Advisory Opinion No. 99-9

Re: T. Brian Handrigan

QUESTION PRESENTED

The petitioner, a Narragansett Town Councilor, a municipal elected position, who as a member of the Town Council addresses issues relating to alcoholic beverage licenses in the Town of Narragansett, requests an advisory opinion as to whether he may participate and vote on such matters given that he and his wife jointly own shares of stock in two Narragansett restaurants that have alcoholic beverage licenses.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the petitioner, a Narragansett Town Councilor, a municipal elected position, who as a member of the Town Council addresses issues relating to alcoholic beverage licenses in the Town of Narragansett, may participate in and vote on such matters only if they do not have a direct financial impact on him or his businesses.

In the Town of Narragansett the Town Council has the responsibility for issuing and renewing alcoholic beverage licenses and for dealing with various issues relating to such licenses. The petitioner represents that he and his wife jointly own shares of stock in two Narragansett restaurants that have alcoholic beverage licenses. Up till now, the petitioner has recused from participating in matters relating to the licenses for the restaurants in which he and his wife own stock but has participated in licensing matters involving all other establishments.

Under the Code of Ethics, the petitioner 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. Substantial conflict is defined as a "direct monetary gain or a direct monetary loss" that accrues, by virtue of the public official's activity, to that individual, a family member, a business associate, an employer, or any business which the public official represents. R.I. Gen. Laws §§ 36-14-5(a), 36-14-7(a). Additionally, the Code provides that a public official or employee may not use his office to obtain financial gain other than as provided by law. R.I. Gen. Laws § 36-14-5(d).

The Commission has issued previous advisory opinions addressing the exact issues raised by the petitioner here. See, e.g., A.O 96-70, A.O. 98-151. In those opinions the Commission has advised members of town and city councils with interests in restaurants/liquor establishments that the law did not prohibit them from serving on the town or city council and, generally, from considering matters relating to the zoning or licensing of restaurants and bars. The Commission further has advised, however, that when an issue came before the council involving a competing business that was in reasonably close proximity to the official’s own, or that otherwise directly impacted the business in which the official had an economic interest, that recusal was required in accordance with R.I. Gen. Laws § 36-14-6.

The same analysis applies here. Clearly the petitioner is an active participant in the restaurant business in Narragansett, and the restaurants in which he has an interest have alcoholic beverage licenses. Therefore, while the fact that a matter comes before the Town Council involving an alcoholic beverage license for another establishment does not in and of itself create a conflict of interest, it does trigger the analysis described above. See R.I. Gen. Laws § 36-14-7(b).

The law does not bar the petitioner from participating in matters involving the restaurant industry in Narragansett, or individual members of that industry, so long as those matters do not directly impact his business and/or his personal financial interests. In previous advisory opinions the Commission has found that, as a general rule, an individual’s business interests would not be impacted directly if his business were not in close proximity to the subject business. If, however, another establishment is a direct competitor of an establishment in which the petitioner and his wife have an interest, a direct impact would be presumed.

Code Citations:

36-14-5(a)
36-14-5(d)
36-14-6
36-14-7(a)

Related Advisory Opinions:

98-151
98-131
98-123
98-111
96-70
96-24
94-42
94-24
92-65
92-20
92-19
91-41
90-57

Keywords:

Business interest
Competitor(s)
Recusal