CEO 14-21 - July 30, 2014

CONFLICT OF INTEREST; VOTING CONFLICT

SCHOOL BOARD MEMBER
EMPLOYED BY NON-PROFIT LITERACY FOUNDATION

To:        Name withheld at personís request (Fort Lauderdale)

SUMMARY:

A prohibited conflict of interest would not be created under Section 112.313(7)(a), Florida Statutes, by a school board memberís employment with a literacy foundation where the foundation has no contract with her board/district and the board member performs no duties related to recruitment of teachers in her district for compensated positions with the foundation. However, the board member would be required, under Section 112.3143(3)(a), Florida Statutes, to abstain from voting on measures related to a board/district contract with the literacy foundation. CEO 10-3 and CEO 10-16 are referenced.


QUESTION 1:

Would the Code of Ethics prohibit a school board memberís operation of a reading mentors program, as part of her employment with a literacy foundation, where the reading mentors program includes recruitment of teachers for contractual positions with the foundation?


Question 1 is answered in the negative, as long as the board member does not operate the reading mentors program within the school district where she is a board member.


By your letter of inquiry and telephone communications with our staff, you relate that this opinion is sought on behalf of a member of a school board (ďBoard MemberĒ) who was recently appointed by the Governor to fill a vacancy on the board and was sworn into office on March 11, 2014. You inquire about the Board Memberís current private capacity employment situation and whether it creates a prohibited conflict of interest and also whether a voting conflict would exist if she were to vote on a measure related to a prospective contract between her Board/District and her private employer. We have combined your several questions about her employment situation into Questions 1, 2, and 3, which we will address first.

You relate that the Board Member is presently employed by a literacy foundation (ďFoundationĒ), a non-profit, tax-exempt corporation, where the Board Member serves as Regional Program Manager. You ask whether a prohibited conflict of interest would exist if the Board Member were to continue in her present duties with the Foundation, which include making presentations concerning a reading mentors program to teachers who serve as faculty advisors to Future Educators of America (ďFEAĒ) chapters within school districts in several counties, including the district where she serves as a Board Member. In this Foundation-sponsored reading mentors program, district students who are members of FEA serve as reading mentors for other students. You state that the Board Memberís presentation includes offering to FEA faculty advisors an opportunity to become Program Advisors under contracts with the Foundation. You relate that, under these contracts, the Foundation directly pays Program Advisors a stipend of $1000 per school year, with no Foundation funds passing through a school district to the Program Advisors. You state that the Board Member also has duties with the Foundation related to a family literacy program, which provides grants to entities other than Florida school districts. You explain that there is presently no contract between the Foundation and the Board Memberís Board/District and that the Board Memberís compensation in her position with the Foundation comes entirely from sources other than her Board/District. You also relate that the Foundation is considering altering these circumstances to require school districts participating in the reading mentors program to contract with the Foundation and to make payments directly to their participating Program Advisors.

This question implicates Section 112.313(7)(a), Florida Statutes,1 which states:


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.


The first part of Section 112.313(7)(a) prohibits a school board member from having an employment or contractual relationship with a business entity or agency that is doing business with or regulated by her agency. The second clause of Section 112.313(7)(a) prohibits employment or contractual relationships which would create continuing or frequently recurring conflicts between private interests and the performance of public duties, or which impede the full and faithful discharge of public duties.

There is no indication that the Board/District, which is the Board Memberís agency,2 presently regulates the Foundation or does business with Foundation. Therefore, the first part of Section 112.313(7)(a), Florida Statutes, would not apply to the situation presented in Question 1. Thus, the question is whether the Board Memberís work with the Foundationís reading mentors program, including teacher recruitment for Foundation contracts, would create a continuing or frequently recurring conflict between her private interests and the performance of her public (Board/District) duties or would impede the full and faithful discharge of her public duties. You state that the Board Memberís duties with the Foundation include recruiting teachers employed by the Board/District to work for the Foundation as independent contractors receiving stipends from the Foundation. If the Board Member were to engage in teacher recruitment within the District where she is a Board Member, we find that a prohibited conflict would exist under the second part of Section 112.313(7)(a) between her private interest as to the Foundation position and her public capacity position as a member of the Board. In such a situation, she could be tempted to act less than objectively toward teachers in her District depending on whether or not they worked for the Foundation. However, if the Board Member were to operate the reading mentors program, including teacher recruitment, in districts other than her District, the scenario would create no inherent conflict. Therefore, we find that the Board Memberís employment duties as to teacher recruitment for the reading mentors program would create no prohibited conflict under Section 112.313(7)(a), as long she performs such duties outside the District where she is a Board Member.

