Francis Oliveira Complaint No. 99-2 STATE OF RHODE ISLAND BEFORE THE RHODE ISLAND ETHICS COMMISSION In Re: Francis Oliveira Complaint No. 99-2 INFORMAL RESOLUTION AND SETTLEMENT Respondent Francis Oliveira and the Rhode Island Ethics Commission hereby agree to a resolution of the above- referenced matter as follows: I. FINDINGS OF FACT AND ADMISSIONS A. The Gate House Matter The Respondent is an elected member of the Portsmouth Town Council and has held that position from 1994 to the present. His private employment is as a real estate agent. During 1996 and 1997, the Respondent and his wife owned and operated LaMond Associates, Ltd., a real estate agency located in Middletown. On various dates from November 25, 1996 through September 8, 1997, the Respondent participated in the Council’s consideration of matters relating to the sale of the Town owned “Gate House” property located at 340 Glen Road. On or about September 25, 1997, the Respondent, on behalf of LaMond Associates, executed a purchase and sales agreement with prospective buyers of the Gate House, reflecting a purchase price of $127,500.00. The Respondent accepted a $1,000.00 deposit for same as their real estate agent. Thereafter, the Respondent’s clients drafted a second purchase and sales agreement, reflecting a purchase price of $130,000.00. The Respondent advised Century 21 Trend Realty, the Town’s listing agent, that his clients wished to increase their offer. In the event that the Town had accepted the Respondent’s clients’ initial bid, the Respondent would have realized a $3,825.00 profit in commission. Had the Town accepted their second bid, the Respondent would have realized a $3,900.00 profit in commission. Prior to the bid deadline, the Respondent contacted Century 21 Trend and inquired if the bid he had submitted on behalf of his clients was the highest bid received. He did not receive any information regarding other bids. On October 14, 1997, the Respondent advised the Council that he would recuse himself from consideration of submitted bids and any further matters concerning the Gate House given that he represented prospective buyers of the property. By correspondence dated October 15, 1997, the Solicitor advised the Respondent that his representation of prospective buyers created an appearance of impropriety. The Solicitor advised him to seek an advisory opinion from the Ethics Commission, prospectively recuse himself from participation in any matters involving the Gate House and terminate his representation of his clients. He also instructed the Respondent to obtain and complete the necessary paperwork as to his prospective recusals and file same with the Town Clerk. The Respondent neither requested an advisory opinion from the Ethics Commission nor filed notice of recusal as required by R.I. Gen. Laws § 36-14-6. B. The Pennfield School Matter The Town of Portsmouth owns a former public school building and its associated land, located at Lot 11, Tax Assessor’s Map 61. Since 1991, the Town leased a portion of that property to the Pennfield School, a private, non-profit corporation, which uses the facility as a private elementary school. On May 11, 1998, the Respondent participated in the Council’s discussion and vote to direct the Solicitor and the Finance Director to represent the Town in initial lease negotiations with School representatives. Subsequently, the Respondent received correspondence from the Solicitor, dated February 3, 1999 and designated “CONFIDENTIAL, PRIVILEGED ATTORNEY/CLIENT COMMUNICATION”. Said communication detailed the progress of lease negotiations, provided information as to possible term modifications, discussed negotiation strategies and outlined the strengths and weaknesses of the parties’ bargaining positions. On February 8, 1999, the Respondent was present during the Council’s Executive Session, at which time the Solicitor provided the Council with specific information regarding the lease negotiations. In particular, he related the School’s preference to purchase land in Portsmouth for its facility and advised that it wanted an “opt out” provision in any lease renewal, which would allow it to purchase other property if land became available to them in the future. On February 8, 1999, the Respondent participated in the Council’s vote to instruct the Solicitor to ascertain whether the Superintendent of Schools would be interested in locating the School Administration offices at the Pennfield School and, absent such an interest, authorized him to negotiate a ten-year lease with the School. On February 9, 1999, the Respondent made unsolicited telephone contact with the Head of the Pennfield School and provided him with information regarding the “Little Slocum Farm”, a property for which he was the listing real estate agent. During 1998, the Respondent had become professionally associated with ReMax Professionals of Newport. As of December 21, 1998, the Respondent was the listing agent for the Little Slocum Farm, a twelve-acre property in Portsmouth owned by Gerald G. and Donna J. Ohlman, Jr.. As of February 13, 1999, the offering price for the Little Slocum Farm was $895,000.00. On or about March 17, 1999, the Pennfield School executed a purchase and sale agreement for the Little Slocum Farm at the Respondent’s ReMax office in