive Board member. The North Providence Federation of Teachers is affiliated with RIFT. In his request for an advisory opinion, the petitioner asks whether he may participate as a Retirement Board member in the following situations: 1. If the applicant is a teacher within the North Providence School System? 2. If the applicant is a relative of a teacher from within the North Providence School System? 3. If the applicant is an administrator within the North Providence School System? 4. If the applicant is a School Committee member of the Town of North Providence? 5. If the applicant is a member of the Rhode Island Federation of Teachers and Health Professionals? 6. If the applicant is a relative of a member of the Rhode Island Federation of Teachers and Health Professionals? 7. If the applicant is a member of the AFL-CIO? 8. If the applicant is a relative of a member of the AFL-CIO? 9. If the applicant who appears before the Retirement Board is represented by the office of Skolnik, McIntyre & Tate Esquires, Ltd. which is the law firm that represents the North Providence Federation of Teachers and the Rhode Island Federation of Teachers and Health Professionals? 10. If the applicant is an employee of the Rhode Island Federation of Teachers of Health Professionals? 11. If the applicant is a relative of an employee of the Rhode Island Federation of Teachers and Health Professionals? 2. Analysis Under the Code of Ethics, the petitioner, as a member of the Retirement Board, 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 business associate, an employer, or any business that the public official represents. See R.I. Gen. Laws § 36-14-7(a). (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(3)). 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. Further, section 5(b) of the Code prohibits the petitioner from accepting other employment that 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. At issue in this advisory opinion request is whether the petitioner may participate in matters regarding various applicants that come before him as a Retirement Board member given his position as a union official in various organizations. This Commission has considered analogous advisory opinions in the past. In Advisory Opinion 97-91, the Commission concluded that a member of the State Labor Relations Board who was also the President and Business Manager of the Public Service Employees' Local Union 1033 of the Laborers' International Union of North America, AFL-CIO, and the Rhode Island Laborers' District Council (District Council) President, should not participate in matters involving local unions affiliated with the District Council. The petitioner in that instance also was advised that he would not be barred from participating in matters involving local unions other than Local 1033 if he resigned his position as President of the District Council. The analysis in that opinion determined that the petitioner was a business associate of those local unions affiliated with the District Council given his position as President of the latter, and therefore in a position to affect the financial objectives of other local unions in the organization. In Advisory Opinion 98-44, the Commission concluded that a Commissioner of the Fire Safety Code Board of Appeal and Review should not participate in appeals involving property owned by Local 799, the Realty Corporation, or members of Local 799 given that he was a Lieutenant of the Providence Fire Department, a Providence Central Labor Council Executive Board member, and President of International Association of Firefighters (Local 799) and the Providence Firefighters Realty Corporation (Realty Corporation). Again, this opinion was based on the petitioner's business association with the organization and its members because of his leadership roles. The Commission similarly has concluded that individuals who are members of the Board of Directors or in other leadership positions of an organization that permitted them to affect the financial objectives of the organization are business associates of the organization. If an official has such a leadership position, the Commission has required the official to recuse himself or herself if the interests of the organization appeared before his or her public agency. See A.O. 96-75 (advising three members of the General Assembly who also served as members of the Board of Directors of local hospitals to recuse themselves from hospital issues since they had a business association with the local hospitals); A.O. 95-59 (requiring a member of the Smithfield School Committee to recuse himself from a vote concerning a community organization if the official's association with the organization allowed him to affect the financial objectives of the organization); A.O. 96-46 (concluding that members of the Providence Historic District Commission (PHCD) who are also Board of Directors members of the Providence Preservation Society Revolving Fund or its corporate parent, the Providence Preservation Society, were prohibited from voting or otherwise participating in the PHDC's reconsideration of an application involving the Providence Preservation Society Revolving Fund); A.O. 98-10 (advising members of the Batters Intervention Program Standards Oversight Committee and its subcommittees that they should not participate in any certification, appeal, variance, or other substantive matter if they were employed by or were members of the Board of Directors of an organization, or the parent or sister of that organization, that had a Batterers Intervention Program that would be affected by the matter under consideration by the Oversight Committee). Conversely, where a petitioner did not hold a leadership position in the union or organization, conflicts of interest were not found since there was not a business associate relationship between the petitioners and the organizations in question. See A.O. 96-92 (concluding that a member of