Advisory Opinion No. 2019-63 Rhode Island Ethics Commission Advisory Opinion No. 2019-63 Approved: October 29, 2019 Re: Richard Epstein QUESTION PRESENTED: The Petitioner, the Vice-Chairman of the Rhode Island Real Estate Commission, a state appointed position, requests an advisory opinion regarding: 1) whether the Code of Ethics prohibits him from becoming a qualified school instructor, given that his School Instructor Application, along with his resume, will be reviewed by the Rhode Island Real Estate Commission as part of his private employer’s Real Estate Course Application; and 2) what restrictions, if any, the Code of Ethics places on him regarding his participation in the Real Estate Commission’s review and/or approval of Real Estate Course Applications submitted by other entities. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, the Vice-Chairman of the Rhode Island Real Estate Commission, a state appointed position, is not prohibited by the Code of Ethics from becoming a qualified school instructor, notwithstanding that his School Instructor Application, along with his resume, will be reviewed by the Rhode Island Real Estate Commission as part of his private employer’s Real Estate Course Application. Further, the Petitioner is not required to recuse from matters involving the approval of Real Estate Course Applications submitted by other schools which are not in close proximity to the public official or his employer’s business, or where the two businesses are otherwise not in competition. The Petitioner is the Vice-Chairman of the Rhode Island Real Estate Commission (“REC”), a nine-member entity within the Department of Business Regulation charged with the review and approval of applications for real estate school licenses, real estate course applications submitted by real estate schools, and school instructor applications. The Petitioner represents that, in his private capacity, he is a real estate agent and a salaried employee with Residential Properties Ltd. (“Residential”) who provides in-house training to other Residential real estate agents. The Petitioner states that he holds a broker’s license and has been working for Residential for the past 20 years. The Petitioner further states that Residential is expected to apply to the REC for a license to open a real estate school with the initial focus on providing sales representative pre-licensing classes. He explains that, in order to provide the sales representative pre-licensing classes, Residential is also submitting a Real Estate Course Application which includes a detailed course timeline; course materials; copies of tests or examinations administered; qualified instructor names; instructor application, if the instructor was not previously approved; and instructor’s resume. The Petitioner further explains that he was asked by Residential to teach the pre-licensing class along with two or three other instructors. Because the Petitioner has not been previously approved as a qualified instructor, he is required to submit a School Instructor Application, along with a resume, for approval by the REC as part of the Residential’s Real Estate Course Application.[1] The School Instructor Application requires an applicant to provide information regarding the school and the course(s) the applicant wishes to teach; the applicant’s qualifications; and a resume. The Petitioner represents that he does not have to appear before the REC regarding the approval of his School Instructor Application, adding that there is no cap on the number of approved school instructors in Rhode Island and that his salary relative to providing in-house training will not change if he becomes a qualified instructor at the Residential’s real estate school. The Petitioner states that he will recuse from participating in the REC review and approval of his employer’s Real Estate Course Application. He further states that the Real Estate Course Applications and documents submitted along with them are public records available for review by any interested person. Given this set of facts, the Petitioner requests guidance from the Ethics Commission regarding whether the Code of Ethics prohibits him from becoming a qualified school instructor, given that his School Instructor Application, along with his resume, will be reviewed by the Rhode Island Real Estate Commission as part of his private employer’s Real Estate Course Application. He also asks what restrictions, if any, the Code of Ethics places on him regarding his participation in REC review and/or approval of Real Estate Course Applications submitted by other entities. The Code of Ethics prohibits a public official from representing himself or any other person before any state or municipal agency of which he is a member or by which he is employed. R.I. Gen. Laws § 36-14-5(e)(1); Commission Regulation 520-RICR-00-00-1.1.4 Representing Oneself or Others, Defined (36-14-5016). This prohibition applies while the public official is employed by the agency and for one year thereafter. Section 36-14-5(e)(4). The definition section of the Code of Ethics provides that a person represents himself before a state or municipal agency if “he [] participates in the presentation of evidence or arguments before that agency for the purpose of influencing the judgment of the agency in his own favor.” Section 36-14-2(12). Additionally, the Code of Ethics prohibits a public official from using his public office or confidential information received though his public office to obtain financial gain, other than that provided by law, for himself or any person within his family, his business associate or any business by which he is employed or represents. Section 36-14-5(d). Also, the Code of Ethics prohibits a public official from participating in any matter in which he has an interest, financial or otherwise, that is in substantial conflict with the proper discharge of his duties or employment in the public interest. Section 36-14-5(a). A public official will have an interest in substantial conflict with his official duties if he has reason to believe or expect that a “direct monetary gain” or a “direct monetary loss” will accrue, by virtue of the official’s activity, to himself, his family member, his business associate, or any business by which the official is employed or represents. Section 36-14-7(a). Finally, a public official must recuse from participation when his employer appears or presents evidence or arguments before his state agency. Commission Regulation 520-RICR-00-00-1.2.1(A)(2) Additional Circumstances Warranting Recusal (36-14-5002). Applying the above-cited provisions of the Code of Ethics, the Petitioner is prohibited from representing himself or others, including his private employer, or acting as an expert witness, before the REC. However, the Ethics Commission must consider whether the review of the Petitioner’s School Instructor Application, along with his resume, by the REC as part of his private employer’s Real Estate Course Application constitutes representing himself for the purposes of section 36-14-5(e) of the Code of Ethics. Most relevant to the instant matter is Advisory Opinion 2009-24, in which the Ethics Commission was presented with facts nearly identical to those presented here. In that advisory opinion, a former state employee who served as legal counsel to the REC