Advisory Opinion No. 99-63

Re: The Honorable William V. Irons

QUESTION PRESENTED

The petitioner, a legislator serving as a State Senator, a state elected position, who is privately employed as an independent insurance broker, requests an advisory opinion as to whether he may participate and vote in the Senate Corporations Committee’s consideration of legislation relating to pharmaceutical health insurance benefits, given that the proposed legislation may have a financial impact on his client’s business.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the petitioner, a legislator serving as a State Senator, a state elected position, who is privately employed as an independent insurance broker, may participate and vote on legislation relating to pharmaceutical health insurance benefits since the proposed legislation is broad-based and will not affect his client’s interests to any greater or lesser extent than that of all other pharmacies and health care consumers in Rhode Island. However, he must file a section 6 notice with the Commission and the Senate which details his business and financial interests, the nature of the potential conflict, and the reasons why, despite the potential conflict, he is able to vote objectively, fairly, and in the public interest.

Under the Code of Ethics, the petitioner may not participate or vote in any matters in which he has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of his duties. See R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest occurs if he has reason to believe or expect that he, a business associate, or a business by which he is employed or represents will derive a direct monetary gain by reason of his official activity. See R.I. Gen. Laws § 36-14-7(a). However, he will not have an interest in substantial conflict with his public duties if any benefit accrues to him, his business associate, or any business by which he is employed or represents “as a member of a business, profession, occupation or group, or of any significant and definable class of persons within the business, profession, occupation or group, to no greater extent than any other similarly situated member of the business, profession, occupation or group, or the significant and definable class of persons within the business, profession, occupation or group.” See R.I. Gen. Laws § 36-14-7(b). Further, he may not use his 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 which he represents or by which he is employed. See R.I. Gen. Laws § 36-14-5(d).

The petitioner advises that he is privately employed as an independent insurance broker, representing individual and corporate clients in the areas of life, health and disability insurance. The Senate Corporations Committee, of which he is the Chairperson, will be considering three bills (99-S 0008, 99-S 0110, and 99-S 0163) which would allow individuals with pharmaceutical health insurance benefits to choose their own pharmacy. He indicates that a corporate pharmacy client of his has an interest in the proposed legislation. He represents that the legislation would not modify the compensation structure of his business contract with the client.

Generally, in determining whether a legislator may participate and vote on proposed legislation, the Commission has considered whether the legislation at issue involved an entire industry and whether or not the legislator would be or could be affected financially by the legislation. See A.O. 98-59; A.O. 98-51; A.O. 98-40. In Advisory Opinion 96-71, the Commission found that it was consistent with the law for a legislator to participate and vote on legislation regulating to the sale of insurance by banks even though he was an insurance agent, based on the importance of the legislation to the public and the fact that the legislator could not reasonably expect any direct monetary gain or loss by reason of his participation.

Consistent with the rationale used in prior opinions, the Commission concludes here that the petitioner may participate and vote on broad-based legislation involving general health care issues of public interest. In this case, the proposed legislation would allow all individuals with pharmaceutical health insurance benefits to choose their own pharmacy. Pursuant to Section 7(b), any benefit or detriment accruing to the petitioner‘s client would affect it to no greater or lesser extent than any other similarly situated members of a significant and definable group. In short, the definable group of individuals and/or entities likely to be affected by such legislation is not only significant, it is enormous. In such instances, public interest and public policy considerations weigh heavily in favor of elected officials participating in the legislative process.

The Commission notes that the type of legislation at issue here, involving broad-based issues of public policy, is precisely the type of legislative activity contemplated by the section 7(b) exception. The proposed legislation not only would impact all pharmacies in Rhode Island, but also would affect health care consumers throughout the state. Finally, consistent with the requirements of the law governing notice and recusal, the petitioner should file a section 6 (R.I. Gen. Laws § 36-14-6) notice with the Ethics Commission and the Senate. The notice should detail his client’s interests in the proposed legislation, and the reasons why, despite these interests, he is able to vote objectively, fairly, and in the public interest on the legislation at issue here.

Code Citations:

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

Related Advisory Opinions:

98-59
98-51
98-40
98-14
97-79
97-57
97-56
96-71
95-64
95-55
95-54
94-25
GCA 13

Keywords:

Business Associate
Class Exception
Client’s Interest