Advisory Opinion No. 99-56

Re: William R. Facente

QUESTION PRESENTED

The petitioner, the City of Warwick Community Development Coordinator, a municipal appointed position, requests an advisory opinion as to whether he may participate in the consideration of Community Development Block Grant applications submitted by Habitat for Humanity West Bay, Inc., given that he serves on that organization’s Board of Directors.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the petitioner, the City of Warwick Community Development Coordinator, a municipal appointed position, may not participate in the consideration of Community Development Block Grant applications submitted by Habitat for Humanity West Bay, Inc. given that he serves on its Board of Directors and, therefore, is its business associate under the Code of Ethics.

The petitioner advises that the City of Warwick Community Development Office staff reviews all Community Development Block Grant (CDBG) applications that are received for completeness and eligibility. He indicates that a nine member Advisory Board discusses all complete applications at a public hearing. As Community Development Coordinator, he represents that he and the Advisory Board make funding recommendations to the Mayor, who has final approval on all funding decisions. However, due to limited resources, not all applications meeting eligibility criteria receive funding. The petitioner further advises that he serves on Habitat for Humanity West Bay, Inc.’s Board of Directors, and that that organization is eligible to submit CDBG applications.

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. 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. See R.I. Gen. Laws §§ 36-14-5(a), 7(a). He 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 a family member. See R.I. Gen. Laws § 36-14-5(d). Section 5(f) of the Code requires the petitioner to recuse himself from voting or otherwise participating in the consideration and/or disposition of a matter involving a business associate. See R.I. Gen. Laws § 36-14-5(f). Under R.I. Gen. Laws § 36-14-2(3), a “business associate” is defined as any individual or entity joined with a public official “to achieve a common financial objective”.

Previously, the Commission has concluded that public officials are “business associates” of entities for which they serve either as members of the Board of Directors or in other leadership positions that permit them to affect the financial objectives of the organization. If an official has such a leadership position, the Commission has required that the official recuse him or herself if the interests of the organization would be affected by an action to be taken by his or her public agency. See A.O. 98-44 (opining that a Commissioner of Fire Safety Code Board of Appeal and Review should not participate in appeals involving property owned by the International Association of Firefighters (Local 799) and the Providence Firefighters Realty Corporation since the petitioner, who held a position with both entities that would permit him to affect the financial objectives of the organization, had a business association relationship with the organizations that triggered the prohibitions set forth in R.I. Gen. Laws § 36-14-5(a)); 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 participation regarding hospital issues since they had a business association with the local hospitals); A.O. 95-59 (advising 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); and A.O. 98-76 (concluding that a Narragansett Town Councilor should not participate in appropriating funding for the Chamber of Commerce since she served on its Board of Directors).

Here, the Commission concludes that the petitioner may not participate in the consideration of CDBG applications submitted by Habitat for Humanity West Bay, Inc. As a member of its Board of Directors, the petitioner has a business association with that organization that triggers the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a), 5(d) and 5(f). Further, by making CDBG funding recommendations to the Mayor, the petitioner exercises discretionary authority, given that not all organizations meeting eligibility criteria will receive grants. Notice of recusal should be filed with both the City of Warwick and the Ethics Commission pursuant to R.I. Gen. Laws § 36-14-6.

Code Citations:

36-14-2(3)

36-14-5(a)

36-14-5(d)

36-14-5(f)

36-14-6

36-14-7(a)

Related Advisory Opinions:

99-35

99-33

99-24

98-108

98-76

98-44

98-16

97-30

96-75

96-54

95-105

95-66

95-59

Keywords:

Business Associate

Memberships

Non-profit Boards