Advisory Opinion No. 2010-37 Rhode Island Ethics Commission Advisory Opinion No. 2010-37 Re: Andrew B. Shapiro QUESTION PRESENTED The Petitioner, Vice Chair of the East Bay Energy Consortium (“EBEC”), a municipal appointed position, requests an advisory opinion regarding: 1) whether he is a person subject to the Code of Ethics by way of his membership on EBEC, and 2) whether he may resign his membership on EBEC and accept employment with a consultant who has worked with EBEC. RESPONSE It is the opinion of the Ethics Commission that the Petitioner, Vice Chair of the East Bay Energy Consortium (“EBEC”), a municipal appointed position: 1) is a person subject to the Code of Ethics by way of his membership on EBEC, and 2) while he is not prohibited from resigning his membership on EBEC and accepting employment with a consultant who has worked with EBEC, he is prohibited by the Code of Ethics from representing himself, any other person, or acting as an expert witness before EBEC for one year from the date of his resignation from EBEC, pursuant to R.I. Gen. Laws § 36-14-5(e). The Petitioner is a member and Vice-Chair of the East Bay Energy Consortium (“EBEC”). EBEC is a regional consortium which includes representatives from the municipalities of Barrington, Bristol, East Providence, Little Compton, Middletown, Newport, Portsmouth, Tiverton, and Warren. The Petitioner was appointed to EBEC by the Warren Town Council. According to a “Memorandum of Agreement” (“MOA”) entered into in March of 2009 by the nine participating municipalities, the purpose of EBEC “is to explore the feasibility of locating a regional wind energy system in the geographic area commonly referred to as the ‘East Bay.’” Additionally, the “Rules and Procedures” adopted by EBEC on December 7, 2009, state that the purpose of EBEC is to “serve as a forum for communication, exploration, coordination, and consensus among” the nine municipal governments and to “collaboratively explore all means to reduce energy expenses and increase renewable energy production.” The Petitioner represents that each municipality that is a member of EBEC appoints a primary representative to EBEC and up to three alternates; the appointments are made by the Town Council or highest governing official of the municipality. Pursuant to the MOA, the Town of Bristol served as the applicant for a grant from the Rhode Island Economic Development Corporation in which grant funds were requested in order to hire a consultant to conduct a feasibility study as to the viability of a regional wind energy system. Additionally, pursuant to the MOA, each of the participating municipalities agreed to make available matching funds at a minimum of $2,000.00, to be provided in either cash or in-kind services. The MOA acknowledges that EBEC members agree to participate in the feasibility study, but that members are not committing to participate in the actual construction of a wind energy system, or to be responsible for the costs of such a project. Submitted with the Petitioner’s written request for an advisory opinion was a document entitled “East Bay Energy Consortium Outline of Governance Structure” (“outline”) which states that it was adopted by EBEC on June 7, 2010. In section I, subsection (D)(5)(c) of that document, a list of potential “Major Decisions” are enumerated, which the document states would require a majority vote of all EBEC members in order to be adopted. Subsection (D)(5)(c) of the outline states that some of the items enumerated as “Major Decisions” apply to EBEC “both before and after legal incorporation,” in other words, that they apply to the current EBEC as it exists now, prior to incorporation, while other items “would only apply after incorporation.”[1] Included in the list of items to be considered “Major Decisions” requiring a majority vote of the current EBEC members are: where to locate turbines; how to finance EBEC operations, including administration & management, turbine acquisition, installation and maintenance; grant applications; whether to involve a developer or other entity as a partner, including selection of the developer(s)/partner(s) and approval of the anticipated legal relationship; selection of major vendors such as turbine manufacturers; hiring and firing of any manager(s) and consultants; approving operating budgets; and approving capital budgets. The Petitioner represents that since EBEC was established, its principal activities to date have been to seek funding, conduct planning meetings, and to commission and evaluate a feasibility study for erecting wind turbines in one or more of EBEC’s member municipalities. EBEC has been awarded grant funding from the Rhode Island Foundation (“RIF”) in