Advisory Opinion No. 2007-28

Advisory Opinion No. 2007-28

Re: Stephen Olsen

QUESTION PRESENTED

The petitioner, the Director of the University of Rhode Island Coastal Resources Center (URI/CRC), a state agency, requests an advisory opinion as to whether the URI/CRC may accept a proposed donation from the O’Neill Properties Group to partially fund the URI/CRC’s development and implementation of the Aquidneck Island Special Area Management Plan (SAMP), in which O’Neill has a financial interest.

SUMMARY

It is the opinion of the Rhode Island Ethics Commission that the University of Rhode Island Coastal Resources Center (URI/CRC) may not accept and utilize a proposed donation from the O’Neill Properties Group to partially fund the URI/CRC’s development and implementation of the Aquidneck Island Special Area Management Plan (SAMP) given that O’Neill has proposed development projects in the subject area and therefore has a direct financial interest in the SAMP process.  The acceptance and utilization of the proposed donation under these circumstances constitutes an appearance of impropriety and would run afoul of the intent of Commission Regulation 5009.

B.DISCUSSION

1.Facts

The petitioner is the Director of the University of Rhode Island Coastal Resource Center (URI/CRC).  He informs that the O’Neill Properties Group (hereinafter “O’Neill”), a Pennsylvania-based real estate development firm, wishes to make a financial contribution of approximately three hundred thousand dollars ($300,000) to partially fund the development and implementation of the Aquidneck Island Special Area Management Plan (SAMP).  O’Neill owns land in Town of Portsmouth and within the proposed SAMP boundaries.  The proposed donation would be made to the URI Foundation, rather than directly to the URI/CRC.  The URI Foundation is a private, not-for-profit charitable foundation that receives and manages gifts.  The petitioner states that the proposed donation would specifically direct that the money be spent by the URI/CRC for the SAMP and other project areas.  He requests an advisory opinion as to the propriety of accepting funds from this developer to help finance the SAMP process.

The Rhode Island Coastal Resources Management Council (CRMC) is authorized under the federal Coastal Zone Management Act of 1972 to develop and implement Special Area Management Plans (SAMPs) to address specific regional issues.  These plans are ecosystem-based management strategies that are consistent with the CRMC’s legislative mandate to preserve and restore ecological systems.  The CRMC coordinates with local municipalities, as well as government agencies and community organizations, to prepare the SAMPs and implement the management strategies.

The CRMC has requested the URI/CRC to facilitate the SAMP process.  The CRMC and the URI/CRC will work with the towns of Middletown, Newport and Portsmouth to design a plan that encompasses the following: smart growth requirements set forth by the U.S. Environmental Protection Agency; buffers and setbacks to accommodate the expected mixed-use developments on the west side of the island; the transfer of federal land from the Navy that is consistent with CRMC regulations and SAMP guidelines; and possible water type changes for that side of Aquidneck Island that will reflect the expected change in use, as envisioned by the towns.

The development of the SAMP coincides with the U.S. Navy’s planned disposal of land on the west side. The SAMP will also incorporate many elements of the Aquidneck Island West Side Master Plan which was developed in 2005 by the Aquidneck Island Planning Commission, with the participation of local and state groups and agencies, including the CRMC.  The SAMP will have a significant public access component and will encourage the use of low-impact development techniques for redevelopment areas along the western side of the island.

The petitioner advises that URI/CRC has served as a neutral facilitator for the SAMP process for more than ten years, along with a wide range of public and private partners.  It has provided the Island with access to internationally-recognized coastal management expertise and the best available science to build the capacity of local decision makers and the community to protect and enhance coastal resources integral to the economic, environmental and social well-being and sustainability of the Island. 

The petitioner represents that URI/CRC will continue to assist the Island with its planning, with guidance from the Aquidneck Island Planning Commission’s West Side Master Plan Task Force.  The work has received funding from multiple sources that include federal funds from the National Sea Grant College Program, the CRMC, and private funding from the Prince Charitable Trust and van Beuren Charitable Foundation.  However, the funding is insufficient to fully cover implementation of the SAMP.  The petitioner advises that the contribution from O’Neill would fill a funding gap and enable the URI/CRC to make greater headway on implementing all aspects of the SAMP process, including paving the way for CRMC to develop its policy for Aquidneck Island growth centers. 

