CONFLICT OF INTEREST
FLORIDA STATEWIDE PASSENGER RAIL COMMISSION MEMBER
SHAREHOLDER IN LAW FIRM THAT REPRESENTS
CLIENTS DOING BUSINESS WITH OR AFFECTED BY FDOT
To: Name withheld at person's request (Tallahassee)
No prohibited conflict of interest would be created were a member of the Florida Statewide Passenger Rail Commission to be a shareholder in a law firm that represents clients that are seeking to do business with FDOT or are impacted by a route for a specific project, by the location of a specific transportation facility, or by the acquisition of right-of-way. A Rail Commissioner's "agency" is that Commission, rather than FDOT, and, given the independence of the two agencies, no continuing or frequently recurring conflict of interest or impediment to the full and faithful discharge of public duties would be created.CEO 94-5, CEO 04-9, CEO 92-11, and CEO 95-30 are referenced.
Would a prohibited conflict of interest exist were a member of the Florida Statewide Passenger Rail Commission to be a shareholder in a law firm that represents clients seeking to do business with the Department of Transportation ("FDOT") through the award of contracts related to publicly funded passenger rail systems, or who would be impacted by the route for a specific project, the location of a specific transportation facility, or the acquisition of right-of-way?
Your question is answered in the negative, under the circumstances presented.
You advise that … has been appointed by the Speaker of the House of Representatives to serve as a member of the Florida Statewide Passenger Rail Commission. As provided in Section 20.23(3)(a), Florida Statutes, the Rail Commission consists of nine voting members who are appointed by the Governor, the President of the Senate, and the Speaker of the House of Representatives. Of the three Speaker appointees, "one of whom must have a legal background, one of whom must have a background in financial matters, and one of whom must have a general business background." Section 20.23(3)(a)1.c., Florida Statutes.
The Rail Commission's "primary functions" are set forth by the Legislature:
1. Monitoring the efficiency, productivity, and management of all publicly funded passenger rail systems in the state, including, but not limited to, any authority created under chapter 343, chapter 349, or chapter 163 if the authority receives public funds for the provision of passenger rail service. The commission shall advise each monitored authority of its findings and recommendations. The commission shall also conduct periodic reviews of each monitored authority's passenger rail and associated transit operations and budget, acquisition of property, management of revenue and bond proceeds, and compliance with applicable laws and generally accepted accounting principles. The commission may seek the assistance of the Auditor General in conducting such reviews and shall report the findings of such reviews to the Legislature. This paragraph does not preclude the Florida Transportation Commission from conducting its performance and work program monitoring responsibilities.
2. Advising the department on policies and strategies used in planning, designing, building, operating, financing, and maintaining a coordinated statewide system of passenger rail services.
3. Evaluating passenger rail policies and providing advice and recommendations to the Legislature on passenger rail operations in the state. [Sec. 20.23(3)(b), Fla. Stat.]
In addition, the Legislature has specifically described what the Rail Commission may not do:
The commission or a member of the commission may not enter into the day-to-day operation of the department or a monitored authority and is specifically prohibited from taking part in:
1. The awarding of contracts.
2. The selection of a consultant or contractor or the prequalification of any individual consultant or contractor. However, the commission may recommend to the secretary standards and policies governing the procedure for selection and prequalification of consultants and contractors.
3. The selection of a route for a specific project.
4. The specific location of a transportation facility.
5. The acquisition of rights-of-way.
6. The employment, promotion, demotion, suspension, transfer, or discharge of any department personnel.
7. The granting, denial, suspension, or revocation of any license or permit issued by the department. [Sec. 20.23(3)(c), Fla. Stat.]
You also advise that the subject Rail Commission member is a shareholder in a law firm that represents clients which seek to do business with FDOT through the award of contracts in connection with publicly funded passenger rail systems, or which would be impacted by the route for a specific rail project, by the location of a specific transportation facility, or by the acquisition of right-of-way. Finally, you advise that the subject Commissioner does not represent clients before FDOT.
Within the Code of Ethics for Public Officers and Employees, Section 112.313(7)(a), Florida Statutes, provides:
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, excluding those organizations and their officers who, when acting in their official capacity, enter into or negotiate a collective bargaining contract with the state or any municipality, county, or other political subdivision of the state; 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.
The first portion of this provision would prohibit a member of the Rail Commission from having a contractual relationship with a business entity that is doing business with his agency or is subject to the regulation of his agency. The second portion addresses contractual relationships that would create a "continuing or frequently recurring" conflict of interest or that would "impede the full and faithful discharge" of public duties.
For the reasons previously explained in CEO 80-79, we have found that an attorney has a contractual relationship with each of the firm's clients. See also, CEO 94-5 and CEO 04-9, for example.
However, even though clients of the firm might be said to be "doing business with" or "subject to the regulation of" FDOT, we conclude that the member's "agency" for purposes of this provision of the Code of Ethics is the Statewide Passenger Rail Commission rather than FDOT. The term "agency is defined as follows:
'Agency' means any state, regional, county, local or municipal government entity of this state, whether executive, judicial, or legislative; any department, division, bureau, commission, authority, or political subdivision of this state therein; or any public school, community college, or state university. [Sec. 112.312(2), Fla. Stat.]
In CEO 92-11 we concluded that that the "agency" of a member of the Transportation Commission was that Commission, rather than FDOT. Similarly, in CEO 95-30 we concluded that an individual was not prohibited from serving on the Environmental Regulation Commission because his law firm represented clients that may have had interests adverse to those of the Department of Environmental Protection. In each of these cases, although the Commission was responsible for broad, policy matters, the Department functioned independently under its Secretary and was responsible for day-to-day regulatory and contracting decisions. Here, in particular, we note that under Section 20.23(3)(d), Florida Statutes, the Rail Commission "is assigned to the Office of the Secretary of the Department of Transportation for administrative and fiscal accountability purposes, but it shall otherwise function independently of the control and direction of the department . . .."
While we would be concerned if the subject of this opinion were to be the firm's relationship with one of the publicly funded passenger rail systems which the Rail Commission is responsible for monitoring and advising, or if the firm were to be representing clients before the Rail Commission1, your question rather involves the law firm's representation of clients who seek to do business with FDOT or who otherwise are affected by FDOT decisions – the route for a specific project, the location of a specific transportation facility, or the acquisition of right-of-way. As specifically provided by law, the Rail Commission may not be involved with the day-to-day operation of FDOT. The Rail Commission is expected to advise FDOT on more general matters, like policies for planning, building, operating, and financing passenger rail services, but cannot take part in awarding contracts, selecting routes for specific projects or locations for transportation facilities, or acquiring right-of-way. Under these circumstances, the firm's clients could not be said to be "doing business with" or "subject to the regulation of the Rail Commission (as opposed to FDOT). Nor, given the legal limitations on the Rail Commission's authority and its independence from FDOT, do we perceive any continuing or frequently recurring conflict or impediment to the full and faithful discharge of public duties, arising out of the firm's representation of clients in these types of matters.
Accordingly, we find that the subject Rail Commission member would not be prohibited from being a shareholder in a law firm that represents clients that are seeking to do business with FDOT or are impacted by a route for a specific project, by the location of a specific transportation facility, or by the acquisition of right-of-way.
ORDERED by the State of Florida Commission on Ethics meeting in public session on September 3, 2010 and RENDERED this 8th day of September, 2010.
Roy Rogers, Chairman
See CEO 95-30..