Advisory Opinion No. 99-107

Re: David Swain

A. QUESTION PRESENTED

The petitioner, a Jamestown Town Councilor, a municipal elected position, requests an advisory opinion as to whether and to what extent he may participate in discussions about a development project for which the Town is an abutter and for which he has a financial interest in the development project.

B. SUMMARY

It is the opinion of the Rhode Island Ethics Commission that the petitioner, a Jamestown Town Councilor, a municipal elected position, may not participate in a discussion on whether the Town should take a position in a matter where it is an abutter given that he has a financial interest in the particular project at issue. By participating in discussions and votes as to whether the Town should take a position as an abutter would affect the likelihood of approval of the development project, thereby affecting the petitioner and/or his business associate. Additionally, the fact that the petitioner has private business interests in the development project would impair his ability to represent the Town's interest on the issue.

C. DISCUSSION

1. Facts

The petitioner is a recently elected member of the Jamestown Town Council. He represents that he provides kayak rentals from his store as well as from the marina owned by Conanicut Marine Service. Conanicut Marine Service (CMS) has submitted a proposal for expansion for off-site parking. The matter has already been considered by the Planning Board and will be considered by the Zoning Board in the near future. The Town is a substantial abutter to the marina. Consequently, the citizens have urged the Town Council to take a position on the expansion before the Zoning Board. The petitioner indicates that he will recuse on what position the Town should take on the proposal and its ultimate vote given his relationship with CMS. However, the petitioner notes that the Town Council will consider two questions: 1) Should the town, being one of the abutters, decide to take a position on the expansion prior to the Zoning Board's decision? 2) If yes, then what should the town's position be - for or against? The petitioner states that if the town decides to take a position here, that it will be precedent for future matters. The petitioner believes that he should be able to participate in the first question since this decision may not only affect the present matter, but future matters as well.

2. Analysis

The Code of Ethics provides that the petitioner shall not have any interest, financial or otherwise, direct or indirect, or engage in any employment or transaction which is in substantial conflict with the proper discharge of his/her duties in the public interest. A substantial conflict of interest occurs if the petitioner has reason to believe or expect that (s)he or any family member or business associate, or any business by which (s)he is employed will derive a direct monetary gain or suffer a direct monetary loss by reason of his/her official activity. R.I. Gen. Laws §§ 36-14-5(a), 7(a). Additionally, the Code provides that an official has reason to believe or expect a conflict of interest exists if it is "reasonably foreseeable" that (s)he, a family member, employer, or business associate will be financially impacted. To be "reasonably foreseeable" the probability must be greater than "conceivable," but the impact need not be certain to occur. See Commission Regulation 36-14-6001. The Code also provides that a public official shall not accept other employment that will impair his/her independence of judgment as to his/her official duties. See R.I. Gen. Laws § 36-14-5(b).

The Commission has not considered any matter analogous to this request. However, it has considered opinions based on “reasonable forseeability.” That issue comes into play in matters that require several steps to take place before an action will be final. However, the nature of these steps is determinative of whether an official may or may not take certain official action. In Celona v. Rhode Island Ethics Commission, 544 A.2d 582, 586 (R.I. 1988), the Court held that the members of the North Providence Town Council violated the Code of Ethics when they enacted a preliminary resolution granting themselves $100 in monthly expense money. Although the resolution required final approval by the General Assembly, the Court found that the Council members had reason to believe or expect that the passage of a resolution would result in a personal financial benefit since the General Assembly generally adopted verbatim resolutions to amend a Town Charter. In Advisory Opinion 99-8 the Commission advised a Narragansett Town Councilor that he should not serve as a member of the Galilee Lease Committee. The Commission found that the Galilee Lease Committee would consider proposals and make recommendations that would directly determine what businesses would have the opportunity to locate in the Port of Galilee and impact existing businesses (including his own) in the area. The facts that the ad hoc committee passed on recommendations to the Director of the DEM, who has the responsibility for leasing decisions, and that any leases then would be reviewed by the State Properties Committee did not diminish the substantive role that would be played in the process by the petitioner as a member of a committee making recommendations. But see Licht v. Rhode Island Ethics Commission, C.A. No. 97-3013 (Filed: March 9, 1998)(finding that there was not a sufficient nexus between an attorney representing the developer of the Providence Place Mall and his actions as a public member of the Board of Governors who no longer owned that land but controlled the relocation of the Continuing Education facility of URI when he voted to accept a report which contained recommendations that, if implemented, could be detrimental to the Mall); See also A.O. 98-82 (concluding that a Foster Town Councilor could participate in a decision to establish a special committee to study the elderly tax freeze although his family members could be impacted by recommendations of a study commission since a number of independent, intervening steps would need to be taken before anyone were affected by actions of the study committee). In the current matter, however, no such intervening steps are present.

