CEO 89-36 -- September 14, 1989
CONFLICT OF INTEREST
COMMUNITY COLLEGE TRUSTEE'S LAW FIRM SERVING AS BOND COUNSEL FOR COLLEGE SUPPORT ORGANIZATION
To: (Name withheld at the person's request.)
A prohibited conflict of interest would be created under Section 112.313(7), Florida Statutes, if the law firm of which a trustee of a community college is a member, acted as bond counsel to the college's direct support organization. The trustee would then have a contractual relationship with the direct support organization, which in turn is doing business with the college. CEO's 87-85 and 85-59 are referenced.
Would a prohibited conflict of interest be created if the law firm of which a trustee of a community college is a member were to act as bond counsel to a foundation which has been established as a direct-support organization for the college?
Your question is answered in the affirmative.
In your letter of inquiry, you advise that you serve as a member of the Board of Trustees of Miami-Dade Community College and are also a member of a law firm which served as bond counsel to the Miami-Dade Community College Foundation, Inc. in regard to a 1986 bond issue. You were neither a partner of the firm nor a Trustee of the College in 1986 but later became a partner and director of the firm and in 1988 became a Trustee of the College.
The Foundation is a "community college direct-support organization" pursuant to Section 240.331, Florida Statutes, which has been incorporated as a nonprofit corporation. Pursuant to Section 240.331, the Foundation is organized and operated exclusively to receive, hold, invest, and administer property and to make expenditures to or for the benefit of the Community College. Although the Foundation's Board of Directors is in part composed of the Trustees of the Community College, you have resigned as a Director of the Foundation.
Currently, the Foundation again proposes to issue bonds to finance the cost of certain educational facilities which will be leased to the Community College at an adequate rent to amortize the bonds and pay periodic interest on them. The Foundation desires to use as bond counsel the same law firm which acted as its bond counsel in 1986, the firm of which you are a member.
In regard to your question, Section 112.313(7)(a), Florida Statutes, provides:
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) prohibits a public official from having a contractual relationship with a business entity which is doing business with his agency. In CEO 87-85 and CEO 86-37, we advised that an attorney has a contractual relationship with each client of his law firm. Therefore, if your firm were to represent the Foundation, you would be considered to have a contractual relationship with the Foundation.
In CEO 85-59, we determined that a direct support organization was doing business with the agency which created it. Pursuant to the analysis of CEO 85-59, we believe that the Foundation would be considered to be doing business with the College. If your law firm were to act as bond counsel to the Foundation, you would have a contractual relationship with a business entity doing business with your agency in violation of Section 112.313(7)(a), Florida Statutes. As stated in CEO 85-59, trustees of the agency which is served by the direct-support organization would be prohibited from contracting with the organization by Section 112.313(7)(a), Florida Statutes.
Accordingly, we find that Section 112.313(7), Florida Statutes, would be violated if the law firm of which you are a member were to serve as bond counsel for a direct-support organization for the Community College while you serve as Trustee of the College.