Advisory Opinion No. 2015-49 Rhode Island Ethics Commission Advisory Opinion No. 2015-49 Approved: December 8, 2015 Re: John Kane Jr. QUESTION PRESENTED: The Petitioner, the Building/Zoning Official for the Town of Middletown, a municipal employee position, requests an advisory opinion regarding whether the Code of Ethics prohibits him from participating in Middletown Zoning Board matters in which a member of the Fort Adams Trust Board of Directors represents himself or another person as their attorney, given the Petitioner’s business dealings with the Fort Adams Trust. RESPONSE: It is the opinion of the Rhode Island Ethics Commission that the Petitioner, the Building/Zoning Official for the Town of Middletown, a municipal employee position, is not prohibited by the Code of Ethics from participating in Middletown Zoning Board matters in which a member of the Fort Adams Trust Board of Directors represents himself or another person as their attorney, notwithstanding the Petitioner’s business dealings with the Fort Adams Trust. The Petitioner is employed as the Building/Zoning Official for the Town of Middletown (“Town”). He represents that his responsibilities include the supervision and enforcement of ordinances relating to buildings, zoning, trailer parks, and other matters assigned to him by the Town Administrator or Town Council. He informs that he also serves as professional staff to the Middletown Zoning Board, attending meetings to provide clarification and interpretations of the zoning ordinance. In his private capacity, the Petitioner states that he has been a licensed master electrician in the state of Rhode Island since 1986. He informs that he is the owner of Electrical Construction Specialists, LLC, (“ECS”) an electrical contracting business. He states that he conducts ECS business outside of Town work hours on nights and weekends. He represents that ECS also has two full-time employees. The Petitioner informs that, since 1987, he has been performing electrical work at historic Fort Adams in Newport, for both special events and maintenance on the historic structure.[1] The historic fort itself is managed by a public/private partnership between the Fort Adams Foundation (“Foundation”), a statutorily created public entity, and the Fort Adams Trust (“Trust”), a private, non-profit entity which works to direct and support the restoration, operation and maintenance of the structure of Fort Adams as a historic site.[2] He states that the Trust is overseen by a Board of Directors, which employs an executive director and other staff to manage the day-to-day operations of the property. The Petitioner represents that, since 1994, the Trust has been a client of his private business, ECS. He informs that he has performed paid electrical services for the Trust and volunteered his expertise to assist the Trust with project planning. He states that the Trust is planning to publicly advertise several maintenance/construction projects that he is interested in bidding on through his private business. The Petitioner informs that David P. Martland, Esq., a member of the Trust’s Board of Directors, is an attorney in private practice who frequently represents clients before the Middletown Zoning Board. Given the Petitioner’s ongoing and anticipated business dealings with the Trust, he seeks guidance as to whether he has to recuse from Zoning Board matters in which Mr. Martland, or any other member of the Trust’s Board of Directors, represents himself or another person as their attorney. Under the Code of Ethics, a public official must recuse himself from participation when his business associate or employer, or a person authorized by his business associate or employer, appears or presents evidence or arguments before his state or municipal agency. Commission Regulation 36-14-5002 (“Regulation 5002”); R.I. Gen. Laws § 36-14-5(f). The Code of Ethics 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 business by which he is employed or which he represents. Section 36-14-5(d). Additionally, 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. Section 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). A business is defined as “a sole proprietorship, partnership, firm, corporation, holding company, joint stock company, receivership, trust or any other entity recognized in law through which business for profit or not for profit is conducted.” Section 36-14-2(2). A business associate is defined as “a person joined together with another person to achieve a common financial objective.” Section 36-14-2(3). A person is defined as “an individual or a business entity.” Section 36-14-2(7). In determining whether a relationship between two parties constitutes an ongoing business association, the Ethics Commission examines the nature of the association and the scope of the business dealings between the parties, and looks to, among other things, whether the parties are conducting ongoing business transactions, have outstanding accounts, or there exists an anticipated future relationship. See, e.g., A.O. 2015-12 (finding that ongoing handyman work for private individual, which was reasonably foreseeable to continue, constituted a business associate relationship); A.O. 2011-45 (opining that an ongoing accountant-client and landlord-tenant relationship between a North Smithfield Town Council member and an architect constituted a business associate relationship); A.O. 99-11 (opining that a Glen Farm Authority member was a business associate of Glenworks, a company that he would subcontract with to provide electrician services). In the present matter, based upon the Petitioner’s representations of ongoing and anticipated future work for the Trust, it is clear that the Petitioner and the Trust are business associates. Therefore, the Code of Ethics requires the Petitioner to recuse from official duties as the Town Building/Zoning Official that would result in a direct financial impact to the Trust. However, given that the Trust operates a state-owned property in the City of Newport, the Trust is not subject to the jurisdiction of the Middletown Zoning Board. Furthermore, although Mr. Martland is a member of the Trust’s Board of Directors, he is not, by extension, a business associate of all of the persons and entities with which the Trust does business. When Mr. Martland appears before the Middletown Zoning Board, he is acting as an attorney representing a client relative to a zoning issue in the Town, not as a member of the Trust’s Board of Directors.[3] Accordingly, absent any other relevant fact that would implicate the Code of Ethics, it is the opinion of the Ethics Commission that the Petitioner is not prohibited by the Code of Ethics from participating in Middletown Zoning Board matters in which a member of the Fort Adams Trust Board of Directors represents himself or another person as their attorney, notwithstanding the Petitioner’s business dealings with the Fort Adams Trust. 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(2) § 36-14-2(3) § 36-14-2(7) § 36-14-5(a) § 36-14-5(d) § 36-14-5(f) § 36-14-7(a) Commission Regulation 36-14-5002 Related Advisory Opinions: A.O. 2015-12 A.O. 2011-45 A.O. 99-11 Keywords: Business Associate Private Employment