CEO 79-1 -- January 18, 1979

CONFLICT OF INTEREST

COUNTY COMMISSIONER PRINCIPAL IN CORPORATION SELLING TIRES TO BUSINESSES GRANTED FRANCHISE BY COUNTY COMMISSION

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

Prepared by: Phil Claypool

SUMMARY:

Section 112.313(7)(a), F. S. 1977 prohibits a public officer from being employed by or having a contractual relationship with a business entity which is subject to the regulation of his public agency. If a county commissioner is a principal in a corporation which sells tires to businesses holding franchises granted by the county commission, it is the corporation rather than the county commissioner, personally, which has a contractual relationship with the franchise holders. Accordingly, no violation of s. 112.313(7)(a) is constituted by said relationship. However, were the commissioner personally, rather than his corporation, to engage in such sales, a conflict would be created, and, therefore, there is at the very least an appearance of conflict of interest which should be considered. Reference is made to CEO's 77-82 and 77-177 in this regard.

QUESTION:

Would a prohibited conflict of interest be created if a corporation of which I, a county commissioner, am a principal entered into an agreement to sell tires to businesses which hold a franchise granted by the county commission?

Your question is answered in the negative.

In your letter of inquiry and in a telephone conversation with our staff, you advise that you are the president of, a director of, and own one-third interest in a corporation which sells and distributes motor vehicle tires, although you do not play an active role in the day-to-day affairs of the company. You further advise that the corporation is contemplating selling tires on a bid basis to some or all of the several companies which collectively hold an exclusive franchise, granted by the county commission of which you are a member, for the collection of residential garbage. In addition, you report that this 20-year franchise was granted before 1972, when you first were elected to the county commission.

Pursuant to Ch. 57-1313, Laws of Florida, the county commission retains substantial regulatory authority over a franchise holder, including the authority to regulate rates, to hold public hearings on complaints concerning its operations, and to amend the franchise agreement. In fact, you advise, the agreement has been amended two or three times, upon requests of the public and the county health director, during the period in which you have served on the commission.

The Code of Ethics for Public Officers and Employees provides in relevant part as follows:

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 that 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.]

This provision prohibits a public officer from being employed by or having a contractual relationship with a business entity which is subject to the regulation of his public agency.

Under the circumstances you have presented, it is the corporation and not you, personally, which would have a contractual relationship (through the sale of tires) with the franchise holders which are subject to the regulation of your agency, the county commission. While you might be deemed to have employment or a contractual relationship with the corporation which sells tires, it is not that corporation which is subject to the regulation of the county commission, but rather the businesses holding the franchise, in which you have no interest.

Accordingly, we find that no prohibited conflict of interest would be created were a corporation of which you, a county commissioner, are a principal to sell tires to businesses which hold a franchise granted by the county commission. However, we feel obligated to point out that were you, personally, rather than your corporation, to sell tires to the franchise holders, you would have a contractual relationship with a business entity subject to the regulation of your agency in violation of s. 112.313(7)(a), F. S. In this regard, see CEO 77-82 (employee of Department of Environmental Regulation leasing land from regulated companies) and CEO 77-177 (city commissioner selling goods to organization funded and administered by the city). As a result, under the circumstances you have described, we feel that there is at the very least an appearance of a conflict of interest which you may wish to consider before your corporation engages in sales to the franchise holders.