the amount of $40,000.00 and from the Rhode Island Economic Development Corporation (“EDC”) in the amount of $100,00.00. EBEC has retained professional staff including legal counsel and a part-time secretary whose primary duty is to take the minutes of EBEC’s meetings. The Petitioner represents that because EBEC is not a “legal entity,” grant funds received from RIF and EDC were in fact awarded to the Town of Bristol, and that, while Bristol accepts advice from EBEC as to how to spend the grant monies, Bristol is not legally obligated to do so. The Petitioner further asserts that, as a matter of law, EBEC does not have the legal capacity or authority to bind a participating municipality to a course of action, and thereafter concludes that, accordingly, EBEC is “purely advisory” in nature. The Petitioner states that, recently, his personal circumstances have changed such that he cannot afford to devote the quantity of volunteer time to EBEC that he has been doing thus far in his role as Vice Chair. The Petitioner represents that one of the firms that has been performing services as a consultant with EBEC, the Arnold Group LLC (“Arnold Group”), has offered the Petitioner a job. He states that prior to the formation of EBEC, Roger Williams University (“RWU”) contracted with the Arnold Group. The Arnold Group was hired by RWU as a consultant to assist the nine municipalities of the East Bay area in putting together an entity that could facilitate the production of a feasibility study on municipal energy independence; the entity ultimately formed was EBEC. The Arnold Group contracted with RWU prior to the formation of EBEC, and thus, prior to the Petitioner’s appointment by the Town of Warren to EBEC; accordingly, the Petitioner did not vote or otherwise participate in any action regarding the hiring of the Arnold Group. Subsequently, an entity known as Applied Science Associates (“ASA”) was hired by EBEC to perform the feasibility study. ASA produced an approximately 100 page long feasibility document which is currently being reviewed by EBEC. If the Petitioner were to accept the proposed job with the Arnold Group, he would resign his membership on EBEC. In the proposed job, the Petitioner states that he would continue to perform many of the same tasks he has been performing as Vice Chair of EBEC and that one of his primary tasks would be to facilitate EBEC’s move into the next phase of the project, which the Petitioner identifies as the “pre-construction” phase. The Petitioner further states that one of his other responsibilities in the proposed position would be to report back to the nine municipalities in regard to the status of the ASA feasibility study in order to receive authorization for EBEC to move on to the next step of the process. As part of his duties in this proposed position, the Petitioner would be representing the consultant, the Arnold Group, before EBEC, prior to one year from the date of his separation from EBEC. Based on all of the above facts, the Petitioner requests an advisory opinion regarding whether: 1) he is subject to the Code of Ethics, by way of his membership on EBEC and, if so, 2) whether he is prohibited by the Code of Ethics from accepting a position with the Arnold Group, an entity which performs consulting services for EBEC, which would require him to represent the Arnold Group before EBEC. Section 36-14-2(8)(ii) of the Code of Ethics defines a "municipal agency" as “any department, division, agency, commission, board, office, bureau, authority quasi-public authority . . . within Rhode Island, other than a state agency and any other agency that is in any branch of municipal government and exercises governmental functions other than in an advisory nature.” Regulation 36-14-2002(4)(b), a provision promulgated by the Ethics Commission in 1999, defines "municipal agency" using the same language as statutory Section (2)(8)(ii), except that it adds “and whether comprised of officials and employees from a single or multiple municipalities, and any other agency that is in any branch of municipal government and which exercises governmental functions other than in a purely advisory nature.” [Emphasis added.] Finally, Regulation 36-14-2001(22), another regulation promulgated by the Ethics Commission, states that a "municipal agency" shall include any entity that: “(a) exercises governmental functions other than in an advisory nature, and expends public funds in excess of $10,000 yearly, or; (b) those entities whose directors or other governing members are appointed by or through the governing body or highest official of state or municipal government.” Most relevant to the instant advisory opinion is the fact that both the statutory