Question 1 is answered accordingly.


QUESTION 2:

Would the Code of Ethics prohibit the Board Memberís operation of a reading mentors program, as part of her employment with a literacy foundation, where the program includes recruitment of Board/District teachers for positions as Program Advisors with the foundation, if the Board/District were to enter into a contract with the Foundation for participation in the Program?


Question 2 is answered in the negative, as long as the Board Member does not operate the reading mentors program within the School District where she is a Board Member.


You state that a prospective contract contemplated by the Foundation would require the Board Memberís Board/District to provide access, facility space, and training to Foundation participants; appoint district personnel to be responsible for data collection and reporting to the Foundation; perform specified deliverables to the Foundation; distribute the Foundationís monetary stipends to participating District personnel; and provide indemnity and insurance coverage for the Foundation. If the Board/District were to enter into such contract with the Foundation, the Board/District would be doing business with the Foundation. Under the first part of Section 112.313(7)(a), as explained above in Question 1, any contract between the Foundation and the Board/District would create a prohibited conflict for the Board Member under Section 112.313(7)(a) unless an exemption is applicable. Because the contract is not contemplated to be awarded under a system of sealed, competitive bids, the exemption under Section 112.313(12)(b) would not apply. Another potential exemption is in Section 112.313(15), Florida Statutes, which provides:


ADDITIONAL EXEMPTION.--No elected public officer shall be held in violation of subsection (7) if the officer maintains an employment relationship with an entity which is currently a tax-exempt organization under s. 501(c) of the Internal Revenue Code and which contracts with or otherwise enters into a business relationship with the officerís agency and:


(a) The officerís employment is not directly or indirectly compensated as a result of such contract or business relationship;

(b) The officer has in no way participated in the agencyís decision to contract or to enter into the business relationship with his or her employer, whether by participating in discussion at the meeting, by communicating with officers or employees of the agency, or otherwise; and

(c) The officer abstains from voting on any matter which may come before the agency involving the officerís employer, publicly states to the assembly the nature of the officerís interest in the matter from which he or she is abstaining, and files a written memorandum as provided in s. 112.3143.


The Foundation is a non-profit, tax-exempt, section 501(c) organization, as required to meet the exemption and, further, you state that the Board Memberís employment would not be directly or indirectly compensated as a result of the prospective contract and that the Board Member has not participated or voted and will not participate or vote regarding a Board/District decision to contract with the Foundation. Thus, there would be no apparent conflict under the first part of Section 112.313(7)(a) because we find that the Board Memberís situation, if the prospective contract were in place and the Board/District were doing business with the Foundation, would meet the exemption in Section 112.313(15), which expressly exempts a public officer from the first part of Section 112.313(7)(a) insofar as the officerís private capacity employment entity contracts with or otherwise engages in a business relationship with the officerís agency. CEO 10-16.

However, because the first part of Section 112.313(7)(a) concerns only the ďregulation ofĒ and ďdoing business withĒ aspects of an employment or contractual relationship, we still must consider whether the Board Memberís employment with the Foundation would create a prohibited conflict of interest under the second part of Section 112.313(7)(a), Florida Statutes, i.e., a continuing or frequently recurring conflict or an impediment to the full and faithful discharge of her duties as a member of the Board, if the prospective contract were in place. In CEO 10-3, we analyzed a school board candidateís employment situation and found that, even if all the requirements for exemption under Section 112.313(15) were met, the candidate still would have a conflict under the second part of Section 112.313(7)(a), if she were to be elected to a school board position, because as a program director she directed the work of a non-profit business and education alliance on behalf of her employer and the duties of her private capacity position would create a prohibited overlap with her public position. Similarly, we find here, as we did in Question 1 above, that the Board Memberís recruitment of teachers employed by her Board/District for compensated positions with the Foundation would create a prohibited overlap with her public duties as a member of the School Board and thus would be a conflict of interest under the second part of Section 112.313(7)(a).

