Advisory Opinion No. 99-122

Re: Richard B. Kiley

QUESTION PRESENTED

The petitioner, the New Shoreham First Warden, a municipal elected position, who because of his position as First Warden serves as a member of the Board of License Review, which issues and oversees liquor licenses in the Town of New Shoreham, requests an advisory opinion as to whether he may participate and/or vote on the Board’s consideration of liquor licensing matters given that his company, Block Island Sales Corporation, holds a liquor license issued by that municipality.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the Code of Ethics requires the petitioner, the New Shoreham First Warden, a municipal elected position, to recuse himself from participation and/or vote on any liquor licensing matters that come before him in his capacity as a member of the Board of License Review.

The petitioner advises that the New Shoreham Board of License Review is comprised of the First and Second Wardens and three Town Councilors-at-Large. The Board has responsibility for the issuance and supervision of liquor licenses within the Town. The petitioner indicates that his company, Block Island Sales Corporation, holds a liquor licensed issued by the previous Board. He represents that his practice as a member of the Board has been to recused from participating in the consideration of matters involving liquor licenses.

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. Substantial conflict is defined as a “direct monetary gain or a direct monetary loss” that accrues, by virtue of the public official’s activity, to that individual, a family member, a business associate, an employer, or any business which the public official represents. See R.I. Gen. Laws §§ 36-14-5(a), 7(a). The Code further provides that a public official or employee may not use his office to obtain financial gain other than as provided by law. See R.I. Gen. Laws § 36-14-5(d).

The Commission has issued previous advisory opinions addressing the exact issues raised by the petitioner here. The Commission has advised members of town and city councils with interests in restaurants/liquor establishments that the law did not prohibit them from serving on the town or city council and, generally, from considering matters relating to the zoning or licensing of restaurants and bars. The Commission further has advised, however, that when an issue came before the council involving a competing business that was in reasonably close proximity to the official’s own, or that otherwise directly impacted the business in which the official had an economic interest, recusal was required in accordance with R.I. Gen. Laws § 36-14-6. See, e.g., A.O. 99-9 (advising a member of the Narragansett Town Council who owns a restaurant holding a liquor license that he should not participate in matters that directly affect his business and further advising that a direct impact is presumed for any establishment within a close proximity to or otherwise in direct competition with his restaurants); A.O 96-70 (requiring a member of the Newport City Council and the Board of License Commissioners who owns a restaurant holding a liquor license to recuse himself from zoning or licensing matters that concern competitors); A.O. 96-24 (recognizing that an Alternate Member of the Newport Zoning Board of Review who is part owner and operator of a hotel and landlord to a restaurant and dance club, may not participate in matters affecting other hotels or matters affecting restaurant, dance clubs, or bed and breakfasts that are located within 500 feet of the petitioner’s businesses); A.O. 94-24 (concluding that the Mayor, as a member of the Board of Licenses Commission and as a part-owner of a family business holding a liquor license, should not participate in decisions involving his family’s competitors); A.O. 91-41 (recommending that a Bristol Town Councilor who was also a liquor sales person should not participate in matters concerning liquor licensing given that the Councilor’s employer would likely suffer a direct monetary gain or direct monetary loss by reason of his official activity). See also A.O. 98-151.

The Commission concludes that the Code of Ethics prohibits the petitioner from participating and/or voting in the Board of License Review’s consideration of liquor licensing matters within the Town of New Shoreham. Here, given the limited and defined size of the municipality at issue, it is reasonably foreseeable that matters regarding the issuance and/or supervision of liquor licenses within the Town may have a direct financial impact upon the petitioner’s company, as well as a financial impact upon its competitors. Accordingly, the petitioner should recuse from participating and voting on any liquor licensing matters which appear before him as a member of the Board of Review and Licensing. Notice of recusal should be filed with both the Ethics Commission and the Town of New Shoreham in accordance with R.I. Gen. Laws § 36-14-6. Finally, the petitioner is reminded that he is prohibited from appearing before the Board of License Review on behalf of his company while he serves on the Board and for a period of one year after his term expires unless a hardship exception is granted by the Ethics Commission. R.I. Gen. Laws 36-14-5(e).

Code Citations:

36-14-5(a)
36-14-5(d)
36-14-5(e)
36-14-6
36-14-7(a)

Related Advisory Opinions:

99-72
99-59
99-9
99-8
98-151
98-131
98-123
98-111
98-10
97-7
96-101
96-81
96-70
96-24
94-24
92-65
92-20
92-19
91-41

Keywords:

Business Interest
Competitor(s)
Financial Interest
Licensing