Advisory Opinion No. 2005-5 Re: Peter W. Corr QUESTION PRESENTED: The petitioner, the Vice Chairman of the Tiverton Planning Board, a municipal appointed position, requests an advisory opinion as to whether he may participate and vote in the Planning Board’s determination of a major land development request made by New England Development, given the fact that the petitioner and New England Development have an existing purchase option agreement concerning property owned by petitioner. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the petitioner, the Vice Chairman of the Tiverton Planning Board, a municipal appointed position, may not participate or vote on the request filed by New England Development given his status as a business associate of New England Development. The petitioner represents that he and his wife entered into a two (2) year purchase option agreement with New England Development (“NED”) on July 23, 2003 whereby NED has the right to purchase the petitioner’s property within a two (2) year period. The petitioner further represents that NED pays the petitioner $500 per month to keep the purchase option open until the expiration date on July 23, 2005. The petitioner describes his property as a three-quarter 3/4 acre parcel which is surrounded by a nineteen (19) acre parcel owned by a different party but also under agreement with NED. The petitioner advises that the nineteen (19) acre parcel borders a forty-four (44) acre lot which is the property that NED has filed a major land development request with the Planning Board. The petitioner also advises that he is an abutter to the project. Under the Code of Ethics, a public official may not participate 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. See R.I. Gen. Laws § 36-14-5(a). An official will have an interest in substantial conflict with his official duties if it is reasonably foreseeable that a "direct monetary gain" or a "direct monetary loss" will accrue, by reason of his official activity, to the official, a family member, a business associate, an employer or any business which the public official represents. See R.I. Gen. Laws § 36-14-7(a); Commission Regulation 36-14-6001. Furthermore, a public official may not use his or her public office to obtain financial gain, other than that provided by law, for himself or for any business associate. See R.I. Gen. Laws § 36-14-5(d). Additionally, a business associate of a person subject to the Code must advise the municipal agency of the nature of its relationship to said person and said person must recuse himself from participating or voting on the matter at issue. See R.I. Gen. Laws § 36-14-5(f). Applying these provisions, if NED is considered to be the petitioner’s “business associate” under the Code, the petitioner would be prohibited from participating in the Planning Board’s consideration of NED’s request. The Code defines “business associate” as a “person joined together with another person to achieve a common financial objective[.]” R.I. Gen. Laws § 36-14-2(3) (emphasis added). The term “person” is defined in the Code as “an individual or business entity[.]” R.I. Gen. Laws § 36-14-2(7). In past advisory opinions, the Commission has held that the buyer and seller in a real estate transaction are considered “business associates” under the Code of Ethics. See A.O. 2002-56 (petitioner and The Nature Conservancy are considered business associates under the Code of Ethics based upon their present rights and obligations pursuant to a promissory note and two unexpired purchase options); A.O. 98-18 (opining that a Zoning Board member must recuse from participating and voting on a petition by the American Legion, Post No. 15 regarding the conveyance of a land parcel, given that the he is the intended purchaser of said parcel). In the instant matter, petitioner and NED are similarly joined to achieve a common financial objective, to wit, the agreement and payments between NED and the petitioner to keep the option to purchase the petitioner’s property open for two (2) years or until July 23, 2005. Even assuming, arguendo, that the petitioner and NED are not considered business associates, the petitioner would still be prohibited from participating or voting in any official business that involves NED based upon his status as an abutter to the property at issue. In past opinions, the commission has applied a rebuttable presumption that a property owner will be financially impacted by official action concerning abutting property. See A.O. 2002-16; A.O. 2001-19; A.O. 2001-4; A.O. 2000-90; A.O. 99-148; A.O. 99-99; A.O. 98-92; A.O. 98-66; A.O. 98-56; A.O. 98-35; A.O. 98-19; A.O. 97-76; A.O. 97-63. Applying the presumption, the Commission frequently has stated that a public official may not participate in decisions concerning abutting property absent some evidence that official action would not affect the financial interests of the public official. Here, it seems reasonably foreseeable, if not likely, that major development by NED would result in a financial impact to abutting landowners. Consequently, the petitioner and NED are considered business associates under the Code of Ethics based upon their present rights and obligations pursuant to the purchase option that expires in 2005. Unless and until the option expires or is exercised, he and NED are considered active business associates. Moreover, the petitioner is considered an abutter to the property at issue. Accordingly, the petitioner is required to recuse from participation and vote in the Planning Board’s consideration of NED’s development requests. Notice of recusal should be filed with the Ethics Commission in accordance with R.I. Gen. Laws § 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) 36-14-6 36-14-6001 36-14-7(a) Related Advisory Opinions: 2002-63 2002-56 2002-30 2002-16 2001-19 2001-4 2000-90 99-148 99-99 98-92 98-66 98-56 98-35 98-19 98-18 97-76 97-63