Advisory Opinion No. 2019-37 Rhode Island Ethics Commission Advisory Opinion No. 2019-37 Approved: June 18, 2019 Re: John F. Ward QUESTION PRESENTED: The Petitioner, Finance Director for the Town of Lincoln, a municipal appointed position, requests an advisory opinion regarding what conflicts of interest exist under the Code of Ethics, if any, and what prohibitions or limitations are imposed upon him in carrying out his current duties, given that the Town has a customer relationship with The Valley Breeze newspaper, for which his brother works as an independent contractor. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, Finance Director for the Town of Lincoln, a municipal appointed position, may carry out his current duties without running afoul of the Code of Ethics, notwithstanding the fact that the Town has a customer relationship with The Valley Breeze newspaper, for which his brother works as an independent contractor, given the Petitioner’s representation that he has no discretionary decision-making authority as Finance Director that would allow him to use his position to benefit his brother’s financial interests. The Petitioner is the Finance Director for the Town of Lincoln and has held that position continuously since January of 2007.[1] According to Article VII, § C7-5 of the Town Charter for the Town of Lincoln, the duties and powers of the Director of Finance include, inter alia, the following: working with the Town Administrator and the Budget Board in compiling the expenditure and revenue estimates for the budget; collecting and receiving all taxes and special assessments as well as license fees, rents, funds, and moneys receivable by the town; maintaining custody of all public funds belonging to or under the control of the town; exercising control over all expenditures by pre-auditing all bills, invoices, payrolls or other claims or charges against the town, and seeing that budget appropriations are not exceeded by disbursements in any department, office or agency of the town; paying out funds by check, such payments being made only after authorization by the Town Council; prescribing and maintaining an accounting system for the town government; requiring reports of receipts and disbursements from each receiving and spending agency of the town; preparing a monthly statement of all receipts and disbursements in sufficient detail to show the financial condition of the town for submission to the Town Administrator and the Town Council; preparing a complete financial statement annually for submission to the Town Administrator, the Town Council and the taxpayers of the town; performing the work of buying for the town all supplies, materials, and equipment required by any department, office or agency of the town and establishing and enforcing specifications with respect to supplies, materials, and equipment. The Petitioner represents that the Town regularly places legal, employment, and display ads such as help wanted, zoning, meeting notices, and parks and recreation announcements in a variety of newspapers including The Providence Journal, The Pawtucket Times, The Woonsocket Call and The Valley Breeze; he further states that the Town’s relationships with these newspapers was well-established long prior to his appointment as Finance Director. He states that each individual department within the Town decides which paper to utilize for the various necessary purposes required and that each department has its own budget to do so. The Petitioner states that his role in this process is to ensure that the various departments of the Town stay within their budget limits and that that monies for services come from the correct account(s). The Petitioner further represents that he also processes and approves invoices for payment and the corresponding payments to vendors under his signature. The Petitioner states that he is not involved in the choice of what papers to contract with or with the placement of advertisements, but rather, that discretion lies solely with the individual departments of the town. He further states that all vouchers for payments to vendors are submitted to and approved by the Town Administrator and that payments and invoices are subjected to the scrutiny of the Town Council and require explicit approval by the Council at each monthly meeting. The Petitioner states that his brother is the former owner of the Valley Breeze newspaper, adding that the newspaper was sold to a third party of no relation to the Petitioner on May 23, 2019. He explains that his brother will continue to perform work for The Valley Breeze as an independent contractor on a full-time basis until November of 2019, and then will write opinion pieces and assist with the coordination of local events on a part-time basis until May of 2020. The Petitioner represents that, as an independent contractor, his brother will not share in the earnings of the newspaper nor will he be financially impacted by the amount of work the Town gives The Valley Breeze. Given these representations, the Petitioner seeks an advisory opinion as to whether there are any inherent conflicts of interest in his carrying out his duties as Finance Director for the Town, given the Town’s customer relationship with The Valley Breeze newspaper, for which his brother works as an independent contractor. Under the Code of Ethics, a public official 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. R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest occurs if he has reason to believe or expect that he or any family member or business associate, or any business by which he is employed, will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity. Section 36-14-7(a). A “person within his . . . family” includes