Newport. Based upon the listed purchase price of $900,000.00, the Respondent would have realized a commission profit of $54,000.00 from the sale of the property. By correspondence dated October 8, 1999, the Respondent advised ReMax that he waived any commission due to him from sale of the Little Slocum Farm. By correspondence dated October 8, 1999, ReMax informed the sellers that the Respondent waived any commission due to him from the sale of their property. The Respondent ultimately did not handle the purchase of the Little Slocum Farm and no funds were paid to him at closing. C. The Ethics Complaint Vote 1. On April 12, 1999, the Respondent participated in the Council’s consideration of his involvement in Council matters regarding lease negotiations with the Pennfield School and his private negotiations with the School for purchase of the Little Slocum Farm. The Respondent participated in the Council’s vote to direct the Solicitor to file an Ethics Complaint against the Respondent, with the Respondent casting the sole opposing vote. II. CONCLUSIONS OF LAW AND SETTLEMENT A. The Gate House The Commission finds that the Respondent, as a Portsmouth Town Councilor, participated and voted on matters relating to the Town’s sale of the Gate House property and subsequently submitted a written bid to purchase said property on behalf of his private clients. The Commission further finds that the Respondent’s actions of participating in Town matters concerning the sale of the Gate House property, as detailed in Section A above, fell within the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a), 5(b), 5(d) and 36-14-6. B. The Pennfield School The Commission finds that the Respondent, as a Portsmouth Town Councilor, participated and voted in the Town’s consideration of its lease renewal negotiations with the Pennfield School. The Commission further finds that the Respondent, in his capacity as a private realtor, engaged in unsolicited negotiations with Pennfield School representatives which led to the School’s purchase of other property for which the Respondent was the listing agent. The Commission further finds that the Respondent stood to gain a commission of six percent of the listed sales price, for a total profit $54,000.00, from the Pennfield School’s purchase of such property. The Commission further finds that the Respondent’s actions of participating in Town matters concerning lease renewal negotiations with the Pennfield School, as detailed in Section B above, fell within the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a), 5(b), 5(c), 5(d) and 36-14-6. C. The Ethics Complaint Vote 1. The Commission finds that the Respondent, as a Portsmouth Town Councilor, participated and voted in the Town’s consideration of whether the Council should direct the Solicitor to file a Complaint with the Ethics Commission regarding the Respondent’s conduct with regard to Sections A and B, above. 2. The Commission further finds that the Respondent’s actions of participating in the Council’s vote regarding the filing of an Ethics Complaint against himself fell within the prohibitions set forth in R.I. Gen. Laws §§ 36-14-5(a), 5(b), 5(d) and 36-14-6. D. Mitigating Factors The Respondent, Francis Oliveira, asserts the following mitigating factors to justify a reduction of the recommended civil penalty of One Thousand ($1,000.00) Dollars to a lesser or no monetary sanction. The Respondent, Francis Oliveira, is a life long resident of the Town of Portsmouth, and has served in many social and charitable organizations in the community. The Respondent, Francis Oliveira, has served as President of the Newport County Board of Realtors, and additionally has served on the Board’s Ethics and Professional Standards Committee. The Respondent, Francis Oliveira, has never had a complaint or any misconduct violation from any fellow realtor or citizens during his twenty-five years as a realtor. The Respondent, Francis Oliveira, has cooperated fully with the Ethics Commission during the pendency of this investigation and process. The Respondent, Francis Oliveira, waived his $54,000.00 realtor’s commission at the closing of the sale of the property between the Pennfield School and the Little Slocum Farm. The Respondent, Francis Oliveira, has not gained anything personally from the unfortunate transgressions cited in these findings of fact. E.Settlement The Respondent agrees that, pursuant to the above Findings of Fact and Conclusions of Law, the Prosecution will recommend, pursuant to R.I. Gen. Laws § 36-14-13(d), the imposition of a civil penalty of $1,000.00. The Respondent affirms that he has not received any compensation, direct or indirect, arising from the Pennfield School’s purchase of the Little Slocum Farm property, and hereby agrees to waive the receipt of any and all future compensation, whether direct or indirect, from said transaction. The Respondent reserves the right to argue for a lesser penalty or the imposition of no penalty. The above terms represent the full and complete Informal Resolution and Settlement for Complaint No. 99-2. Katherine Tammelleo, Commission Prosecutor Francis Oliveira, Respondent Christopher S. Gontarz, Counsel for Respondent Bar No. 3124 Note: The Commission accepted the settlement and imposed a $1000 civil penalty (June 20, 2000).