The petitioner informs that O’Neill has secured building permits for the Carnegie Abbey Villages for residential, golf course and other activities, and for a marina at Weaver Cove.  O’Neill has not received building permits for proposed developments at Weyerhaeuser and a land component at Weaver Cove.  He further states that, although O’Neill’s proposed development plans are fully compatible with the West Side Master Plan, it awaits CRMC’s policy on growth center development for the Island before it will proceed with any construction.  He indicates that funding from O’Neill is in no way related to the outcomes of the SAMP process. 

Based upon the initial review of the proposed plans, the petitioner expects that revised CRMC regulations will generally support the Town’s regulations, the AIPC Master Plan and the EPA document. The URI/CRC also anticipates that the revised regulations may require O’Neill to provide the following: 1) more visual and physical coastal public access than proposed; 2) increase hurricane preparedness; 3) apply vegetative storm water techniques, such as low impact development techniques; and 4) enhance their habitat protection effort. 

At the petitioner’s request, the URI/CRC’s US Programs Team leader, Jennifer McCann, provided the Commission with additional information.  The URI/CRC will develop the SAMP over a four year period, beginning in 2007, and submit it to the CRMC, which will accept, reject or alter the proposed SAMP at public hearing.  The CRMC will issue permits to O’Neill based upon the final, approved SAMP.  The amount of O’Neill’s proposed donation is derived from the total amount of permitting fees that the CRMC would waive based upon the percentage of the development proposal that inures to the public benefit.  O’Neill has expressed a desire to donate this amount to the URI/CRC to help finance the SAMP process.

Ms. McCann informs that the SAMP project has a budget of $876,000.  Of that amount, she estimates that 41% is for salaries and 27% for consultants.  O’Neill’s donation is not required to complete the SAMP and would not result in a shorter development period, but Ms. McCann advises that the funds would add value to the process.  Specifically, she indicates that additional funds would allow the URI/CRC to make its Aquidneck Island SAMP website more interactive, which would more fully educate the public and in turn provide for the development of better policies. 

 Additionally, the URI/CRC is privately funded and relies upon its fundraising efforts and contributions to raise monies for salaries.  Ms. McCann advises that the URI/CRC must raise approximately $100,000 for each of its full time equivalent employees.  There are nineteen (19) employees of the URI/CRC.  All six (6) members of the US Team, which will be developing the SAMP, are on “soft money.”  In theory, if there are insufficient funds remaining in a project to pay for a staff member’s salary, that staff member may be let go until additional funds are secured.  The URI/CRC has a fundraising goal of $1,300,000 to meet the $876,000 budget for the SAMP over the next four (4) years. 

Ms. McCann represents that the URI/CRC support staff would also dedicate an estimated total of six (6) months of the year to the SAMP.  Not all members of the US Team would be working on the SAMP full-time.  Assuming the donation is permissible under the Code of Ethics, Ms. McCaan indicates that it would be preferable to designate a portion of the donation to provide for salaries.  However, she acknowledged that it would be possible to designate O’Neill’s donation for use in non-salary areas.

2.Analysis

Pursuant to Commission Regulation 5009, no person subject to the Code of Ethics shall accept or receive any gift or other thing having a fair market value or actual cost that is greater than twenty-five dollars ($25), but in no case having an aggregate fair market value or aggregate actual cost greater than seventy-five dollars ($75) in any calendar year, including but not limited to gifts, loans, rewards, promises of future employment, favors or services, gratuities or special discounts, from a single “interested person,” without the interested person receiving lawful consideration of equal or greater value in return.  Commission Regulation 5009(b).  An “interested person” is defined as a person or a representative of a person or business “that has a direct financial interest in a decision that the person subject to the Code of Ethics is authorized to make, or participate in the making of, as part of his or her official duties.”  Commission Regulation 5009(c).

Further, a public official may not accept any reward or promise of future employment in return for or based on any understanding or expectation that his vote, official action, or judgment will be influenced.  R.I. Gen. Laws § 36-14-5(g).  R.I. Gen. Laws § 36-14-5(i) prohibits any person from giving or offering “any gift, loan, political contribution, reward or promise of future employment based on any understanding or expectation that the vote, official action or judgment of said person would be influenced thereby.” When enacting the Code of

Ethics, the General Assembly included as one of its legislative purposes the elimination of appearances of impropriety.  The appearance of impropriety, in and of itself, does not constitute a violation of any statutory or regulatory provision of the Code of Ethics, nor do the constitutional provisions that mandated the creation of the Ethics Commission establish that an appearance of impropriety constitutes a violation of the law.  See R.I. Gen. Laws § 36-14-3; R.I. Const. art. III, sec. 8. 

