CEO 79-65 -- October 17, 1979

CONFLICT OF INTEREST; VOTING CONFLICT OF INTEREST

CITY COUNCIL MEMBER VOTING ON CONTRACT BETWEEN CITY AND CHAMBER OF COMMERCE, OF WHICH HE IS A DIRECTOR

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

Prepared by: Phil Claypool

SUMMARY:

The Code of Ethics does not prohibit a city council member from serving on the board of directors of a chamber of commerce which has contracted with the city to publicize the city. Although s. 112.313(3), F. S., prohibits a public officer from acting in his official capacity to purchase services for his agency from a business entity of which he is a director, the city council is not deemed to be purchasing services for itself from the chamber of commerce by virtue of the contract for publicity. Rather, the contract requires the chamber to perform services on behalf of the city to the general public. Reference is made to CEO's 77-16, 77-55, and 78-98, in which the same distinction has been made. There is no conflicting employment or contractual relationship under s. 112.313(7)(a) because uncompensated service on the board of directors of a nonprofit organization has been determined in the above- referenced prior opinions not to constitute either employment or a contractual relationship with that organization. The fact that the council member is a director and member of the chamber of commerce does not indicate that he would receive any private gain from the city's contract with the chamber so as to create a voting conflict of interest under s. 112.3143, F. S.

QUESTIONS:

1. Does a prohibited conflict of interest exist when a member of a city council serves on the board of directors of the city chamber of commerce, which has contracted with the city to publicize the city?

2. Does a voting conflict of interest exist when a city council member votes in favor of a contract between the city and the city chamber of commerce, which he serves as a member of its board of directors?

Question 1 is answered in the negative.

In your letter of inquiry you advise that ____ is a member of the City Council of the City of Cape Coral and serves on the Board of Directors of the Cape Coral Chamber of Commerce. You further advise that recently he voted to approve an ordinance adopting a budget with funds allocated for payment to the chamber of commerce under a contract between the city and the chamber of commerce. Pursuant to the contract, the chamber of commerce is responsible for the publicity of the city, with the city being responsible for reimbursing the chamber's expenditures for advertising, printing, publicity-related correspondence, and for other activities of direct benefit to the city. In a telephone conversation with our staff, ____ advised that members of the board of directors of the chamber of commerce are elected by the chamber's members and receive no compensation for their service on the board.

The Code of Ethics for Public Officers and Employees provides in 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 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.]

This provision prohibits a public officer from being employed by, or having a contractual relationship with, a business entity which is doing business with his agency. In previous advisory opinions we have advised that uncompensated service on the board of directors of a nonprofit organization does not constitute employment or a contractual relationship with that organization. See CEO's 77-16, 77-55, and 78-98. Therefore, this provision would not prohibit your service on the board of directors of the chamber of commerce.

The Code of Ethics also provides:

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. The foregoing shall not apply to district offices maintained by legislators when such offices are located in the legislator's place of business. This subsection shall not affect or be construed to prohibit contracts entered into prior to:

(a) October 1, 1975.

(b) Qualification for elective office.

(d) Beginning public employment.

[Section 112.313(3), F. S. 1977.]

This provision prohibits a public officer from acting in his official capacity to purchase any services for his agency from a business entity of which he is a director. We have advised that a city commissioner acts in his official capacity when the city commission acts. See CEO 75-201. In addition, it appears that the chamber of commerce constitutes a "business entity," as that term is defined in s. 112.312(3), F. S.

However, we are of the opinion that the city council is not purchasing services for itself from the chamber of commerce by virtue of the contract between them. We agree with the subject council member's observation that the contract requires the chamber to perform publicity services on behalf of the city to the general public, and not to provide services to the city. This is the same distinction we have made in advisory opinions CEO 77-16 (nonprofit mental health services provider held not to be selling services to Department of Health and Rehabilitative Services); CEO 77-55 (nonprofit corporation promoting economic development for county held not to be selling services to the county); and CEO 78-98 (nonprofit corporation established to attract industry to county and municipalities held not to be selling services to county or to municipalities).

Accordingly, we find that the Code of Ethics for Public Officers and Employees does not prohibit the subject city council member from serving on the board of directors of a chamber of commerce which has contracted with the city to publicize the city.

Your second question is answered in the negative.

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

Voting conflicts. -- No public officer shall be prohibited from voting in his official capacity on any matter. However, any public officer voting in his official capacity upon any measure in which he has a personal, private, or professional interest and which inures to his special private gain or the special gain of any principal by whom he is retained shall, within 15 days after the vote occurs, disclose the nature of his interest as a public record in a memorandum filed with the person responsible for recording the minutes of the meeting, who shall incorporate the memorandum in the minutes. [Section 112.3143, F. S. 1975.]

In CEO 76-24 we advised that a city councilman who was a member of a chamber of commerce was not required to file a memorandum of voting conflict following his vote on the city's leasing of property to the chamber of commerce. In our view, the fact that the subject city council member is a member of the board of directors of the chamber of commerce, as well as being a member of the chamber of commerce, does not indicate that he would receive any private gain from the city's contract with the chamber of commerce, or that he has been "retained" by the chamber of commerce.

Accordingly, we find that a voting conflict of interest was not created when the subject city councilman voted in favor of a contract between the city and the city chamber of commerce while serving on its board of directors.