and regulatory definitions of “municipal agency” exclude entities that are “purely advisory” in nature. The Commission has previously addressed the question of whether a municipal entity is “purely advisory” in nature. In some instances, the Commission has determined that an entity is “purely advisory” in nature and that its members are not subject to the Code. See, e.g., A.O. 2002-58 (opining that a Tiverton Economic Development Committee (TEDC) member was not required to file a financial disclosure statement pursuant to R.I. Gen. Laws § 36-14-16 as the TEDC acts in a purely advisory capacity given that it merely makes recommendations to the Town Council, and, therefore, is not a “municipal agency” for purposes of the Code of Ethics); A.O. 2001-23 (opining that a Warwick Affirmative Action Commission member was not required to file a financial disclosure statement pursuant to R.I. Gen. Laws § 36-14-16 as that Commission acts in a purely advisory capacity given that the Commission’s responsibilities generally involve encouraging and supporting the employment and advancement of under-represented groups within the City of Warwick and stating that its “role in reviewing and recommending actions to the Director of Personnel relating to affirmative action does not constitute sufficient subjective involvement in the policy-making area for purposes of the Code of Ethics”); A.O. 2000-13 (opining that the Little Compton Harbor Commission is an advisory entity as that term is defined in the Code of Ethics given that it has no substantive decision-making authority, and thus, is not a municipal agency bound by the Code of Ethics). In other circumstances, the Commission has opined or implicitly found that an entity was not “purely advisory” in nature and that its members were subject to the Code. See, e.g., A.O. 2001-38 (opining that the Portsmouth Open Space Commission is not “purely advisory” in nature given that the Commission’s duties include the management of existing public open space and conservation lands, the identification and protection of significant natural and scenic resources and the identification and development of potential nature sanctuaries and greenways, and the inventory of open space and all town-owned land); A.O. 99-35 (concluding that members of the Planning Committee of Governor’s Justice Commission should not participate in matters concerning business associates or employers coming before the Committee, notwithstanding that it is not the ultimate decision-maker as to sub-grant awards, since it is an essential step in the process that narrows and directs where funding will be allocated); A.O. 97-60 (opining that the Rhode Island Historical Records Advisory Board, which “clearly includes an advisory component, and does not have final decision-making authority,” is not purely advisory in nature, given “its role in reviewing and recommending actions to the [National Historical Publications and Records] Commission constitutes sufficient subjective involvement in the policy-making area to warrant the categories of disclosure mandated by the General Assembly in the Code of Ethics”). In Advisory Opinion 95-43, this Commission opined that the Advisory Council to the Assistive Technology Access Partnership is not purely advisory in nature, given that, inter alia, its budget, though federally funded, is allocated and controlled through the State's Department of Human Services, and is used to pay for services needed by the Council and its members in order to carry out their mandate. In that advisory opinion, this Commission included as a criteria a consideration of whether the entity in question maintains control over the expenditure of public funds, including its own budget, and stated that “in view of the fact that the Advisory Council is funded with public money, we conclude that it is not advisory in nature and, consequently, is subject to the jurisdiction of the Ethics Commission.” In the facts as presented by this Petitioner, EBEC has hired consultants and employees, has a role in reviewing and recommending actions to its member municipalities that will play a significant role in those municipalities decisions regarding alternative energy supplies going forward, has discretionary authority over $140,000.00 in grant funds, as well as the funds contributed by the member municipalities, has the intention to participate in the “Major Decisions” as outlined in the “East Bay Energy Consortium Outline of Governance Structure,” and is preparing to enter into the “pre-construction” phase of its mission. Based on these facts and all of the other details submitted by the Petitioner, we opine that EBEC is not “purely advisory” in nature, notwithstanding