CEO 78-58 -- September 8, 1978

CONFLICT OF INTEREST

ATTORNEY FOR HOUSING AUTHORITY MEMBER OF INVESTMENT GROUP WHICH OWNS RENTAL PROPERTY WITH TENANTS RECEIVING RENT SUPPLEMENTS FROM HOUSING AUTHORITY

To: Bryan W. Henry, Attorney, Tallahassee Housing Authority, Tallahassee

Prepared by: Phil Claypool

SUMMARY:

The Code of Ethics in s. 112.313(7)(a), F. S. (1977) prohibits a public officer from having a contractual relationship with any business entity or any agency which is subject to the regulation of, or is doing business with, his public agency. In a previous advisory opinion, CEO 77-88, that provision was found to prohibit a county commissioner from entering into a contractual relationship with a county housing assistance office as a landlord in the lease of property under the H.U.D. s. 8 Housing Assistance Payments Program. In the instant case, however, where a housing authority attorney privately is a member of an investment group which owns rental property that it rents directly to tenants who, in turn, receive rent supplements from the housing authority, there is no contract between the public officer's business and his agency in violation of the literal terms of s. 112.313(7)(a). The petitioner also questions whether the situation would be violative of the spirit of the Code of Ethics, and, when examined in this light, it appears that the instant situation does not differ significantly from that referenced in CEO 77-88. The investment group of which the housing authority attorney is a member will receive a rent subsidy from the authority. In the commission's view, the arrangement therefore violates the spirit, if not the letter, of the Code of Ethics.

QUESTION:

Does a prohibited conflict of interest exist where I, a part-time attorney for a housing authority, belong to an investment group which owns rental property, where one tenant is receiving a rent supplement from the housing authority?

Your question is answered in the negative.

In your letter of inquiry you advise that you are an attorney in private practice, representing on a part-time basis the Tallahassee Housing Authority. You also advise that you belong to an investment group which owns several pieces of rental property within the city, one of which has been leased by the property manager to an individual who is receiving a rent supplement through the housing authority. In addition, you advise that this supplement is paid directly to the property manager by the housing authority, although there is no contract between the landlord and the housing authority, as the only contract involved is a lease with the occupant. You wish to know whether this transaction would violate the standards of conduct provided in the Code of Ethics for Public Officers and Employees, s. 112.313, F. S. The Code of Ethics provides in relevant part:

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 is an officer or employee . . . ; nor shall an officer or employee of an agency have or hold any employment or contractual relationship which will create a continuing or frequently recurring conflict between his private interests and the performance of his public duties or that would impede the full and faithful discharge of his public duties. [Section 112.313(7)(a), F. S. 1977.]

Enclosed, please find a copy of a previous advisory opinion we have issued, CEO 77-88. In that opinion we advised that this provision of the Code of Ethics prohibited a county commissioner from entering into a contractual relationship with a county housing assistance office as a landlord pursuant to the H.U.D. s. 8 Housing Assistance Payments Program. The rationale for that opinion was that in order to participate in the program as a landlord, the subject commissioner would have had to enter into a contract with the county housing assistance office which, as a county agency, was subject to the regulation of the board of county commissioners, his agency.

In terms of the literal application of s. 112.313(7)(a), above, we perceive a material difference between your situation and that addressed in CEO 77-88. In the former opinion there was a contract between the housing assistance office and the subject county commissioner as landlord, whereas you have advised that in your case there is no contract between the landlord and the housing authority. In the absence of a contractual relationship, there can be no violation of s. 112.313(7)(a), and, accordingly, we find that there is no prohibited conflict of interest under the circumstances you have described.

However, you have also asked whether the spirit of the Code of Ethics would be violated under these circumstances. When examined in this light, it appears that your situation does not differ significantly from that of the county commissioner in CEO 77-88. The county commissioner would have received the rent subsidy from a county agency which was subject to the regulation of his board; similarly, your investment group will receive a rent subsidy from the city agency which you serve as a part-time attorney. Therefore, if we were to answer the question posed at the beginning of this opinion based solely on the spirit of the Code of Ethics, we would answer your question in the affirmative.