2015-04-30 / Opinion

Farley Lodges Complaints Against Nicholson

By Barry Bridges

Two ethics complaints filed against interim Newport City Manager Joseph Nicholson by former Councilor Michael Farley were heard during a meeting of the Rhode Island Ethics Commission on Tuesday, April 28.

After an initial determination hearing in Providence, Commission Chair Ross Cheit announced that sufficient facts were alleged that, if shown to be true, would constitute violations of the Rhode Island Ethics Code. The board therefore authorized an investigation that will look further into the substance of Farley’s charges.

A senior staff attorney for the commission, Katherine D’Arezzo, told Newport This Week that the decision to investigate does not address the validity of the claims. “From their examination of the ‘four corners’ of the complaints, the commissioners decided to move forward to the next step in the process.”

Pursuant to the commission’s own procedural rules, neither Nicholson nor Farley was allowed to participate in the initial hearing, and it was closed to the public.

The Ethics Code is a set of statutory and regulatory provisions which regulate the ethical conduct of elected and appointed public officials as well as state and municipal employees.

The two complaints were filed on April 9 and 20 and largely cover times when Nicholson was serving as city solicitor. The first concerns an alleged business relationship that Nicholson’s law firm had with the Clarke School Limited Partnership, a privately-owned real estate developer which is presently in default to the City of Newport on a 20-year-old debt.

The city’s involvement with the project dates to 1994 when the Community Development Block Grant Fund loaned $1.35 million as a second mortgage to Clarke School LP to purchase and develop the former school into affordable and senior housing. When the balance to the city became due in 2012, the partnership was granted cil, but an additional extension request was later denied and the loan remains unpaid.

Farley asserts that Nicholson’s firm had been hired by Clarke to work on eviction cases, but that Nicholson never disclosed that fact and did not recuse himself in the matter of recovering the debt on the city’s behalf. Farley further says that Nicholson’s Clarke representation violated ethics laws by being in “substantial conflict with the proper discharge of his duties” as the municipal attorney.

The second matter alleged that Nicholson failed to list business that his law firm did for the Newport Housing Authority in the annual disclosures required to be filed by public officials. Farley maintains that “an official who is self-employed is obligated to disclose all work performed for municipal agencies over $250 on his annual financial disclosure” and that Nicholson failed to do so from 2008 through 2013.

Nicholson and his attorney, Chris Gontarz, declined to comment on Farley’s allegations, citing the ongoing nature of the proceedings.

D’Arezzo said that the commission will adhere to a well-established procedural process in moving forward. The investigative phase must usually be completed with 180 days of the date the complaints were filed. The Commission has the power to issue subpoenas to compel the production of evidence or the attendance of witnesses, and its staff may take oral or written evidence under oath.

The findings of the investigation will then be presented at a probable cause hearing, where Nicholson and Farley may be present. The commission could then vote to dismiss the complaint for lack of evidence, or find that there is sufficient probable cause to move to an adjudicative hearing where the staff prosecutor and Nicholson would present evidence and examine witnesses in an adversarial process. The commission would then meet in closed session to deliberate and decide whether there have been knowing and willful violations of ethics provisions.

In cases where a breach is established, the commission has the option of several remedies, including issuing a cease and desist order, imposing a civil fine of up to $25,000 per violation, or, for egregious violations, removing from office any official not subject to impeachment.

At any time in the process, the parties may also seek an informal disposition through an agreed settlement, consent order, or other resolution of the pending complaint, subject to the approval of the commission.

Final orders of the commission are subject to review by the Rhode Island Superior and Supreme courts.

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