CEO 13-13 - September 18, 2013
CONFLICT OF INTEREST; VOTING CONFLICT
AIRPORT AUTHORITY COMMISSIONER DONATING RIGHT TO PURCHASE
PROPERTY TO AIRPORT AUTHORITY
To: Name withheld at person's request
No prohibited conflict of interest would be created under Sections 112.313(3) and 113.313(7)(a), Florida Statutes, were an airport authority commissioner who privately contracted to purchase a parcel of property located near the airport to donate his right to purchase the parcel to the airport authority. The commissioner would not be selling real property to his agency-he would be donating the right to purchase the property to the airport authority. His transfer of the right to purchase the property also would not create a prohibited contractual relationship. The commissioner is advised to abstain from voting on the matter and to fully comply with Section 112.3143, Florida Statutes, when it comes before the airport authority, as the airport authority's decision regarding the donation would inure to his economic benefit or loss. CEO 82-15, CEO 82-31, CEO 90-49, and CEO 96-31 are referenced.
Would a prohibited conflict of interest be created were an airport authority commissioner to donate the right to purchase a parcel of property to the airport authority where he has entered into a contract to purchase the property for himself?
Under the particular circumstances of this inquiry, your question is answered in the negative.
Through your letter of inquiry and correspondence with our staff, we are advised that you serve as the General Counsel to the Sarasota Manatee Airport Authority, and have been authorized to seek this opinion on behalf of . . ., a member of the Airport Authority's governing board from Manatee County. You relate that the Commissioner is an experienced and successful homebuilder and developer in the two-county area where the airport is located, and that in December 2012, he personally contracted to purchase 84 acres of industrially-zoned property about a half-mile from the end of one of the airport's runways. The purchase price for the property was $2.3 million and the Commissioner paid a $125,000 deposit, which, under the terms of the contract, gave him six months to decide whether to close on the property. If he chose not to go forward with the purchase, his $125,000 deposit would be returned in full.
During the six-month period, he approached the Airport Authority's president/chief executive officer and inquired whether the Airport Authority might be interested in the property if he donated the purchase rights under the contract to the Airport Authority. The Airport Authority president had the property appraised and the appraisal reflected a fair market value of $2.6 million, which was communicated to the Commissioner. As the initial six-month period came to an end, the Commissioner negotiated a still lower price of $1.8 million with the seller, but in exchange for the lowered price, the Commissioner agreed to a closing date of October 14, 2013, and although the amount of his deposit was reduced to $100,000, it would be forfeited if the sale did not close. The Commissioner would like to assign his purchase rights to the Airport Authority as long as the transaction would not violate the Code of Ethics. It is contemplated that if the Airport Authority decides to go forward with the purchase, the Airport Authority would pay $100,000 to the closing agent and the Commissioner's $100,000 deposit would be returned to him.
The applicable provisions of the Code of Ethics are as follows:
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.]
Section 112.313(3) prohibits a public officer from acting in his private capacity to sell property to his own agency. However, Section 112.313(3) is not applicable here because the Commissioner would not be selling property to the Airport Authority. Instead, he would be donating his right to purchase a parcel to the Airport Authority. In CEO 82-15, we opined that this provision did not apply where a county commissioner donated a tract of land to the county. This opinion was also cited in CEO 90-49, where a county commissioner donated land for a road right-of-way to the county. Based on this precedent, we do not believe that the Commissioner's donation of his right to purchase the property to the Airport Authority would violate Section 112.313(3), Florida Statutes.
Section 112.313(7)(a) prohibits the Commissioner from having a contractual relationship with a business entity that is doing business with his agency. It also prohibits contractual relationships which create continuing or frequently recurring conflicts of interest, or which impede the full and faithful discharge of public duties.