Rhode Island Laborers' Local 1215 who served as the Chairperson of the Westerly Housing Authority Board of Commissions could participate in the consideration of a contract with Rhode Island Laborers' Local 1217 notwithstanding the fact that he was a member of a different local of the same union since he was not a business associate of Local 1217); see also A.O. 96-60 (advising a member of the Narragansett Personnel Board of Appeal that she could participate in grievances of employees represented by Local 1033 even though she was a member of that union since she was not a union official and that any benefits she received would not be affected by any decision of the Narragansett Personnel Board); A.O. 96-54 (opining that Zoning Board of Review and Planning Board members could participate in matters concerning rezoning for the YMCA although several members of these Boards were also members of the YMCA and one Planning Board member was a former member of the YMCA Board of Directors provided that they, as members, were not in a position to affect the financial objectives of the organization). Based on the Code of Ethics and consistent with these previous advisory opinions, the Commission concludes that the petitioner may not participate in matters concerning members of the North Providence Federation of Teachers or RIFT since he serves in leadership positions in those organizations. Because the petitioner holds leadership positions in those organizations, he is a business associate of the Federation of Teachers and RIFT, and of its members, since he shares a common financial objective with the organization and its members. Specifically, as to Question #1, the petitioner asks whether he may participate in matters where the applicant is a North Providence teacher given that he is President of the North Providence Federation of Teachers. The petitioner represents that most, but not all, teachers in North Providence are members of the North Providence Federation of Teachers. Therefore, the petitioner should recuse on matters where the applicant is a member of the North Providence Federation of Teachers since he is President of that organization. However, as to North Providence teachers who are not members of that union and with whom he does not have any other relationship, recusal is not necessary under the Code of Ethics. The petitioner raises the same issue as to members of the RIFT (Question #5). The petitioner represents that he serves on the Personnel Committee and is Treasurer of that organization. He receives a stipend for this service. Additionally the North Providence Federation of Teachers is an affiliate of RIFT. Again, since the petitioner serves in a leadership position of RIFT, he should not participate in matters where the applicant is a member of the RIFT. Although Question #7 presents a similar issue as to AFL-CIO members, a different outcome is appropriate. The petitioner is a member of its Executive Board. The AFL-CIO is a federation of unions with each union being autonomous. The AFL-CIO is not itself a labor union. For example, the AFL-CIO does not aid locals in collective bargaining. Additionally, the AFL-CIO is made up of a number of different unions/professions - from building trades to steelworkers to government employees who do not share the same contract, constitution or organizational structure. The Commission concludes that the petitioner is not a business associate of AFL-CIO members generally, except those who, like himself, are members of the Executive Board. The petitioner is prohibited, however, from participating in matters as a Retirement Board member concerning AFL-CIO Executive Board members with whom he serves since, as Executive Board members, they share a common financial objective with the AFL-CIO. This conclusion is consistent with previous advisory opinions finding that members of the Board of Directors of organizations are business associates of the organization and of the other board members. See A.O. 98-71 (advising Solicitor that recusal is required on Nature Conservancy matter where he provided legal representation to the Environmental Council of which the Nature Conservancy is a member of the Board); A.O. 98-16 (advising Judge to recuse on matters that come before him concerning tenant- Rhode Island Juvenile Officer’s Association or members of its Board of Directors). Questions #2, #6, and #8 relate to matters where relatives of union members with whom he is associated are applicants in the Retirement System. Assuming the applicant is not a member of a union in which he holds a leadership position, but whose relative is a North Providence Federation of Teachers or RIFT, or AFL-CIO Executive Board member (This opinion does not prohibit the petitioner from acting in matters where a AFL-CIO member's relative appears before him, so long as the individual is not a relative of an AFL-CIO Executive Board member with whom he serves.), the next question is whether a conflict exists based on the applicant's relationship with the union member. Since the petitioner is prohibited from acting in matters that could result in a financial gain or loss to his business associates, he should not participate in matters where the applicant is either a spouse or dependent child of the business associate. By acting in such matters, he would be affecting the applicant's financial status and therefore directly impact the business associate's financial status. See A.O. 97-132 (advising Town Solicitor that he could not advise Town Council given that a client/business associate's spouse could be affected by the particular matter; (The Town Solicitor was representing a Town Councilor's wife in a personal injury action. The Commission concluded that he could not advise the Town Council on a particular zoning matter where his client's spouse/Town Councilor was one of the applicants and since his participation in advising the Town Council could be reasonably expected