Advisory Opinion No. 2013-38 RHODE ISLAND ETHICS COMMISSION Advisory Opinion No. 2013-38 Approved: November 19, 2013 Re: Patrick A. Guida, Esq. QUESTION PRESENTED: The Petitioner, a member of the Rhode Island Board of Education, a state appointed position, requests an advisory opinion regarding whether the Petitioner’s business associate, Duffy & Sweeney, LTD, is prohibited by the Code of Ethics from being engaged by the Rhode Island Department of Elementary and Secondary Education as outside legal counsel. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner’s business associate, Duffy & Sweeney, LTD, is not prohibited by the Code of Ethics from being engaged by the Rhode Island Department of Elementary and Secondary Education as outside legal counsel. The Petitioner is a member and the Vice-Chair of the Rhode Island Board of Education (“BOE”), having been appointed in January 2013.[1] He previously served on the Rhode Island Board of Regents for Elementary and Secondary Education from 2001 through 2012. He represents that the BOE has supervisory powers over the Rhode Island Department of Elementary and Secondary Education (“RIDE”) and the Rhode Island Office of Higher Education. He states that the BOE hires the Commissioner of Education for RIDE (“Commissioner”) and delegates to the Commissioner the authority to hire and manage RIDE’s staff. In his private capacity, the Petitioner states that he is a contract partner at the law firm of Duffy & Sweeney, LTD (“Duffy & Sweeney”). He represents that he is not a shareholder of Duffy & Sweeney and holds no equity interest therein. He informs that he was recently informed by David Abbott, Esq., who is both the Deputy Commissioner and General Counsel for RIDE, that RIDE would like to hire Charles T. Schmidt, Esq., to assist in a legal matter involving a contract with a technology vendor. The Petitioner states that Mr. Schmidt is also a contract partner at Duffy & Sweeney. He informs that Mr. Abbott selected Mr. Schmidt because of his extensive experience in technology law and intellectual property law. He states that the BOE does not participate in RIDE’s selection or hiring of outside legal counsel and that neither he nor the BOE have had any involvement in the selection of Mr. Schmidt for this particular matter. He further represents that it is unlikely that RIDE will bring this contract matter before the BOE. Cognizant of the Code of Ethics, the Petitioner informs that, if Mr. Schmidt and Duffy & Sweeney are engaged by RIDE, he would have no involvement in the provision of any legal services to RIDE. He also states that his individual compensation would not be impacted because he is not a shareholder of Duffy & Sweeney and he would not receive any share of the compensation paid by RIDE for the services rendered by other attorneys at his law firm. He further represents that he will recuse from participating in any matter in which an attorney from Duffy & Sweeney appears before the BOE or any matter that could financially impact Duffy & Sweeney. Under the Code of Ethics, a public official is prohibited from using his public office or confidential information received through his public office to obtain financial gain for himself, his family, his business associate, or any person by which he is employed or whom he represents. R.I. Gen. Laws § 36-14-5(d). A “business associate” is defined as any individual or business entity joined together with a public official “to achieve a common financial objective.” Section 36-14-2(3) & (7). Additionally, a public official must recuse himself from participation when his business associate or employer appears or presents evidence or arguments before his state or municipal agency. Commission Regulation 36-14-5002(a)(2) (“Regulation 5002”); R.I. Gen. Laws § 36-14-5(f). Finally, a public official shall not have any interest, financial or otherwise, or engage in any business, employment, transaction or professional activity, or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his duties or employment in the public interest. Section 36-14-5(a). A substantial conflict of interest exists if an official has reason to believe or expect that he, any person within his family, a business associate or an employer will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. Section 36-14-7(a). In the present matter, the Petitioner is a business associate of Duffy & Sweeney and, therefore, he is required to recuse from BOE matters in which an attorney from Duffy & Sweeney appears, as well as any BOE matters that may have a financial impact upon Duffy & Sweeney. According to the Petitioner’s above representations, however, it is unlikely that an attorney from Duffy & Sweeney will appear before the BOE in connection with the contract matter involving RIDE. Furthermore, the Petitioner states that neither he nor the BOE had any influence, involvement or decision-making authority relative to the selection of Duffy & Sweeney for this matter. The Petitioner states that he will not participate in Duffy & Sweeney’s provision of legal services to RIDE and that he will derive no financial benefit from the provision of such services as he is not a shareholder in the law firm. See A.O. 2011-46 (opining, inter alia, that a partner in a law firm in which a Providence City Council member was “of counsel” could serve as a hearing officer for the Providence School Department, given that any compensation paid by the City to the hearing officer would not be shared with the petitioner and the hearing officer would not be appearing before the City Council). For all of these reasons, it is the opinion of the Ethics Commission that the Petitioner’s business associate, Duffy & Sweeney, is not prohibited by the Code of Ethics from being engaged by RIDE as outside legal counsel provided that: the Petitioner was not involved in RIDE’s selection of Duffy & Sweeney; he is not involved in the provision of services to RIDE; he does not receive a financial benefit from Duffy & Sweeney’s provision of services to RIDE; and he recuses from participating in any matter in which an attorney from Duffy & Sweeney appears before the BOE or any BOE matter that could financially impact Duffy & Sweeney. Notice of recusal shall be filed in accordance with § 36-14-6. Code Citations: § 36-14-2(3) § 36-14-2(7) § 36-14-5(a) § 36-14-5(d) § 36-14-5(f) § 36-14-7(a) § 36-14-6 Commission Regulation 36-14-5002 Related Advisory Opinions: A.O. 2011-46 Keywords: Business Associate Private Employment This Advisory Opinion is strictly limited to the facts stated herein and relates only to the application of the Rhode Island Code of Ethics. Under the Code of Ethics, advisory opinions are based on the representations made by, or on behalf of, a public official or employee and are not adversarial or investigative proceedings. Finally, this Commission offers no opinion on the effect that any other statute, regulation, ordinance, constitutional provision, charter provision, or canon of professional ethics may have on this situation. [1] The Rhode Island Board of Education was statutorily reconstituted as of January 1, 2013, and is vested with all the powers and duties of its two (2) predecessor boards: the Board of Governors for Higher Education and the Board of Regents for Elementary and Secondary Education. R.I. Gen. Laws §16-97-1.