Advisory Opinion No. 2011-44

Re: Edward F. Yazbak, CPA, MST

QUESTION PRESENTED

The Petitioner, a member of the North Smithfield Town Council, a municipal elected position, requests an advisory opinion regarding whether he may participate and vote in the Town Council’s consideration of matters relating to a zoning change for a proposed elderly housing development, for which his business associate has been engaged to provide architectural services that include appearances before the Town Council.

RESPONSE

It is the opinion of the Rhode Island Ethics Commission that the Petitioner, a member of the North Smithfield Town Council, a municipal elected position, must recuse from participation and vote in the Town Council’s consideration of any matters relating to a zoning change for a proposed elderly housing development, given that his business associate has been engaged to provide architectural services for that development that include appearances before the Town Council.

The Petitioner is a member and current President of the North Smithfield Town Council (“Town Council”), having been elected in November 2010. In his private capacity, the Petitioner is a self-employed Certified Public Accountant. He advises that North Pine Residences LLC (“North Pine Residences”) and DAS Contracting Corporation (“DAS Contracting”) have petitioned the Town Council to rezone the property on which they seek to build a new assisted living facility, nursing home and/or housing for the elderly. The Petitioner represents that he recently learned that North Pine Residences and DAS Contracting have engaged John O’Hearne’s architectural services for this project. He states that Mr. O’Hearne appeared at the October 3, 2011 Town Council meeting to give a presentation regarding the how the project would look from various angles and elevations and that Mr. O’Hearne’s conceptual renderings were added to the rezoning petition materials. He informs that this matter was continued and is on the agenda for the October 17, 2011 meeting.

The Petitioner states that Mr. O’Hearne is an architect and the owner and sole proprietor of O’Hearne Associates. He represents that Mr. O’Hearne and O’Hearne Associates have been his accounting clients since at least 2001. He also informs that he has a 50% interest in real estate that has been rented to O’Hearne Associates for the past 10 years, and for the foreseeable future.

Based upon the above representations, the Petitioner seeks advice as to whether he can participate and vote in the Town Council’s consideration of matters relating to North Pine Residences’ and DAS Contracting’s petition to rezone certain property, given that Mr. O’Hearne is providing architectural services for this project, has appeared before the Town Council in support of the project, and his conceptual renderings are now included in rezoning petition before the Town Council.

Under the Code of Ethics, the Petitioner 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. R.I. Gen. Laws § 36-14-5(a). The Petitioner will have an interest in substantial conflict with his official duties if he has a reason to believe or expect that a “direct monetary gain” or a “direct monetary loss” will accrue, by virtue of his official activity, to himself, a family member, a business associate, an employer, or any business which he represents. Section 36-14-7(a). He is also prohibited from using his public position or confidential information received through his position to obtain financial gain, for himself or his family or business associates, other than that provided by law. Section 36-14-5(d).

Additionally, no business associate of any person subject to the Code of Ethics shall represent him or herself, or any other person, or act as an expert witness before the municipal agency of which the person is a member unless the agency is advised of the nature of the relationship and the official recuses himself from voting or otherwise participating in his agency’s consideration of the matter at issue. Section 36-14-5(f). A business associate is defined as “a person joined together with another person to achieve a common financial objective.” Section 36-14-2(3).

It is clear that the Petitioner and Mr. O’Hearne are business associates. The Petitioner has an ongoing accountant-client relationship with Mr. O’Hearne and receives rental income from O’Hearne Associates. The Commission has found a business association to exist between a client and accountant. A.O. 2005-64 (opining that a member of the Burrillville Redevelopment Agency was a business associate of the nonprofit developer because he was a partner in an accounting firm that provided accounting services to the developer on a “continuing basis”). The Commission has also opined that a landlord tenant relationship is a business associate relationship pursuant to the Code of Ethics. See A.O. 2011-36 (opining that a Providence City Plan Commission member has an ongoing business association with his former firm, given his 25% interest in the entity that owns the premises rented to that firm); A.O. 2006-9 (opining that a New Shoreham Town Council member has a business association with his landlord requiring his recusal). Accordingly, it is the opinion of the Ethics Commission that the Petitioner must recuse from participation and vote in the Town Council’s consideration of any matters relating to the elderly housing development for which Mr. O’Hearne has been engaged to provide architectural services. Notice of recusal must be filed in accordance with section 36-14-6.

The Petitioner also sought advice regarding the effect of his recusal on his responsibility as Town Council President to conduct Town Council meetings. In general, any time the Petitioner’s recusal is required he must recuse from all participation on that agenda item, which includes refraining from conducting that portion of the meeting as Town Council President.

Code Citations:

§ 36-14-2(3)

§ 36-14-5(a)

§ 36-14-5(d)

§ 36-14-5(f)

§ 36-14-6

§ 36-14-7(a)

Related Advisory Opinions:

A.O. 2011-36

A.O. 2006-9

A.O. 2005-64

A.O. 2001-14

Keywords:

Business Associate

Recusal