the fact that EBEC itself is not the ultimate decision-maker in some of these matters. Accordingly, we opine that the Petitioner is a “person subject to the Code” and we turn to the second question posed by his request. Under the Code of Ethics, a public official may not have an interest or engage in any employment or professional activity that is in substantial conflict with the proper discharge of his duties in the public interest. R.I. Gen. Laws § 36-14-5(a). The Code of Ethics also prohibits the Petitioner from willfully and knowingly disclosing or using for pecuniary gain confidential information acquired by him in the course of and by reason of his official duties. R.I. Gen. Laws §36-14-5(c). Additionally, he may not use his public position or confidential information received through his position to obtain financial gain, other than that provided by law. R.I. Gen. Laws § 36-14-5(d). Most relevant to this Petitioner’s particular set of facts is section 5(e) of the Code, which 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) and (2). A “person” for purposes of the Code is defined as "an individual or a business entity.”R.I. Gen. Laws § 36-14-2(7). Section 5(e)’s prohibitions are stricter than virtually any other provisions in the Code. In most instances under the Code, public officials and employees may address potential conflicts of interest by declining to participate in related discussions and votes. This is not the case with section 5(e). Absent an express finding by the Commission that a hardship exists, the prohibitions in that section are absolute. R.I. Gen. Laws § 36-14-5(e)(1) and (e)(4). As an initial matter, we note that the Petitioner's proposed conduct falls squarely within section 5(e)'s prohibition, given that he would be representing the Arnold Group before EBEC within one year from his separation from service as a member of EBEC. Furthermore, nothing presented by this Petitioner speaks to the kind of “hardship” that allows for an exception to what would otherwise be prohibited conduct, pursuant to R.I. Gen. Laws § 36-14-5(e)(1), which has primarily been applied in the past by this Commission to instances of hardship involving the public official’s need to represent himself or herself before his or her own agency regarding his residential or commercial property. See, e.g., A.O. 2007-19 (granting a hardship exception to a Little Compton Town Council member to appear before the Zoning and Planning Boards to request a subdivision variance for a substandard lot in order that his mother could gift the house that he currently lived in to he and his wife); A.O. 2007-51 (granting a hardship exception to a Portsmouth Town Council member who sought to obtain a variance for property that she had owned and used for over twenty years, that was directly adjacent to her residence, with the intended use of the subject property being as a residence for her adult son); A.O. 2005-32 (granting a hardship exception to a Westerly Planning Board member to appear before the Planning Board to request a zone change which would allow the Petitioner to relocate his business, an ice cream shop, notwithstanding that his property rights did not pre-exist his appointment to the Planning Board); A.O. 98-97 (granting a hardship exception to a Glocester Planning Board member who sought a variance and special use permit to sell produce from a barn located on the same property as his principal residence). Accordingly, we opine that the Petitioner, while not generally prohibited from accepting a position with the Arnold Group upon his resignation from EBEC, is prohibited by R.I. Gen. Laws § 36-14-5(e) from representing himself, the Arnold Group, or any other person, or from acting as an expert witness before EBEC prior to one year from his date of severance from EBEC. Additionally, we caution the Petitioner that he is prohibited by the Code of Ethics from willfully or knowingly using or disclosing, for pecuniary gain, any confidential information acquired by him by reason of his official duties as a member of EBEC. R.I. Gen. Laws § 36-14-5(c). Finally, the Petitioner is advised that this opinion solely addresses the application of the Code of Ethics to the facts as represented by the Petitioner. This opinion does not address the application of any other statutes, rulings, policies, charters, or ordinances to such activity. Code Citations: 36-14-2(7) and (8)(ii) 36-14-5(a) 36-14-5(c) 36-14-5(d) 36-14-5(e) 36-14-7(a) Regulation 36-14-2002(4)(b) Regulation 36-14-2001(22) Related Advisory Opinions: A.O. 2007-19 A.O. 2007-51 A.O. 2005-32 A.O. 2002-58 A.O. 2001-23 A.O. 2000-78 A.O. 2000-13 A.O. 99-35 A.O. 98-97 A.O. 97-7 A.O. 97-60 A.O. 95-43 Keywords: Revolving Door