As to the Board Memberís employment as Regional Program Manager for the reading mentors program with the Foundation in school districts other than the one in which she serves as a Board Member, the same analysis would apply. The Board Member would be exempt from the first part of Section 112.313(7)(a) by operation of the exemption in Section 112.313(15), as stated above. However, the second part of Section 112.313(7)(a) would not apply in that scenario because the Board Member would not recruit teachers to receive Foundation compensation who also were employed by her Board/District. Therefore, we find that no conflict of interest would exist if the Board Member were to be employed by the Foundation as Regional Program Manager for the reading mentors program in school districts other than her District.

Question 2 is answered accordingly.


QUESTION 3:

Would the Code of Ethics prohibit the Board Memberís operation of a family literacy program as part of her employment with the Foundation?


Question 3 is answered in the negative.


You state that the Foundation conducts a family literacy program through Foundation grants to support adult education and early childhood literacy programs conducted by community-based organizations. You relate that the Board Memberís role in the family literacy program is to provide technical assistance for grant recipients and to collect data from grantees. You state that none of the Foundationís current or anticipated family literacy grants involve the Board Memberís Board/District or any Florida school board or district.

There is no indication that the Board Memberís Board/District presently regulates the Foundation or does business with Foundation. Therefore, the first part of Section 112.313(7)(a), Florida Statutes, would not apply to the scenario presented in Question 3, absent a contract between the Board/District and the Foundation. If the Foundation and the Board/District were to enter into a contract, the exemption in Section 112.313(15), as analyzed above in Question 2, would apply to exempt the Board Member from a conflict under the first part of Section 112.313(7)(a). As long as none of the family literacy grants or activities occur within the Board Memberís District, we find that no conflict would be created under the second part of Section 112.313(7)(a) concerning the Board Memberís work with the Foundation as to the family literacy program, whether or not the Board/District enters into a contract with the Foundation.

Question 3 is answered accordingly.


QUESTION 4:

Would the voting conflicts law prohibit the Board Member from voting on measures before the Board related to a potential contract between the Board/District and the Foundation?


Question 4 is answered in the affirmative.


The statutory provision implicated here is Section 112.3143(3)(a), Florida Statutes, which provides:


VOTING CONFLICTS.--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 officerís 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.


The voting conflicts law, applicable to local, elective public officers, comes into play in a situation in which the vote/measure would cause special private gain or loss to the voting officer personally, the officerís principal (e.g., the officerís employer, client of the officerís firm), the officerís business associate, the officerís relative (e.g., spouse), or certain other persons or entities listed in the statute.

Under the facts you have presented, a vote on a measure to approve a contract between the Board/District and the Foundation would create a special private gain for the Foundation, which is the Board Memberís principal (employer). Therefore, we find that the Board Member would be required to abstain from the vote(s). Further, the Board Member would be required to publicly state to the Board the nature of her interest in any measure(s) concerning the Foundation, and, within 15 days after the relevant vote(s), to file a memorandum (CE Form 8B) disclosing the nature of her interest in the relevant vote(s)/measure(s).

Question 4 is answered accordingly.


ORDERED by the State of Florida Commission on Ethics meeting in public session on July 25, 2014, and RENDERED this 30th day of July, 2014.


____________________________________

Linda McKee Robison, Chair


[1]Section 112.313(3), Florida Statutes (Doing Business With Oneís Agency), does not apply to the Board Memberís situation because, under the facts you have presented, the Board Member is not an officer, partner, director, or proprietor of the Foundation and otherwise is not acting in her private capacity with the Foundation to sell Foundation services to the Board/District.

[2]The Code of Ethics in Section 112.312, Florida Statutes, defines ďagencyĒ as ďany state, regional, county, local, or municipal government entity of this state.Ē