Advisory Opinion No. 2004-27

Re: The Honorable Leo R. Blais

QUESTION PRESENTED

The petitioner, a member of the Rhode Island Senate, a state elected position, requests an advisory opinion to determine what limitations are placed on his ability to participate and vote on legislation relating to healthcare and pharmacies, given that he is privately employed as a pharmacist and is the owner of the Pawtuxet Valley Prescription and Surgical Center.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the petitioner, a member of the Rhode Island Senate, a pharmacist and owner of the Pawtuxet Valley Prescription and Surgical Center, may participate and vote on legislation relating generally to healthcare and pharmacies in instances where neither the petitioner, nor the Center could reasonably expect to derive a direct monetary gain or suffer a direct monetary loss. In instances where such a financial impact is reasonably foreseeable, the petitioner may not participate and vote on legislation relating to healthcare and pharmacies unless a section 7(b) exception applies.

The petitioner informs that he is a state senator representing District 24, which includes Coventry, Scituate and Foster. The petitioner represents that he is a pharmacist in his private employment. The petitioner represents that he is the President and owner of the Pawtuxet Valley Prescription and Surgical Center (Center). On its website, the Center is described as “a multi-faceted, vertically integrated medical care, product, prescription and service provider.” The petitioner informs that the Center is comprised of an infusion care division, a durable medical equipment department and a retail pharmacy. Apothecare, a subset of the Center’s retail pharmacy, is a laboratory with compounding facilities capable of developing customized mixtures from all available pharmaceuticals and other chemicals. According to the petitioner, the Center’s clients include individuals, hospitals, nursing homes, hospice facilities, out-patient clinics, group homes and a variety of other medical service providers and institutions. In light of the petitioner’s private profession and business interests, he wants to know to what extent he may participate and vote on legislation relating generally to healthcare and pharmacies.

Under the Code of Ethics, no public official shall in any way use his public office or confidential information received through his holding any public office, to obtain financial gain, other than that provided by law, for himself, a family member, any business associate, an employer or any business which he represents. See R.I. Gen. Laws § 36-14-5(d). In addition, 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 and employment in the public interest. See R.I. Gen. Laws § 36-14-5(a). A “substantial conflict” is present where a public official, a family member, a business associate, an employer, or any business which the public official represents will derive a direct monetary gain or suffer a direct monetary loss by reason of the official’s activity. See R.I. Gen. Laws § 36-14-7(a). The financial impact described in section 7(a) need not be certain to occur, but only “reasonably foreseeable.” See Commission Regulation 7001. Section 7(b) outlines two exceptions to the substantial conflict rule: (1) where a public official, a family member, a business associate, an employer or any business which the public official represents would accrue a benefit or detriment as a member of a business, profession, occupation or group “to no greater extent than any other similarly situated member” and (2) where such person or business would accrue a benefit or detriment as a member of a “significant and definable” class or subgroup within the business, profession, occupation or group “to no greater extent than any other similarly situated member.”

In determining whether a substantial conflict exists, the Commission must consider whether a public official, a family member, a business associate, an employer or any business which the public official represents, would derive a direct monetary gain or suffer a direct monetary loss by reason of the official’s activity. See R.I. Gen. Laws § 36-14-5(a) and 7(a). If no substantial conflict exists, then the public official may participate in the matter at issue. See, e.g., A.O. 2002-5 (opining that the petitioner, a member of the State Senate and a part-time nurse at the Cranston Senior Center, could participate and vote on legislation relating to the City of Cranston’s pension fund since he could not reasonably expect to be financially impacted by the legislation at issue); A.O. 96-71 (opining that the petitioner, a member of the State Senate and a private insurance agent, could participate and vote on legislation regulating the sale of insurance by banks since he could not reasonably expect to be financially impacted by the legislation at issue).

If a substantial conflict seems apparent, then the Commission must consider whether either of the two exceptions outlined in Section 7(b) apply. Would the official, his family member, business associate, employer or any business which he represents accrue a benefit or detriment as a member of a business, profession, occupation or group to no greater extent than any other similarly situated member? Under this exception, no substantial conflict exists where an entire industry is impacted equally. See, e.g., A.O. 98-40 (opining that the petitioner, a member of the State House of Representatives and the spouse of a dentist, could participate and vote on legislation relating to the practice of dentistry since the legislation at issue affects all dentists within Rhode Island to the same extent); A.O. 98-14 (opining that the petitioner, a member of the State House of Representatives and owner of a restaurant which serves alcohol, could vote on legislation relating to the legal alcohol limit since the legislation at issue affects all members of the restaurant, bar and hospitality industry to the same extent).

Whereas the first exception set forth in section 7(b) is absolute, the second exception is a qualified one and only applies where the proposed subgroup is “significant and definable.” In determining whether a proposed subgroup is sufficiently “significant and definable,” the Commission considers the totality of the circumstances, including, but not limited to: (1) the description of the class or subclass; (2) the size of the class; (3) the function or official action being contemplated by the public official; and (4) the nature and degree of foreseeable impact upon the class and its individual members as a result of the official action. A.O. 2003-57; see, e.g., A.O. 97-75 (opining that an employee subgroup of 85 members within a single division of DEM was not sufficiently “significant and definable”); A.O. 97-65 (opining that an employee subgroup of 45 members of a single school system was not sufficiently “significant and definable”).

In the instant matter, the petitioner seeks guidance as to his ability to participate and vote on any and all legislation relating to healthcare and pharmacies that potentially could arise before the Senate. For illustrative purposes, the petitioner attached 18 Senate bills to his request for an advisory opinion. These various bills relate to healthcare, medical insurance, drug pricing and pharmacies. Given the spectrum of services provided by the Center and the numerous classes impacted by the proposed legislation, the Commission cannot issue a blanket statement regarding the effect such bills might have on the Center and/or the petitioner.

Before participating in the Senate’s consideration of any legislation relating to healthcare and/or pharmacies, the Commission advises the petitioner to consider whether a substantial conflict exists under sections 5(a) and 7(a) (i.e., whether the petitioner, his family member, business associate, employer or any business which he represents would derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity). If no substantial conflict exists, then the petitioner may participate in the Senate’s consideration of the subject legislation. If a substantial conflict seems likely, the petitioner must then consider whether either of the exceptions enumerated in section 7(b) apply. In order to qualify under the first exception, the legislation at issue must not impact the petitioner and/or the Center to any greater extent than any other such facility, facility owner or pharmacist within the health care industry. In the event the petitioner and/or the Center are deemed members of a subgroup within the health care industry, the respective subgroups must be sufficiently “significant and definable” in order to qualify under the second exception. If neither exception applies, then the petitioner must recuse from participation in the Senate’s consideration of the subject legislation in accordance with R.I. Gen. Laws § 34-14-6. Notice of recusal must be filed with the Ethics Commission and the Senate.

Code Citations:

36-14-5(a)

36-14-5(b)

36-14-5(d)

36-14-6

36-14-7(a)

36-14-7(b)

Related Advisory Opinions:

2003-57

2003-2

2002-5

99-63

98-84

98-59

98-40

98-14

97-21

96-91

96-71

95-71

95-54

GCA 13

Keywords:

Class Exception

Financial Interest

Private Employment

Business Interest