Rhode Island Ethics Commission

 

 

Advisory Opinion No. 2014-21

 

Approved:  August 19, 2014

 

Re:  N. David Bouley

 

QUESTION PRESENTED:

 

The Petitioner, the acting director of the Department of Planning & Development for the City of Woonsocket, a municipal employee position, requests an advisory opinion regarding whether the Code of Ethics prohibits him from participating in the City’s review of NeighborWorks® Blackstone River Valley’s application for a Community Development Block Grant. 

 

RESPONSE:

 

It is the opinion of the Rhode Island Ethics Commission that the Petitioner, the acting director of the Department of Planning & Development for the City of Woonsocket, a municipal employee position, is required by the Code of Ethics to recuse from participating in his official capacity in any matters involving NeighborWorks® Blackstone River Valley, including NeighborWorks’ application for a Community Development Block Grant.  

 

The Petitioner is the acting director of the Department of Planning & Development (“Planning Department”) for the City of Woonsocket (“City”), having been hired in May 2014.  He states that his duties include:  directing the day to day activities of the Planning Department staff and the Community Development Block Grant (“CDBG”) Program; preparing and administering city-wide grant applications; serving as the executive director of the Redevelopment Agency of Woonsocket; and other projects as assigned by the Mayor.

 

In his private capacity, the Petitioner represents that in August of 2012 he was contacted by the Executive Director of NeighborWorks® Blackstone River Valley (“NeighborWorks”)[1] about working as a consultant to administer the federal Community Development Block Grant (“CDBG”) home repair program for qualified lower-income individuals in the Towns of Foster and Scituate.[2]  The Petitioner states that he collaborated with NeighborWorks to draft the proposals that NeighborWorks submitted to Foster and Scituate.  He informs that Foster and Scituate accepted NeighborWorks’ proposals and each town entered into a contract with NeighborWorks to administer their CDBG home repair programs.[3] 

 

The Petitioner informs that he has been operating Scituate’s home repair program since June 2013 and Foster’s home repair program since October 2013.  He informs that he bills NeighborWorks for his services and NeighborWorks sends bills to each town.  He states that he is paid as an independent contractor by NeighborWorks for these services.  He represents that at this time, after clearing the initial backlog of loan applications, his work for Foster and Scituate totals approximately twenty hours each month.  He states that he performs his work for Foster and Scituate on his own time and without the use of any City resources or equipment.  He states that his private work does not interfere with his ability to perform his duties as the City’s acting director of the Planning Department.

 

The Petitioner represents that NeighborWorks has applied for a CDBG grant from the City for a project on Main Street.  He informs that the City is required to invest fifteen percent of its CDBG funds in community housing development organizations and NeighborWorks is the only local organization that qualifies.  The Petitioner seeks advice as to whether he may participate in the City’s review of NeighborWorks’ CDBG application given his private work with NeighborWorks for Scituate and Foster.

 

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.  R.I. Gen. Laws § 36-14-5(a). A substantial conflict of interest exists if an official has reason to believe or expect that he, any person within his family, a business associate or an employer will derive a direct monetary gain or suffer a direct monetary loss by reason of his official activity.  Section 36-14-7(a).  The Code also prohibits a public official from using his public office or confidential information received through his public office to obtain financial gain for himself, his family, his business associate, or any person by which he is employed or whom he represents.  Section 36-14-5(d).  Finally, the Code of Ethics provides that a public official shall not accept other employment that would impair his independence of judgment as to his official duties or require or induce him to disclose confidential information acquired by him in the course of his official duties.  Section 36-14-5(b). 

 

Additionally, a public official must recuse himself from any matter in which his business associate appears before the municipal agency by which he is employed.  Section 36-14-5(f); Commission Regulation 36-14-5002(a)(1).  A “business associate” is defined as an individual or business entity joined together with another person to achieve a common financial objective.  Section 36-14-2(3), (7). 

 

The Commission has previously found that a business association exists where there is an ongoing business relationship between a public official and an organization. The Code of Ethics requires recusal by that public official when it is reasonably foreseeable that the organization/business associate will be directly financially impacted by the public official’s actions.  For example, in Advisory Opinion 2013-18 the Commission opined that the ongoing provision of services as a paid independent contractor for Butler Hospital, reviewing patient applications for a medical research study, constituted a “business associate” relationship between that public official and the hospital.  Therefore, the petitioner, who was a member of the Health Services Council (“HSC”), was required to recuse from the HSC’s consideration of Care New England Health System’s merger application, given that his business associate, Butler Hospital, was a Care New England Health System operating unit. 

