CEO 78-39 -- June 13, 1978

CONFLICT OF INTEREST

STATE REPRESENTATIVE PART OWNER OF, OFFICER AND DIRECTOR OF, AND RECEIVING BENEFITS FROM CORPORATION PERFORMING CONSTRUCTION WORK FOR THE STATE

To: (Name withheld at the person's request.)

Prepared by: Phil Claypool

SUMMARY:

A public officer is prohibited from being an officer or director of, or owning a material interest in, any business entity which is doing business with his public agency. Section 112.313(3), F. S. 1977. However, under the definition of "agency" contained in s. 112.312(2), a state legislator's agency is the Florida Legislature. Therefore, no conflict of interest is created where he is part owner and an officer and director of a corporation which performs construction work for the state so long as that corporation does not do business with the Legislature. Nor is there a conflict created under s. 112.313(7)(a), F. S., as subsection (2) thereof creates an exemption where the officer's agency is a legislative body and the regulatory power exercised over the business entity is strictly through the enactment of laws or ordinances. See CEO 77-6.

QUESTION:

Would a prohibited conflict of interest be created were I to purchase stock in, to resume my position as an officer and director of, and to receive compensation from a corporation which performs construction work for municipalities, counties, and the state?

Your question is answered in the negative.

In your letter of inquiry, which references an earlier advisory opinion to you, CEO 77-6, you advise that you wish to terminate your consultant status with the corporation which was the subject of that opinion and that you wish to purchase stock in the corporation and to resume your position as its secretary-treasurer and member of its board of directors. As a consequence of your position as an officer of the corporation, you advise that you will receive monetary remuneration as well as other benefits. You also advise that the corporation from time to time performs construction for municipalities, counties, and the state on a competitive bid basis, and that the corporation has not and foreseeably will not be under direct contract with the Legislature, since state contracts are handled by the Division of General Services.

The Code of Ethics 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. 1977.]

This provision prohibits a public officer from being an officer or director of, or owning more than 5 percent of, any business entity which is doing business with his agency. See CEO's 75-196, 76-5, and 76-12. However, since your "agency," as that term is defined in s. 112.312(2), F. S. 1977, is the Legislature, and since the corporation is not doing business with the Legislature, this prohibition is not applicable.

Nor do we find that s. 112.313(7)(a), F. S. 1977, which prohibits a public officer from being employed by a business entity which is doing business with or subject to the regulation of his agency, applies to your situation, for the same reasons outlined in CEO 77-6. Accordingly, we find that the Code of Ethics does not prohibit you from purchasing stock in, resuming your position as an officer and director of, and receiving compensation from a corporation which performs construction work for municipalities, counties, and the state.