Other advisory opinions concern a public official’s business interest that requires recusal based on a substantial conflict of interest and an impairment of his/her independence of judgment. For example, in Advisory Opinion 97-30, the Commission advised a Town Councilor to recuse from participation in the Housing Authority appointment process given his financial interest, providing rental units to tenants under a program administered by the Housing Authority, and since matters involving tenants of his are likely to come before the Housing Authority. In finding a financial impact, the Commission found that the Councilor would be voting on the appointment of someone who would have at least some responsibility for administering a program that directly affected him. Similarly, in A.O. 98-1, the Commission concluded that a Town Councilor should not participate in the zoning decision relating to a nursery where he operated a hotdog stand given his financial interest in the subject property. The Commission also noted that his employment interest would affect his independence of judgment as to the issues before him. See also A.O. 97-144 (finding that the Mayor of Cumberland should not take part in negotiations with a Plaintiff in a lawsuit against the Town given that his law firm would likely receive some payment on his law firm's claim against the Plaintiff in Bankruptcy Court on separate matters which would be derived, in part, from the Town’s payment of the Plaintiff’s claim); A.O. 93-14 (concluding that a Coventry Town Councilor should not participate and vote on matters involving a proposal to build a supermarket-shopping plaza given that this private business had a contract for the sale and distribution of bakery items with the supermarket). But see A.O. 98-143 (advising a member of the Smithfield Conservation and Soil Erosion Commissions could participate in the consideration of a mall construction proposal despite the fact that his son-in-law’s company, by whom he also is employed, has been retained as environmental engineers for the project given that the Commissions did not have discretionary authority over matters that could affect the interests of that company).

In this matter, the Town Council's decision involves the intersection of the petitioner’s business interests and the fiduciary duty he owes to the Town of Jamestown as a member of the Town Council. If the petitioner takes part in the decision about whether the Town should take a position on the CMS expansion, he has effectively participated in the larger question of the position that the town should take since whether or not the Town takes a position will impact the likelihood of its approval. By participating in such a decision while having a stake in the ultimate outcome, creates a substantial conflict of interest and impairs his independence of judgment necessitating recusal under of the Code of Ethics. However, nothing prevents the petitioner from speaking as a private citizen in public forums if he recuses himself from the Council's considerations and/or votes regarding this issue. Commission Regulation 36-14-7003, the Public Forum Exception, provides that any person may publicly express his or her viewpoint in a public forum on any matter of general public interest or on any matter that directly affects said individual.

Code Citations:

36-14-5(a)
36-14-5(b)
36-14-7(a)
36-14-6001
36-14-7003

Related Advisory Opinions:

99-8
99-7
98-143
98-82
98-30
98-27
98-16
98-1
97-144
97-86
97-30
93-14

Related Case Law:

Celona v. Rhode Island Ethics Commission, 544 A.2d 582, 586 (R.I. 1988)
Licht v. Rhode Island Ethics Commission, C.A. No. 97-3013 (Filed: March 9, 1998)

Keywords:

Business Interest