was allowed to accept a part-time instructor position with the Rhode Island Association of Realtors (“RIAR”), notwithstanding the fact that all such instructors must be approved as qualified by the REC. The petitioner’s resume was forwarded by RIAR to REC along with a letter setting forth the petitioner’s qualifications. The REC then reviewed the petitioner’s qualifications and voted to approve him as a qualified instructor. The petitioner did not have any interactions with REC and did not represent himself or RIAR before REC. The Ethics Commission concluded that the examination of the petitioner’s resume for instructor approval did not constitute representing himself for purposes of section 36-14-5(e)(4). Similarly, here the Petitioner represents that he will have no interactions with his own agency, the REC, relative to his application. Further, the Petitioner states that he fulfills all requirements relative to the approval of school instructors. Accordingly, based on the above representations, and consistent with the above-cited Advisory Opinion 2009-24, it is the opinion of the Ethics Commission that inclusion of the Petitioner’s School Instructor Application and resume as part of his employer’s Real Estate Course Application, and the review of such application and resume by the REC, do not constitute representing himself for the purposes of the Code of Ethics. The Petitioner is required, however, to recuse from participating in REC discussions and decision-making relative to his employer’s Real Estate Course Application, as well as the School Instructor Applications submitted by the Petitioner or other instructors who teach or will be teaching classes for his employer’s school. The Petitioner is further required to recuse from matters in which his employer or his employer’s representative appears to present evidence or arguments on behalf of his employer or is a party or participant in the matter. The Petitioner may not use any confidential information he obtained while working for the REC for financial gain. Section 36-14-5(b), (c) & (d). The Petitioner is prohibited from participating in REC matters relative to the establishment of school instructor caps, since any official action taken by the Petitioner in such matters would have a direct financial impact on himself and/or his employer. See A.O. 2006-9 (opining that a member of the New Shoreham Town Council was prohibited from participating in the Town Council’s review of a Class A alcoholic beverage license, given that his landlord was a holder of one of only two licenses in the Town, and from participating in establishing alcoholic beverage license caps for either Class A or Class B alcoholic beverage licenses, given his landlord/tenant relationship with a Class A alcoholic beverage license holder and his employment relationship with a Class B alcoholic beverage holder). Notice of recusal shall be filed in accordance with section 36-14-6. Lastly, the Ethics Commission will address the Petitioner’s concerns relative to his ability to participate in REC review and/or approval of Real Estate Course Applications submitted by other entities. The Ethics Commission has previously opined that a public official is required to recuse himself from participation and/or vote on any matter in which he or his employer has a business or financial interest or which involves the financial interests of his or his employer’s direct competitor that is in reasonably close proximity to the official or his employer’s business. See, e.g., A.O. 2017-32 (opining that a Newport Planning Board member was required to recuse from participation in matters before the Planning Board involving hotels or other short-term rental properties that were in close proximity to, or direct competition with, the boutique hotel she was helping to develop); A.O. 2004-38 (opining that a member of New Shoreham Town Council, who worked at a restaurant with a liquor license, was requires to recuse on any liquor licensing matters that were likely to result in a direct financial impact upon his employer or on its direct competitors, as such matters were also likely to financially impact the petitioner’s employer); A.O. 2002-23 (opining that a CRMC member who was an owner of Brown & Howard Wharf Marina on Newport Harbor could not participate in CRMC matters pertaining to Waites Wharf, a competitor within 1,500 feet of the petitioner’s property); A.O. 99-9 (opining that a Narragansett Town Councilor who owned a restaurant holding a liquor license could not participate in matters directly affecting his business, and further advising that a direct financial impact was presumed in matters involving establishments within a close proximity to or otherwise in direct competition with his restaurant); A.O. 96-24 (recognizing that an Alternate Member of the Newport Zoning Board of Review who was part owner and operator of a hotel and landlord to a restaurant and dance club, could not participate in matters affecting other hotels or matters affecting restaurants, dance clubs, or bed and breakfasts that were located within 500 feet of the petitioner’s businesses). However, the Commission has also opined that recusal is not required from matters involving similar businesses which are not in close proximity to the public official or his employer’s business, or where the two businesses are otherwise not in competition. See A.O. 2004-13 (opining that a Scituate Town Councilor who leased his property to persons running a family restaurant with a Class BV liquor license could participate in the Town’s issuance of a Class C liquor license for a saloon located three miles from the Councilor’s property); A.O. 2000-62 (opining, inter alia, that Providence Tourism Council Deputy Director, also a minority stockholder in a Providence restaurant, could participate in matters involving the restaurant industry in Providence, or individual members of that industry, provided that such matters did not directly impact his restaurant and/or his personal financial interests). Accordingly, based on the above representations and the review of prior advisory opinions, it is the opinion of the Ethics Commission that the Petitioner is not required to recuse from matters involving the approval of Real Estate Course Applications submitted by other schools which are not in direct competition with the public official or his employer’s business, such that either the Petitioner or his employer’s business would be directly financially impacted as a result of any action taken by the Petitioner in his official public capacity. The Ethics Commission can only provide general guidance relative to his participation in matters involving the approval of Real Estate Course Applications submitted by other schools. Therefore, the Petitioner is advised to seek further guidance from the Ethics Commission as specific issues arise. 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: § 36-14-2(12) § 36-14-5(a) § 36-14-5(b) § 36-14-5(c) § 36-14-5(d) § 36-14-5(e) § 36-14-6 § 36-14-7(a) 520-RICR-00-00-1.1.4 Representing Oneself or Others, Defined (36-14-5016) 520-RICR-00-00-1.2.1(A)(2) Additional Circumstances Warranting Recusal (36-14-5002) Related Advisory Opinions: A.O. 2017-32 A.O. 2009-24 A.O. 2006-9 A.O. 2004-38 A.O. 2004-13 A.O. 2002-23 A.O. 2000-62 A.O. 99-9 A.O. 98-111 A.O. 96-24 Keywords: Private Employment