CEO 92-11 -- March 6, 1992
CONFLICT OF INTEREST
FLORIDA TRANSPORTATION COMMISSION MEMBER AOF COUNSEL@
TO LAW FIRM PRACTICING EMINENT DOMAIN LAW
To: Malcolm R. Kirschenbaum, Appointee to Florida Transportation Commission (Cocoa Beach)
No prohibited conflict of interest would be created were a member of the Florida Transportation Commission to have an "of counsel" relationship with a law firm which represents property owners involved in eminent domain matters with the Department of Transportation. Section 112.313(7)(a), Florida Statutes, would not be violated because the member's "of counsel" status would not create a contractual relationship between the member and clients of the firm, because the clients would not be doing business with the Department, because the member's agency (the Commission) would not be dealing with the clients, and because the member would have no public duties of such a nature as to be susceptible to compromise in favor of his private interests.
CE Form 2 (Quarterly Client Disclosure) would not have to be filed because the member would not be personally representing clients before agencies at his level of government, and because he is not a partner or associate of the law firm. CEO's 88-63, 80-79, 78-8, 76-7, and 74-55 are referenced.
Would a prohibited conflict of interest be created were you, an appointee to the Florida Transportation Commission, to be confirmed by the State Senate, where the law firm with which you have an "of counsel" relationship has a condemnation/eminent domain practice involving the Florida Department of Transportation?
Your question is answered in the negative.
By your letter of inquiry, materials accompanying the letter, and telephone conversation between you and our staff, we areadvised that you have been appointed by the Governor to serve as a member of the Florida Transportation Commission ("Commission"). The Commission exists pursuant to Section 20.23, Florida Statutes, and consists of nine members; it has general oversight and evaluation functions regarding the Florida Department of Transportation ("Department"), makes general pronouncements regarding transportation goals and policy, and serves as a liaison between the Governor and Legislature on transportation issues, you relate.
You further relate that the Commission or any member is statutorily prohibited from entering into the day-to-day operations of the Department. In addition, you relate that the Commission has no role in the acquisition of rights-of-way, the selection of specific transportation routes, the settlement of eminent domain actions or the amount of compensation to be paid for a taking, etc. Also, you relate that the Commission does not control the budget of the Department and has no input into the selection, pay, evaluation, or retention of Department personnel, with the exception of the Secretary of the Department who is selected by the Governor from among three persons nominated by the Commission. The Commission votes on reports, policy resolutions, etc., dealing with matters of broad concern, such as whether local governments should get a share of gasoline tax funds to assist in complying with growth/infrastructure concurrency requirements. The Commission does not vote on narrow matters such as whether to acquire a particular parcel of property for public use or whether to assign a particular value to a parcel.
You relate that you are an attorney who has not engaged in the active practice of law for over ten years, that you are primarily a real estate developer, and that you are "of counsel" to a law firm which has a significant condemnation practice involving all taking authorities, including the Department. Approximately twenty percent of your annual income is derived from this "of counsel" relationship, in the form of an annual consultant's fee, and you are not a stockholder or partner in the firm. You provide the firm with advice on investments, banking, and real estate matters, and you assist the firm in securing new clients. Your private office is maintained in your real estate office in Cocoa Beach, separate and apart from the firm's offices in Orlando and Cocoa Beach; you maintain separate books and records from the firm and are not controlled by the firm as an employee.
Section 112.313(7)(a), Florida Statutes, 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.
This section prohibits a public officer or employee from holding a contractual relationship with a business entity or agency if the entity or agency is doing business with or is subject to the regulation of his agency. It also prohibits a public officer's or public employee's holding of 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.
Since you do not practice law for the firm, are not a partner or stockholder of the firm, and are not an employee of the firm, we do not believe you have a contractual relationship with the clients of the firm (some of whom could be property owners involved in some stage of condemnation matters with the Department), as discussed in CEO 88-63, 80-79, and other opinions. Rather, we believe that your relationship with the firm constitutes an "of counsel" status within the reasoning of CEO 74-55 whereby you do not have a contractual relationship with the firm's clients by virtue of being a "member" of the firm. Further, we find that the clients of the firm involved in condemnation matters, even if you had a contractual relationship with them, are not doing business with the Department, because a public taking of property lacks the true voluntariness of agreement necessary to constitute "doing business." See CEO 78-8 and CEO 76-7. In addition, even if you were deemed to have a contractual relationship with the firm's eminent domain clients, and even if the clients were deemed to be doing business with or subject to the regulation of the Department, the Department is not your agency, but, rather, an executive department of State government separate and distinct from the Commission, under the Code of Ethics definition of "agency" which provides:
'Agency' means any state, regional, county, local or municipal government entity of this state, whether executive, judicial, or legislative; any department, division, bureau, commission, authority, or political subdivision of this state therein; or any public school, community college, or state university. [Section 112.312(2), Florida Statutes.]
We therefore find no prohibited conflict under the first provision of Section 112.313(7)(a).
In order for a prohibited conflict to be present under the second provision of Section 112.313(7)(a), the public officer or employee must have public duties of a nature and extent such that the officer or employee could be tempted to compromise those duties in favor of his private interests. See Zerweck v. State Commission on Ethics, 409 So.2d 57 (Fla. 4th DCA 1982). We find that your public duties, as represented by you in this opinion's factual recital, do not constitute such duties. The statutory admonition to the Commission to not involve itself in the day-to-day functions of the Department, its inability to affect or influence the outcome of particular condemnation proceedings, its inability to select specific transportation routes, its lack of budgetary or personnel control over the Department (the separate agency whose actions actually have the potential to affect eminent domain clients of the firm), and its role as a body which suggests and evaluates matters of broad policy all point to the duties of the Commission being of the type which are not susceptible to compromise in favor of clients of the firm.
Further, since you would not personally be representing clients, and since you are not a partner or associate of the law firm, we find that your serving on the Commission would not necessitate your filing our Form 2 (Quarterly Client Disclosure) regarding clients represented for a fee or commission at the State level of government. See Section 112.3145(4), Florida Statutes, and CEO 74-55.
Accordingly, under the factual scenario contained herein, we find that a prohibited conflict of interests would not be created were you to be confirmed to and serve on the Florida Transportation Commission while having an "of counsel" relationship with a law firm which represents eminent domain clients involved in actions or proceedings of the Department of Transportation.