We do not find this provision to bar the donation, either. Under the first part of Section 112.313(7)(a), while in a strict sense it might be said that the Commissioner would hold a contractual relationship with a business entity (his company or his proprietorship) doing business with the Airport Authority (his public agency) by virtue of the mutual obligations of the donation, we find that, in this particular situation, any concerns are obviated by Section 112.316, Florida Statutes, which provides:
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.
And, similarly, under the second part of the statute, we do not see a frequently recurring conflict or an impediment to the full and faithful discharge of the Commissioner's public duties.
You have asked us to advise whether the voting conflict statute requires the Commissioner to abstain from the Airport Authority's decision to accept the assignment of his purchase rights. Section 112.3143(3)(a), Florida Statutes, provides:
No county, municipal, or other local public officer shall vote in an official capacity upon any measure which would inure to his or her special private gain or loss; which he or she knows would inure to the special private gain or loss of any principal by whom he or she is retained or to the parent organization or subsidiary of a corporate principal by which he or she is retained, other than an agency as defined in s. 112.312(2); or which he or she knows would inure to the special private gain or loss of a relative or business associate of the public officer. Such public officer shall, prior to the vote being taken, publicly state to the assembly the nature of the officer's interest in the matter from which he or she is abstaining from voting and, within 15 days after the vote occurs, disclose the nature of his or her interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes.
You have advised that if the Airport Authority declines the assignment of the right to purchase the property, the Commissioner would have the option of offering the opportunity to another entity, going forward with the purchase himself, or forfeiting his $100,000 deposit. In CEO 96-31, we advised a city councilman that he should abstain from voting to assign a leasehold interest in a city-owned marina to a company in which he owned a substantial interest. In that situation, we concluded that the city's approval of the lease assignment would inure to the special gain or loss of the assignee company in which the city councilman owned a substantial interest. In CEO 82-31, we opined that a water control district board member should abstain from voting to accept a donation of land to the district from the board member's employer since his employer stood to specially benefit from the donation. Although the Commissioner's situation differs from these two opinions, we believe that he should abstain from voting as a member of the Airport Authority to accept the assignment of his rights to purchase the property. The Commissioner's $100,000 deposit will be returned to him if the Airport Authority accepts the assignment, and will not if it does not. Earlier this year, the Florida Legislature amended the voting conflict law to define the term "special private gain or loss." Section 112.3143(1)(d), Florida Statutes (2013) (Chapter 2013-36, Section 6, Laws of Florida), now provides:
"Special private gain or loss" means an economic benefit or harm that would inure to the officer, his or her relative, business associate, or principal, unless the measure affects a class that includes the officer, his or her relative, business associate, or principal, in which case, at least the following factors must be considered when determining whether a special private gain or loss exists:
1. The size of the class affected by the vote.
2. The nature of the interests involved.
3. The degree to which the interests of all members of the class are affected by the vote.
4. The degree to which the officer, his or her relative, business associate, or principal receives a greater benefit or harm when compared to other members of the class.
The degree to which there is uncertainty at the time of the vote as to whether there would be any economic benefit or harm to the public officer, his or her relative, business associate, or principal and, if so, the nature or degree of the economic benefit or harm must also be considered.
Although this new provision is no different from the Commission's long-standing interpretation of the voting conflicts law, we do believe that the Commissioner would experience a special private gain or loss from the Airport Authority's decision to accept the assignment of his rights to purchase the property. Therefore, he should abstain from voting, announce the reason for his abstention, and file the voting conflict form (CE Form 8B) with the person responsible for keeping the Airport Authority's minutes within 15 days of the vote.
Accordingly, we find that no prohibited conflict of interest would be created were the Airport Authority to accept the Commissioner's assignment of his rights to purchase the 84-acre parcel of property located approximately one-half mile from an airport runway, but that the Commissioner should abstain from voting on the matter.
ORDERED by the State of Florida Commission on Ethics meeting in public session on September 13, 2013, and RENDERED this 18th day of September, 2013.
Morgan R. Bentley, Chair