CEO 90-3 -- January 24, 1990
CONFLICT OF INTEREST
TRANSPORTATION AUTHORITY MEMBER OWNING TEMPORARY OFFICE SERVICE COMPANY DOING BUSINESS WITH THE AUTHORITY
To: (Name withheld at the person's request.)
A prohibited conflict of interest under subsections (3) and (7) of Section 112.313, Florida Statutes, would be created were a member of a transportation authority to own a temporary staffing company which does business with the authority. Under the circumstances presented, the exemption provided for business transacted under a rotation system would not apply because all qualified suppliers of services are not included. However, the exemption provided for transactions under $500 may apply where a single transaction with the company does not exceed this amount.
Would a prohibited conflict of interest be created were a member of a transportation authority to own a temporary office service company doing business with the authority?
Your question is answered in the affirmative, subject to the exemption noted below.
In your letter of inquiry and subsequent correspondence with our staff, you advise that . . . . serves as an appointed member of the Jacksonville Transportation Authority (JTA). You also advise that she owns a temporary staffing company which supplies temporary help services to the JTA. According to your letter, there are approximately seventeen temporary services doing business within the jurisdiction of the JTA. Since 1983, the JTA has utilized the services of two of these services, including the one owned by the newly appointed Authority member. In 1988, the JTA began using an additional service, and recently the Authority decided to add a fourth based on its status as a certified disadvantaged business enterprise. Business is rotated among these temporary services based on the type of employee needed, the timing of that need, and the cost. Staff of the JTA contacts a specific service based on the need for a particular employee of whom they are aware, or contacts each of the three services currently providing temporary staff. Staff of the JTA then determines which service can provide the needed services in a timely and cost effective manner. You advise that one service has been used more often than any of the others, but this is not the service owned by the JTA member. You indicate that the JTA had developed an important working relationship with each of these agencies for some time prior to the recent appointment of the subject JTA member. You inquire whether ownership of this temporary service creates a prohibited conflict of interest with her duties as a member of the Authority.
The Code of Ethics for Public Officers and Employees provides in relevant part:
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 of 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.
(c) Appointment to public office.
(d) Beginning public employment.
[Section 112.313(3), Florida Statutes.]
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.]
The former provision would prohibit the subject JTA member from acting in her private capacity to sell any services to her agency. While contracts entered into prior to appointment to public office are excluded from this prohibition, no information you have provided indicates that these services are rendered under an ongoing contract predating the official's appointment to the JTA. Therefore, this provision would appear to prohibit the subject JTA member's company from providing services to the Authority.
The second provision quoted above would prohibit the JTA member from holding a contractual relationship with a business entity which is doing business with her agency. We have advised that ownership of a business would constitute such a contractual relationship. See CEO 78-93. We find that the Authority member's company is "doing business" within the meaning of this provision by selling services to the Authority. Therefore, this provision also would appear to prohibit the Authority member from doing business with her agency.
The Code of Ethics also provides several exemptions to the prohibitions of these two provisions. In your letter of inquiry you note particularly the exemption where business is conducted under a rotation system. Section 112.313(12)(a), Florida Statutes, provides that no person shall be held in violation of subsection (3) or subsection (7) if:
Within a city or county the business is transacted under a rotation system whereby the business transactions are rotated among all qualified suppliers of the goods or services within the city or county.
In CEO 79-17, we advised that this exemption would not apply to a school board member who provided dental services to a school program, where only interested dentists participated rather than all qualified suppliers. Based on the rationale of this opinion, we find that this exemption also would not apply in the instant situation. Rather than business being rotated among the suppliers currently used by the JTA, a decision is made in each case by JTA staff as to which temporary service to use. Also, only three or four of the suppliers within the JTA's jurisdiction are used rather than all qualified suppliers of temporary help services.
Section 112.313(12)(f), Florida Statutes, provides another exemption where the total amount of the subject transaction does not exceed $500. You have suggested in subsequent correspondence with our staff that the term "transaction" in this case should be defined as one temporary employee per week of services. You have indicated that on this basis the invoices submitted to the HTA by the board member's company do not exceed $495. Based on our previous decisions, we do not agree with this definition of "transaction." In CEO 89-64, we advised that purchases could be made from a local official's business where each instance in which the governmental entity solicited a purchase did not exceed $500. Applying this rationale to the facts presented, it is more important how the business is contracted for by the JTA than how invoices are billed by the company. The exemption amount would be measured by each request to the board member's business for temporary services. For example, if the request was for one individual to serve for one day, this would constitute a transaction. If the request was for four individuals to serve for one month, this too would constitute a transaction. To permit a company to break the transaction into fragments by isolating the billing of one worker for a selected period of time would allow the exemption to consume the prohibitions of Sections (3) and (7) of Section 112.313. Therefore, to the extent that a single solicitation of business with the board member's company does not exceed $500, it would not be prohibited under these sections. Where services are requested from the company, regardless of the number of persons or time period involved, which obligate the JTA to a payment to the company which exceeds $500, the exemption would not apply.
Accordingly, we find that a prohibited conflict of interest would be created were the subject Transportation Authority member to own a temporary staffing agency selling services to the Authority, unless each transaction with the company does not exceed $500 and is thereby exempted.