CEO 84-13 -- March 8, 1984
CONFLICT OF INTEREST
COUNTY SUPERVISOR OF ELECTIONS PERSONALLY BANKING WITH BANK DOING BUSINESS WITH SUPERVISOR'S OFFICE
To: Mr. Kurt S. Browning, Supervisor of Elections, Pasco County
No prohibited conflict of interest exists where a supervisor of elections has deposited the public funds of his office with a bank with which he has transacted personal business for several years. Where only minimal funds are held in account at the bank, and the bank serves basically as a conduit for investments maintained with the State Board of Administration's investment pool, the officer's relationship with the bank would not interfere with the full and faithful discharge of his public duties. Therefore, although the officer has a contractual relationship with a business entity doing business with his agency, the literal language in Section 112.313(7), Florida Statutes, should be understood in light of Section 112.316, Florida Statutes.
Does a prohibited conflict of interest exist where you, a supervisor of elections, have deposited the public funds of your office with a bank with which you have transacted personal business for several years?
Your question is answered in the negative under the circumstances presented.
In your letter of inquiry you advise that you are the Supervisor of Elections for Pasco County. You also advise that you have been doing business with a local bank since 1976 in the form of various personal accounts and personal loans. Recently, you advise, you opened several business accounts at the same local bank for the deposit of the funds of your office.
Prior to your opening the business accounts at the bank, you telephoned another local bank regarding the service charges for these types of accounts. That bank required a charge for checks written on the checking account, charged for wire transfers, and required a minimum balance in the checking account. The bank which you chose for the business accounts does not charge for checks or wire transfers, and does not require a minimum balance, because the bank already is doing business with other county offices and is charging no service charge.
The Code of Ethics for Public Officers and Employees 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 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), Florida Statutes (1983).]
This provision prohibits a public officer from having a contractual relationship with a business entity which is doing business with his agency. In our view, you have such a contractual relationship through your personal accounts and loans with the bank, which is doing business with your agency by serving as a depository of funds for the Supervisor of Elections.
There are a number of exemptions to the prohibition of Section 112.313(7)(a) which are contained in Section 112.313(12), Florida Statutes. Of those exemptions, the following two warrant some discussion:
The business is awarded under a system of sealed, competitive bidding to the lowest or best bidder and:
1. The official or his spouse or child has in no way participated in the determination of the bid specifications or the determination of the lowest or best bidder;
2. 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
3. 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 interest, or his spouse's or child's interest, and the nature of the intended business. [Section 112.313(12)(b), Florida Statutes (1983).]
The fact that a county or municipal officer or member of a public board or body, including a district school officer and an officer of any district within a county is a stockholder or an officer or director of a bank will not bar such banks from qualifying as a depository of funds coming under the jurisdiction of any such public board or body, provided it shall appear in the records of the agency that the governing body of such agency has determined that such officer or member of a public board or body as aforesaid has not favored such bank or banks over other qualified banks. [Section 112.313(12)(g), Florida Statutes (1983).]
If a sealed, competitive bidding process were used to select the institution at which your office would maintain its accounts, Section 112.313(12)(b) would permit you to transact personal business with that institution. Under the terms of the exemption, however, someone else in your office would have to prepare the specifications and award the business to the bank.
The second exemption quoted above pertains specifically to depositories of public funds. However, this provision applies only to situations where the public officer is a stockholder, officer, or director of a bank and where the governing body of the public agency has determined that the officer has not favored the bank over other qualified banks. For these reasons, we find that this exemption does not apply here.
Nevertheless, the Code of Ethics also provides:
Construction. -- It is not the intent of this part, nor shall it be construed, to prevent any officer or employee of a state agency or county, city, or other political subdivision of the state or any legislator or legislative employee from accepting other employment or following any pursuit which does not interfere with the full and faithful discharge by such officer, employee, legislator, or legislative employee of his duties to the state or the county, city, or other political subdivision of the state involved. [Section 112.316, Florida Statutes (1983).]
You have advised that the bank is used only for checking services and as a vehicle for transferring funds to the State Board of Administration's investment pool. The bank is not used for investment purposes. When the Board of County Commissioners provides funds to your office each month, the funds are deposited in your office's business savings account at the bank and then wire transferred to your office's account with the State investment pool. When payments are to be made, sufficient funds are wire transferred from the pool back to the business savings account, and then are transferred to the appropriate one of three office checking accounts at the bank. Your office maintains a maximum of $500 in the business savings account to provide for emergencies.
Under these circumstances, we believe that your private dealings with the bank do not interfere with the full and faithful discharge of your public duties, which with respect to public funds we view primarily as attempting to maximize earnings and to minimize associated costs. Our concern in these types of situations is that decisions on where to deposit public funds not be influenced by private considerations of preferential treatment from the depository. Here, the depository has little or no inducement to offer preferential treatment, as it serves primarily as a conduit for the transfer of funds to and from the State investment pool, with access only to the minimal continuing balance in your office's business accounts and the float for outstanding checks.
Accordingly, we find that the Code of Ethics for Public Officers and Employees does not prohibit you from privately doing business with a bank which serves as a depository for the funds of your office under the circumstances presented here. Although we have been urged by persons who are not a party to this proceeding to set standards in this opinion which would apply to all public officers who are authorized to invest public funds, we have not done so for two reasons. First, Section 112.322(3)(a), Florida Statutes, only authorizes this Commission to render an advisory opinion to a public officer concerning the interpretation of the Code of Ethics "in a particular context." Secondly, we do not feel that we have sufficient information at this time to enable us to provide an interpretation for all public officers which both would guard against conflicts of interest and would not create unnecessary barriers to public service.