Advisory Opinion No. 98-157

Re: David M. Chenevert


The petitioner, a Cumberland Town Councilor, a municipal elected position, requests an advisory opinion as to whether he may participate in the award of workers compensation insurance coverage for the Town given that an insurance agency with which he has both a professional and personal relationship has bid on the project.


It is the opinion of the Rhode Island Ethics Commission that the petitioner, a Cumberland Town Councilor, a municipal elected position, may not participate in the consideration and awarding of workers compensation insurance coverage for the Town given the nature of his relationship with an insurance agency that has bid on the project. The Petitioner's relationship with the insurance agency falls within the definition of business associate as set forth in R.I. Gen. Laws § 36-14-2(3). As such, the Petitioner's participation in matters concerning that insurance agency is prohibited by R.I. Gen. Laws §§ 36-14-5(a) and 5(f).

Under the Code of Ethics, the petitioner may not participate in a matter in which he has an interest, financial or otherwise, that is in substantial conflict with the proper discharge of his public duties. R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest exists if the official has reason to believe or expect that he, a member of his family, or any business associate 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). Therefore, a public official or employee may not participate in a matter concerning or presented by a business associate. See R.I. Gen. Laws § 36-14-5(f). A business associate is defined as an individual or business entity joined with an official to achieve a common financial objective. See R.I. Gen. Laws §§ 36-14-2(3) and 2(7).

In prior advisory opinions the Commission has found a business associate relationship to exist between an independent insurance agency and its clients. See A.O. 91-81 (concluding Town Councilor who owned an insurance agency that he should recuse when any client of his agency appeared before the Town Council); A.O. 90-79 (advising House Speaker and member of the Rhode Island Public Buildings Authority who owned and operated an insurance agency to decline future renewals or insurance business from those businesses or entities that appear before him); A.O. 90-25 (concluding that a member of the House of Representative should not participate or vote on any legislation specifically benefiting any client or business associate of his in connection with his personal insurance brokerage business); A.O. 83-16 (finding that it could offer no protection to a potential appointee to the Woonsocket Local Assessment Committee if he were to accept the appointment given that he was the Chairperson of the Board of an insurance agency and held 25% of its outstanding stock and where the agency's insurance clients would be involved); A.O. 86-46(advising that Senator member of the Board of Commissioners of the Solid Waste Management Corporation should recuse from participation in awarding a contract to an engineer where his private insurance client was a subcontractor to one of the engineering firms submitting a bid). Compare A.O. 93-21 (concluding that a Town Councilor could participate in license issuance where applicant was an insurance client absent a significant financial nexus between the granting of the license and the agent's commission or income).

Here, the petitioner is a personal friend of one of the principal owners of the agency and has his insurance through that agency as well. The petitioner's personal relationship with one of the principals does not require his recusal under the Code of Ethics. When enacting the Code of Ethics, the General Assembly included as one of its legislative purposes the elimination of appearances of impropriety. The legislature did not, however, make the appearance of impropriety a violation of the law. In such matters, if the petitioner believes it would be an appearance of impropriety to participate, he may, although he is not required to do so, recuse. However, in this matter, the petitioner also has a business relationship with the principal and his insurance agency. The relationship is direct and ongoing, with a principal of the insurance agency serving as the petitioner’s agent for a variety of insurance matters. The nature and extent of the relationship falls within the definition of “business associate.” The petitioner should follow the dictates of Section 6 of the Code of Ethics, which require him to recuse from participation, file a statement of conflict of interest with the Town Council and send a copy of the statement to the Ethics Commission.

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Business associate