Re: Richard A. Pike
QUESTION PRESENTED
The petitioner, a South Kingstown Planning Board member, a municipal appointed official, requests an advisory opinion as to whether the law requires that he recuse on matters concerning clients of his insurance agency when the matters before the Planning Board are not directly related to his income.
RESPONSE
It is the opinion of the Rhode Island Ethics Commission that the petitioner, a South Kingstown Planning Board member, a municipal appointed official, should recuse on matters concerning clients of his insurance agency even though the matter before the Planning Board is not directly related to his income. The petitioner's relationship with his insurance clients is a business association as defined in R.I. Gen. Laws § 36-14-2(3). As such, the petitioner's participation in matters concerning those insurance clients 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 insurance agency and its clients. See A.O. 98-157 (finding that a Town Councilor who was a client of an insurance agency should recuse when that agency appears before him); A.O. 91-81 (concluding that a Town Councilor who owned an insurance agency 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. 99-21 (concluding that a Town Councilor who did not have contracts or specific business relationships for the sale of automobile parts could participate in a contract decision since he merely sells parts to companies in the ordinary course of business).
Here, the petitioner is a principal owner of the insurance agency and writes policies for a variety of clients. The relationship with his clients is direct and ongoing. 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 Planning Board and send a copy of the statement to the Ethics Commission. The petitioner is also cautioned that the Code of Ethics prohibits recusals on a frequent and regular basis (see Commission Regulation 5003).
Code Citations:
36-14-2(3)
36-14-5(a)
36-14-5(d)
36-14-5(f)
36-14-5003
Related Advisory Opinions:
99-21
98-157
98-149
98-104
97-137
93-21
91-81
90-79
90-25
86-46
93-16
Keywords:
Business Associate