Advisory Opinion No. 99-121

Re: Neena Sinha Savage, Esq.

QUESTION PRESENTED

The petitioner, an attorney with the Department of Business Regulation, a state employee position, requests an advisory opinion as to whether she may attend a conference for which hotel, airfare, and some meals will be paid by the sponsoring organization, Society of Insurance Licensing Administrators.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the petitioner, an attorney with the Department of Business Regulation, a state employee position, may attend a conference for which hotel, airfare, and some meals will be paid by the Society of Insurance Licensing Administrators (SILA) since as to the petitioner, the SILA is not an "interested person" as that term is defined in the Code of Ethics, in that its members do not have a direct financial interest in a decision that the petitioner can make or participate in the making of. See Commission Regulation 5009.

The petitioner serves as legal counsel in the Department of Business Regulation. Among other duties, the petitioner may advise the Insurance Division on various issues relating to licensing and serve as prosecutor or hearing officer in insurance producer license matters. The petitioner advises that Pictorial, Inc. established the SILA in 1990, which is in business of providing insurance licensees with continuing education materials. SILA has over 1300 members and was created to communicate with and educate insurance licensing experts. These licensing experts administrate license applications, renewals and other criteria in maintaining the licenses of their employers, insurance companies. The SILA will reimburse the petitioner for her conference hotel, travel and meal expenses.

Commission Regulation 36-14-5009, which became effective on July 1, 1998, provides that no person subject to the Code of Ethics shall accept a gift from an “interested person,” with only a few exceptions. The regulation narrowly defines “interested person” as an individual or business entity “that has a direct financial interest in a decision that the person subject to the Code of Ethics is authorized to make, or to participate in the making of, as part of his or her official duties.”

Here, the petitioner does make decisions regarding licensees. In previous decisions, the Commission has concluded that when considering whether an organization is an interested person for purposes of the gift regulation, that it must look to the nature of its membership. See A.O. 98-114 (concluding, in part, that Construction Industries of Rhode Island is an interested person under the gift regulation as to the Director of Transportation since its membership is made up of construction companies and consultants with a direct financial interest in decisions that the Director of Transportation is authorized to make, or participate in the making of, as part of his official duties). Here, SILA is made up of insurance licensing administrators who do not appear before the petitioner. While they are employed by insurance companies, the petitioner makes decision on licensees, i.e. agents, who are at least two steps removed from license administrators.

Additionally, the relationship between the decisions that the petitioner makes and the organization, SILA, is removed and consequently not “direct” as required by the regulation. In order for the petitioner to financially affect the SILA membership, the petitioner would make decisions revoking or suspending an insurance agent’s license, which could in turn impact the insurance company whose products he or she sells, and who also employ license administrators who make up the membership of SILA. Again, the relationship is indirect, at best. Simply because the petitioner has some responsibilities in the insurance area does not mean that every conference involving the insurance industry would constitute a prohibited gift. As such, the SILA conference does not constitute a prohibited gift for the petitioner under the Commission’s regulation. See A.O. 99-25 (advising Coventry Town Councilors could attend party sponsored by Teachers Alliance since the ability of the Council to affect the specifics of the line item related to teachers salary are too remote to qualify the Coventry Teachers Alliance and its membership as “interested persons” with respect to the Council since the Council must vote on the School Department budget “in toto”).

The petitioner states that it would be helpful for other insurance division employees to have guidance regarding attendance at conferences. The response as to a specific conference and recipient necessarily would be fact specific. The Commission would consider what the DBR attendees’ job responsibilities include and whether he/she has the ability to make decisions that will have a direct financial impact on the sponsor of the conference. Where the sponsor is an organization, the Commission will look at whether the organization is made up of interested persons. If the persons/entities making up the organization are interested persons or represent interested persons, then the DBR official should either decline reimbursement or have the department pay. Additionally, the sponsor could provides a grant to the DBR and an official/supervisor at DBR could decide to send a person (as long as it is not him/herself) to the conference since it would no longer be a gift to an individual person. Also, if the employee will be a speaker at the event, he or she may accept meals at the program regardless of whether the sponsoring party were an interested person under the gift regulation.

Code Citations:

36-14-5009

Related Advisory Opinions:

99-25

98-114

Keywords:

Gifts

Meals

Travel