 

See also A.O. 2012-32 (opining that the acting director of the Department of Planning and Development for the City of Providence was not prohibited by the Code of Ethics from teaching a course at Brown University; however, he was required to recuse from any matters involving Brown University, his business associate, that could come before him in his public capacity as acting director); A.O. 2006-27 (opining, inter alia, that a public official serving on both the Gloucester and Foster-Glocester Regional School Committees was a business associate of a company for whom he provided subcontracting work and was required to recuse from School Committee matters where it was reasonably foreseeable that his business associate would be directly financially impacted by his official action); A.O. 2004-11 (opining that a Town of Lincoln School Building Commission member, who also owned a carpentry business, was a business associate of any person or entity with which he was engaged as a subcontractor and that the business associate relationship existed while the services were provided, until the petitioner was paid and no further subcontracting work was anticipated); A.O. 99-11 (concluding that a Glen Farm Authority member, who was also an electrician, was a business associate of a company that he performed services for and was required to recuse from the Authority’s consideration of his business associate’s lease). 

 

In the present matter, the Petitioner represents that as an independent contractor for NeighborWorks he serves as a consultant to administer Foster and Scituate’s CDBG home repair programs.  He states that he submits bills for services rendered to NeighborWorks and he is paid directly by NeighborWorks.  The Petitioner also states that he completes this private work on his own time and without the use of any City resources or equipment.  Based upon the above representations, there is no indication that the Petitioner’s private work for NeighborWorks is in substantial conflict with the exercise of his public duties as the acting director of the City’s Planning Department.  However, we conclude that the Petitioner’s ongoing business relationship with NeighborWorks constitutes a “business associate” relationship as that term is defined in the Code of Ethics. 

 

Accordingly, it is the opinion of the Ethics Commission that the Petitioner is required to recuse from any matters relating to NeighborWorks, including NeighborWorks’ recent CDBG application, that may come before him in his public capacity as acting director of the Woonsocket Department of Planning & Development and refer such matters to his superiors.  Notice of recusal shall be filed with the Commission in accordance with § 36-14-6.   

 

This Advisory Opinion is strictly limited to the facts stated herein and relates only to the application of the Rhode Island Code of Ethics.  Under the Code of Ethics, advisory opinions are based on the representations made by, or on behalf of, a public official or employee and are not adversarial or investigative proceedings.  Finally, this Commission offers no opinion on the effect that any other statute, regulation, ordinance, constitutional provision, charter provision, or canon of professional ethics may have on this situation. 

 

Code Citations:

§ 36-14-2(3)

§ 36-14-2(7)

§ 36-14-5(a)

§ 36-14-5(b)

§ 36-14-5(d)

§ 36-14-5(f)

§ 36-14-6

§ 36-14-7(a)

Commission Regulation 36-14-5002

 

Related Advisory Opinions:

A.O. 2013-18

A.O. 2012-32

A.O. 2006-27

A.O. 2004-11

A.O. 99-11

 

Keywords

Business Associate

Private Employment

Recusal

 



[1]    NeighborWorks is a private, non-profit community development corporation that works with residents, businesses, and neighborhood institutions to enrich neighborhood life and make affordable housing opportunities available throughout Northern Rhode Island.  See www.neighborwoksbrv.org.

 

[2]  While the cities of Cranston, East Providence, Pawtucket, Providence, Warwick and Woonsocket operate their own CDBG programs independent of state effort, the state’s small municipalities, including Foster and Scituate, have their CDBG programs managed by the Rhode Island Division of Planning in the Department of Administration.  See http://www.planning.ri.gov/community/development/blockgrants/.  The CDBG programs in Foster and Scituate were previously managed by the Western Rhode Island Home Repair Program.  However, the Western Rhode Island Home Repair Program was suspended by the state’s Division of Planning due to administration problems in May 2012.

 

[3] The Petitioner represents that the state’s Division of Planning also approved NeighborWorks’ proposals for the operation of Foster and Scituate’s CDBG home repair programs.