As an initial matter, the Commission must determine whether the subject donation properly falls within its jurisdiction.  Based upon the facts presented, O’Neill clearly would be an “interested person” as to the URI/CRC under a gift regulation analysis, given that it has proposed development projects in the area for which the URI/CRC is charged with developing the SAMP.  Here, however, the proposed donation would be made to the URI Foundation, rather than to the entity preparing the SAMP in which O’Neill has a financial interest.

Although the proposed donation would be made to the URI Foundation, a private entity over which the Commission does not exercise jurisdiction, it would be structured as a donation with an express directive as to its usage.  O’Neill would direct that the donation be used by the URI/CRC for the SAMP and other project areas.  By donating funds for the SAMP to an entity that is not subject to the Code of Ethics, with the express directive that it be used by the entity subject to the Code of Ethics to develop the very project in which the donor has a financial interest, O’Neill would effectively circumvent the Code’s prohibitions regarding the receipt of gifts from interested persons. Such a result would run contrary to the legislative intent of the Code of Ethics.  Based upon these facts, the Commission assumes jurisdiction for the purpose of addressing the URI/CRC’s request for an advisory opinion in this instance.

In Advisory Opinion 2001-12, the Commission concluded that Code of Ethics would not prohibit the Town of Johnston and/or its elected officials acting on behalf of the Town from accepting the donation of a dais from the Rhode Island Resource Recovery agency, or from accepting the donation of two boats for use by the Town's Fire Department from a business located within the Town and, therefore, subject to the Town's rules, regulations and ordinances.  Although both prospective donors were “interested persons,” both donations were earmarked for use by the Town of Johnston, rather than resulting in any personal benefit to any particular official.  The Commission also noted that there was no evidence to suggest that the donations were intended to impermissibly influence any decisions by the Town.  See also A.O. 99-17 (finding that the Code of Ethics did not prohibit the Rhode Island Building Officials Association from accepting the donation of space at a home show from the Rhode Island Builders Association. Although the members of the Building Officials Association were municipal employees who had decision-making authority with regard to members of the Builders Association, the donation of space was provided to the Building Officials Association, rather than to individual officials.)

Similarly, in Advisory Opinion 99-111 the Commission concluded that the Code did not prohibit the Town of Johnston from accepting the donation of a rescue vehicle from a municipal vendor who was an “interested person” as to various Town officials.  The Commission opined that individual officials should not accept gifts or donations offered to them personally by the vendor but that the donation of a rescue vehicle was being provided to the Town itself, rather than to individual Town officials, and did not confer a financial benefit on any individual official.  Additionally, there was no evidence to suggest that the gift/donation in that instance was intended to impermissibly influence any decisions of the Town. See R.I. Gen. Laws §§ 36-14-5(g) and 5(i).

 In the aforementioned opinions, the Commission specifically found that no individual official would receive a personal financial benefit from the donations at issue.  In contrast, O’Neill’s proposed donation would be earmarked for the SAMP process, in which O’Neill has a direct financial interest.  Further, the URI/CRC staff members who will be developing the SAMP are “soft money” employees who are dependent upon fundraising efforts and private contributions for their continued paid employ.  The rationale outlined in the prior opinions does not apply in the instant situation because there is a likely financial benefit to individual URI/CRC employees who are making decisions in the SAMP process. 

The Commission concludes that the URI/CRC may not accept and utilize funds donated by O’Neill to partially fund the SAMP process, given that O’Neill has proposed development projects in the subject area.  The URI/CRC’s acceptance and use of funds donated by a developer with a direct financial interest in the outcome of the process, and with the express directive that the donation fund the process, would clearly constitute an appearance of impropriety.  Although an appearance of impropriety is not, in and of itself, a violation of the Code of Ethics, the Commission cannot opine that the proposed donation would be consistent with the Code of Ethics based upon the facts presented. Further, the proposed donation to the entity developing the SAMP in which O’Neill has a direct financial interest would run afoul of the intent of Commission Regulation 5009.

Finally, no evidence has been presented to the Commission to suggest that the donation is intended to impermissibly influence the URI/CRC’s decisions with respect to the development of the SAMP.  See R.I. Gen. Laws §§ 36-14-5(g) and 5(i). 

Code Citations :

36-14-3

36-14-5(g)

36-14-5(i)

36-14-5009

R.I. Const., art. III, sec. 7

Related Advisory Opinions :

2001-12

99-111

99-17

Keywords :

Code Jurisdiction

Donations

Gifts