Advisory Opinion No. 2013-26 Re: Naomi Neville QUESTION PRESENTED The Petitioner, a member of the Newport City Council, a municipal elected position, requests an advisory opinion regarding whether the Code of Ethics prohibits her from participating in City Council matters involving the Newport Yacht Club, given that her husband is an individual member of the Newport Yacht Club. RESPONSE It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the Newport City Council, a municipal elected position, is not prohibited by the Code of Ethics from participating in City Council matters involving the Newport Yacht Club, notwithstanding that her husband is an individual member of the Newport Yacht Club, provided that there are no other facts or circumstances that would otherwise create a conflict of interest. The Petitioner is a member and Vice Chairperson of the Newport City Council (“City Council”), having been first elected in November 2010. She states that a resolution came before the City Council on July 24, 2013, regarding the Newport Yacht Club’s (“Yacht Club”) lease of municipal property. She informs that the City Council instructed City staff to research the terms of the current lease and the nature of the property improvements made by the Yacht Club for discussion at a future City Council meeting. She represents that the Yacht Club has been leasing land from the City of Newport (“City”) since at least 1963. She states that the Yacht Club consists of a clubhouse, a restaurant and sailing facilities, and it provides dockage and mooring services to its members and offers sailing lessons to its members and the public. The Petitioner represents that she recused from participating in the City Council’s consideration of this matter because her husband is an individual member of the Yacht Club and pays annual dues to the Yacht Club. She states that her husband is not an officer or a member of the Board of Directors, he has never served on any Yacht Club committee, and he does not use the dockage or mooring facilities. She informs that she does not use the services of the Yacht Club other than occasionally taking their children to the annual Christmas party. Given the above representations, the Petitioner seeks advice as to whether she can participate in upcoming City Council matters related to the Yacht Club’s municipal lease. She states that she expects the matter to be placed on the agenda in the fall after the staff has had time to gather the requested information. Under the Code of Ethics, a public official may not participate in any matter in which she has an interest, financial or otherwise, that is in substantial conflict with the proper discharge of her duties or employment in the public interest. R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest exists if an official has reason to believe or expect that she, any person within her family, a business associate or an employer will derive a direct monetary gain or suffer a direct monetary loss by reason of her official activity. Section 36-14-7(a). The Code also prohibits a public official from using her public office or confidential information received through her public office to obtain financial gain for herself, her family, her business associate, or any person by which she is employed or whom she represents. Section 36-14-5(d). Under the Code of Ethics, a business associate is defined as “a person joined together with another person to achieve a common financial objective.” Section 36-14-2(3). A person is defined as “an individual or a business entity.” Section 36-14-2(7). The Commission has stated that persons are “business associates” of the entities for which they serve as either officers or members of the Board of Directors, or in some other leadership position that permits them to affect the financial objectives of the organization. See e.g. A.O. 2012-28 (opining that a Tiverton Planning Board member, who was also a member of the Board of Directors of the Tiverton Yacht Club (“TYC”), was a business associate of the TYC and, therefore, was required to recuse from participating in the Planning Board’s consideration of a proposed amendment to the Tiverton Zoning Ordinance as requested by the TYC). In contrast, the Commission has generally held that mere membership in an organization, as opposed to the holding of a position as a director, officer, or other position of leadership, does not create a business association requiring recusal. See A.O. 2009-39 (opining that the Barrington Town Planner’s general membership in the Bayside Family YMCA (“YMCA”), where he did not serve in any leadership position, did not constitute a business associate relationship with the YMCA and, thus, he was permitted to participate in Barrington’s review of the YMCA development proposal and plans). Similarly and particularly relevant to the instant matter is Advisory Opinion 2007-53, in which the Commission considered whether general membership in the Newport Yacht Club constituted a business association. The Commission opined that a member of the Newport Waterfront Commission, who was also a general member of the Yacht Club, with no greater power or privileges than any other ordinary members of the Yacht Club, was not a business associate of the Yacht Club. Therefore, the petitioner was not prohibited by the Code of Ethics from participating in the Newport Waterfront Commission’s consideration of a mooring fee increase. Here, as in Advisory Opinion 2007-53, the Petitioner’s husband is an individual member of the Yacht Club, with no greater power or privileges than any other ordinary members of the Yacht Club. She further represents that he is not a member of the Board of Directors and has never served on any Yacht Club committees. Accordingly, the Petitioner’s husband’s individual membership in the Yacht Club does not constitute a business associate relationship as that term is defined by the Code of Ethics. For all of these reasons, it is the opinion of the Ethics Commission that the Petitioner is not prohibited by the Code of Ethics from participating in City Council matters involving the Newport Yacht Club, notwithstanding that her husband is an individual member of the Newport Yacht Club. Code Citations: § 36-14-2(3) § 36-14-2(7) § 36-14-5(a) § 36-14-5(d) § 36-14-7(a) Related Advisory Opinions: A.O. 2012-29 A.O. 2012-28 A.O. 2010-25 A.O. 2009-39 A.O. 2007-53 Keywords: Business Associate Family Memberships