CEO 77-182 -- December 14, 1977
CONFLICT OF INTEREST
EMPLOYEE OF SCHOOL BOARD SELLING ITEMS TO SCHOOL BOARD
To: (Name withheld at the person's request.)
Prepared by: Phil Claypool
Although s. 112.313(3), F. S., prohibits a public employee acting in a private capacity from selling any goods to the political subdivision which employs him, Ch. 77-349, Laws of Florida, provides several exemptions to the prohibition contained in s. 112.313(3). In relevant part, that statute provides that no person shall be held in violation of s. 112.313(3) or (7) if: The business is transacted under a rotation system which includes all qualified suppliers of the goods or services within the political subdivision; the business is awarded by competitive bidding, the official or his spouse or child have in no way participated in the specifications for or determination of the bid, and the officer disclosed his interest prior to submission of the bid; the purchase or sale is for legal advertising in newspapers, for utilities services, or for passage on common carriers; the transaction constitutes an emergency purchase or contract necessary to protect the health, safety, or welfare of citizens; the business entity is the only source of supply within the political subdivision and the official discloses his interest to the governing body of that subdivision; or the total amount of the transaction does not exceed $500, which is interpreted by the commission to mean that an official may do not more than $500 worth of business with his political subdivision in any given 12-month period. Provided the terms of any one of the above exemptions are met, no prohibited conflict of interest would be created were a school board employee to sell office supplies to that school board.
Would a prohibited conflict of interest exist were an employee of a school board to sell office supplies to that school board?
Your question is answered in the negative, subject to conditions specified later in this opinion.
In your letter of inquiry you advise that ____ owns the only office supply business in Sumter County and that for several years he has been under contract to the Sumter County School Board to maintain all of their business machines. In this relationship he is considered an employee of the school board and receives all employee benefits from the board. You also advise that the board wishes to purchase items from his company when needed on an emergency basis or on a casual basis and that ____ wishes to know if he would be entitled to submit bids on equipment and other supplies to the board.
The Code of Ethics for Public Officers and Employees provides in relevant part:
DOING BUSINESS WITH ONE'S AGENCY. -- No employee of an agency acting in his official capacity as a purchasing agent, or public officer acting in his official capacity, shall either directly or indirectly purchase, rent, or lease any realty, goods, or services for his own agency from any business entity of which he or his spouse or child is an officer, partner, director, or proprietor or in which such officer or employee or his 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 his own agency, if he is a state officer or employee, or to any political subdivision or any agency thereof, if he is serving as an officer or employee of that political subdivision. . . . [Section 112.313(3), F. S. 1975.]
This provision prohibits a public employee acting in a private capacity from selling any goods to the political subdivision which employs him. Therefore, the business owned by the subject school board employee seemingly is prohibited from selling office supplies to the school district. See CEO's 75-196 and 76-23.
However, Ch. 77-349, Laws of Florida, provides several exemptions to the general rule of s. 112.313(3), above. That chapter provides, in relevant part:
[N]o person shall be held in violation of subsection (3) or subsection (7) if:
(a) Within a city or county the business is transacted under a rotation system whereby the business transactions are rotated among all qualified suppliers of the goods or services within said city or county; or
(b) The business is awarded under a system of sealed, competitive bidding to the lowest or best bidder and the official or his spouse or child have in no way participated in the determination of the bid specifications or the determination of the lowest or best bidder; and the official or his spouse or child has in no way used or attempted to use his influence to persuade the agency or any personnel thereof to enter such a contract other than by the mere submission of the bid; and the official, prior to or at the time of the submission of the bid has filed a statement with the Department of State if he is a state officer or employee, or with the Clerk of the Circuit Court of the county in which the agency has its principal office if he is an officer or employee of a political subdivision, disclosing his, or his spouse's or child's, interest and the nature of the intended business; or
(c) The purchase or sale is for legal advertising in newspapers, for any utilities services, or for passage on common carriers; or
(d) An emergency purchase or contract which would otherwise violate a provision of subsection (3) or subsection (7) must be made in order to protect the health, safety, or welfare of the citizens of the state or any political subdivision thereof; or
(e) The business entity involved is the only source of supply within the political subdivision of the officer or employee, and there is full disclosure of the officer's or employee's interest in the business entity to the governing body of the political subdivision; or
(f) The total amount of the subject transaction does not exceed $500. [Section 1, Ch. 77-349, Laws of Florida.]
Paragraph (b) provides an exemption under which the subject employee could sell to the school board when a system of sealed, competitive bidding is used and where suitable disclosure is made. Paragraph (d) relates to emergency purchases. Assuming that the school board could find that an emergency purchase of office supplies from the subject employee were necessary in order to protect the health, safety, or welfare of the citizens of the school district, paragraph (d) would be applicable. Paragraph (e) may also have some applicability, as you have advised that the subject employee owns the only office supply business within the county. To the extent that a particular item is not found in another store within the county, the subject employee's business would be the only source of supply within the political subdivision. However, to the extent that a particular item might also be found in a store within the county that is not an office supply company, for example, a discount store, paragraph (e) would not apply.
Paragraph (f) provides an exemption where the total amount of the transaction does not exceed $500. In interpreting this exemption, as in interpreting all statutes, the primary guide to statutory construction is to determine the purpose of the Legislature. Tyson v. Lanier, 156 So.2d 833 (Fla. 1963). Considering the provisions of paragraphs (a) through (f), it is apparent that the legislative intent behind Ch. 77-349 was to allow several limited exceptions to the blanket prohibitions contained in s. 112.313(3) and (7) in order to avoid working unreasonable hardships in cases where the possibility of undue official influence would be slight in comparison to the hardship visited upon the political subdivision by the prohibition. Thus, there is the exemption for emergencies, where the hardship would be great, and there is the exemption for bidding, where the possibility of undue influence is virtually nonexistent. However, were we to interpret paragraph (f) to allow a public officer or employee to sell to his agency any amount of goods or services so long as it is broken down into numerous transactions of $500 or less, we would be creating an exception which could consume the general rule, one which would be contrary to the legislative intent in allowing the possibility of undue official influence where no hardship would have been worked upon the political subdivision otherwise and which would make the carefully considered restraints of the other exemptions meaningless. As the courts of this state have recognized:
The court, in construing a statute, must regard legislative intent as the guiding factor, and this intent must be given effect even if it appears to be contradictory to the strict wording of the statute and to the rules of construction. The literal interpretation should not be accorded if it leads to an unreasonable conclusion or to a result not intended by the lawmakers. [City of Fort Lauderdale v. Des Camps, 111 So.2d 693, 695 (2 D.C.A. Fla., 1959).]
See also Bauer v. Reese, 161 So.2d 678 (1 D.C.A. Fla., 1964), and Rinkler Materials Corp. v. City of North Miami, 273 So.2d 436 (3 D.C.A. Fla., 1973). Accordingly, in order to avoid reaching an unreasonable result, we interpret paragraph (f) to exempt from the general prohibitions of s. 112.313(3) and (7) a single transaction of an amount not exceeding $500; where there are a series of transactions over a period of time between the agency and the officer, employee, or his business entity, we will consider them as parts of one single ongoing transaction so as to exempt a total of not more than $500 worth of business within any calendar or fiscal year. Having so interpreted paragraph (f), we find that the subject employee may do no more than $500 worth of business with the school board in any given 12-month period, exclusive of whatever transactions he may have with the board that fall within one of the other exemptions in Ch. 77-349.