CEO 07-1 --January 31, 2007
CONFLICT OF INTEREST
CITY HOUSING AUTHORITY MEMBER PARTNER
IN LAW FIRM HIRED TO PROVIDE LEGAL SERVICES
TO AUTHORITY PRIOR TO MEMBER'S JOINING FIRM
Under the specific circumstances presented in this opinion, a conflict of interest does not exist under Section 112.313(3) or Section 112.313(7)(a), Florida Statutes, where a member of a city housing authority is a partner in a law firm providing legal services to the authority, where the firm was hired to provide the services prior to the member's joining the firm. However, a conflict of interest will be created if the authority enters into a new agreement with the firm, absent the applicability of an exemption under Section 112.313(12), Florida Statutes. CEO 85-40, CEO 89-48, CEO 94-5, CEO 97-5, CEO 01-15, and CEO 02-14 are referenced. 1
Does a prohibited conflict of interest exist where a member of a city housing authority is a partner in a law firm providing legal services to the authority?
Under the specific circumstances presented in your inquiry, this question is answered in the negative as to the firm's contract or business with the authority entered into prior to the member's joining the firm and is answered in the affirmative as to any contracts or business between the authority and the firm entered into after his joining the firm.
By your letter of inquiry, we are advised that you inquire in behalf of Steven Chaykin (member), a member of the Housing Authority of the City of Miami Beach (Authority or HACMB)2, who also is an attorney in Miami-Dade County, Florida. Further, you advise that approximately four years ago the Authority hired a law firm as labor counsel, that the member was on the Authority board at the time of the hiring, but that the member was not in the firm at the time it was hired. Additionally, you advise that approximately three years ago the firm was merged into and absorbed by another law firm, that until December of last year the member was a partner in a third law firm, and that the member (also in December of last year) moved to the firm which absorbed the firm originally hired as labor counsel.3
The Code of Ethics for Public Officers and Employees provides in part:
DOING BUSINESS WITH ONE'S AGENCY.-No employee of an agency acting in his or her official capacity as a purchasing agent, or public officer acting in his or her official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his or her own agency from any business entity of which the officer or employee or the officer's or employee's spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or the officer's or employee's spouse or child, or any combination of them, has a material interest. Nor shall a public officer or employee, acting in a private capacity, rent, lease, or sell any realty, goods, or services to the officer's or employee's own agency, if he or she is a state officer or employee, or to any political subdivision or any agency thereof, if he or she is serving as an officer or employee of that political subdivision. The foregoing shall not apply to district offices maintained by legislators when such offices are located in the legislator's place of business or when such offices are on property wholly or partially owned by the legislator. This subsection shall not affect or be construed to prohibit contracts entered into prior to:
(a) October 1, 1975.
(b) Qualification for elective office.
(c) Appointment to public office.
(d) Beginning public employment.
[Section 112.313(3), Florida Statutes.]
CONFLICTING EMPLOYMENT OR CONTRACTUAL RELATIONSHIP.-No public officer or employee of an agency shall have or hold any employment or contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, an agency of which he or she is an officer or employee . . .; nor shall an officer or employee of an agency have or hold any employment or contractual relationship that will create a continuing or frequently recurring conflict between his or her private interests and the performance of his or her public duties or that would impede the full and faithful discharge of his or her public duties. [Section 112.313(7)(a), Florida Statutes.]
We find that the member's situation regarding the current contract/business for legal services between the firm and the Authority is not conflicting for him under either statute. Regarding Section 112.313(3), we find that he was not an attorney of the firm at the time of the purchase/sale, only having become a partner of the merged/absorbed firm (the successor in interest to the contract/business) nearly four years later. Thus, the member did not act in a public (Authority) capacity to purchase services from a business entity with which he held a leadership or ownership status under the statute (because he was not affiliated with the firm when the Authority entered into the contract/business with the firm), and he did not act in a private (firm) capacity to sell services to the Authority (again, because he was not affiliated with the firm when it entered into the contract/business with the Authority).
Regarding Section 112.313(7)(a), while the member does in fact hold a contractual relationship with the merged/absorbed firm (a business entity doing business with the Authority by virtue of being the private party to the existing legal services contract), we refuse to read the statute in isolation, preferring to construe it in conjunction with Section 112.316, Florida Statutes, which provides:
CONSTRUCTION.-It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his or her duties to the state or the county, city, or other political subdivision of the state involved.
Under the particular facts of your inquiry, we find that the member's very recently begun relationship with the firm, a business entity doing business with the Authority because of its contract/business with the Authority (which he voted on years earlier while not affiliated with the firm), would not interfere with the full and faithful discharge of his public duties to the Authority. Also supportive of our reasoning in this regard is CEO 97-5, in which we found that a county commissioner's voting to approve leases and funding of an organization which later would become her employer would not defeat the applicability of an exemption to the prohibition of Section 112.313(7)(a), reasoning that at the time the commissioner voted the organization was not her employer.
However, we also find that, should the member's law firm be selected anew to provide legal services to the Authority, a conflict of interest would be created under the statutes, unless one of the exemptions of Section 112.313(12), Florida Statutes, applies.4 CEO 85-40 and CEO 02-14.5
Your inquiry is answered accordingly.
ORDERED by the State of Florida Commission on Ethics meeting in public session on January 26, 2007 and RENDERED this 31st day of January, 2007.
Norman M. Ostrau, Chair
Prior opinions of the Commission on Ethics are viewable on its website: www.ethics.state.fl.us
You advise that the Authority is a public housing agency created by the City Commission of the City of Miami Beach as an independent agency to provide housing services to the community as provided under Federal and State law; that pursuant to Section 421.05, Florida Statutes, the Authority consists of five board members appointed by the City Commission; that the Authority board appoints an executive director, who manages daily operations; that board members are volunteers who are paid no compensation for their service; that the board hires all professionals and consultants and votes upon all contracts valued at over $25,000; and that the executive director is provided the authority to procure all services under $25,000.
You advise that in spite of the merger and move, a particular attorney (not the member) has been and remains the lawyer providing the labor counsel services to the Authority, continuously representing the Authority for many years beginning prior to the member's sitting on the Authority.
Note that the exemption of Section 112.313(12)(b), Florida Statutes, requires, inter alia, sealed, competitive bidding to the lowest or best bidder. Requests for proposals or other methods similar to sealed, competitive bidding are not within the exemption. CEO 01-15 and CEO 89-48.
Further, we find that the member should abstain from voting and comply with the other requirements of Sections 112.3143(3) and (4), Florida Statutes, regarding Authority measures concerning any future selection of labor counsel, if his firm seeks to respond to an Authority labor counsel services request for proposals or qualifications. However, please note that such compliance will not insulate the member from conflicts under Sections 112.313(3) and 112.313(7)(a), Florida Statutes. CEO 94-5.