Advisory Opinion No. 2008-35 Rhode Island Ethics Commission Advisory Opinion No. 2008-35 Re: Susan T. Krumholz, JD., Ph.D. QUESTION PRESENTED The petitioner, a member of the Tiverton Zoning Board of Review, a municipal appointed position, requests an advisory opinion regarding whether she may participate and vote on a petition brought by the Tiverton Land Trust for a variance to allow it to host a seasonal farmers' market on its property, given the fact that the petitioner is a member of, and contributor to, the Tiverton Land Trust. RESPONSE It is the opinion of the Rhode Island Ethics Commission that the petitioner, a member of the Tiverton Zoning Board of Review, a municipal appointed position, may participate and vote on a petition brought by the Tiverton Land Trust for a variance to allow it to host a seasonal farmers' market on its property, notwithstanding the fact that the petitioner is a member of, and an annual contributor to, the Tiverton Land Trust. The petitioner is a member of the Tiverton Zoning Board of Review ("the Zoning Board"). She states that the Zoning Board is scheduled to consider a petition brought by the Tiverton Land Trust ("the Land Trust") which seeks a variance to allow the Land Trust to host a farmers' market each Saturday on land that it owns. The petitioner represents that the Land Trust is a private, non-profit, charitable organization, dedicated to preserving open space in Tiverton. To accomplish its mission, the Land Trust purchases, or secures development rights to, open space properties using funds raised through grants from state, federal, and private agencies, and from contributions from local businesses and individuals. The Land Trust also educates and informs the community of the benefits of preserving open space by holding special events, such as the aforementioned farmers' market, on the lands it owns. The petitioner states that the Land Trust is administered and operated by a Board of Directors with approximately sixteen (16) members. The petitioner and her husband have contributed to the Land Trust annually for several years. She states that she has never held a position as officer or director of the Land Trust, although she has volunteered to help with one of its annual events, Pardon Gray Day, for the past two or three years. Although individual contributors are sometimes referred to as "members" of the Land Trust, such contributors have no decision-making authority over the Land Trust's objectives or operation. Furthermore, the petitioner states that to the best of her knowledge she receives no special benefits or privileges as a result of her "membership" other than a copy of the Land Trust newsletter and notice of Land Trust-sponsored events that are open to the community at large. Given these representations, the petitioner asks whether the Code of Ethics permits her participation in the Zoning Board's consideration of the Land Trust's petition for a variance. Under the Code of Ethics, a public official or employee may not participate in any matter in which she has an interest, financial or otherwise, which is in substantial conflict with the proper discharge of her duties in the public interest. See R.I. Gen. Laws §§ 36-14-5(a). The petitioner will have an interest in substantial conflict with her official duties if she has reason to believe or expect that a “direct monetary gain” or a “direct monetary loss” will accrue, by virtue of her official activity, to herself, a family member, a business associate, an employer, or any business which she represents. See R.I. Gen. Laws § 36-14-7(a). Commission Regulation 36-14-6001 provides that a public official has reason to believe or expect that a conflict of interest exists when it is “reasonably foreseeable.” Also, a public official must recuse herself from voting or otherwise participating in her agency's consideration of a matter presented by, or concerning, her business associate. See R.I. Gen. Laws § 36-14-5(f). A business associate is defined as “a person joined together with another person to achieve a common financial objective.” R.I. Gen. Laws § 36-14-2(3). Thus, if petitioner is considered a “business associate” of the Land Trust, she must recuse from participation in matters concerning or brought by the Land Trust, or from matters that would result in a direct financial impact to the organization. However, if she is not a “business associate” of the Land Trust, and assuming that she will derive no personal benefit from decisions impacting the Land Trust, she need not recuse. In order to determine whether a relationship rises to the level of a “business association” under the Code of Ethics, the Commission must examine the nature of the association and the scope of the parties’ business dealings. See, e.g., A.O. 2004-29. In the past, the Commission has concluded that public officials are "business associates" of entities for which they serve either as members of the Board of Directors or in other leadership positions that permit them to affect the financial objectives of the organization. See A.O. 98-76 (opining that a member of the Narragansett Town Council may not participate in matters concerning the Narragansett Chamber of Commerce, including the upcoming vote on a possible appropriation of funds to the organization, given that she serves on its Board of Directors). On the other hand, the Ethics Commission has generally held that mere membership in an organization, as opposed to holding a position as a director, officer or other position of leadership, does not create a business association requiring recusal. See A.O. 2007-53 (opining that, because a member of the Newport Harbor Commission was a mere member of the International Yacht Restoration School, Sail Newport and the Newport Yacht Club, but not on the Board of Directors or in any other type of leadership position allowing him to affect their financial objectives, he was not a “business associate” of these organizations and need not recuse from taking official action that financially impact them); 2007-45 (opining that, as the petitioner was not an officer in any of the political organizations of which he was a member, nor in any other leadership position within the organizations, nor in any way able to affect the financial objectives of the organizations, he was not a “business associate” of those organizations such that §§ 5(a) and 7(a) would be implicated); A.O. 2002-06 (opining that mere membership in the Chamber of Commerce does not rise to the level of a business association that would trigger the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a) and 5(f), and thus, Westerly Town Councilors who were members, but not officers, of the Greater Westerly-Pawcatuck Chamber of Commerce were not prohibited from voting on the granting of a tax exemption for the Chamber of Commerce); A.O. 96-54 (in which the Commission concluded that Town of Westerly Zoning Board members, who were also members of the YMCA, could participate in matters concerning rezoning for the YMCA, based upon the fact that mere membership, without the ability to affect the YMCA’s financial objectives, did not rise to the level of a “business association” requiring recusal). Here, although the petitioner makes annual contributions to the Land Trust and is therefore considered by it to be a "member," she is not on the Board of Directors, nor an officer, nor in any type of leadership position that would allow her to affect the Land Trust's financial objectives. Rather, she is merely an ordinary member/contributor with no greater authority than other contributor, and apparently with no greater access to Land Trust assets than any other member of the Tiverton community. Furthermore, the petitioner's unpaid volunteerism for the Land Trust does not constitute a business association under the Code. See A.O. 2002-4 (Budget Board member who is an unpaid volunteer for the public library may participate in budget process relating to the library). Based on all of the above, the petitioner is not a “business associate” of the Land Trust and need not recuse from the Zoning Board's discussion and voting relative to the Land Trust's petition for a variance. Code Citations : § 36-14-2(3) § 36-14-5(a) § 36-14-5(f) § 36-14-6 § 36-14-7(a) Related Advisory Opinions : A.O. 2007-58 A.O. 2004-3 A.O. 98-25 A.O. 97-112 Keywords : Business Association Financial Interest Recusal