the official’s brother. Commission Regulation 520-RICR-00-00-1.3.1(A)(1) Prohibited Activities – Nepotism (36-14-5004) (“Regulation 1.3.1”). A public official is also prohibited from using his position or confidential information received through his position to obtain financial gain, other than that provided by law, for himself, a family member, business associate, or any business by which he is employed or represents. Section 36-14-5(d). The general nepotism prohibitions of Regulation 1.3.1 (B)(1) provide that a public official shall not participate in any matter as part of his public duties if he has reason to believe or expect that any person within his family is a party to or a participant in such matter or will derive a direct monetary gain or suffer a direct monetary loss. In 2008, the Commission issued Advisory Opinion 2008-17 to this Petitioner. At that time, the Petitioner’s duties as Financial Director were identical to those listed above, and the Petitioner’s brother was a majority owner of The Valley Breeze. The Petitioner represented in 2008 that, while the position of Finance Director involved the use of discretionary powers and actions, the Petitioner’s duties regarding the Town’s customer relationship with The Valley Breeze did not, adding that he had no part in the decision-making process as to which newspapers the Town contracted with or for what purpose. He described his involvement as being limited to a financial review to ensure that adequate funds existed within the proper account to pay for the services, coupled thereafter with the processing of payment vouchers which had to be further approved by the Town Administrator and the Town Council. Because those actions were deemed ministerial only and did not involve the Petitioner exercising any discretionary authority that could affect the financial interests of his brother as the owner of The Valley Breeze, the Commission opined that the Petitioner’s duties as Finance Director did not present any conflicts of interest.[2] Here, the Petitioner seeks further guidance from the Commission based on the change in circumstances of his brother no longer being an owner of The Valley Breeze, but remaining on as an independent contractor until May of 2020. The Petitioner is held to the same standard today with respect to his duties as Finance Director and the Town’s customer relationship with The Valley Breeze as he was in 2008, and the advisory opinion upon which the Commission relied in 2008 is no less germane. See A.O. 2003-69 (opining that a Mail Ballot Clerk for the City of East Providence Board of Canvassers, whose position as Mail Ballot Clerk was ministerial only and did not involve exercising any discretionary authority that could affect the candidacy of her spouse, a potential candidate for a seat on the East Providence City Council, was not in a position to use her position to benefit her spouse, but should exercise diligence in identifying any actions that she might be asked to take that would involve discretionary authority as to the election process and should recuse herself from participation on any matters relating to, or affecting the candidacy of, her spouse and/or other City Council candidates). Because the role of the Petitioner’s brother has transitioned from owner to independent contractor for The Valley Breeze, the relationship between the Petitioner’s brother and the newspaper is less involved that it was in 2008. Because the Petitioner’s brother, who once shared in the earnings of The Valley Breeze as its owner is now compensated as an independent contractor, the Petitioner would have even less opportunity to use his position to financially benefit his brother were his duties as to the Town’s payments to The Valley Breeze more than ministerial. The Petitioner represents that his duties as Finance Director have not changed since 2008. He further represents that the Town’s customer relationship with the Valley Breeze and the Petitioner’s role in that relationship also have not changed since 2008. For these reasons, the Petitioner’s duties in that regard are still ministerial. Accordingly, the Petitioner is not prohibited by the Code of Ethics from carrying out his current duties as Finance Director as pertains to the Town’s customer relationship with The Valley Breeze, notwithstanding that his brother works as an independent contractor for that newspaper. 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. Code Citations: § 36-14-5(a) § 36-14-5(d) § 36-14-7(a) 520-RICR-00-00-1.3.1 Prohibited Activities – Nepotism (36-14-5004) Related Statutory Provisions: Article VII, § C7-5 of the Town Charter for the Town of Lincoln Related Advisory Opinions: A.O. 2008-17 A.O. 2003-69 Keywords: Family Financial Interest [1] The Petitioner is also presently a member of the Woonsocket City Council, a municipal elected position. He explains in his letter seeking this advisory opinion that, as such, he has recused from all matters related, either directly or tangentially, to The Valley Breeze, and states that he intends to continue to do so until his brother’s work as an independent contractor for that newspaper ends in May of 2020. For that reason, the Petitioner has limited his request for this advisory opinion to matters arising only in his capacity as Finance Director for the Town of Lincoln. [2] The Petitioner was cautioned, however, that should his duties as Finance Director enlarge or change to include any discretionary decision-making role or authority in regard to the Town’s customer relationship with The Valley Breeze, or any other newspaper with which the Town contracted for services, he should either recuse from participation in such action and/or request further guidance from the Commission.