to result in a financial gain or loss to his client's spouse. The Commission concluded that there was a reasonable likelihood that the Town Councilor would be affected materially by any resolution or other developments relating to his wife's personal injury suit and that, although the petitioner's client did not currently have an interest in property affected by the zoning proposal, it was reasonably foreseeable that his client would be affected materially by matters relating to a financial interest of her husband.) see also A.O. 95-17 (opining that a Town Councilor who was also an attorney should not participate as a Town Councilor in a liquor license application submitted by his client's spouse given that he was representing his client in a marital dispute with the license applicant; and, A.O. 82-54 (concluding that a Newport Zoning Board of Review member should recuse where clients of her spouse's firm appear before her). The petitioner also raises questions (#3 and #4) as to whether he may act in matters where the applicant is a North Providence Administrator or School Committee member. The petitioner represents that these applicants are not part of the North Providence Federation of Teachers. Since they are not members of the union in which he serves in a leadership capacity and provided the petitioner does not have some other relationship with these individuals, the Code of Ethics does not require him to recuse on these matters as a Retirement Board member. The petitioner also requests advice as to whether he may participate in matters before the Retirement Board when affected individuals or entities are represented by Skolnik, McIntyre & Tate Esquires, Ltd (Question #9). This law firm not only represents the North Providence Federation of Teachers and RIFT, but also represents the petitioner personally on an ongoing basis. Previously, the Commission has concluded that an ongoing attorney-client relationship creates a business association that triggers the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a) and 5(f). See e.g., A.O. 98-56 and A.O. 98-25. Specifically, the Commission has found that this relationship extends not only to the attorney that represents the interests of the official but also to the law firm with which his attorney is employed or professionally associated since there is a financial nexus that runs between the official and the firm. See A.O. 98-142 (concluding that CRMC member should not participate in matters whenever his attorney's law firm is involved in a matter before the CRMC); A.O. 95-81 (opining that a member of the Cranston Zoning Board may not participate and/or vote on a matter presented by a law firm when an attorney of that firm represents the petitioner in an unrelated matter); C.f. A.O. 96-76 (advising a member of the Health Services Council, who served as "of counsel" to a law firm, that he should not participate in matters involving his law firm or his law firm's clients) Finally, the petitioner requests advice as to whether he may participate in matters concerning employees of the RIFT and their relatives (Questions #10 and #11). The petitioner represents that the employees are not members of the union. Provided that no other relationship exists, e.g., business associate or supervisory control, the Code of Ethics does not prohibit the petitioner from participating in matters concerning employees of the union or relatives of the union employee (assuming that the relatives do not belong to a union with which the petitioner holds a leadership position). The petitioner does not have a common financial objective with those who simply work for the union for which he serves as Treasurer. However, if the petitioner exercises direct supervisory control over the employees of the Union, his independence of judgment may be impaired when participating in matters as a Retirement Board member regarding those employees, necessitating recusal. See R.I. Gen. Laws § 36-14-5(b). See e.g., A.O. 96-2 (concluding that Board of Utility Commissioners member may continue to serve on that Board provided that he recuses himself from any decision or discussion relating to the General Manager's employment given that, in his private capacity, the General Manager serves on a board of directors that has ultimate jurisdiction over the private employment of the BUC member). See also A.O. 98-23, A.O. 96-82, A.O. 95-85, A.O. 91-17. Based on the above analysis, it appears that the petitioner may have to recuse on a variety of matters given his leadership positions in various unions. While the petitioner may claim that requiring recusal on these matters is at odds with the intended composition of the Retirement Board, the Commission is still constrained to apply the Code of Ethics to all public officials and employees. Additionally, we believe that the goals and purposes of both the statute creating the Retirement Board and of the Code of Ethics with regard to Board members can be met. First, the provisions do not facially conflict and second, in application, members of the particular groups may serve on the Board without causing a violation. The petitioner is not barred from serving on the Retirement Board, nor is he prohibited from holding leadership positions in various labor organizations. If, however, he chooses to do both at the same time then provisions of the Code of Ethics come into play as outlined above. Finally, we remind the petitioner that recusals must be in accordance with Section 6 of the Code of Ethics, which require him to submit his statements of conflict of interest to the Retirement Board and sending a copy to the Ethics Commission. Code Citations: 36-14-2(3) 36-14-5(a) 36-14-5(b) 36-14-5(d) 36-14-5(f) 36-14-7(a) Related Advisory Opinions: 98-142 98-71 98-56 98-44 98-25 98-23 98-16 98-10 97-132 96-92 96-82 96-76 96-75 96-60 96-59 96-54 96-46 96-2 95-114 95-85 95-81 95-17 92-45 91-50 91-17 82-54 Keywords: Business associate Unions/bargaining unit