CEO 75-125 -- June 20, 1975
CONFLICT OF INTEREST
NO CONFLICT EXISTS WHERE A MEMBER OF A WATER MANAGEMENT BOARD DOES BUSINESS ON A COMPETITIVE BID BASIS WITH AN AGENCY THE BOARD REGULATES
To: Robert E. Vaughn, Southwest Florida Water Management District, Brandon
Prepared by: Jeff Trammel
Pursuant to s. 112.313(2), F. S. (1974 Supp.), a public officer is prohibited from owning a material interest in any business entity doing business with his own agency unless such business is contracted with full public competition. Where the agency is not the officer's own but one over which his agency exercises regulatory powers, and because in this case competitive bidding procedures were followed, no conflict of interest exists. Further, where the regulated agency contracts, on a competitive-bid basis, with two companies in which two members of the regulatory board hold material interests, no conflict exists for the reasons stated above. Such board members are subject, however, to the filing of CE Form 4 should they be called upon to vote on matters pertaining to such business.
1. Does a conflict of interest exist if I am a member of the Southwest Florida Water Management District Board (SWFWMD) and a company in which I own a material interest obtains a contract with full public competition from a local governmental agency whose wellfield is regulated by the SWFWMD Board?
2. Does a conflict of interest exist if an agency regulated by the SWFWMD Board contracts on a competitive-bid basis with two separate companies to do work on a watertank construction project, where one firm is materially owned by me and the other, a consulting engineering firm, is materially owned by a fellow SWFWMD Board member?
Question 1 is answered in the negative.
As a member of the SWFWMD Board, you are clearly a public officer within the meaning of s. 112.312(7)(b), F. S. (1974 Supp.), and thus subject to the Code of Ethics for Public Officers. The code prohibits public officers from holding positions that create conflicting interests as defined in s. 112.313(2), F. S.:
No public officer or employee of an agency shall own a material interest in any business entity doing business with the agency of which he is an officer or employee, except in those cases when the business is contracted with full public competition and award is made to the lowest or best bidder or to a consultant in accordance with Chapter 287.055, Florida Statutes.
This provision seeks to prevent the occurrence of those situations where a public officer uses his official position to his private business advantage. In order to assure public trust, officeholders should continuously avoid transactions that suggest conflicting interests.
After hearing your oral testimony and examining the documents submitted, we are of the opinion that your company's contract with an agency regulated by the board does not breach the above provision since it lacks two elements essential to the occurrence of a violation. First, your company is not "doing business with the agency of which [you are] an officer . . . ." The agencies with which your company contracted are municipal and county governments, not the SWFWMD. The fact that the projects are on land leased from the water management district has no known bearing on this question. Second, there is no violation of the Code of Ethics "when the business is contracted with full public competition and award is made to the lowest or best bidder . . . ." In your appearance before the commission, you assured the integrity of the competitive bidding procedure employed by the municipal and county governments, adding that the board had authority only over approving the design of the project, but no other control over actual construction. It is evident that in the absence of these two conditions there is no infraction of s. 112.313(2), supra. Likewise, none of the other standards of conduct appear to be violated by this transaction.
Question 2 is also answered in the negative.
As noted in our response to your first query, the prime contractor is not in violation of the Code of Ethics where he either does business with an agency other than the one of which he is an officer or if he contracts on a competitive-bid basis. In this instance, both of the criteria are met, so there is no violation by the contractor or consulting engineer. See CEO 75-7.
In conclusion, we would call to your attention the code's requirement that voting conflicts of interest be disclosed. If you consider a matter which directly or indirectly inures to your private gain, you must file one copy of CE Form 4 (see copy attached) with the SWFWMD Board and a copy with the Ethics Commission. To avoid any appearance of impropriety, Form 4 should be filed as soon as practicable but not later than 15 days after the vote or abstention from voting occurs.
Your questions are thus answered based on the law as it existed at the time of your inquiry together with the facts stated in your request for advisory opinion and no other information.